Worth v. Tamarack American, Div. Of Great American
| Decision Date | 31 March 1999 |
| Docket Number | No. IP 97-1757 CB/S.,IP 97-1757 CB/S. |
| Citation | 47 F.Supp.2d 1087 |
| Parties | John O. WORTH, d/b/a Worth Law Offices, Plaintiff, v. TAMARACK AMERICAN, a Division of Great American Insurance Co., and American National Fire Insurance Co., a subsidiary of Great American Insurance Co., Defendant. |
| Court | U.S. District Court — Southern District of Indiana |
Rodney V. Taylor, Christopher & Taylor, Indianapolis, IN, for plaintiff.
G. Ronald Heath, Johnson Smith Pence Densborn Wright & Heath, Indianapolis, IN, for defendants.
ENTRY GRANTING DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
Plaintiff, John O. Worth ("Worth"), brings this bad faith and declaratory judgment action against his insurer, American National Fire Insurance Company ("American National"), and against the processors of his claim, Tamarack American ("Tamarack"). Worth alleges that defendants acted in bad faith in denying his claim and he seeks a declaration that the professional liability insurance policy he purchased from American National obligates defendants to defend and indemnify him in an underlying legal malpractice action brought against him by a former client. All parties, plaintiff and defendants, move for summary judgment. For the reasons discussed, defendants' motions for summary judgment are GRANTED and plaintiff's motion for summary judgment is DENIED.
John O. Worth practices law in Rush County, Indiana. In the late 1980's, Larry Clock ("Clock"), a farmer, retained Worth to advise him on his struggling farming business. Over the course of the next several years, Worth represented Clock in three different actions: Mr. Clock's divorce from his wife, a lawsuit against the United States alleging improprieties in the administration of the Agricultural Stabilization and Conservation Service program ("ASCS"), and a Chapter 7 bankruptcy filing. See Pl.'s Br.Summ.J. at 1-2.
On August 5, 1991, three days before the running of the statute of limitations, Worth filed the ASCS suit on Clock's behalf in the Southern District of Indiana (coincidentally in this very court), pursuant to the Federal Tort Claims Act. While reviewing Clock's business records in 1989, Worth discovered a potential claim against the Department of Agriculture. See Worth Dep. at 12, 14-15. The claim rested on the theory that the Farmer's Home Administration ("FMHA") and the Blackford County ASCS did not permit Clock to sell stored grain at an optimal time to maximize profits. See Tamarack's Br. Summ.J. at 6; Worth Dep. at 12. Worth surmised that the possible recovery from the ASCS suit could be used to offset the amount Clock owed to the FMHA. See Worth Dep. at 12, 14-15.
On August 30, 1991, an Indiana state court apparently issued a decree finalizing the Worth divorce, specifying that any recovery from the ASCS claim would be divided equally between Mr. Worth and his ex-wife. See Pl.'s Br.Summ.J. at 1-2.
On November 21, 1991, this Court ordered Worth to show cause, on or before December 5, 1991 (December 3, 1991 represented the 120th day after the August 5, 1991 filing of the complaint), why the ASCS action should not be dismissed for failure to perfect service on the defendant, the United States of America, pursuant to Federal Rules of Civil Procedure 4(d), 4(j) and 41(b).1 On December 10, 1991, Worth filed a motion for an extension of time until December 21, 1991 to respond to the Court's Order, claiming that he had not received our order until December 9, 1991. Nonetheless, on December 11, 1991, we granted Worth's motion for an extension.
On December 30, 1991, nine days after Worth neglected to comply with his self-imposed deadline to respond to our Order to Show Cause why the case should not be dismissed, and 27 days after the deadline to effect service of process upon the defendant as required by Rule 4, Worth filed his response. He claimed that he had forwarded a copy of the complaint and summons to an assistant United States attorney in the Southern District of Indiana, and that he had forwarded a certified copy of the pleadings to the Attorney General of the United States in Washington, D.C.; (we would learn subsequently that Worth forwarded these pleadings on December 27 and December 31, 1991 respectively). See Worth's Dec. 30, 1991 Response to Order to Show Cause; Worth's April 21, 1992 Response Def.'s Mot. Dismiss.
On February 25, 1992, the government filed a motion to dismiss Clock's ASCS complaint, contending that Worth failed to effect service of the complaint and summons in the manner required by Federal Rule of Civil Procedure 4(d). Namely, the government contended that Rule 4 mandated that Worth serve process upon both the United States attorney, or his/her official designee, and the Attorney General of the United States within 120 days after filing the complaint. In other words, December 3, 1991 represented Worth's last day to serve process upon the required persons before mandatory dismissal of Clock's claim, absent a showing by Worth of "good cause" excusing his failure to comply with Rule 4 requirements. The government also asserted that since the statute of limitations had run on Clock's ASCS complaint, a Rule 4 dismissal for failure to effect service of process would completely bar any future filing of the ASCS action.2
Despite the looming dismissal of his client's complaint, Worth remained silent in responding to the government's motion to dismiss for well over 30 days. On April 8, 1992, this Court ordered Worth to show cause before April 23, 1992 why the government's unopposed motion to dismiss should not be granted. On April 21, 1992, Clock filed a two-page response, claiming (without supporting evidence) that he had perfected service upon "Gary Hobbs," an individual who Worth claimed was both an ASCS employee and an agent of the United States.3 Worth also claimed that his tardy mailing of the ASCS complaint to the Attorney General of the United States and to an Assistant United States Attorney in this District constituted proper service of process and that, in any event, the United States somehow had actual notice of the action within the 120 day period despite the lack of formal service. Worth never provided any reason for his failure to serve process upon the appropriate individuals within the required 120 day time period, nor did he attempt to offer a "good cause" explanation for his inaction.
