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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 QBE INSURANCE CORPORATION'S MOTION TO DISMISS, OR ALTERNATIVELY FOR SUMMARY JUDGMENT, ON COUNTS 2 AND 3 OF BNSF/COACH AMERICA'S COUNTERCLAIM

          Daniel L. Hovland, Chief Judge.

         Before the Court is “QBE Insurance Corporation's Motion to Dismiss, or Alternatively for Summary Judgment, on Counts Two and Three of Counterclaims” filed on September 26, 2016. See Docket No. 129. BNSF Railway Company and CUSA ES, LLC filed a response in opposition to the motion on October 3, 2016. See Docket No. 133. QBE Insurance Corporation then filed a reply brief on October 17, 2016. See Docket No. 134. 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 Friday, August 19, 2011, Timothy P. Rennick was operating a motor vehicle on behalf of and at the direction of the Defendants BNSF and Coach America. Rennick was transporting decedents Todd Burckhard and Blaine Mack, both employees of BNSF, to Glasgow, Montana, pursuant to their employment duties with BNSF. While traveling west on Highway 2, the vehicle Rennick was driving collided with a vehicle driven by Ronald Keiser. As a result of the collision, both Burckhard and Mack were killed.

         On March 28, 2013, the surviving spouses of Todd Burckhard and Blaine Mack brought the underlying action on behalf of the estates against BNSF and Coach America. On May 2, 2013, Coach America filed a third party complaint against Ronald Keiser and his insurer, QBE Insurance. See Docket No. 13 (Case No. 4:13-cv-038). On July 16, 2013, Coach America filed an amended third party complaint to add Ost Brothers, Inc., d/b/a Wagon Wheel Bar as an additional third party defendant. QBE Insurance, Ronald Keiser, and Ost Brothers, Inc., each filed motions to dismiss in the underlying action. On September 3, 2013, the Court dismissed the third party complaint against QBE Insurance and concluded the Plaintiffs may not bring a direct action against an insurer unless liability is reasonably clear. See Docket No. 40 (Case No. 4:13-cv-038). The Court later dismissed the third party complaint against Ronald Keiser and against Ost Brothers Inc. for lack of personal jurisdiction. See Docket Nos. 43 and 51 (Case No. 4:13-cv-038).

         On September 24, 2013, QBE Insurance requested leave to deposit its policy limits with the Court to allocate the funds between competing interests. See Docket No. 44 (Case No. 4:13-cv-038). The Court denied QBE Insurance's request for leave to deposit funds because QBE Insurance was no longer a party to the lawsuit, and it was not yet established the insurance proceeds were “in dispute.” See Docket No. 50 (Case No. 4:13-cv-038).

         On November 1, 2013, QBE Insurance filed this interpleader action against Corrie Burckhard as personal representative of the estate of Todd Burckhard, Maria Mack as personal representative of the estate of Blaine H. Mack, BNSF, Coach America, and Timothy P. Rennick in an effort to resolve any claims against it arising from the underlying action. See Docket No. 3. On April 11, 2014, the Defendants, BNSF and Coach America, filed an answer to the interpleader complaint and a counterclaim against QBE Insurance. In their counterclaim, BNSF and Coach America sought a declaration as to the allocation of the QBE Insurance policy proceeds and alleged claims against QBE Insurance for violations of unfair trade practices under Montana law, common law bad faith, indemnification, and attorney's fees. See Docket No. 13. On May 12, 2014, QBE Insurance filed a motion to dismiss BNSF and Coach America's counterclaims of violations of unfair trade practices, common law bad faith, indemnification, and attorney's fees. See Docket No. 18. On October 17, 2014, the Court granted without prejudice QBE Insurance's motion to dismiss the counterclaims, except for the counterclaim seeking declaratory judgment. See Docket No. 46.

         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.

         After conclusion of the jury trial in the underlying action, BNSF and Coach America renewed their counterclaim against QBE Insurance and their cross-claim against Burckhard and Mack. See Docket No. 49. QBE Insurance filed a Motion to Dismiss Counts 2 through 5 of Coach America/BNSF's renewed counterclaim on March 5, 2015. See Docket No. 51. The Court granted in part and denied in part QBE Insurance's motion to dismiss, dismissing Count 4 (tort of another) and Count 5 (attorney's fees) of BNSF and Coach America's counterclaim. See Docket No. 83. QBE Insurance again seeks dismissal, or alternatively, summary judgment of the remaining counts (Counts 2 and 3) of BNSF/Coach America's counterclaim.[1]

         II. STANDARD OF REVIEW

         The pending motion before the Court filed by QBE Insurance seeks dismissal for lack of subject matter jurisdiction of Count 2 and Count 3 of BNSF and Coach America's counterclaim. Rule 12(b)(1) of the Federal Rules of Civil Procedure governs challenges to subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). “Because at issue in a factual 12(b)(1) motion is the trial court's jurisdiction - its very power to hear the case - there is substantial authority that the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case.” Osborn v. United States, 918 F.2d 724, 730 (8th Cir. 1990). As a result, “no presumptive truthfulness attaches to the plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims.” Id. Nonetheless, the burden is on the plaintiff to demonstrate jurisdiction exists.

         II. LEGAL DISCUSSION

         In its motion to dismiss, or alternatively for summary judgment, Count 2 (Unfair Trade Practices) and Count 3 (Third-Party Common Law Bad Faith) of Coach America and BNSF's Second Counterclaim, QBE Insurance contends the Court should dismiss the counts because (1) the Court lacks subject matter jurisdiction over the claims and (2) the doctrines of res ...


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