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QBE Insurance Corp. v. Burckhard

United States District Court, D. North Dakota

August 22, 2017

QBE Insurance Corporation, Plaintiff,
v.
Corrie Burckhard, as Personal Representative for the estate of Todd Burckhard; Maria Mack, as Personal Representative for the estate of Blaine H. Mack; BNSF Railway Company, a Delaware corporation; CUSA ES, LLC, d/b/a Coach America Crew Transport; and Timothy P. Rennick, Defendants,
v.
BNSF Railway Company, a Delaware Corporation and CUSA ES, LLC, d/b/a Coach America Crew Transport, Counter-Claimants,
v.
QBE Insurance Corporation, Counter-Defendant.

          ORDER DENYING BNSF'S MOTION FOR SUMMARY JUDGMENT RE: OFFSET

          Daniel L. Hovland, Chief Judge.

         Before the Court is “BNSF Railway Company's Motion for Partial Summary Judgment Re: Offset” filed on September 28, 2016. See Docket No. 131. Defendants Corrie Burckhard and Maria Mack filed a response in opposition to the motion on October 19, 2016. See Docket No. 135. BNSF Railway Company filed a reply brief on October 31, 2016. See Docket No. 137. For the reasons set forth below, the motion is denied.

         I. BACKGROUND

         This case arises out of an underlying action in which Corrie Burckhard, as Personal Representative for the Estate of Todd Burckhard, and Maria Mack, as Personal Representative for the Estate of Blaine H. Mack filed suit against BNSF Railway Company (“BNSF”) and CUSA ES, LLC (“Coach America”) to recover for the wrongful deaths of their husbands. See Case No. 4:13-cv-038 (D.N.D. March 28, 2013). On August 19, 2011, a Coach America driver was driving a motor vehicle and transporting the decedents, Todd Burckhard and Blaine Mack, both employees of BNSF, to Glasgow, Montana. While traveling west on Highway 2, a vehicle driven by Ronald Keiser collided with the vehicle Rennick was driving. As a result of the collision, both Burckhard and Mack were killed. At the time of the accident, Keiser had an insurance policy with QBE Insurance Corporation (“QBE Insurance”).

         The underlying action proceeded to trial on December 11, 2014. See Docket No. 167 (Case No. 4:13-cv-038). At the conclusion of eight days of trial, the jury returned a verdict and found BNSF was negligent under FELA and such negligence caused the deaths of Todd Burckhard and Blaine Mack. The jury awarded damages in the amount of $2, 668, 943.00 to Corrie Burckhard and damages in the amount of $987, 690.00 to Maria Mack. The jury further found Coach America and/or its employee, Timothy Rennick, were negligent, but such negligence did not play a substantial role in causing the deaths of Todd Burckhard and Blaine Mack.

         On January 5, 2015, BNSF and Coach America filed a motion in the underlying action to alter or amend the judgement in favor of Burckhard and Mack to reduce the amount payable to the Plaintiffs by $300, 000 for each Plaintiff. See Docket No. 168 (Case No. 4:13-cv-038). BNSF and Coach America's request was based upon the language of an “Off Track Vehicle Accident Benefits Agreement” which stated:

         E. Offset:

It is intended that this Article V is to provide a guaranteed recovery by an employee or his personal representative under the circumstances described, and that receipt of payment thereunder shall not bar the employee or his personal representative from pursing [sic] any remedy under the Federal Employer Liabilities Act or any other law; provided, however, that any amount received by such employee or his personal representative under this Article may be applied as an offset by the railroad against recovery that is obtained.

See Docket No. 132-2 at 6. The Court denied BNSF and Coach America's motion to amend or alter the judgment because the issue of whether BNSF may be entitled to an offset under the “Off Track Vehicle Accident Benefits Agreement” was collateral to the merits of the underlying case. See Docket No. 180 (Case No. 4:13-cv-038). On appeal, the Eighth Circuit Court of Appeals affirmed the Court's decision in the underlying action to not alter or amend the judgment, emphasizing the amounts paid by BNSF to Burckhard and Mack “may be applied as an offset by the railroad against recovery that is obtained” under the “Off Track Vehicle Accident Benefits Agreement.” See Docket No. 216-1 at 11 (Case No. 4:13-cv-038) (emphasis in original). The Eighth Circuit specifically agreed with the rational of this Court in denying the motion, concluding there was no abuse of discretion upon denying the request to alter or amend the judgment:

The action before the district court, and tried to the jury, encompassed only claims under FELA and negligence under Montana common law. The agreement was not encompassed within the decision on the merits of plaintiffs['] FELA case. Moreover, the agreement has the potential to spawn additional litigation over the use of the word “may.”

Id. at 12.

         On November 1, 2013, QBE Insurance Corporation filed this interpleader action against Corrie Burckard, as personal representative for the estate of Todd Burckhard; Maria Mack, as personal representative for the estate of Blaine H. Mack; BNSF; and Coach America in an effort to resolve any claims against it arising from the underlying action. See Docket No. 3. On February 18, 2015, Coach America and BNSF filed a counterclaim against QBE Insurance as well as a cross claim against Burckhard and Mack. See Docket No. 49. In the cross claim, BNSF and Coach America allege “BNSF and Coach America are entitled to declaratory relief affirming their right to an offset or credit to the damages awarded (described in Paragraphs 21 and 22) by the Jury in Case No.: 4.13-cv-038 based on the Off Track Vehicle Benefits Agreement payments of $300, 000 to each Estate.” Id. at 10. On March 10, 2015, Burckhard and Mack then filed a crossclaim against BNSF and Coach America. See Docket No. 55. As part of their crossclaim, Burckhard and Mack allege:

21. Coach America has never made payment on the Off-Track Vehicle Agreement and is not entitled to the benefit of the Off-Track Vehicle Agreement offset.
22. BNSF, and only BNSF, is entitled to an offset by the amount paid for the Off-Track Vehicle Agreement. However, because BNSF has tendered the defense and indemnity obligations to Coach America and AIG, BNSF will not be paying the verdict and therefore is not entitled to an offset. BNSF is entitled to a subrogation claim against Coach America for the off track vehicle payment or against other at fault individuals including in their claims against the bar and other insurance, but only to the extent the ...

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