Justia Civil Procedure Opinion Summaries

In June 2011, fourteen-year-old Jean-ah Leon was seriously injured while operating a Bad Boy Buggy ( an off-road vehicle used for outdoor recreation). A year later, Jean-ah’s parents, Vincent and Mandi Leon, filed a products liability and personal injury lawsuit in Louisiana against the owner of the Bad Boy Buggy, a Louisiana resident. They also named the owner’s insurer, the Textron Parties, and several other entities and individuals. Within a few days, the Leons dismissed all parties except the vehicle owner and his insurer from the Louisiana case. The Leons filed suit in Adams County, Mississippi, against the Textron Parties and the others previously named in the Louisiana suit, seeking damages of “an amount not yet determined” but greater than $10,000,000. The Leons served that complaint and summonses on the Textron Parties through their registered agents in Mississippi. They amended their complaint, adding claims for gross negligence and punitive damages. The Leons did not issue new summonses to the Textron Parties with the amended complaint; instead, they sent copies to the Textron Parties’ headquarters by certified mail with accompanying letters addressed “To Whom it May Concern.” The Textron Parties’ attorney in the Louisiana case also requested and received a copy of the amended complaint by email. The Textron Parties’ answer was due thirty days after they were served with the original complaint. They did not file an answer to the original complaint or the amended complaint. The Leons then sought a default judgment against the Textron Parties based on the amended complaint. An entry of default and default judgment were entered the same day. The issue this case presented for the Mississippi Supreme Court's review arose from that default judgment: the Textron Parties claimed that the default judgment was void and should have been set aside because they did not receive proper service of the amended complaint, they were not given notice of the default judgment, and the plaintiffs failed to state a claim against them. Additionally, the Textron Parties asserted that a three-pronged balancing test for relief from default judgments required that it be set aside because they had a colorable defense and the plaintiffs would not be prejudiced. The Supreme Court held that the default judgment was not void, but it should have been set aside under the three-pronged test. View "BB Buggies, Inc. v. Leon" on Justia Law

Illinois insurance regulators permitted WellPoint to acquire RightCHOICE health insurance. WellPoint caused RightCHOICE Insurance to withdraw from the Illinois market. WellPoint offered the policyholders costlier UniCare policies as substitutes. Those who chose not to pay the higher premiums had to shop for policies from different insurers, which generally declined to cover pre-existing conditions. Former RightCHOICE policyholders filed a purported class action. The district court declined to certify a class and entered judgment against plaintiffs on the merits. No one appealed. Absent certification as a class action, the judgment bound only the named plaintiffs. Their law firm found other former policyholders and sued in state court. Defendants removed the suit under 28 U.S.C. 1453 (Class Action Fairness Act); the proposed class had at least 100 members, the amount in controversy exceeded $5 million, and at least one class member had citizenship different from at least one defendant. Plaintiffs sought remand under section 1332(d)(4), which says that the court shall “decline to exercise” jurisdiction if at least two-thirds of the class’s members are citizens of the state in which the suit began and at least one defendant from which “significant relief” is sought is a citizen of the same state. The district court declined remand, declined to certify a class, and again rejected the case on the merits. The Seventh Circuit affirmed, stating that “Counsel should thank their lucky stars that the district court did not sanction them under 28 U.S.C. 1927 for filing a second suit rather than pursuing the first through appeal." View "Phillips v. Wellpoint Inc." on Justia Law

Plaintiff-appellant Richard Salzer received medical care at an SSM Healthcare of Oklahoma (SSM) facility for injuries he sustained in an accident. At the time of his treatment, he had a health insurance plan (the "Plan"). Salzer entered into a contract with SSM to receive its services (the "Hospital Services Agreement"), under which he "authorized disclosure of [his] medical information for billing purposes and authorized [his] health insurance company to pay." SSM had an existing contract with Salzer's health insurance company (the "Provider Agreement") which required SSM to submit covered medical charges to Salzer's insurance company and accept discounted payment from the insurer. Although the Provider Agreement prohibited SSM from seeking payment for a covered charge from Salzer, SSM sought the non-discounted amount directly from him. Salzer sued SSM alleging breach of contract and other state law claims based on SSM's attempt to collect payment for medical care from Salzer instead of his health insurance company. SSM removed the case to federal district court. Salzer challenged the district court's denial of his motion to remand based on its determination that his claims were completely preempted by the Employee Retirement Income Security Act of 1974 (ERISA). Finding no reversible error, the Tenth Circuit affirmed the district court. View "Salzer v. SSM Health Care of Oklahoma" on Justia Law

The district court entered summary judgment relieving Kentucky Farm Bureau Mutual Insurance of its duty to defend Elk Glenn against certain breach of contract and related claims arising from the sale of a residential lot. The Sixth Circuit dismissed an appeal. A certification to appeal under Rule 54(b) requires the district court to determine that there is no just reason for delay, which requires the district court to balance the needs of the parties against the interests of efficient case management. The district court’s only reason supporting immediate appeal was the “real prejudice” Kentucky Farm Bureau would suffer. That reference, without further explication, does not provide reasoning supporting the necessity of immediate review. Without proper certification for an interlocutory appeal under Rule 54(b), an order disposing of fewer than all claims in a civil action is not immediately appealable. The Sixth Circuit declined to order the district court to make the necessary findings supporting jurisdiction. View "Adler v. Elk Glenn, LLC" on Justia Law

