Omaha Indem. Co. v. Royal American Managers, Inc.

Decision Date04 January 1991
Docket NumberNo. 86-0422-CV-W-9.,86-0422-CV-W-9.
Citation755 F. Supp. 1451
PartiesThe OMAHA INDEMNITY COMPANY, et al., Plaintiffs, v. ROYAL AMERICAN MANAGERS, INC., et al., Defendants.
CourtU.S. District Court — Western District of Missouri

COPYRIGHT MATERIAL OMITTED

Joe Rebein, Shook, Hardy & Bacon, Kansas City, Mo., Sheila J. Carpenter, Francis M. Gregory, Jr., Sutherland, Asbill & Brennan, Washington D.C., John W. Bonds, Jr., Carey DeDeyn, J.D. Fleming, Jr., Sutherland, Asbill & Brennan, Atlanta, Ga., for plaintiffs.

Byron Neal Fox, Robert L. Wehrman, Polsinelli, White, Vardeman & Shalton, Kansas City, Mo., James M. Kaplan, Wilson, Elser, Moskowitz, Edelman & Dicker, New York City, Oscar B. Goodman, Goodman, Stein & Chesnoff, Las Vegas, Nev., John L. Hayob, Kevin E. Glynn, Niewald, Waldeck, Norris & Brown, Robert W. Cotter, Dysart, Taylor, Penner, Lay & Lewandowski, P.C., Thomas O. Baker, Baker & Sterchi, Kansas City Mo., Robert A. Calinoff, Calinoff & Katz, New York City, Jonathan

A. Margolies, McDowell, Rice & Smith, Max W. Foust, Foust, Strother & Frickleton, Duke W. Ponick, Jr., Ponick, Amick & Allen, Kansas City, Mo., James R. Bell, Murane & Bostwick, Casper, Wyo., for defendants.

Robert B. Best, Watson, Ess, Marshall & Enggas, Kansas City, Mo., pro se.

Laramie Ins. Co., Casper, Wyo., pro se.

Steven Hurley Mustoe, McDowell, Rice & Smith, Kansas City, Mo., for garnishee.

ORDER GRANTING PARTIAL SUMMARY JUDGMENT AGAINST JAMES R. WINING, WILLIE A. SCHONACHER, JR., FIELDING REINSURANCE, LTD. AND KENSU HOLDINGS, INC.

BARTLETT, District Judge.

I. Background

On April 3, 1986, Mutual of Omaha (Mutual) and The Omaha Indemnity Company (Omaha Indemnity) began this litigation against Royal American Managers, Inc. (RAM), James R. Wining (Wining), Willie A. Schonacher, Jr. (Schonacher), Fielding Reinsurance, Ltd. (Fielding), Kensu Holding, Inc. (Kensu) and other affiliated entities. Plaintiffs' claims arose from a managing general agency relationship between RAM and Omaha Indemnity in which RAM wrote reinsurance business in Omaha Indemnity's name. Claims for breach of contract, breach of fiduciary duty, negligence, fraudulent misrepresentation, prima facie tort, civil conspiracy and equitable relief were asserted.

On May 23, 1986, counsel for defendants moved to compel arbitration of all the claims against RAM and for a stay of all litigation against the defendants during the pendency of the arbitration proceeding asserting that "the claims against RAM and the claims against the Moving Defendants involve common fact issues which may be resolved in the arbitration." Memorandum in Support of Motion to Dismiss or, in the Alternative, to Stay Litigation at 27.

All claims against RAM in Omaha Indemnity's original Complaint were submitted to arbitration. On May 11, 1989, the arbitration panel returned an award of $225,000,000 in favor of Omaha Indemnity and against RAM. I confirmed this arbitration award and entered final judgment against RAM on July 7, 1989. RAM has paid nothing toward satisfaction of this judgment but Omaha Indemnity has been able to recover $5,000,000 from an errors and omissions insurer.

On November 17, 1989, plaintiffs filed a Third Amended Complaint. In Count V, plaintiffs assert that Wining and Schonacher are liable for the RAM arbitration judgment because they are privies of RAM and are bound by the judgment entered against RAM under principles of res judicata. In Count VI, plaintiffs assert that Wining, Schonacher, Fielding and Kensu, as well as others, aided and abetted breaches of fiduciary duty. Plaintiffs assert a conspiracy claim against RAM, Wining, Schonacher, Fielding, Kensu and other related entities in Count IX.

On April 13, 1990, plaintiffs moved for summary judgment against Wining and Schonacher on Count V of their Third Amended Complaint. On June 15, 1990, plaintiffs moved for summary judgment against Fielding and Kensu.

