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Home Sweet Home: Kansas Federal Court Finds Homeowner's Policy Coverage Subject to Residency Requirements

27 Nov 2023

ABSTRACT: In a recent ruling, the United States District Court for the District of Kansas held that an insurance provider retains the right to withhold coverage under a homeowner’s policy designated as “residence premises” in instances where the insured did not actually reside on the premises.

In Sina Davani v. Travelers Personal Insurance Company and Geico Insurance Agency, LLC, the United States Court for the District of Kansas granted summary judgment in favor of the defendant-insurer. The court’s decision was grounded in its interpretation of the homeowner’s policy, which extended coverage solely to the designated “residence premises.” Considering the language of the insurance policy, the court found that the plaintiff-insured, who conceded that he had never resided at the insured premises, was obligated to maintain residence for coverage to apply. This, in turn, formed the basis for the court’s decision.

After submitting a claim to his insurance company for property damage caused by a water leak, the insured filed a breach of contract claim against the insurer. He argued that the insurance company breached its obligation under the terms of the insurance policy, which required the insurer to conduct a reasonable investigation and promptly pay the insured’s claim. In response, the insurer pointed to the terms of the insurance policy, stating that coverage was explicitly limited to “residence premises,” defined within the policy as “[t]he one family dwelling or unit where you reside.” The insurer moved for summary judgment under the terms of the insurance policy, asserting that there was no breach of the insurance policy because – as a matter of law – the policy did not cover the insured’s claim.

The district court observed that while the insured acknowledged that he did not presently live at the property, the issue was whether the term “residence premises” was sufficiently clear to exclude coverage for “a vacant property.” Applying the principles of Kansas law governing the interpretation of insurance contracts, the court turned to the policy’s express terms and held that the term “residence premises,” as included and defined in the insurance policy, bore no ambiguity. In so holding, the court drew upon the ordinary meaning of the term “residence” as a “building used as a home,” concluding that this dismissed any potential confusion on the scope of coverage in this case.

Construing the term “residence premises” to mean property where the insured actually lives, the court determined that the insurance policy required not only the insured’s physical presence on the property but also an accompanying intent to remain there for coverage to apply. The court therefore granted summary judgment in favor of the insurer because it was undisputed that the insured never “resided” at the insured premises.

Implications

This decision provides guidance to the insured and insurer alike. For the insured, this decision demonstrates the implications that may arise when a homeowner’s policy lacks language aligning with insured’s intended use of the insured property. For the insurer, this opinion illustrates the importance of drafting policies with clear, well-defined, and unambiguous language that safeguards against future failure-to-pay claims and other risks associated with litigation. Baker Sterchi attorneys will continue to monitor this litigation.

Court Compels Arbitration where Employer's Right to Modify Terms is not "Unfettered"

30 Nov 2021

ABSTRACT: An arbitration agreement that placed meaningful limits on an employer's right to modify the agreement did not lack consideration, according to the Kansas federal district court.

A number of recent court decisions have invalidated employment arbitration agreements where the employer reserves the right to modify terms. Courts have increasingly held that modification rights make the employer’s promise to arbitrate illusory, and thus, the agreement to arbitrate lacks consideration. Bucking this trend, however, the District of Kansas, in an opinion by Judge Toby Crouse, recently affirmed that an employment arbitration agreement which does not give the employer “unfettered” authority to modify its terms is supported by valid consideration and is enforceable. The Court also held that an arbitration agreement which incorporates AAA delegation rules is a “clear and unmistakable” delegation, giving the arbitrator the authority to rule on his or her own jurisdiction and issues of arbitrability.