Expedia (and several other hotel booking websites, collectively, "Petitioners") has been subject to approximately 80 underlying lawsuits by states, counties, and municipalities (collectively, taxing authorities) for purportedly failing to collect the right amount of local occupancy taxes from its hotel customers. Expedia tendered most of the suits to its insurer, Zurich, although some were tendered late. Zurich refused to defend Expedia on a number of grounds, including late tender and that the underlying suits may be excluded from the policies' coverage. The trial court declined to make a determination of Zurich's duty to defend Expedia, instead ordering discovery that Expedia claimed was prejudicial to the underlying actions. Petitioners sought adjudication of their summary judgment motion concerning their respective insurers' duty to defend them in cases brought by local taxing authorities. They further requested a stay of discovery in the coverage action that could prejudice them in the underlying litigation. Upon review of the matter, the Washington Supreme Court held that the trial court erred by delaying adjudication of Zurich's duty to defend Expedia. Accordingly, the Court vacated the trial court's order. The case was remanded to the trial court to determine Zurich's duty to defend Expedia in each of the 54 underlying cases subject to Expedia's motion. The trial court was furthermore ordered to stay discovery in the coverage action until it could make a factual determination as to which parts of discovery are potentially prejudicial to Expedia in the underlying actions. View "Expedia, Inc. v. Steadfast Ins. Co." on Justia Law

Claimant Andres Carbajal alleged he was injured when scaffolding he was on was blown over and he fell while working on a construction project in Okmulgee. He filed a claim in the Workers' Compensation Court and alleged that he was an employee of Precision Builders, Inc., and/or Mark Dickerson (Precision) when he fell. The tribunal denied the claim upon determining that claimant was an independent contractor and not an employee. The three-judge panel affirmed the trial tribunal and the panel's order was affirmed by the Court of Civil Appeals. The issue this case presented to the Oklahoma Supreme Court on certiorari was whether petitioner was an employee or independent contractor. "Considering each of the factors on which the evidence was presented leads us to the conclusion that claimant met his burden to show that he was an employee of Precision." The Court of Appeals' decision was vacated and the case remanded for further proceedings. View "Carbajal v. Precision Builders, Inc." on Justia Law

The Patient Protection and Affordable Care Act, 42 U.S.C. 18002, provides $5 billion to reimburse employers and their proxies for outlays on early retirees’ medical care. WEA, which administers health-care programs on behalf of Wisconsin school districts, told them that it would collect on their behalf. It decided to use the money to reduce future premiums. The school districts claim that WEA should have rebated premiums for the years in which the retirees received the medical care that led to the federal payments. The difference matters to school districts that want to switch carriers. WEA’s plan to cut future rates, rather than provide rebates, gave it a competitive advantage. Districts filed suit, characterizing WEA’s choice to allocate no money to districts, that switch carriers as a form of conversion. All of the claims arise under state law and all litigants are citizens of Wisconsin. WEA removed to federal court, contending that the Act and its implementing regulations are the crux of the litigation. The Seventh Circuit ordered the case returned to state court, reasoning that the suit does not necessarily raise any issue of federal law and that the McCarran-Ferguson Act, 15 U.S.C. 1011–15, gives states preeminence in the domain of insurance regulation. View "Hartland Lakeside Joint No. 3 Sch. Dist. v. WEA Ins. Corp." on Justia Law

In this insurance coverage dispute, the driver involved in an accident filed a claim with the Insurer of the other vehicle involved in the accident. The Insurer denied the claim. The Office of the Insurance Commissioner reviewed the denial and ordered the Insurer to adjust and resolve the claim. The Insurer did not file an appeal and instead filed a complaint for declaratory and injunctive relief in the federal district court. The district court dismissed the federal court action on res judicata grounds. The First Circuit Court of Appeals affirmed, holding that res judicata barred this action and no exceptions to res judicata applied. View "Universal Ins. Co. v. Office of the Ins. Comm'r" on Justia Law

Plaintiff filed a class action suit in an Illinois circuit court against Ernida, LLC alleging that Ernida had faxed unsolicited advertisements to Plaintiff and more than thirty-nine other recipients without first obtaining their permission. Ernida’s insurer, American Economy Insurance Company (American), took up Ernida’s defense in Illinois. While the Illinois action was ongoing, Plaintiff filed suit in federal district court against American, asserting diversity jurisdiction and seeking a declaration that American had a duty to defend Ernida in the Illinois action and had a responsibility to indemnify and pay any judgment in that action. The district court granted American’s motion to dismiss, concluding that Plaintiff had not presented a justiciable controversy. On appeal, American claimed that Plaintiff’s claim did not meet the amount-in-controversy requirement for diversity jurisdiction since Plaintiff had expressly waived any right to recover anything over $75,000 in its Illinois complaint. The First Circuit Court of Appeals vacated the district court’s order dismissing the case for lack of standing and remanded with instructions to dismiss for lack of subject-matter jurisdiction, as the matter in controversy did not not exceed the sum or value of $75,000. View "CE Design, Ltd. v. Am. Economy Ins. Co." on Justia Law

This appeal arose from an insurance coverage dispute concerning an industrial accident that occurred on a decommissioned platform in the Outer Continental Shelf. The key issue on appeal was whether the district court entirely disposed of any one claim against Continental. The court need not conclusively determine whether Tetra and Maritech have asserted one claim or two against Continental because, even if the court were to construe their request for a declaration on Continental's indemnity obligations as a single claim, it was clear that the district court did not fully dispose of that one claim. Accordingly, the court dismissed for want of jurisdiction. View "Tetra Technologies, Inc., et al. v. Vertex Services, L.L.C." on Justia Law