On June 26, 1992, we issued an Entry dismissing the ASCS complaint with prejudice, finding Worth's response to the government's motion to dismiss "entirely unavailing, both on the facts and the law." Court's June 26, 1992 Entry at 2. We noted that a suit brought against the United States under the Federal Tort Claims Act requires compliance with Rule 4, which mandates delivery of a copy of the summons and complaint to the U.S. Attorney for the district in which the action is brought (or the designated employee of that office) and the sending of the same pleadings to the Attorney General of the United States at Washington D.C. We found Worth's purported service of process upon Gary Hobbs a completely insufficient attempt to comply with Rule 4, terming it "suspicious" in light of Hobbs' resignation from ASCS well over a year before Worth filed the ASCS complaint, and finding that Worth failed to serve the United States even assuming he had succeeded in serving Gary Hobbs. Id. at 3.
We further held that Worth's failure to serve the United States by December 3, 1991 mandated dismissal of the ASCS action absent a showing that the delay was based on good cause, remarking that "plaintiff's counsel has offered no explanation or excuse for his failure to meet that deadline, not to mention his failure to make a showing of `good cause.'" Id. at 4. We concluded that although a dismissal prompted by failure to comply with Rule 4(j) is generally a dismissal without prejudice, we dismissed the ASCS action with prejudice since the six-month statute of limitations had passed since the date the Department of Agriculture mailed notice of final denial of Clock's claim (February 8, 1991), thereby foreclosing any future filing of the ASCS action after our dismissal.
On May 18, 1992, almost a month after Worth finally responded to the government's motion to dismiss the ASCS action, Worth filed a Chapter 7 bankruptcy petition on behalf of his client, Larry Clock. Worth listed the ASCS suit as an asset of the bankruptcy estate, as we had not ruled on the fully briefed motion to dismiss by that date. As mentioned, on June 26, 1992, we dismissed the ASCS complaint and mailed a copy of our entry to Worth, which he apparently received. See Worth Dep. at 22, 15. On September 28, 1992, Clock received a Chapter 7 bankruptcy discharge.
On March 6, 1997, more than four years after dismissal of the ASCS action, and after Clock filed a complaint with the Indiana Supreme Court Disciplinary Commission, Clock brought a malpractice and fraud action against Worth. See Tamarack's Ex. 13 (Clock V.Compl.). Clock alleged that Worth's negligence in failing to serve process upon the United States in the ASCS action resulted in its dismissal. He also alleged that Worth defrauded him by intentionally concealing the fact that the ASCS action had been dismissed. Specifically, Clock claimed that Worth never informed him of the dismissal despite numerous personal meetings related to his bankruptcy, that Worth failed to disclose the dismissal during telephone conversations, that Worth avoided returning his telephone calls as late as September 1995, and that Clock wrote letters to Worth after the 1992 dismissal confirming that Clock still believed the case was active. See Tamarack's Ex. 13 (Clock V.Compl.), Exs. 19, 20. Clock maintained that he learned of Worth's alleged negligence for the first time on July 9, 1996, when he sought legal counsel from Cohen & Malad...
To continue reading
Request your trial
-
Heritage Mut. Ins. Co. v. Advanced Polymer Tech.
...is not sufficient to support an award" for bad faith. Erie Ins. Co. v. Hickman, 622 N.E.2d 515, 520 (Ind.1993); Worth v. Tamarack American, 47 F.Supp.2d 1087, 1102 (S.D.Ind.1999) (summarizing Indiana law), aff'd, 210 F.3d 377, 2000 WL 101227 (7th Cir.2000). "[A] good faith dispute about .........
-
Skinner v. Metro. Life Ins. Co., 3:09 CV 394.
...insured; and 4) using an unfair advantage to force an insured into settlement of a claim. (DE # 11 at 12) (citing Worth v. Tamarack Am., 47 F.Supp.2d 1087, 1102 (S.D.Ind.1999)).) In Indiana, “there is a legal duty implied in all insurance contracts that the insurer deal in good faith with i......
-
Eli Lilly and Co. v. Zurich American Ins. Co., 104CV0446SEBVSS.
...mistake of fact or law, honest error, or poor judgment do not amount to bad faith. See Worth v. Tamarack American, a Div. Of Great American Ins. Co., 47 F.Supp.2d 1087, 1100 (S.D.Ind.1999). Generally, an insurer who acts with the knowledge that there is no reasonable basis for denying a cla......
-
Dave's Detailing, Inc. v. Catlin Ins. Co.
...case law where Indiana courts have defined what constitutes a “reasonable investigation.” See Worth v. Tamarack American, a Div. of Great American Ins. Co., 47 F.Supp.2d 1087, 1100 (S.D.Ind.1999) (acknowledging that Indiana courts had not defined what constitutes a “reasonable investigation......