The case is Braden v. Optum RX, Inc., in which Baker Sterchi is serving as local counsel for the defendants. Braden sued her former employer and other entities, including UnitedHealth Group (“UHG”), for violations of the Family Medical Leave Act and Americans with Disabilities Act. Defendants moved to compel arbitration, because when Braden began her employment with UHG, she signed an arbitration agreement that was presented to her as a condition of employment. The Agreement covers most arbitrable employment disputes, including disputes arising under the FMLA and ADA. Importantly, the employer reserved “the right to amend, modify, or terminate the Policy effective on January 1 of any year after providing at least 30 days’ notice” to employees on the company intranet. The agreement incorporated the American Arbitration Association (“AAA”) Employment Dispute Resolution Rules, including Section 6 of the AAA Rules which states that “the arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope or validity of the arbitration agreement.” Finally, the agreement also states “continuation of employment with UnitedHealth Group is deemed to be acceptance of this Policy.”

Braden worked for UHG for six years. Toward the end of her employment, a medical condition allegedly caused Braden to exhaust her FMLA leave, and her continued absences were counted as unexcused under UHG’s attendance policy. UHG eventually terminated Braden’s employment for accruing too many unexcused absences.

Braden opposed UHG’s motion to compel arbitration, claiming that the agreement lacked consideration based on the UHG’s ability to modify its terms and challenging the agreement’s delegation provision. She argued that UHG’s promise to arbitrate was illusory because UHG reserved the right to modify or terminate the Agreement. Braden cited cases from several district courts in other jurisdictions (relying heavily on a case from Hawaii) which held that the UHG arbitration provision at issue lacked consideration because UGH’s promise to arbitrate was illusory. As a result, Braden claimed, no valid agreement was ever formed.

The Court granted UHG’s motion to compel arbitration. The Court explained that under Kansas law, if a modification clause provides the employer the “unfettered” right to modify or revoke its promise to arbitrate, then the promise is illusory. However, if the right to modify is “meaningfully limited,” then a promise to arbitrate is not illusory. Additionally, under Kansas law, an arbitration agreement does not require mutuality of obligation between the employer and employee. Rather, a contract is formed as long as both parties retain some valid consideration.

The Court held that UHG’s right to amend the policy is not “unfettered” because UHG was required to provide at least 30 days’ advanced notice and could only modify or terminate the Agreement effective January 1 of the year following notice. As a result of this effective date, UHG was prohibited from immediately terminating the agreement, which could have the effect of cutting off existing claims.

The Court also distinguished the cited cases from Hawaii, pointing out that under substantive law, Hawaii requires “mutuality of obligation” in bilateral contacts. The Court found that because Braden and UHG both promised to submit their grievances to arbitration, there was valid consideration on both sides.

Next, Braden challenged the Agreement’s delegation provision. Under Kansas law, a delegation provision is only valid where there is “clear and unmistakable evidence” of the parties’ intent to delegate to the arbitrator threshold issues of formation, enforceability, and other issues of arbitrability. Rather than separately attacking the delegation provision, Braden argued that because the Agreement as a whole was illusory, so was the delegation provision. Relying on Tenth Circuit precedent, the Court held that the parties had expressly incorporated AAA rules, which constitute “clear and unmistakable evidence” of an agreement to delegate arbitrability issues to the arbitrator.

Finally, Braden argued the rules limiting discovery were unconscionable. The Court found that because the delegation provision was valid, the Court’s role was limited to determining whether a contract was formed. Therefore issues such as unconscionability are left to the arbitrator.

In conclusion, in Kansas, so long as meaningful limits are placed on an employer’s ability to modify an arbitration agreement, courts will compel arbitration. From Braden, and the cases cited therein, drafters should ensure that the modification provisions include, at a minimum:

ample notice to employees that changes to the agreement are forthcoming;
a date certain on which changes will become effective; and
a statement that modification or termination of the agreement will not affect claims already submitted to arbitration.

UPDATE: Kansas Issues Updated Executive Order Prohibiting Foreclosures and Evictions

25 Mar 2020

As we previously reported, last week, Kansas Governor Laura Kelly issued Executive Order 20-06 prohibiting evictions, foreclosures and any related judicial proceedings in the State of Kansas through May 1, 2020. Now, Governor Kelly has issued Executive Order 20-10, which amends and supersedes the previous order and provides additional clarification on certain points.

First, the new order expressly states that pending foreclosures and evictions are not prohibited by the order. This was implicit in the first order but is now clearly stated.

