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Rudzik v. Star Insurance Co.

United States District Court, D. Kansas

April 28, 2015

KENYA D. RUDZIK; CHANCE R. RUDZIK; TLC TRUCKING, LLC; and REYMUNDO ESTRADA GARCIA, Plaintiffs,
v.
STAR INSURANCE COMPANY; CUSTARD INSURANCE ADJUSTERS; and DONALD SEWARD, Defendants.

MEMORANDUM AND ORDER

MONTI L. BELOT UNITED STATES DISTRICT JUDGE

The following are before the court:

1. Plaintiffs’ motion to remand (Doc. 16); Star Insurance Co. response (Doc. 19); Plaintiffs’ reply (Doc. 24);

2. Defendants Custard Ins. Adjusters and Donald Seward’s motion to dismiss (Docs. 17, 18); Plaintiffs’ response (Doc. 25); Defendants’ reply (Doc. 26); and

3. Defendant Star Ins. Co.’s motion to consolidate cases (Docs. 7, 8); and Plaintiffs’ response (Doc. 11).

I. Background.

On November 28, 2012, Kenya Rudzik was making a left turn on U.S. Highway 83 in Haskell County, Kansas, when her car was rear-ended by a tractor-trailer driven by TLC Trucking employee Reymundo Estrada Garcia (hereinafter “Estrada”). Rudzik suffered severe injuries, including a spinal cord injury with paraplegia.

At the time of the accident, TLC Trucking had an automobile liability policy in effect with Star Insurance Company. The policy had a coverage limit of $1, 000, 000 per accident. Prior to this accident, Star Insurance had contracted with Custard Insurance Adjusters, an independent adjusting company, for services including investigation, adjusting and advising Star with respect to insurance claims. Star sent the Rudzik claim to Custard, and Custard employee Donald Seward was assigned to work on it.

Seward and various Star employees gathered information about the accident over the next several months. During this period, counsel for the Rudziks requested that Seward or Star disclose the policy limits and whether there was any excess coverage, but they refused to do so. On February 20, 2013, a Star employee allegedly told Rudziks’ counsel that he could request and receive that information in the discovery process but that Star was not authorized to disclose it. At this time, there was no “discovery process” because there was no lawsuit.

The Rudziks allege that as of February 2013 defendants knew that liability was clear on the part of Estrada, TLC’s driver, that Kenya Rudzik’s injuries were severe and her damages would likely exceed the policy limits, and that TLC had no excess insurance coverage.

In April 2013, Star sent an email asking Seward to confirm that the Rudziks’ home had been remodeled to accommodate Kenya Rudzik’s disability, as the Rudziks had reported, and to make discrete inquiries in Rudzik’s home town to confirm the extent of her injuries. Seward responded that they would do so and subsequently confirmed both the remodel and Kenya Rudzik’s evident paralysis.

On May 16, 2013, a Star adjuster advised Rudziks’ counsel that the policy limit was $1 million and that there was no excess coverage. He requested that Rudziks’ counsel provide a medical record confirming that Kenya Rudzik was paralyzed. Star did not initiate settlement discussions or make a settlement offer.

On May 17, 2013, Rudziks’ counsel mailed a petition to the state district court in Grant County, naming TLC and Estrada as defendants. (He also sent Rudzik’s medical records to Star). The petition was filed May 21, 2013, and was served on TLC and Estrada on July 22, 2013. Shortly thereafter a Star employee contacted Rudziks’ counsel and asked if they intended to make a settlement demand. Rudziks’ counsel declined to do so, saying it was the Rudziks’ position that Star had breached its contract with TLC and had acted negligently or in bad faith. The Star employee did not make a settlement offer.

On October 23, 2013, an attorney representing Star contacted Rudziks’ counsel and offered the policy limit of $1, 000, ...


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