Michael-Zahir–David Fleming v. Corporation Service Company

Summary

The United States District Court for the District of Maryland denied Liberty Mutual’s motion for reconsideration under Federal Rule of Civil Procedure 54(b). The court held that although the plaintiff had not exhausted Maryland administrative remedies when filing the action, a subsequent final decision by the Maryland Insurance Administration or Office of Administrative Hearings satisfied the exhaustion requirement for his statutory lack-of-good-faith insurance claim. The court rejected Liberty Mutual’s argument that the plaintiff’s separate appeal of the administrative decision barred the claim.

Holdings

1. A claimant may not file or pursue a claim under Maryland Courts and Judicial Proceedings § 3-1701 before a final decision is issued under Maryland Insurance Article § 27-1001. The plaintiff had not exhausted those remedies when he filed the complaint, so the claim was inadequately pleaded at that time.
2. The plaintiff's subsequent exhaustion of administrative remedies permitted him to continue pursuing the lack-of-good-faith claim, and Liberty Mutual did not establish that the plaintiff's appeal of the administrative final decision to a Maryland circuit court precluded the federal action.
3. Reconsideration was not warranted because Liberty Mutual did not show that the court's prior determination—that the complaint plausibly stated a lack-of-good-faith claim—should be changed in light of the subsequent administrative decision.

Questions Presented

1. Whether reconsideration under Federal Rule of Civil Procedure 54(b) was warranted because the plaintiff had not exhausted the administrative remedies required for a Maryland Courts and Judicial Proceedings § 3-1701 lack-of-good-faith claim when he filed the complaint.
2. Whether the plaintiff's subsequent exhaustion of administrative remedies and separate appeal of the administrative decision precluded him from pursuing the lack-of-good-faith claim in federal court.

Disposition

other