Second, the new order restricts the foreclosure moratorium to financial institutions foreclosing on single-family residences, where the default is caused by financial hardship relating to the COVID-19 pandemic. So, if the default under the terms of the mortgage occurred before March, 2020, a financial institution likely still may proceed with foreclosure. The new order does, however, purport to place a new pleading burden on foreclosing entities, during the effective period, to establish that the default was not caused by the COVID-19 pandemic.

The new order clarifies that the eviction moratorium applies to any landlord, whether it is an individual, entity, financial institution, nursing or long-term care facility, or other entity. But again, the moratorium only applies where the financial hardship leading up to the eviction was substantially caused by hardship relating to the coronavirus.

Excepted from the new order are foreclosures initiated by the United States government. The new order also encourages, but does not require, lenders and landlords to try to work out “payment plans or other agreements” to address defaults caused by COVID-19.

Baker Sterchi will continue to monitor Kansas State policy concerning evictions and foreclosures and will provide updates as they are received.

Kansas Temporarily Prohibits Foreclosures and Evictions

20 Mar 2020

In response to the COVID-19 pandemic, Kansas Governor Laura Kelly issued Executive Order 20-06 on March 17, 2020, prohibiting evictions, foreclosures and any related judicial proceedings in the State of Kansas through May 1, 2020.

Specifically, Executive Order 20-06 directs and orders “all financial institutions operating in Kansas to temporarily suspend the initiation of any mortgage foreclosure efforts or judicial proceedings and any commercial or residential eviction efforts or judicial proceedings until May 1, 2020.”

While this prohibitive language could arguably be read to only apply to financial institutions, Baker Sterchi has confirmed with the Governor’s Office that it intends for the prohibition to apply to any landlord, whether a financial institution, other entity, or even individuals. This executive intent is further reflected in the recitals that precede the Executive Order:

WHEREAS, the adverse economic impacts of COVID-19 include the potential for Kansans to miss mortgage or rent payments as a result of lost wages and now is not the time for creditors or landlords to initiate foreclosure or eviction proceedings; and

WHEREAS, this Administration will do whatever it can to assist Kansans in these challenging times, and that includes allowing Kansans to retain their homes and businesses to avoid immediate danger to their health, safety, and welfare.

Accordingly, unless otherwise directed, all landlords in Kansas should refrain from instituting foreclosure or eviction proceedings until May 1, 2020.

While new foreclosure and eviction proceedings are prohibited at this time, it is important to note that Executive Order 20-06 does not suspend any obligation to pay rent. So, tenants are advised to continue paying rent unless they have a written agreement with their landlords to suspend or forbear rent during this time. Moreover, the Executive Order does not impact judicial foreclosure and eviction proceedings that were commenced prior to entry of the Executive Order. Parties to pending eviction or foreclosure proceedings should monitor the policies and dockets of the courts in their respective counties in order to determine the status of each case.

Baker Sterchi will continue to monitor Kansas State policy concerning evictions and foreclosures and will provide updates as they are received.

Kansas Supreme Court Strikes Down Statutory Caps on Noneconomic Damages

17 Jun 2019

ABSTRACT: A seismic shift in Kansas personal injury litigation may be on the horizon, as the Kansas Supreme Court rules that the state's cap on noneconomic damages violates the constitutional right to a jury trial.

On June 14, 2019, in the case of Hilburn v. Enerpipe, Ltd., the Kansas Supreme Court struck down the state’s statutory cap on noneconomic damages in personal injury cases. The court held that the damages cap deprives plaintiffs of the Constitutional right to have a jury decide damages.

By eliminating one of the key protections Kansas has traditionally extended to businesses, insurers, and other personal injury defendants, the decision dramatically increases both the unpredictability of civil litigation in the state and the risk of being surprised by a potentially devastating runaway verdict. Furthermore, because the Kansas Supreme Court has ruled the statutory damages cap “facially unconstitutional,” the ruling will affect not only future claims, but also those currently pending in Kansas courts.

