Lecher-Zapata v. QBE Ins. Corp.

• Decision Date: 29 May 2020
• Docket Number: 4:19-CV-3053
• Parties: JOHN LECHER-ZAPATA, Plaintiff, v. QBE INSURANCE CORPORATION, a Wisconsin corporation, et al., Defendants.
• Court: U.S. District Court — District of Nebraska

JOHN LECHER-ZAPATA, Plaintiff, v. QBE INSURANCE CORPORATION,

a Wisconsin corporation, et al., Defendants.

4:19-CV-3053

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEBRASKA

May 29, 2020

MEMORANDUM AND ORDER

The plaintiff in this case, John Lecher-Zapata, is suing several defendants arising out of the alleged mishandling of a Nebraska workers' compensation claim that the plaintiff filed in 2013. Filing 1 at 3. Specifically, the defendants are:

• QBE Insurance—the workers' compensation carrier allegedly responsible for the claim;

• Julie Martin, Brian Nolan, and the Nolan, Olson & Stryker law firm—the lawyers who represented QBE in the workers' compensation case; and

• Rubina Khaleel and the Adelson, Testan, Brundo & Jimenez law firm—the lawyers who were retained by QBE to represent Midwest Demolition, the plaintiff's company, in the workers compensation proceeding.

Filing 1 at 1-2. All the defendants move to dismiss the plaintiff's claims, on various grounds. The Court will grant their motions and dismiss the complaint.

BACKGROUND

The plaintiff alleges that he was both an employee and the owner of Midwest Demolition. Filing 1 at 3. Presumably, he believes he was injured in the course and scope of his employment, because he filed a petition in the Nebraska Workers' Compensation Court in 2013 and an amended petition in 2014. Filing 1 at 3. QBE retained Martin and his law firm as its counsel, and Khaleel and her law firm to represent Midwest Demolition. Filing 1 at 3.

The complicating factor in that litigation seems to have been that the plaintiff filed his petition against Midwest Demolition, his own company. See filing 18-2; filing 18-3; filing 18-4. According to the workers' compensation court, the plaintiff sought to fire Khaleel and "direct the defense of his own claim." Filing 18-5 at 1. So, the workers' compensation court explained:

Unable to resolve the obvious impasse that has arisen, all concerned parties and/or counsel are looking to the Court for guidance. The undersigned indicated at the aforementioned hearing that he does not believe that he has jurisdiction to resolve the underlying contract of insurance dispute as to who represents whom and the authority of any of them to speak for the other. Clearly, issues of contract interpretation; duty to defend and an insured's duty to cooperate among other issues are presented. Again, the Court advised the parties that he does not have authority to resolve these matters. In response, the plaintiff did indicate that he intends to seek relief in the district court. That may well be the forum to resolve the present deadlock.

The Court believes that it is necessary to stay the present proceedings until such time as the parties have resolved their differences either among themselves or via resolution by a court ofcompetent jurisdiction. The parties, whether separately or jointly, are to advise the Court when either circumstance has come to pass.

Filing 18-5 at 1-2.

QBE filed a declaratory judgment action against Midwest Demolition in the District Court of Lancaster County, Nebraska, in 2014, seeking to resolve the dispute. Filing 18-6. Ultimately, the parties stipulated to dismiss that case with prejudice in 2019. Filing 18-7. It's not clear from the record how the matter was resolved.

Meanwhile, the plaintiff also tried to get the case into state district court, by filing a "Notice of Removal" in the District Court of Lancaster County purporting to remove the workers' compensation case to the state district court. Filing 15-1. It's not clear what happened to that—presumably, it didn't work out—but the plaintiff also filed his own complaint in the District Court of Lancaster County against the same defendants as in this case (minus Nolan, who hadn't appeared yet). Filing 15-1 at 68-71.

In that case, the plaintiff alleged that the defendants had violated attorney-client privilege by "shar[ing] secret communications" among themselves. Filing 15-1 at 68. The state district court dismissed his complaint for failure to state a claim upon which relief could be granted. Filing 15-1 at 76-79. The Nebraska Court of Appeals affirmed the district court's decision. Filing 15-1 at 72-75.

