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Businesses alleging financial loss against insurer lose before 7th Circuit

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The 7th Circuit Court of Appeals ruled against a group of businesses that sued an insurance company claiming its failure to adequately pay G&S Metal Consultants Inc. following an explosion at the GSMC Georgia plant led to the plaintiffs suffering financial losses.

G&S Metal Trading, G&S Holdings, Aluminum Sizing, and owner operators of G&S Metal Consultants R. Scott Galley II and Cynthia Galley sued Continental Casualty Co., the insurer of GSMC. Pursuant to its policy, Continental made some payouts to GSMC after the explosion, but GSMC claimed those payments were inadequate. It since has filed for bankruptcy, which has affected the businesses of the parties in this case. G&S Metal Trading, G&S Holdings and Aluminum Sizing are affiliated with GSMC and are additional named insureds under the policy that covered the Georgia plant.

The lawsuit filed in South Bend alleges seven counts against Continental: breach of contract, promissory estoppel, bad faith claims handling, negligent claims handling, tortious interference with contract, negligent infliction of emotional distress and breach of fiduciary duties. The crux of the complaint was that as a result of the failure to receive timely and adequate payments, GSMC experienced financial difficulties and the plaintiffs were adversely affected by the ensuing loss of business with GSMC.

U.S. District Judge Jon DeGuilio dismissed the lawsuit for failure to state a claim or that the plaintiffs lacked standing. The 7th Circuit found the plaintiffs couldn’t succeed on their claim that the wrong standard was applied to the motion to dismiss. The federal pleading standard as set forth in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), applies.

In G&S Holdings LLC, et al. v. Continental Casualty Company, 11-1813, the federal appellate court affirmed DeGuilio’s dismissal of the breach of contract, promissory estoppel, bad faith claims handling, negligent claims handling, and breach of fiduciary duties claims pursuant to Federal Rule of Civil Procedure 12(b)(1). DeGuilio ruled that the plaintiffs weren’t the real parties in interest because they did not seek recovery for an injury they suffered directly. The 7th Circuit also upheld DeGuilio’s rejection of the plaintiffs’ contention that they had standing as third-party beneficiaries of the policy.

The Circuit Court also found that Vectren Energy Marketing & Service Inc. v. Executive Risk Specialty Ins. Co., 875 N.E.2d 774 (Ind. App. 2007), applies.

“Even though the loss was a predictable result of the failure to fulfill the obligations of the policy, due to the interdependent relationship between the plaintiffs and GSMC, the claim against the insurer must be brought by the party to whom the duty is owed, which was GSMC,” Judge Ilana Diamond Rovner wrote.

 

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  1. Indianapolis employers harassment among minorities AFRICAN Americans needs to be discussed the metro Indianapolis area is horrible when it comes to harassing African American employees especially in the local healthcare facilities. Racially profiling in the workplace is an major issue. Please make it better because I'm many civil rights leaders would come here and justify that Indiana is a state the WORKS only applies to Caucasian Americans especially in Hamilton county. Indiana targets African Americans in the workplace so when governor pence is trying to convince people to vote for him this would be awesome publicity for the Presidency Elections.

  2. Wishing Mary Willis only God's best, and superhuman strength, as she attempts to right a ship that too often strays far off course. May she never suffer this personal affect, as some do who attempt to change a broken system: https://www.youtube.com/watch?v=QojajMsd2nE

  3. Indiana's seatbelt law is not punishable as a crime. It is an infraction. Apparently some of our Circuit judges have deemed settled law inapplicable if it fails to fit their litmus test of political correctness. Extrapolating to redefine terms of behavior in a violation of immigration law to the entire body of criminal law leaves a smorgasbord of opportunity for judicial mischief.

  4. I wonder if $10 diversions for failure to wear seat belts are considered moral turpitude in federal immigration law like they are under Indiana law? Anyone know?

  5. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

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