Daly & Black Scores Key Remand Victory in Nebraska

When a policyholder files suit in his home county after his insurance carrier denies a claim, the insurance company often tries to “remove” the case from state court to federal court. Insurance defendants prefer federal court because they perceive it as a more favorable forum and it makes litigation more onerous and expensive for the insured. After an insurance company “removes” the case to federal court, the insured can sometimes pursue “remand,” or ask the federal court to send the case back to state court because that is where the case belongs.

Daly & Black, P.C., frequently fights this battle with insurance companies. Although it is a battle the firm frequently wins, a recent victory was especially remarkable.

Our client, Good Shepherd Assisted Living Corp., operates a nursing home in the small town of Blair, Nebraska. The facility sustained severe damage as a result of a storm on June 3, 2014. Great American Insurance Company of New York and the adjuster it assigned to the claim, Eric Howell, wrongfully denied the nursing home’s claim, which left and continues to leave the facility in a deplorable condition.

Daly & Black filed suit in state court against Great American and Howell, alleging breach of contract against the insurance company and common law bad faith against both the carrier and Howell. Great American removed the case to federal court, arguing that Good Shepherd could not possibly make out a claim against Howell under Nebraska law and Howell should therefore be dismissed, which would afford the federal court jurisdiction over the case. The essence of the removal argument was that Howell was “improperly joined” as a defendant in the lawsuit.

We filed a motion to remand, arguing that although Nebraska courts have not explicitly recognized a cause of action for bad faith against an adjuster, they might, and that is a decision that should be left to those courts, not the federal court. The magistrate agreed with us, and also recognized at least one alternative theory of liability against Howell. She recommended to the Court that it remand the case.

Defendants objected to the magistrate’s findings and recommendation, arguing to the federal judge that the magistrate had misunderstood the facts and improperly applied the case law. The judge squarely rejected the arguments, overruled all Defendants’ objections, and adopted the magistrate’s findings and recommendation.

The Court’s ruling means that Good Shepherd will be able to pursue its case where it belongs – in state court, in its home county. We look forward to helping achieve justice for Good Shepherd and its residents.

You can read the magistrate’s findings and recommendation here, and the Court’s order here.

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