St. Peter's Hospital et al v. American International Group et al

Filing 111

ORDERED: l. Lexington's Motion for Partial Summary Judgment is GRANTED. 2. St. Peter's is DISMISSED as a party plaintiff. 3. Lexington's counterclaim against St. Peter's is DISMISSED. 4. The caption is amended to reflect the dismissal of St. Peter's as a Plaintiff. Signed by Judge Sam E Haddon on 6/1/2018. (HEG)

IN THE UNITED ST ATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
HELENA DIVISION
ST. PETER'S HOSPITAL and
MOUNTAIN STATES
HEALTHCARE RECIPROCAL RISK
RETENTION GROUP and
COLUMBIA CASUAL TY
COMPANY,

FILED
JUN OI 2018
Clerk, U. S District Court
District Of Montana
Helena

No. CV 16-91-H-SEH

ORDER

Plaintiffs,
vs.

LEXINGTON INSURANCE
COMPANY,
Defendant.
Before the Court is Defendant Lexington Insurance Company's
("Lexington") Motion for Partial Summary Judgment.' A hearing on the motion
was held on May 31, 2018.
Introduction

The motion, framed as one for summary judgment, in substance, seeks

1

Doc. 67.

dismissal of St. Peter's Hospital ("St. Peter's") on "real party in interest grounds." 2
Material facts are not in dispute. The motion is well-taken. Dismissal of St. Peter's
as a party is appropriate.
This case arises from a now-settled underlying claim and suit brought
against St. Peter's by a former patient ("Underlying Suit"). In settlement of the
underlying case, St. Peter's entered into an assignment ("the Assignment") with
Mountain States Healthcare Reciprocal Risk Retention Group and Columbia
Casualty Company ("the Plaintiff Insurers") by which:
Assignor [St. Peter's] ... hereby assigns and transfers to
Assignees [Plaintiff Insurers] and their agents, any and
all benefits of any and all claims, actions, causes of
action, rights, damages, losses, costs, expenses,
compensation, and sums of money due or owing to
Assignor that Assignor has had, now has, or may have ..
. against any other person, company, or entity, including
but not limited to any insurance carrier of Assignor ...
arising out of, in connection with, by reason of, or
related directly or indirectly to the Underlying Action.
Assignor consents to Assignees bringing any lawsuits for
the matters assigned herein in the name of Assignor ....
Assignor specifically assigns the benefits of any claim
against Assignor's insurance carriers alleging breach of
contract, breach of duty to defend, violation of the Unfair
Trade Practices Act, or common law bad faith. This
assignment does not preclude Assignees from bringing
claims on their own behalf in addition to, in conjunction
with, or separately from the claims asserted in Assignor's
2

Doc. 69 at 2.
2

name by assignment. 1
Discussion

Summary judgment is appropriate "if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a
matter oflaw." 2 Such is the case here.
Fed. R. Civ. P. l 7(a) provides that "[a]n action must be prosecuted in the
name of the real party in interest." To be a real party in interest under l 7(a), a
party must have a substantive legal right to be protected, conferred by federal or
state substantive law. 3
It is the settled law of both the Ninth Circuit and the Montana Supreme

Court that complete assignment of a claim divests the assignor of any remaining
interest in the matter assigned. 4
The assignment by St. Peter's in this case, as recited above, included, inter

1

Doc. 68-2 at 1-2.
Fed. R. Civ. P. 56(a); See also Am. Triticale, Inc. v. Nytco Servs., Inc., 664 F.2d 1136,
1141-45 (9th Cir. 1981).
3
See 4 JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE,§ 17.10[1] (Matthew
Bender 3d Ed. 2017); See also Allstate Ins. Co. v. Hughes, 358 F.3d 1089, 1093-94 (9 th Cir.
2004).
4
See 4 JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE,§ 17.11 [l][a]
(Matthew Bender 3d Ed. 2017) ( citing Klamath-Lake Pharm. Ass 'n v. Klamath Med. Serv.
Bureau, 701 F.2d 1276, 1282-83 (9th Cir. 1983); see also Newman v. Scottsdale Ins. Co., 301
P.3d 348,362 (Mont. 2013) (quoting Skauge v. Mountain States Tel. & Tel. Co., 565 P.2d 628,
631 (Mont. 1977).
2

3

alia:

Assignor [St. Peter's) ... hereby assigns and transfers to
Assignees [Plaintiff Insurers] and their agents, any and
all benefits of any and all claims, actions, causes of
action, rights, damages, losses, costs, expenses,
compensation, and sums of money due or owing to
Assignor that Assignor has had, now has, or may have ..
. against any other person, company, or entity, including
but not limited to any insurance carrier of Assignor ...
arising out of, in connection with, by reason of, or
related directly or indirectly to the Underlying Action. 5
The claims asserted in the instant case all arose from the Underlying Suit
and were within the claims assigned by St. Peter's to the Plaintiff Insurers. The
assignments were complete. St. Peter's retained no real-party-in-interest basis
upon which to maintain any action against Lexington in this case, including: ( 1)
any potential claims under Montana's declaratory judgment statute, Mont. Code
Ann. § 27-8-202; or (2) by reason of St. Peter's retention of its right to be named
as a plaintiff and to "bring[] claims on their own behalf;"6 or (3) by reason of
retention of a right to adjustment of loss run in the event of recovery by the
Plaintiff Insurers. Moreover, Defendant unequivocally agreed to dismiss its
counterclaim against St. Peter's in this case if the instant motion is granted. 7 St.

5

Doc. 68-2 at I.
Doc. 68-2 at 2.
7
Doc. 97 at 9.
6

4

Peter's is not a real party in interest in this case. It must be dismissed.
ORDERED:
l.

Lexington's Motion for Partial Summary Judgment 8 is GRANTED.

2.

St. Peter's is DISMISSED as a party plaintiff.

3.

Lexington's counterclaim9 against St. Peter's is DISMISSED.

4.

The caption is amended to reflect the dismissal of St. Peter's as a

Plaintiff.

s'fDATED this / ~ay of June, 2018.

b"0i:&11-\
United States District Judge

'Doc. 67.
Doc.7 at 21-45.

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5