I. The Judicial Invalidation of the Kansas Noneconomic Damages Cap

The Hilburn case arose out of a motor vehicle accident. Plaintiff Diana Hilburn was a passenger in a car that was rear-ended by a semi-truck owned by Defendant Enerpipe, Ltd. Enerpipe admitted liability but contested damages. After a trial solely on the damages question, the jury awarded Ms. Hilburn $33,490 for medical expenses and $301,510 for noneconomic losses. The trial court reduced the award of noneconomic damages to the noneconomic damages cap of $250,000, pursuant to K.S.A. §60-19a02.

Hilburn appealed on several bases, including a challenge to the constitutionality of the damages cap. The Supreme Court held that Section 5 of the Kansas Constitution provides that “the right of trial by jury shall be inviolate.” Courts have interpreted this language to preserve the right to a jury trial “in those causes of action that were triable to a jury under the common law extant in 1859, when the Kanas Constitution was ratified by the people of our state.” The plurality opinion emphasized that that “the determination of noneconomic damages was a fundamental part of a jury trial at common law” and, therefore, ought to be protected as “inviolate” under Section 5 of the state constitution.

“The cap’s effect,” Justice Beier concluded, “is to disturb the jury’s finding of fact on the amount of the award. Allowing this substitutes the Legislature’s nonspecific judgment for the jury’s specific judgment. The people deprived the Legislature of that power when they made the right to a trial by jury inviolate. Thus we hold that the cap on damages imposed by K.S.A. §60-19a02 is facially unconstitutional because it violates Section 5 of the Kansas Constitution Bill of Rights.”

Until recently, the cap on noneconomic damages seemed to be very well entrenched in Kansas law. The limits were codified in the statute books, and judges and practitioners had become familiar with their application and importance in personal injury cases. As recently as 2012, the Kansas Supreme Court, in Miller v. Johnson, affirmed the constitutionality of a very similar cap applicable in medical malpractice cases. The majority held that the legislature’s cap on noneconomic damages was “an adequate and viable substitute” to the common-law right to a jury trial on the question of damages. With its decision in Miller, Kansas had become the eighteenth state to affirm the constitutionality of some type of cap on noneconomic damages.

In Hilburn, the Kansas Supreme Court tossed out the same statutory cap that it had affirmed a mere 7 years ago. The recent case illustrates the importance a single judicial appointment can have. Justices Johnson, Beier, Biles, and Luckert remained consistent in their opinions from Miller (2012) to Hilburn (2019). Justices Rosen, who did not participate in the Miller decision, and Stegall, who was not on the Court in 2012, both sided with the plurality in Hilburn to hold the damages cap unconstitutional.

II. Conclusion

Kansas law still presents advantages to civil defendants. It follows a modified comparative fault rule that precludes any recovery by a plaintiff who bears more than 50% of the fault for an occurrence. It allows the comparison of fault of non-parties and has enacted a “one-action rule,” requiring that all parties have their fault determined in a single trial. It has abandoned joint and several liability, holding each defendant responsible only for its percentage of the damages awarded.

But make no mistake, the cap on noneconomic damages provided by K.S.A. §60-19a02 was one of the more important protections Kansas law offered to defendants in personal injury cases. That protection is now gone, and it seems unlikely to come back with the current court makeup.

Kansas Filing Deadline Differs by Filing Type

21 May 2018

ABSTRACT: An innocuous line in a Court of Appeals opinion reminds attorneys that there is a different deadline for paper filings versus electronic filings.

In Kansas, unless you are electronically filing your documents, the last day for filing ends “when the clerk’s office is scheduled to close.” K.S.A. 60-206(a)(4)(B). If you are electronic or fax filing, you have until “midnight in the court’s time zone.” K.S.A. 60-206(a)(4)(A).

In JPMorgan Chase Bank, N.A. v. Taylor, No. 117,774 (Kan.App. May 11, 2018), the Court of Appeals refused to consider the homeowner’s late-filed opposition to the confirmation of the sale, noting, “any response she would have to the motion needed to be filed by the close of business.”

