Ortega-Maldonado v. Allstate Ins. Co., Civ. No. 06-461 (PJS/RLE).

• Decision Date: 12 September 2007
• Docket Number: Civ. No. 06-461 (PJS/RLE).
• Citation: 519 F.Supp.2d 981
• Parties: Veronica ORTEGA-MALDONADO, as assignee of the claims of Maria Guitterrez and Genoveva Manzanarez, Plaintiff, v. ALLSTATE INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — District of Minnesota

519 F.Supp.2d 981

Veronica ORTEGA-MALDONADO, as assignee of the claims of Maria Guitterrez and Genoveva Manzanarez, Plaintiff, v. ALLSTATE INSURANCE COMPANY, Defendant.

Civ. No. 06-461 (PJS/RLE).

United States District Court, D. Minnesota.

September 12, 2007.

Gary L. Manka, Neil G. Clemmer, Katz Manka Teplinsky Due & Sobol, Ltd., Minneapolis, MN, for Plaintiff.

Brian A. Wood, Kevin J. Rodlund, Lind Jensen Sullivan & Peterson, PA, Minneapolis, MN, for Defendant.

ORDER ADOPTING REPORT AND RECOMMENDATION

PATRICK J. SCHILTZ, District Judge.

Based upon the Report and Recommendation of United States Magistrate Judge Raymond L. Erickson, and after an independent review of the files, records and proceedings in the above-titled matter, IT IS ORDERED:

1. That the Defendant Allstate Insurance Company's Motion for Summary Judgment [Docket No. 42] is granted.

2. That the Plaintiff Veronica Ortega-Maldonado's Motion for Summary Judgment [Docket No. 52] is denied.

LET JUDGMENT BE ENTERED ACCORDINGLY.

REPORT AND RECOMMENDATION

RAYMOND L. ERICKSON, United States Chief Magistrate Judge.

I. Introduction

This matter came before the undersigned United States Magistrate Judge pursuant to a special assignment, made in accordance with the provisions of Title 28 U.S.C. § 636(b)(1)(B), upon the parties' cross-Motions for Summary Judgment. At the time of the Hearing, the Plaintiff appeared by Neil G. Clemmer, Esq., and the Defendant appeared by Kevin J. Rodlund, Esq. For reasons which follow, we recommend that the Defendant's Motion for Summary Judgment be granted, and the Plaintiff's Motion for Summary Judgment be denied.

II. Factual and Procedural Background

This case arises out of an automobile accident, on March 11, 2001, that occurred in Minneapolis, Minnesota, and that involved the Plaintiff Veronica Ortega-Maldonado, and Maria Guitterrez ("Guitterrez"), in which neither party admitted fault. At the time of the accident, Guitterrez was driving a car that belonged to her mother, Genoveva Manzanarez ("Manzanarez"), and that was insured by the Allstate Insurance Company ("Allstate"). See, Affidavit of Kevin J. Rodlund, Docket No 45, Exhibit A, at ¶ II, and Exhibit J. Guitterrez and Manzanarez (collectively, the "Insureds") contacted Allstate, within several days of the accident, to make a claim for benefits, and Allstate made no-fault benefit payments for chiropractic treatments, that were provided to Guitterrez, until November of 2001. See, Affidavit of Gary L. Manka, Docket No. 66, Exhibit B, at pages 17-19.

On September 27, 2001, Allstate received a request for subrogation from the Plaintiff's insurer, American Family. See, Affidavit of Rodlund, supra at Exhibit B, p. 23. Allstate conducted an investigation of the accident and, on April 12, 2002, sent correspondence to the Plaintiff's attorney denying liability, and to American Family denying the subrogation claim. Id.

The Plaintiff subsequently initiated a State Court action against the Insureds for damages arising from the accident, and alleges that, on May 12, 2003, she served a copy of the Summons and Complaint on the Insureds and, on that same date, also mailed a copy of the Summons and Complaint to Allstate. See, Affidavit of Rodlund, supra at Exhibit A. Prior to Trial, the State Court sent the matter to nonbinding arbitration, and the Plaintiff alleges that, on December 3, 2003, she mailed a letter to Allstate that provided notice of the Arbitration Hearing which occurred on December 11, 2003. See, Complaint, Docket No. 1, at p. 4, ¶ IX; Affidavit of Rodlund, supra at Exhibit H. Neither Allstate, nor the Insureds, appeared at that Arbitration Hearing, which resulted in an award against the Insureds for $105,000.00. See, Complaint, supra at ¶ X; Affidavit of Rodlund, supra at Exhibit

The Plaintiff alleges that, on March 16, 2004, she mailed a copy of the original Summons and Complaint; Affidavits of Service of the Summons and Complaint on Guitterrez and Manzanarez, that were served on August 12, 2002; the State Court's Order dated December 12, 2003; and the Arbitrator's Award for $105,000.00; to Allstate, but that Allstate did not respond. See, Complaint, supra at p. 5, ¶ XI; Affidavit of Rodlund, supra at Exhibit K. On August 4, 2004, the Plaintiff allegedly served Allstate with a Garnishment Summons. See, Complaint, supra at ¶ XII. When Allstate also failed to respond to service of the Summons, the Plaintiff brought a Motion in State Court for leave to commence a supplemental proceeding and, on September 15, 2004, the Plaintiff filed a Supplemental Complaint with the Trial Court. See, Affidavit of Rodlund, supra at Exhibit A, at p. 5. On September 30, 2004, the Insureds assigned their rights against Allstate to the Plaintiff. See, Docket No. 1, Exhibit A.

