This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2002).
STATE OF MINNESOTA
IN COURT OF APPEALS
Dipchan Kissoondath, Ann Kissoondath,
and Michael Heinonen, as assignees of
James LaBosco, J.D. Sandstone, and J.D. Sandstone, Inc.,
United States Fire Insurance Company,
d/b/a Crum & Foster Commercial Insurance
Company, a foreign corporation,
Filed December 10, 2002
Hennepin County District Court
File No. 989429
Michael L. Weiner, Christopher J. Moreland, Yaeger, Jungbauer, Barczak & Vucinovich, PLC, 745 Kasota Avenue, Minneapolis, MN 55414 (for respondents)
William M. Hart, Kenneth W. Dodge, Erica Gutmann Strohl, Meagher & Geer P.L.L.P., 4200 Multifoods Tower, 33 South Sixth Street, Minneapolis, MN 55402 (for appellant)
Considered and decided by Hudson, Presiding Judge, Peterson, Judge, and Anderson, Judge.
U N P U B L I S H E D O P I N I O N
This appeal is from a summary judgment granted respondents on their claim against appellant insurer for breach of good-faith duty to settle after this court reversed a judgment in favor of the insurer and remanded for a new trial. Appellant argues that there are genuine issues of material fact as to causation and liability that preclude summary judgment. We affirm.
In July 1990, respondents Dipchan Kissoondath and Michael Heinonen were seated in Heinonen’s parked pickup truck. A taxicab operated by Gregory Ammerman struck the pickup truck from behind, causing injuries to Kissoondath and Heinonen. Ammerman was employed by James LaBosco, whose taxicab business, J.D. Sandstone, Inc., was insured under a liability policy issued by appellant United States Fire Insurance Company (U.S. Fire).
Kissoondath, his wife, and Heinonen sued LaBosco and his company. They offered to settle for $350,000, the policy limits, but U.S. Fire offered only $35,000 to Kissoondath and $12,000 to Heinonen, both of whom turned the offer down. The cases were consolidated and proceeded to trial in August 1994. The jury found the cab driver negligent and awarded respondents more than $2 million in damages, and this court affirmed. Kissoondath v. Ammerman, Nos. C7-95-128, C0-95-1346 (Minn. App. Dec. 26, 1995), review granted (Minn. Feb. 12, 1996), and order granting review vacated (Minn. June 19, 1996) (Kissoondath I).
After the trial, LaBosco realized that his taxicab company had not been properly incorporated and that he could be personally liable for the portion of the verdict that was in excess of the policy limits. He assigned his claim against U.S. Fire for breach of its good-faith duty to settle to respondents, who then sued U.S. Fire for the excess verdict and attorney fees. After a trial, the jury concluded that U.S. Fire did not breach its duty to settle, and respondents appealed. This court reversed and remanded for a new trial. Kissoondath v. U.S. Fire Ins. Co., 620 N.W.2d 909, 919 (Minn. App. 2001), review denied (Minn. Apr. 17, 2001) (Kissoondath II).
On remand, respondents moved for summary judgment. After allowing appellant to submit additional affidavits, the district court granted summary judgment in favor of respondents.
D E C I S I O N
An appellate court will review an order granting summary judgment to determine whether there are genuine issues of material fact in dispute and whether there are errors of law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990).
Generally, a liability insurer has authority to settle claims for an insured. Short v. Dairyland Ins. Co., 334 N.W.2d 384, 387 (Minn. 1983). The insurer must act in good faith when deciding whether to settle the claim. Id. While the insurer will seek to settle the claim “at the lowest possible figure,” it owes its insured a fiduciary duty to represent the insured’s best interests and to defend and indemnify. Id. This duty requires the insurer to give “equal consideration * * * to the financial exposure of both the insured and insurer.” Lange v. Fid. & Cas. Co., 290 Minn. 61, 65, 185 N.W.2d 881, 884 (1971) (quotation omitted). The insurer must
“lay bare the truth—not only of the potential consequences of a deficiency judgment but of the potential conflict between the interests of the carrier and the insured.”
Id. at 68, 185 N.W.2d at 886.
