Bamford, Inc. v. Regent Insurance Company et al

Filing 101

MEMORANDUM AND ORDER - Defendant's motion (Filing No. 85 ) for partial summary judgment is granted. Plaintiff's request for damages for loss of business opportunities is denied as a matter of law. Ordered by Senior Judge Lyle E. Strom. (GJG)

IN THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF NEBRASKA
BAMFORD, INC., a Nebraska
business corporation,

)
)
)
Plaintiff,
)
)
v.
)
)
REGENT INSURANCE COMPANY,
)
a Wisconsin business
)
corporation,
)
)
Defendant.
)
______________________________)

8:13CV200

MEMORANDUM AND ORDER

This matter is before the Court on the motion (Filing
No. 85) of defendant Regent Insurance Company (“Regent”) for
partial summary judgment on the issue of plaintiff Bamford
(“Bamford”) Inc.’s damages for “loss of business opportunities.”
After review of the briefs, indices of evidence, and relevant
case law, the Court finds as follows.
I.

FACTS
This case concerns a breach of the fiduciary duties of

good faith and fair dealing between Regent and its insured
client, Bamford.

Bamford was in litigation regarding a vehicle

accident, and Regent supplied Bamford’s legal counsel.

Instead

of accepting settlement offers, Regent insisted upon a trial.
After the jury determined damages, the parties entered into
post-verdict settlement negotiations.

Regent paid approximately

$6,000,000 and Bamford paid $1,999,996.49 out-of-pocket.

Filing

No. 87, at 2.
Bamford claims three kinds of damages from the initial
case, the settlement damages, attorney fees, and “loss of

business opportunities” damages.

This motion concerns the “lost-

business-opportunities” form of damages.

Bamford elected to pay

its out-of-pocket expenses from an Edward Jones investment
account.

According to Bamford, that investment account increased

significantly in value after Bamford withdrew its funds.

But for

Bamford’s withdrawal from its investment account, Bamford “los[t]
business opportunities in the amount of $24,865.32 by losing
investment value of reserve assets in order to pay
$1,999,996.49.”

Filing No. 87, at 3 (citing Filing No. 1).

Since the filing of the complaint, Bamford’s president, Roger
Scheidies, believes that figure increased to $540,766.12 and
Bamford has amended its complaint accordingly (Filing No. 92).
II.

LEGAL STANDARDS
A motion for summary judgment shall be granted by the

Court “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 of law.”

Fed. R. Civ. P. 56(a).

A “material” fact is one

that “might affect the outcome of the suit under the governing
law,” and a genuine issue of material fact exists when “the
evidence is such that a reasonable jury could return a verdict
for the nonmoving party.”
U.S.

242, 248 (1986).

Anderson v. Liberty Lobby, Inc., 477

On a motion for summary judgment, facts

must be viewed in the light most favorable to the nonmoving party
only if there is a genuine dispute as to those facts.

Wood v.

SatCom Marketing, L.L.C., 705 F.3d 823, 828 (8th Cir. 2013).

-2-

The moving party bears the burden to establish that no
genuine issue of material fact exists.

Fed. R. Civ. P. 56(a);

Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970).

If the

moving party does not meet its initial burden, summary judgment
must be denied even if no affidavits or other evidence have been
submitted in opposition to the motion.

See id. at 159-60.

After

the moving party has met its burden, “the non-moving party may
not rest on the allegations of his pleadings, but must set forth
specific facts, by affidavit or other evidence, showing that a
genuine issue of material fact exists.”

Singletary v. Mo. Dept.

of Corrections, 423 F.3d 886, 890 (8th Cir. 2005).
III. DISCUSSION
The issue before the Court is whether Bamford’s lostbusiness-opportunity damages is foreseeable.

The Court finds the

lost investment value is not foreseeable.
Regent has provided persuasive argument from the Sixth
Circuit which addresses the issue before this Court directly.
Filing No. 87, at 8 (citing Ventas, Inc. v. HCP, Inc., 647 F.3d
291, 327 (6th Cir. 2011); citing also Layne v. Bank One, Ky.,
N.A., 395 F.3d 271, 277, n.7 (6th Cir. 2005); Or. Steel Mills,
Inc. v. Coopers & Lybrand, L.L.P., 83 P.3d 322, 329-30 (Or.
2004)); Mutuelles Unies v. Kroll & Linstrom, 957 F.2d 707, 714
(9th Cir. 1992).

In Vertas, the Sixth Circuit found that

Kentucky law would “deny recovery of compensatory damages arising
from currency market fluctuations wholly unrelated to the
defendant's conduct [because t]hese damages are unforeseeable.”
-3-

Ventas, 647 F.3d at 327 (citing Or. Steel Mills, 336 Or. 329, 83
P.3d 322, 329-30).

Likewise, Bamford’s “lost-business-

opportunity” damages are unrelated to Bamford’s injury and
unforeseeable.

Bamford elected to withdraw its funds from its

investment account.

Regent did not cause Bamford to liquidate

assets from this specific account.

However Bamford chose to

finance its settlement agreement, those options were not within
Regent’s control.

Regent could not have foreseen Bamford would

remove money from its investment account and that the account
would appreciate substantially in value.

Conversely, the Court

agrees with Regent when it argues, if the account decreased
substantially in value, Bamford’s damages would not sustain a
downward departure.
Therefore, as a matter of law, plaintiff may not
recover the difference in the value of “investment” funds that it
liquidated to pay its share of the settlement with a third party
at the time of settlement and the value that plaintiff estimates
such funds would have achieved as of May 19, 2014, had it not
liquidated the fund to settle its claims.

Accordingly,

IT IS ORDERED:
1) Defendant’s motion (Filing No. 85) for partial
summary judgment is granted.

-4-

2) Plaintiff’s request for damages for loss of business
opportunities is denied as a matter of law.
DATED this 15th day of October, 2014.
BY THE COURT:
/s/ Lyle E. Strom
____________________________
LYLE E. STROM, Senior Judge
United States District Court

-5-