Allstate made its first appearance in the case on May 17, 2005, by filing an Answer to the Plaintiff's Complaint. See, Affidavit of Rodlund, supra at Exhibit A at page 5. A Hearing, at which Allstate appeared, was held on May 24, 2005, id. at page 6, and on July 8, 2005, the State Court granted the Plaintiff's Motion for Summary Judgment, and awarded a Judgment against Allstate in the amount of 830,000.00. See, Affidavit of Neil G. Clemmer, Docket No. 54, at Exhibit B. This left a Judgment against the Insureds for the $75,000.00, that was in excess of the $30,000.00 liability limit in their Allstate policy.¹ Id. at Exhibit J On January 19, 2006, the Plaintiff, as the assignee of the Insureds, brought a claim in State Court alleging Counts of negligence, breach of contract, bad faith, and breach of duty to defend against Allstate, and alleging that Allstate was liable for the difference between the awarded $30,000.00, and the Judgment of $105,000.00.² See, Docket No. 1. This action was removed to this Court in February of 2006, and on November 6, 2006, Allstate filed a Motion for Summary Judgment, see, Docket No. 42, and the Plaintiff filed a cross-Motion for Summary Judgment on December 8, 2006. Docket No. 52.

Allstate argues that Summary Judgment is appropriate for four (4) reasons. See, Allstate's Memorandum in Support, Docket No. 44. First, it alleges that the Insureds cannot recover damages, as a result of Allstate's alleged failure to defend, since the Insureds did not defend themselves before the Trial Court, and therefore, did not incur any attorney's fees, or costs. Next, Allstate claims that, as a matter of law, it could not be in breach of its duty to consider a reasonable settlement offer, since there is no evidence, in the Record, that demonstrates that a settlement offer was ever made to Allstate. Allstate also notes that the Plaintiff has failed to name an expert to testify on the issue of "bad faith," so as to establish her breach of contract claim. Finally, Allstate alleges that the Plaintiff's entire claim is based on notice letters of questionable authenticity, which do not support her central claim, that Allstate received notice of the Trial Court action, but failed to defend the Insureds.

In turn, the Plaintiff argues that the State Court's decision to grant the Plaintiffs Motion for Summary Judgment should be given preclusive effect under the doctrine of collateral estoppel. We address each contention seriatim.

III. Discussion

A. Standard of Review. Summary Judgment is not an acceptable means of resolving triable issues, nor is it a disfavored procedural shortcut when there are no issues which require the unique proficiencies of a Jury in weighing the evidence, and in rendering credibility determinations. See, Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Midwest Oilseeds, Inc. v. Limagrain Genetics Corp., 387 F.3d 705, 711 (8th Cir.2004), cert. denied, 544 U.S. 977, 125 S.Ct. 1860, 161 L.Ed.2d 728 (2005). Summary Judgment is appropriate when we have viewed the facts, and the inferences drawn from those facts, in a light most favorable to the nonmoving party, and we have found no triable issue. See, Eide v. Grey Fox Technical Servs. Corp., 329 F.3d 600, 604 (8th Cir.2003); Philip v. Ford Motor Co., 328 F.3d 1020, 1023 (8th Cir.2003); United Fire & Casualty Ins. Co. v. Garvey, 328 F.3d 411, 413 (8th Cir. 2003). For these purposes, a disputed fact is "material" if it must inevitably be resolved and the resolution will determine the outcome of the case, while a dispute is "genuine" if the evidence is such that a reasonable Jury could return a Verdict for the nonmoving party. See, Anderson v Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Planned Parenthood of Minnesota/South Dakota v. Rounds, 372 F.3d 969, 972 (8th Cir.2004); Fenney v. Dakota, Minnesota & Eastern R.R. Co., 327 F.3d 707, 711 (8th Cir.2003)

As Rule 56(e) makes clear, once the moving party files a properly supported Motion, the burden shifts to the nonmoving party to demonstrate the existence of a genuine dispute. In sustaining that burden, "an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavit or as otherwise provided in this Rule, must set forth specific facts showing that there is a genuine issue for trial." Rule 56(e), Federal Rules of Civil Procedure; see also, Anderson v. Liberty Lobby, Inc., supra at 256, 106 S.Ct. 2505; Eddings v. City of Hot Springs, Ark., 323 F.3d 596, 602 (8th Cir.2003).

Moreover, the movant is entitled to Summary Judgment where the nonmoving party has failed "to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, supra at 322, 106 S.Ct. 2548; see also, Forest Park II v. Hadley, 408 F.3d 1052, 1057 (8th Cir.2005); Mercer v. City of Cedar Rapids, 308 F.3d 840, 843 (8th Cir.2002); Hammond v. Northland Counseling Center, Inc., 218 F.3d 886, 891 (8th Cir.2000). No genuine issue of fact exists in such a case because "a...