That brings us to this case, in which the plaintiff complains that the insurers' declaratory judgment action "was filed with Malice and in Bad Faith . . . for the purpose of denying Plaintiff's worker's compensation complaint by attempting to deny coverage. . . ." Filing 1 at 5. Generally, he alleges that the various lawyers conspired to assist QBE in frustrating his workers' compensation claim. See filing 1 at 5-6. As a result, he claims, of beingdenied medical treatment, his injuries have gotten worse. Filing 1 at 6. So, he demands

A) Lost wages since the filing of the worker's compensation case; and

B) Medical care for the remaining of the Plaintiff 's life; and

C) An amount for Pain and Suffering; and

D) An Equitable amount for the shortened life span of the Plaintiff contracting [chronic obstructive pulmonary disease] while under employment; and

E) For Punitive and Compensatory Damages according to proof.

Filing 1 at 6.

STANDARD OF REVIEW

A complaint must set forth a short and plain statement of the claim showing that the pleader is entitled to relief. Fed. R. Civ. P. 8(a)(2). This standard does not require detailed factual allegations, but it demands more than an unadorned accusation. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The complaint need not contain detailed factual allegations, but must provide more than labels and conclusions; and a formulaic recitation of the elements of a cause of action will not suffice. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). For the purposes of a motion to dismiss a court must take all of the factual allegations in the complaint as true, but is not bound to accept as true a legal conclusion couched as a factual allegation. Id.

And to survive a motion to dismiss under Fed. R. Civ. P. 12(b)(6), a complaint must also contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face. Iqbal, 556 U.S. at 678. A claimhas facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. Where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but has not shown—that the pleader is entitled to relief. Id. at 679.

Determining whether a complaint states a plausible claim for relief will require the reviewing court to draw on its judicial experience and common sense. Id. The facts alleged must raise a reasonable expectation that discovery will reveal evidence to substantiate the necessary elements of the plaintiff's claim. See Twombly, 550 U.S. at 545. The court must assume the truth of the plaintiff's factual allegations, and a well-pleaded complaint may proceed, even if it strikes a savvy judge that actual proof of those facts is improbable, and that recovery is very remote and unlikely. Id. at 556.

When deciding a motion to dismiss under Rule 12(b)(6), the Court is normally limited to considering the facts alleged in the complaint. If the Court considers matters outside the pleadings, the motion to dismiss must be converted to one for summary judgment. Fed. R. Civ. P. 12(d). However, the Court may consider materials that are necessarily embraced by the pleadings without converting the motion. Mattes v. ABC Plastics, Inc., 323 F.3d 695, 697 n.4 (8th Cir. 2003). Documents necessarily embraced by the pleadings include those whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading. Ashanti v. City of Golden Valley, 666 F.3d 1148, 1151 (8th Cir. 2012). The Court may also take notice of public records, such as state court records. Levy v. Ohl, 477 F.3d 988, 991 (8th Cir. 2007).

DISCUSSION

Discussion of the plaintiff's claim(s) necessarily begins with an assessment of what precisely he's claiming. His complaint is primarily just a factual narrative, without expressly identifying any legal theory. See filing 1. That, of course, is appropriate under the Federal Rules of Civil Procedure: it is the facts alleged in a complaint, and not the legal theories, that state a claim, and the Court must examine a complaint to determine if the allegations set forth a claim for relief. Topchian v. JPMorgan Chase Bank, N.A., 760 F.3d 843, 849 (8th Cir. 2014). But in the face of the defendants' motions, the plaintiff's brief (filing 32) primarily reasserts his factual narrative (adding additional details) without clearly articulating why it states a claim for relief, or clearly refuting the defendants' arguments that it doesn't. . . and that's less helpful.

In his brief, however, the plaintiff does clearly identify a state-law claim for malicious prosecution¹ as one potential theory of recovery. Filing 32 at 7-8. The plaintiff also suggests, in his response to a separate motion for sanctions, that he's pursuing a professional malpractice claim. Filing 37 at 3. And his consistent references to QBE's alleged "bad faith" suggest a tort claim for bad faith denial of insurance coverage. See filing 32 at 6-7. Seeing no other likely candidates, it is on those theories that the Court will focus its attention.²

QBE INSURANCE

The Court will begin with the plaintiff's claims against QBE, because for reasons that will become apparent, the claims against the other defendants are primarily derivative of those against QBE.

First, the plaintiff doesn't have a malicious prosecution claim against QBE. In a malicious prosecution case, the necessary elements for the plaintiff to establish are (1) the commencement or prosecution of the proceeding against him or her; (2) its legal causation by the present defendant; (3) its bona fide termination in favor of the present plaintiff; (4) the...