The court holds that Rule 13 means what it says. That is necessary in a world where trial judges make rulings like this.

Mirchandani borrowed money from BMO and defaulted. BMO sold and assigned ts rights to TradeCor, which sued him and got summary judgment. Mirchandani then filed suit against BMO and TradeCor, making every allegation that a bright service-station owner (or one with legal counsel behind the scenes) can think of as an alternative to paying his debt. TradeCor moved to dismiss because the allegations were compulsory counterclaims in the first suit. The trail court granted the motion and this opinion affirms. The point of the opinion, though, is that BMO also moved to dismiss, apparently arguing that as its assignee TradeCor stood in its shoes and therefore that it, too, should be treated as a party for Rule 13 purposes. The trial court bought that argument.

The Court of Appeals does not. BMO cited a Third Circuit case holding that a successor-in-interest by virtue of corporate restructuring was the “functional equivalent” of its predecessor, the named party. The court wastes no time on this. “We see no basis here to depart from the plain language of Rule 13 . .. . Even if we chose to follow [the Third Circuit case] in broadening the meaning of “opposing party,” the exceptions recognized therein . . . are very narrow and not applicable here.”

(link to opinion)

Allowing a new exclusion to UIM coverage.

Sally lived with her father. After getting hit while riding her motorcycle she sought UIM benefits under his auto policy. Although she was a relative living in his household, and would therefore normally be covered, the policy excluded relatives who owned a motor vehicle. So AmFam denied her claim; she sued; the trial court ruled for her; AmFam appealed. This opinion reverses, holds the exclusion valid, but remands on reasonable expectations.

Sally argued that the AmFam exclusion was really a disguised “other vehicle’ exclusion. That exclusion (excluding UIM coverage if the policy does not cover the vehicle for liability) is invalid because the statute (20-259.01) allows the policyholder to buy UIM coverage for all insureds. But the statute and public policy do “not restrict the parties’ right to agree on who is an insured.” Sally, because she owned a motorcycle, was by AmFam’s exclusion not an insured at all. That isn’t and end-run around the prohibition of “other vehicle” UIM exclusions because, you see, under the policy she did not merely have no UIM coverage, she had none at all.

Sally also argued reasonable expectations – i.e., her father’s reasonable expectations –  because the exclusion was allegedly buried inconspicuously. The trial court hadn’t had to reach that argument; this court does, says she’s entitled to try to prove it, and therefore remands.

(link to opinion)

A case about intervention and a small story illustrating the decline of modern times.

Thomas won one million dollars in the lottery. He elected to take the money as an annuity. That is not in theory the optimal solution but, like structured settlements,  protects people against themselves. But it can’t protect them from the sharks who nowadays swim up to recipients of annuities and structured settlements and tempt them with a cash sale (the opinion says that Thomas was approached by several of them; it calls them “structured settlement companies,” which is what we used to call the outfits that sold them rather than the vultures that buy them).  (Lawyers used to spend considerable time, thought, and effort creating structures to protect the financially unsophisticated, the naïve, and the juvenile; we used to be able to protect the weak. Today there is, for every lawyer’s tv commercial, a commercial enticing the foolish to undo the lawyer’s work.) Thomas sold his million dollars to Genex for $428,128. But then he changed his mind, tried to cancel the deal, and sold instead to Woodbridge for $430,000. (Yes, Thomas arguably breached a contract and undeniably bought himself trouble for 1872 bucks, about .4% of the principal involved; so, you see, there really is a reason why some people should use annuities and structured settlements and why the law shouldn’t let them be taken advantage of on the basis of some pro-forma paperwork.)

But when Thomas and Woodbridge filed their paperwork Genex moved to intervene arguing that it had an interest in the money and that approving the sale would impair its right to recover it. The argument comes from Rule 24, which requires for intervention an intervenor’s interest in the property and threatened impairment of its ability to protect its interest (in addition to a timely motion and the lack of a party who will protect that interest). The trial court denied the motion and entered judgment approving the transfer. Genex then filed a Rule 60(c) motion, which the court denied. The Court of Appeals affirms.

A mere contingent interest in the property is not enough. The requirement (however notional) of court approval for the transfer of the annuity makes Genex’s interest contingent upon that approval. And failing to intervene would not prevent Genex from suing the parties involved.

Genex argued that it had filed a UCC-1 but the court says that it did not in fact have a security interest, again because its interest was contingent.

Because Genex had no right to intervene it also was not entitled to Rule 60 relief even “assuming for purposes of argument that a nonparty may move for relief from judgment under Rule 60.”

(link to opinion)