State National Insurance v. County of Camden

824 F.3d 399, 94 Fed. R. Serv. 3d 1251, 2016 U.S. App. LEXIS 9689, 2016 WL 2990975
CourtCourt of Appeals for the Third Circuit
DecidedMay 24, 2016
DocketNo. 14-4766
StatusPublished
Cited by84 cases

This text of 824 F.3d 399 (State National Insurance v. County of Camden) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State National Insurance v. County of Camden, 824 F.3d 399, 94 Fed. R. Serv. 3d 1251, 2016 U.S. App. LEXIS 9689, 2016 WL 2990975 (3d Cir. 2016).

Opinions

OPINION OF THE COURT

FISHER, Circuit Judge.

State National appeals from the dismissal of its claims against Donna Whiteside for legal malpractice. The District Court dismissed State National’s claims because State National could not demonstrate that Whiteside’s actions proximately caused State National to suffer any damages. In this case, we must first determine whether this Court has jurisdiction over State National’s appeal. Only then may we determine whether the District Court erred in dismissing the claims against Whiteside.

For the reasons that follow, we hold that this Court lacks jurisdiction over State National’s appeal because it was untimely. Accordingly, we do not reach the merits of State National’s claim that Whiteside was improperly dismissed from its case.

I.

A. Factual History

This dispute centers on Donna White-side’s representation of the County of Camden, New Jersey (“County”) in a lawsuit brought by Nicholas Anderson, which resulted in a jury award paid, in part, by the County’s excess insurer, State National Insurance Company (“State National”).

On December 23, 2004, Nicholas Anderson was seriously injured after crashing his car into a guardrail on a road owned and maintained by the County. Anderson filed suit against the County for negligence in maintaining the road and guardrail and sought $5 million in damages.

The County maintained an insurance policy with State National whereby the County was responsible for the first $300,000 of losses and State National’s obligations were triggered only if a potential loss exceeded this amount. In order to invoke State National’s coverage obligations, the policy required the County to “provide an adequate defense and investigation of any action for or notice of any actual, potential or alleged damages.” In the event that the County failed to meet this requirement, the policy provided that State National “shall not be liable for any damages or costs or expenses resulting from any such occurrence.” The policy limit was $10 million.

Pursuant to the policy, the County utilized its own in-house attorney, Donna Whiteside, Assistant County Counsel, to defend the County against the Anderson lawsuit. According to State National, the County did not notify State National of the Anderson lawsuit until several months after it was filed and after the County first became aware of the claims against it. Whiteside initially informed State National [403]*403that the case was meritless and valued it at $50,000. In the midst of trial, Whiteside changed her valuation and requested the full $10 million policy limit to settle the claims with Anderson. After receiving this valuation, State National conducted an independent review and denied the County’s request for $10 million. After the parties failed to settle, the Anderson case continued to trial. On October 17, 2008, the jury reached a verdict in favor of Anderson and awarded him $31 million, which was later remitted to $19 million. -

B. Procedural History

Four days after the verdict in the Anderson case, State National filed suit, seeking a declaratory judgment that it was not obligated to provide coverage under the policy because the County had breached the policy contract. It alleged that the County failed to timely notify State National of the case and failed to mount an adequate investigation and defense of the lawsuit, as required by the policy. State National also asserted claims directly against Whiteside for professional negligence, legal malpractice, breach of fiduciary duty, and breach of contract.

In its first amended complaint, State National alleged that Whiteside’s defense of the case fell well below “adequate” because she did not present evidence or assert defenses that would have either totally cut off the County’s liability or would have substantially lowered Anderson’s recovery. Specifically, State National alleges that she did not present expert reports or testimony, raise available statutory defenses, or cross-examine Anderson’s expert witnesses. Because Whiteside advised State National on the case status, progress, and likely outcome, State National claims that an attorney-client relationship existed between it and Whiteside.

Whiteside moved to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. On March 17, 2010, the District Court granted her motion, holding that the County and Whiteside were not two distinct entities based on respondeat superior and the contract between State National and the County, and thus any liability of Whiteside must be borne by the County. Moreover, the District Court found no proximate cause because if Whiteside did not provide an adequate defense, then State National was not obligated to pay. But if Whiteside did provide an adequate defense, then State National was subject only to its existing contractual duty to pay.

Following the dismissal, on March 30, 2010, State National filed a motion under Rule 59(e), asking the District Court to reconsider its dismissal of Whiteside. The District Court denied State National’s motion on June 25, 2010. The District Court also denied State National’s motion for certification under Rule 54(b), which if granted, would have allowed State National to immediately appeal Whiteside’s dismissal.

Although Whiteside was dismissed from the litigation, State National’s case against the other defendants went on. Over the next four years, all of State National’s claims against the other defendants were resolved, and only the claims against the County remained. Eventually, the District Court denied State National’s motion for summary judgment on its remaining claims against the County. State National alleges that in the District Court’s March • 31, 2014, order denying summary judgment, the District Court undermined its prior ruling that served as the basis for dismissing Whiteside. Accordingly, State National sought leave to renew its claims against Whiteside under Rule 60(b)(6), which permits the District Court to grant [404]*404relief from a final judgment, order, or proceeding.

Before the District Court ruled on State National’s Rule 60(b)(6) motion, State National and the County reached a settlement. The parties filed a joint Stipulation of Dismissal with prejudice pursuant to Rule 41(a)(l)(A)(ii) on October 14, 2014. The Stipulation of Dismissal acknowledged that State National wanted to renew its claims against Whiteside, but State National made no motion or request before the District Court apart from the clause in the Stipulation of Dismissal.

On December 1, 2014, the District Court denied State National’s Rule 60(b)(6) motion to renew the claims against Whiteside. It rested on the same reasoning as its earlier ruling and rejected State National’s arguments that its March 31, 2014, order called any of its prior rulings into question. In that opinion, the District Court ordered the clerk of court to terminate the litigation and close the case.

The case was. closed on December 1, 2014. State National filed its Notice of Appeal on December 16, 2014. In the Notice of Appeal, State National sought an appeal from the District Court’s December 1, 2014, order denying its motion under Rule 60(b)(6) to reinstate its claims against Whiteside.

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824 F.3d 399, 94 Fed. R. Serv. 3d 1251, 2016 U.S. App. LEXIS 9689, 2016 WL 2990975, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-national-insurance-v-county-of-camden-ca3-2016.