In this case, JP Morgan initiated foreclosure proceedings and bought the property at the foreclosure auction for the full judgment amount. JP Morgan then filed a motion with the court to confirm the sheriff’s sale. The District Court confirmed the sale the same day without waiting for any objection and without notifying the homeowner. The District Court never served the homeowner with the Order.

Over one year later, the homeowner realized the District Court confirmed the sale and filed a motion for relief from that Order. The District Court denied the motion, and issued a minute sheet that included no findings of fact or conclusions of law.

The Court of Appeals in partially affirming and partially overturning the lower court noted that the rule requires that any “person that files a timely response objection to a motion to confirm a sheriff’s sale has the right to have that objection read and considered by the district court.” Id. at *6. Thus, “any procedure that allows for automatic approval of a sheriff’s sale without at least waiting to see if someone files an objection is subject to a later ruling that it is void as a violation of due process.” Id.

In this case, however, the Court of Appeals held that the Homeowner:

was served the motion by mail on November 13, 2015. She had seven days to respond, plus three days for mail service. K.S.A. 60-206 (a)(1)(d); Supreme Court Rule 133(b) (2018 Kan. S. Ct. R. 199). Accordingly, any response she would have to the motion needed to be filed by the close of business November 23, 2015. [Homeowner] did not file her response until November 24, 2015, so it was untimely. Therefore, even though the district court's order was premature, opening it up for a claim of violation of [Homeowner]'s due process rights, we cannot find error in the district court's failure to consider an untimely objection to confirmation of the sale.

Id. Thus, the Court of Appeals did not look at any of the arguments.

The Court of Appeals was unable to determine whether the District Court abused its discretion based solely on the minute order and remanded to the district court to make clear the findings of fact and conclusions of law.

Kansas Saving Statute Only Works Once

27 Jun 2017

ABSTRACT: The Kansas savings statute, K.S.A. 60-518, may not be invoked after the expiration of 6 months following the dismissal of the original timely action.

On May 26, 2017, the Kansas Supreme Court in Lozano v. Alvarez, (No. 113,060) 2017 Kan. LEXIS 287 (May 26, 2017)[1] tested the Kansas saving statutes, which states:

If any action be commenced within due time, and the plaintiff fail in such action otherwise than upon the merits, and the time limited for the same shall have expired, the plaintiff, or, if the plaintiff die, and the cause of action survive, his or her representatives may commence a new action within six (6) months after such failure.

Kan. Stat. Ann. § 60-518. The statute allows a case that has been dismissed for a reason other than the merits to be refiled within 6 months of the dismissal, notwithstanding that the statute of limitations has expired.

The Kansas Supreme Court held that the dismissal of an action that was filed during K.S.A. 60-518's 6-month grace period does not trigger another 6-month grace period. Thus, a third lawsuit does not relate back to the original filing and may be barred by the statute of limitations.

Lozano filed a civil action against the Alvarezes alleging injuries as a result of a battery. Lozano I was dismissed without prejudice by the Ford County District Court for lack of prosecution. Lozano refiled his case less than 6 months later using the Kansas savings statute. The district court dismissed Lozano II without prejudice on December 31, 2013, once again for a lack of prosecution.

Lozano refiled the action on June 18, 2014, attempting to invoke K.S.A. 60-518 a second time. (Lorenzo III). The Alvarezes moved to dismiss Lorenzao III with prejudice, claiming the savings statute did not permit the refiling.

The Kansas Supreme Court affirmed the dismissal of Lorenzo III with prejudice and declined to apply the saving statute in serial fashion, because “the 6-month grace period in the savings statute applies only to an action that was commenced during the statute of limitations period.” Id. at *12. The Court reasoned,

the dismissal of an action that was filed during K.S.A. 60-518's 6-month grace period does not trigger another grace period because it is not an "action" to which K.S.A. 60-518 applies. In short, a plaintiff is limited to one 6-month period of grace to get a determination on the merits; refilings beyond that 6-month period are barred by the statute of limitations. Id. at *12-13.

[1] See the full Opinion.

Reunited and it Feels so Good

09 May 2017

ABSTRACT: Standing in a foreclosure case requires possession of an enforceable note at the time the foreclosure is filed. A mortgage and note may be later reunited and be enforceable.