II. Standard for Summary Judgment

Rule 56(c), Federal Rules of Civil Procedure, provides that summary judgment shall be rendered if the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." In ruling on a motion for summary judgment, it is the court's obligation to view the facts in the light most favorable to the adverse party and to allow the adverse party the benefit of all reasonable inferences to be drawn from the evidence. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970); Inland Oil and Transport Co. v. United States, 600 F.2d 725, 727-28 (8th Cir.), cert. denied, 444 U.S. 991, 100 S.Ct. 522, 62 L.Ed.2d 420 (1979).

If there is no genuine issue about any material fact, summary judgment is proper because it avoids needless and costly litigation and promotes judicial efficiency. Roberts v. Browning, 610 F.2d 528, 531 (8th Cir.1979); United States v. Porter, 581 F.2d 698, 703 (8th Cir.1978). The summary judgment procedure is not a "disfavored procedural shortcut." Rather, it is "an integral part of the Federal Rules as a whole." Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 2555, 91 L.Ed.2d 265 (1986); see also City of Mt. Pleasant v. Associated Electric Cooperative, Inc., 838 F.2d 268, 273 (8th Cir.1988). Summary judgment is appropriate against a party who fails to make a showing sufficient to establish that there is a genuine issue for trial about an element essential to that party's case, and on which that party will bear the burden of proof at trial. Celotex, 106 S.Ct. at 2553.

The moving party bears the initial burden of demonstrating by reference to portions of pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, the absence of genuine issues of material fact. However, the moving party is not required to support its motion with affidavits or other similar materials negating the opponent's claim. Id. (emphasis added).

The nonmoving party is then required to go beyond the pleadings and by affidavits, depositions, answers to interrogatories and admissions on file, designate specific facts showing that there is a genuine issue for trial. Id. A party opposing a properly supported motion for summary judgment cannot simply rest on allegations and denials in his pleading to get to a jury without any significant probative evidence tending to support the complaint. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986).

A genuine issue of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. The evidence favoring the nonmoving party must be more than "merely colorable." Id. 106 S.Ct. at 2511. When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show there is some metaphysical doubt as to the material facts. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986) (footnote omitted).

The inquiry to be made mirrors the standard for a directed verdict: whether the evidence presented by the party with the onus of proof is sufficient that a jury could properly proceed to return a verdict for that party. Id. Essentially, the question in ruling on a motion for summary judgment and on a motion for directed verdict is whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law. Anderson, 106 S.Ct. at 2512.

III. Undisputed Facts

In a Scheduling Order dated February 24, 1990, I required the following procedure be used to determine if there are disputes of material fact in connection with the Motions for Summary Judgment.

a) In a separate section of its brief in support of its Motion for Summary Judgment, the moving party shall present a concise statement of material fact as to which the non-moving party contends no genuine issue exists. The facts should be numbered and referenced to those portions of the record upon which movant relies;
b) In a separate section of its brief in opposition, the non-moving party shall respond to each fact listed by movant by either agreeing the fact is undisputed, or by agreeing that the fact is undisputed for the purposes of ruling on movant's Motion for Summary Judgment only, or by stating that the fact is disputed. If any fact is disputed, the non-movant shall provide the reason for disputing the fact by designating a portion of an affidavit, declaration under penalty of perjury or relevant portion of depositions, answers to interrogatories or responses to requests for admissions.

Omaha Indemnity complied with the February 24, 1990, order by submitting a statement of material facts as to which it contends no genuine issue exists along with its April 13, 1990, and June 15, 1990, Motions for Summary Judgment.

When Wining and Schonacher had not responded to the April 13, 1990, motion by May 16, 1990, I ordered them to file their opposition to plaintiffs' April 13, 1990, Motion for Partial Summary Judgment by July 2, 1990.

On July 18, 1990, when no response had been received to either the April 13, or June 15, 1990, motion, plaintiffs "respectively suggested for the reasons stated in its respective moving papers that the judgment sought in its motions of April 13, 1990, and June 15, 1990, should be granted and entered at this time as final judgments."

On July 19, 1990, Wining, Schonacher, Fielding and Kensu moved for leave to file, out of time, their suggestions opposing plaintiffs' summary judgment motions. On August 9, 1990, I granted these defendants leave to file, out of time, their suggestions opposing plaintiffs' summary judgment motions.

Defendants' suggestions opposing plaintiffs' two summary judgment motions do not comply with my February 24, 1990,...

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