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United States District Court for the District of Kansas
November 7, 2019, Decided; November 7, 2019, Filed
Case No. 19-4036-HLT-ADM
MEMORANDUM AND ORDER
This matter comes before the court on Plaintiff's Motion for Attorneys' Fees and Costs, and Order for Second Mediation (ECF No. 15). Plaintiff Arnold Long seeks an award of fees and expenses and an order directing a second mediation because he contends that Defendant American Family Mutual Insurance Company, S.I. did not act in good faith when it sent only its attorney to mediation and that attorney lacked the authority to meet Mr. Long's settlement demand. For the reasons stated below, the court finds that there is insufficient information to determine whether American Family's representative had full settlement authority to meet any reasonable settlement demand by Mr. Long. However, the court grants Mr. Long's motion and awards the requested sanctions because American Family has not met its burden to show that it meaningfully participated in mediation [*2] when it sent only its attorney of record to attend the mediation.
Mr. Long's complaint alleges that he purchased a property insurance policy from American Family that provided $224,100 for dwelling coverage and $224,100 for personal property coverage. (ECF No. 1 ¶ 6.) After a grease fire caused significant damage to Mr. Long's home and personal property, he made a claim for the policy limits. (Id. ¶ 10.) At the time, Mr. Long was in the process of purchasing the home from his brother pursuant to a contract for deed. (Id. ¶ 7.) American Family tendered payment to Mr. Long's brother for property damage to the house, but it denied coverage for Mr. Long's personal property on the basis that Mr. Long lied on his policy application by failing to disclose that he had a 20-year-old conviction for possession of marijuana. (Id. ¶ 12.) American Family's answer also asserts other policy exclusions. Mr. Long asserts a breach of contract claim and also seeks an award of attorneys' fees and costs pursuant to KAN. STAT. ANN. § 40-256. (Id. ¶ 19.)
The scheduling order required the parties to mediate by November 1, 2019. (ECF No. 10, at 3.) The parties scheduled mediation with Timothy J. Finnerty on September 20, [*3] 2019. In advance of the mediation, Mr. Finnerty reminded the parties that both they "and their counsel with authority to settle the case will be present unless specifically released from that obligation by the parties' agreement." (ECF No. 15-1, at 2.) He further reminded the parties that D. Kan. Rule 16.3 applies to mediation of cases pending in federal district court in the District of Kansas. (Id.) The parties met at Mr. Finnerty's office. Mr. Long attended personally along with counsel and a law clerk working at counsel's firm. No representative of American Family attended in person other than its counsel of record. According to Mr. Long, defense counsel only had authority to settle the case for $20,000, which was far less than Mr. Long's demand of $320,000. Mr. Long argues that defense counsel lacked full settlement authority and that sending only counsel to mediation was insufficient.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
2019 U.S. Dist. LEXIS 193885 *; 2019 WL 5819968
ARNOLD LONG, Plaintiff, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, S.I., Defendant.
Subsequent History: Summary judgment denied by Long v. Am. Family Mut. Ins. Co., 2020 U.S. Dist. LEXIS 31622 (D. Kan., Feb. 25, 2020)
mediation, settlement authority, sanctions, parties, settlement, attend, defense counsel, attorney's fees, costs