On April 21, 2017, the Kansas Supreme Court in FV-I, Inc. v. Kallevig, (No. 111,235) 2017 Kan. LEXIS 135 (Apr. 21, 2017)[1] reviewed a mortgage foreclosure. The dispute was between FV-I, the first mortgage holder, and Bank of the Prairie (BOP), the second mortgage holder[2].

One week before the foreclosure, the mortgage was assigned to FV-I. Attached to the petition was a copy of the mortgage and a copy of the note with an undated endorsement to a third-party. At trial, FV-I presented the original note containing an additional two endorsements, ending with an endorsement in blank. BOP undisputedly had three junior mortgages.

BOP challenged FV-I’s standing to foreclose and the priority of its mortgages.

1. FV-I’s Standing to Foreclose

BPO alleged that FV-I did not have standing to pursue its claim without establishing enforcement rights in the promissory note as of the date of the filing. First, FV-I argued that it need not prove possession of the note and the existence of enforcement rights in it at the time it filed its petition in order to establish standing to pursue mortgage foreclosure. Second, FV-I argued that standing could be established by its undisputed possession of the mortgage prior to filing, even without possession of the note.

The Kansas Supreme Court held that:

standing in a foreclosure action is predicated on the plaintiff's ability to demonstrate—either in the pleadings, upon motion for summary judgment, or at trial—that it was in possession of the note with enforcement rights at the time it filed the foreclosure action. Allowing a lack of standing to be cured by a post-petition assignment granting enforcement rights in the note after the foreclosure action has been filed would defeat any incentive for a note holder to ensure that it has enforcement rights prior to filing the action.

Id. at *29.

The Court further held that “possession of the mortgage alone does not establish standing,” because “a person or entity possessing only the mortgage would never experience the cognizable injury, i.e., the default necessary to foreclose the mortgage.” Id. at 46.

The Kansas Supreme Court remanded the action to determine whether FV-I had enforcement rights in the promissory note as of the date of the filing such that it had standing to bring a foreclosure action. Id. at *37.

2. BOP’s Priority

BOP argued that FV-I’s mortgage was unenforceable, because the note and mortgage had been split; thus, BOP’s mortgages were superior. The District Court held that FV-I's mortgage and note had split, because the note and mortgage FV-I held had not followed the same path to FV-I, which rendered FV-I's mortgage unenforceable and allowed BOP's mortgages to jump ahead in priority.

The Supreme Court, in overturning the holding that BOP’s mortgages had priority, noted that the lower court’s decision was based on an “overreading” Landmark Nat. Bank v. Kesler, 289 Kan. 528, 539-40, 216 P.3d 158 (2009). Landmark, did not address the effect of a split on the priority of the mortgage or whether a separated note and mortgage could later be reunited. In short, Landmark never held that a currently unenforceable mortgage, in effect, no longer exists. The Kansas Supreme Court held that, “[r]egardless of whether a split occurred or the party capable of enforcing the note was not a party to this case, the mortgage itself still exists.” Id. at *50.

The Court remanded the case with instruction to determine whether FV-I or BOP had priority consistent with the general rules that the first to record a mortgage has priority so long as the mortgage is not released. Id.

[1] See the full opinion at http://www.kscourts.org/Cases-and-Opinions/opinions/SupCt/2017/20170421/111235.pdf

[2] The homeowners/debtors were no longer involved in the case, because the parties agreed to sell the property and place the proceeds in escrow pending resolution of the matter.

Jury verdicts in the Kansas City area are little changed from last year

09 Feb 2017

The calendars said the years were different, but data from the Greater Kansas City Jury Verdict Service shows that 2016 and 2015 were nearly the same in many respects. Every year, the Greater Kansas City Jury Verdict Service issues a “Summary and Statistics of Jury Verdicts” for the greater Kansas City area. The report includes verdicts from the U.S. District Courts in the Western District of Missouri as well as Jackson, Clay and Platte counties in Missouri and Johnson and Wyandotte counties in Kansas. The statistics in 2016 were remarkably similar to those in 2015.

