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Murphey v. Mid-Century Insurance Co.

United States District Court, D. Kansas

June 12, 2014



JULIE A. ROBINSON, District Judge.

This removal action seeks to enforce a purported settlement agreement between Plaintiff Beverly E. Murphey and Defendant Mid-Century Insurance Company ("Mid-Century"), the automobile liability insurance carrier for Defendant Laura Wiggs. Before the Court is Plaintiff's Motion for Partial Summary Judgment (Doc. 10) on Count I of the Petition and Plaintiff's Motion for Judgment on the Pleadings (Doc. 12) as to Mid-Century's counterclaim for rescission. The motions are fully briefed and the Court is prepared to rule. For the reasons explained below, the Court grants Plaintiff's motions.

I. Summary Judgment Motion

A. Uncontroverted Facts

The uncontroverted facts relevant to the motion for summary judgment are straightforward.[1] The Court views the evidence in the light most favorable to Defendant, the non-moving party. Defendant Mid-Century issued a policy of automobile liability insurance that provides liability coverage for Defendant Wiggs. Kevin Lash, a Special General Adjuster for Mid-Century, was assigned as the adjuster to handle Plaintiff Beverly Murphey's claim against it stemming from a motor vehicle accident involving Ms. Murphey and Ms. Wiggs that occurred on February 4, 2013.

In September 2013, Mr. Lash began exchanging e-mails with Terrence Campbell, counsel for Ms. Murphey. On September 17, Mr. Campbell sent to Mr. Lash medical and other records in support of her claim and demanded payment of $366, 618.24 "so that suit may be avoided." On October 9, Mr. Lash sent Mr. Campbell an e-mail stating in part: "As I indicated on your voice-mail, against your demand of $366, 618.24, we offer $116, 000. We look forward to your response."[2] The following day, October 10, at 3:59 p.m., Mr. Campbell responded by e-mail:

I am authorized to reduce Ms. Murphey's demand to $310, 000. It appears to her that your offer does not take into account the likelihood of punitive damages if it is determined (as seems likely) that your insured was texting and driving. Do you have a recorded statement from your insured that you can produce? The $310, 000 demand will expire by its terms at 5:00 p.m. central time on October 15, 2013.[3]

At 6:10 p.m. on October 10, Mr. Lash responded by e-mail: "Against $310, 000, we provide a counteroffer of $221, 000. We look to your response. Our insured denies any texting or like distraction. Where is that allegation coming from?"[4]

On October 11 at 1:13 p.m., Mr. Campbell responded: "Kevin, the offer of $221, 000 is hereby accepted. Thank you for your professionalism on this claim."[5] At 3:03 p.m. that same day, Mr. Lash wrote to Mr. Campbell by e-mail: "Terry, My apology. The offer for $221, 000 was a typographical error. The offer is and always was to be $121, 000."[6] Mr. Campbell and Mr. Lash exchanged further e-mails expressing their differing views about whether Mr. Lash's typographical error sufficed to invalidate any agreement that may have been formed. Mr. Campbell takes the position that a settlement agreement was reached; Mr. Lash maintains that it was not and attempted to reopen the negotiation with a $121, 000 counteroffer.

The maximum settlement authority that Mr. Lash received from his manager was $160, 000. When he typed the October 10 e-mail offering $221, 000, it was a typographical error that he did not catch at the time he sent the e-mail. He intended to type $121, 000 instead.

On October 23, 2014, Ms. Murphey filed a Petition in Douglas County, Kansas District Court seeking to enforce the parties' settlement agreement. She alleges state law claims for breach of contract, and for a declaratory judgment that the parties entered into a binding and enforceable settlement agreement, the terms of which call for Mid-Century to pay Ms. Murphey $221, 000. The case was removed on November 21, 2013. Defendant asserts a counterclaim for rescission. In its Answer and Counterclaim, it denies that any binding or enforceable contract was made or entered into with plaintiff as alleged in the Petition, but in the event it is determined that a contract was made or entered into, Mid-Century maintains that such contract was retracted and rescinded by defendant promptly upon notice of the typographical error. No discovery has been conducted in this matter, either in state of federal court.[7]

B. Summary Judgment Standard

Summary judgment is appropriate if the moving party demonstrates that there is "no genuine issue as to any material fact" and that it is "entitled to judgment as a matter of law."[8] In applying this standard, the court views the evidence and all reasonable inferences therefrom in the light most favorable to the nonmoving party.[9] "There is no genuine issue of material fact unless the evidence, construed in the light most favorable to the nonmoving party, is such that a reasonable jury could return a verdict for the nonmoving party."[10] A fact is "material" if, under the applicable substantive law, it is "essential to the proper disposition of the claim."[11] An issue of fact is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the non-moving party.'"[12]

The moving party bears the initial burden of providing the court with the basis for the motion and identifying those portions of the record that show the absence of a genuine issue of material fact.[13] "A movant that will not bear the burden of persuasion at trial need not negate the nonmovant's claim."[14] The burden may be met by showing that there is no evidence to support the nonmoving party's case.[15] If this initial burden is met, the nonmovant must then "go beyond the pleadings and set forth specific facts' that would be admissible in evidence in the ...

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