St. Louis Record

Wednesday, July 17, 2019

Judge says complex insurance action involving White Knight Diner 'completely unmanageable,' case dismissed


By John Breslin | Apr 2, 2019

ST. LOUIS – A complex action centered on an insurance settlement and involving multiple unrelated plaintiffs and defendants has been dismissed by a federal court.

Judge John A. Ross of the U.S. District Court for the Eastern District of Missouri denied plaintiffs White Knight Diner, et al.'s request to file a second amended complaint and dismissed the matter on March 25.

"In order to achieve a fair and efficient resolution under the uniquely complex circumstances of this case, the court finds the only remedy to address plaintiffs’ pleading deficiencies is to dismiss the case in its entirety without prejudice," Ross wrote.

The action, led by White Knight Diner against Arbitration Forums Inc. and various insurance companies, centered on the payment of alleged "illegal" subrogation claims.

Ten policy holders filed suit against seven insurance companies and the arbitration services in a case that has its roots in a two-car collision that caused damage to the St. Louis diner, the ruling states.

The plaintiffs claim the insurance companies, after paying out to the plaintiffs, then made claims against those involved in the accident and their insurers.

"As a result of these actions, plaintiffs’ insurance premiums increased, they did not receive the full value of their deductibles, were not reimbursed for attorneys’ fees and costs in their lawsuits against the (third party) tortfeasors, and were impeded from presenting their claims against the tortfeasors," according to the March 25 ruling.

The plaintiffs asked for unjust enrichment, compensatory and punitive damages. They also filed a motion to amend their complaint to include a claim of civil conspiracy. The defendants alleged that the plaintiffs can file a claim for breach of contract and that the action should be dismissed.

In his ruling, Ross noted that the court "is faced with an action involving multiple claims by multiple unrelated plaintiffs against multiple unrelated defendants."

"While all of the plaintiffs allege harm resulting from their respective insurers’ settlement and payment of subrogation claims through an arbitration services company without their consent, the circumstances surrounding each of their claims is highly individualized," Ross wrote.

He added that continuing with the claims in one action "would be completely unmanageable given the risk of confusion and prejudice and the need for plaintiff-specific discovery."

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