Comparable Number of Trials and Plaintiffs’ Verdicts

The Jury Verdict Service’s annual summary reported on 113 trials in 2016 compared to 110 in 2015. These numbers are down from the preceding two-year period: there were 133 trials in 2014, and 122 trials in 2013.

Because trials may involve multiple claims and multiple verdicts, the verdict statistics are based on the claims and not the cases. For the 113 trials in 2016, there were 199 verdicts for claims and for the 110 cases in 2015, there were 178 verdicts for claims.

Although the number of trials has decreased from 2013 and 2014, the percentage of plaintiff verdicts is little changed. In both 2015 and 2016, 42% of the verdicts were for plaintiffs compared to 38% for plaintiffs in 2014 and 40% in 2013. These numbers are down from the 55% of the verdicts for plaintiffs in 2012.

Comparable Average Monetary Awards

The overall average of the monetary awards for plaintiffs’ verdicts also remained almost the same in 2016 as they were in 2015. In 2016, the average of plaintiffs’ verdicts was $1,383,549 while the average in 2015 was $1,376,323. Both of those averages are over $1 million more than the average plaintiffs’ verdict in 2014, which was $350,730. While each of these figures is far below the $5,577,689 average verdict in 2013 and somewhat lower than the $1,772,469 average in 2012, the 2013 numbers were skewed by a single $400 million verdict that inflated the 2013 average.

Fluctuating Number of Large Verdicts

Although the average plaintiff’s verdict was similar in 2016 compared to 2015, the number of verdicts exceeding $1 million more than doubled in 2016. There were 16 verdicts of $1 million or more in 2016 and only six such verdicts in 2015. The number of million dollar or more verdicts has fluctuated over the last five years. In 2012, there were 19 such verdicts but only five in 2013 and then ten in 2014, the recent year with the lowest average monetary award in plaintiffs’ verdict matters.

Juries in the following venues awarded million dollar or more verdicts over the last five years.

Key Observations

Over the last four years, the percentage of defense verdicts on plaintiffs’ claims has consistently hovered around 60%.
When money has been awarded, the average verdict amounts over the last two years were nearly identical.
Half of the seven-figure jury awards over the last five years have occurred in Jackson County, Missouri state court .

Conclusion

Although every case is different, information regarding verdict percentages and jury award amounts in the specific venues can help assess the values of cases and claims. For instance, recent data confirms the received wisdom among experienced practitioners that juries in Jackson County, Missouri, are more likely to assess million dollar or more awards on plaintiffs’ claims than juries in Platte County, Missouri. As always, clients, as well as national counsel who are working with local counsel, should carefully consider the forum when assessing the value of a case.

Source: Greater Kansas City Jury Verdict Service Year-End Reports 2012-2016

Practice Reminder: A Motion to Compel Arbitration Does not Alter the Time to Answer

29 Dec 2016

ABSTRACT: A Motion to Compel Arbitration is not one of the motions under Fed.R.Civ.P. 12(b) that extends the time to answer under Fed.R.Civ.P. 12(a)(1). In order to avoid filing an answer, defendants should file a Motion to Dismiss or, in the alternative, To Compel Arbitration.

During a recent scheduling before the United States District Court for the District of Kansas, the Court sua sponte asked counsel when he intended to answer on behalf of his client. Counsel replied that the defendant had filed a motion to compel arbitration and stay the case. The Court, politely, but firmly, reviewed all of the motions listed under Fed.R.Civ.P. 12(b) and noted that a motion to compel arbitration was not among the motions that would alter the time to answer. The Court gave defendant 10 days to answer.

When moving to compel arbitration pre-answer, please remember the rules and either: (1) file a motion to dismiss, under Fed.R.Civ.P. 12(b)(1) or in the alternative, to compel the parties to arbitrate and stay the case, or (2) prepare to answer within the 21-day time period, under Fed.R.Civ.P. 12(a)(1)(A). Either step will assist in avoiding a default judgment while waiting for a ruling on the motion to compel arbitration.