Birdno v. Best Buy Company of Minnesota, Inc.

Filing 32

ORDER denying 16 defendant's motion to dismiss. Signed on 11/6/13 by Chief District Judge Fernando J. Gaitan, Jr. (Enss, Rhonda)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF MISSOURI
CENTRAL DIVISION
JOHN BIRDNO,
Plaintiff,
v.
BEST BUY STORES, LP,
Defendant.

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) No. 13-4188-CV-C-FJG
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ORDER
Pending before the Court is Defendant’s Motion to Dismiss (Doc. No. 16).
On September 26, 2013, defendant filed the pending motion to dismiss, arguing that
plaintiff Birdno is not the real party in interest. Instead, defendant asserts that Missouri
Farm Bureau Insurance paid insurance proceeds to plaintiff, and defendant believes that
Missouri Farm Bureau Insurance is the real party in interest pursuant to Federal Rule of
Civil Procedure 17(a)(3). In the alternative, defendant argues that Missouri Farm Bureau
Insurance should be joined as a necessary party in this matter under Federal Rule of Civil
Procedure 19. As noted by plaintiff in his response, defendant’s motion to dismiss did not
cite any case law supporting defendant’s contention that plaintiff was not the real party in
interest under Rule 17 or that plaintiff’s insurer is a necessary party under Rule 19.
In plaintiff’s response, plaintiff notes the general law in Missouri is that the insured is
the only real party in interest in a subrogation action as long as there has not been an
assignment of the insured’s property damage claim to the insurer. See Hagar v. Wright
Tire & Appliance Inc., 33 S.W.3d 605, 610 (Mo. Ct. App. 2000). Plaintiff further notes that
under Missouri law, in a subrogation action, the subrogee is neither a proper nor necessary

party, and the action must be brought in the name of the subrogor. See Roberts v.
Progressive Northwestern Insurance Company,151 S.W.3d 891, 899 (Mo. Ct. App. 2004).
In its reply suggestions, defendant argues (using primarily case law from outside the
Eighth Circuit and/or case law over 50 years old) that the issue of who is a proper party to
suit is a federal procedural question (as opposed to a question of substantive law), and
therefore this Court should not follow Missouri law in this diversity action. In particular,
defendant cites to United States v. Aetna Cas. & Sur. Co., 338 U.S. 366, 380-81 (1949),
and cases discussing Aetna, for the proposition that an insurer is generally the real party in
interest in a subrogation action in federal court.
As discussed in plaintiff’s sur-reply, Aetna involved four separate Federal Tort
Claims Act suits in which none of the cases had been brought in the name of the insured
alone—instead, the suits were brought in the names of partial insurer subrogees, where
there was a possibility of multiple suits. See Braniff Airways, Inc. v. Falkingham, 20
F.R.D. 141, 144 (D. Minn. 1957). The court in Braniff found, in similar circumstances to
those presented here, that “when the insured brings the suit alone, to recover for the whole
loss, the controversy can be adjudicated completely and finally without the joinder of the
insurer subrogees, and the defendant will have only one lawsuit to defend.” Braniff, 20
F.R.D. at 144. Plaintiff further notes a more recent case where this Court has held that in a
federal diversity case, the subrogee insurer “has no right to participate in the trial of
plaintiff’s action.” House of Loyd v. Versa Corp., No. 89-0943-CV-W-6, 1991 U.S. Dist.
LEXIS 11501 at *8 (W.D. Mo. 1991)(J. Sachs). In House of Loyd, the Court found that “[i]f
the insurer is merely subrogated to the rights of the insured, it is not the real party in interest
and cannot bring the suit.” Id. at *7.
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The Court further notes that, in a diversity action, state law determines who is a real
party in interest. Kuelbs v. Hill, 615 F.3d 1037, 1041 (8th Cir. 2010). Indeed, the Eighth
Circuit has cited with approval Hagar v. Wright Tire & Appliance, Inc., 33 S.W.3d 605, 610
(Mo. Ct. App. 2000) in describing Missouri law regarding subrogation. Travelers Prop.
Cas.. Ins. Co. of America v. Nat’l Union Ins. Co. of Pittsburg, Pa., 621 F.3d 697, 710 (8th
Cir. 2010). See also Cretcher Lynch & Co. v. National Council on Compensation Ins.,
Inc., 149 F.3d 817, 819 (8th Cir. 1998)(finding that insurer subrogee was not a real party in
interest under Missouri law, and dismissing insurer’s claims without prejudice). Defendant
has not demonstrated that plaintiff is not the real party in interest under Federal Rule of
Civil Procedure 17, nor has defendant demonstrated that Missouri Farm Bureau Insurance
should be joined as a plaintiff under Federal Rule of Civil Procedure 19. Defendant’s
motion (Doc. No. 16) is DENIED.
IT IS SO ORDERED.

Dated: November 6, 2013
Kansas City, Missouri

S/ FERNANDO J. GAITAN, JR.
Fernando J. Gaitan, Jr.
Chief United States District Judge

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