An insurer may show good faith in declining a settlement “if it in good faith believed that its insured was not liable.” Short, 334 N.W.2d at 388 (quoting Boerger v. Am. Gen. Ins. Co., 257 Minn. 72, 75, 100 N.W.2d 133, 135 (1959)). Even if the insured was clearly liable, a refusal to settle may be in good faith if the insurer believed that the proposed settlement “was greater than the amount the jury would award as damages.” Id. If the insurer acts in bad faith in refusing to settle within the policy limits and the jury returns an award in excess of the policy limits, the insurer may be liable for the excess amount. Id. at 387.
In this case, a jury trial was held, and the jury concluded in a special verdict that U.S. Fire did not breach its good-faith duty to settle. Kissoondath v. U.S. Fire Ins. Co., 620 N.W.2d 909, 914 (Minn. App. 2001), review denied (Minn. Apr. 17, 2001) (Kissoondath II). The district court denied Kissoondath’s motion for a new trial, and Kissoondath appealed, asserting that the court erred in its jury instructions and evidentiary rulings and that the evidence did not justify the verdict. Id. This court found prejudicial errors in the district court’s evidentiary rulings and jury instructions. Id. at 919. In addition, this court addressed whether the evidence supported the jury’s verdict that U.S. Fire did not breach its good-faith duty to settle within the policy limits. Id. This court ruled that “the evidence, even when viewed in a light most favorable to the verdict,” did not support the verdict. Id.
This court stated:
The record demonstrates that [U.S. Fire] failed to materially inform and continually communicate with insured regarding the settlement offer and the likelihood of an excess verdict. [U.S. Fire’s] counsel only advised insured of a “theoretical risk” of an excess verdict, when in fact he was obligated to advise insured, in detail, as to the implications of an excess verdict
Id. (citation omitted). This court concluded that
[b]ecause [U.S. Fire] did not inform its insured of (1) the estimated dollar amount that the insured would be exposed to in the event of an excess judgment, and (2) the likelihood of an excess judgment, [U.S. Fire] did not proceed in good faith.
Id. (citation omitted). Appellant sought review of this decision by the supreme court, but the supreme court denied review.
On remand, the district court considered respondents’ motion for summary judgment based on this court’s holding in Kissoondath II that the evidence did not support the verdict. It also permitted appellant to submit additional evidence in opposition to respondents’ summary judgment motion. Finding that the additional evidence presented by appellant did not create a genuine issue of material fact, the court granted summary judgment in favor of respondents on their claim for breach of appellant’s good-faith duty to settle.
In this situation, where this court decided as a matter of law that the evidence showed that U.S. Fire did not proceed in good faith, and appellant was not successful in obtaining review of the decision, we are bound by our earlier decision under the law-of-the-case doctrine.
There exists a well-established rule that issues considered and adjudicated on a first appeal become the law of the case and will not be reexamined or readjudicated on a second appeal of the same case.
Lange v. Nelson-Ryan Flight Serv., Inc., 263 Minn. 152, 155, 116 N.W.2d 266, 269 (1962) (footnote omitted). “[W]hen a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case.” In re Welfare of M.D.O., 462 N.W.2d 370, 375 (Minn. 1990) (quotation omitted).
Appellant disputes whether the law-of-the-case doctrine applies and argues that this appeal from summary judgment does not address the same issue as addressed in Kissoondath II, which was an appeal from the denial of a new trial on the issue of whether the evidence supported a jury verdict. But because in the previous appeal this court decided as a matter of law that the evidence showed that U.S. Fire did not proceed in good faith, we are bound by our earlier decision. Kissoondath, 620 N.W.2d at 919.
Appellant next argues that the evidence it submitted in opposition to respondents’ motion for summary judgment created a genuine issue of material fact regarding liability. After carefully reviewing the record, we agree with the district court that the affidavits appellant provided “contain only general statements that do not provide any additional information about U.S. Fire’s communications with LaBosco before trial.” The affidavits do not create a genuine issue of material fact as to whether the insurer communicated to its insured the information that it needed to communicate.
Appellant also argues that summary judgment was improperly granted because there is a genuine fact issue with respect to causation. Specifically, appellant contends that there was a genuine fact issue whether LaBosco would have chosen to go to trial even if his insurer had fully communicated to him the risk of becoming personally liable for a jury verdict in excess of his insurance coverage. If LaBosco would have chosen to go to trial even after full communication, appellant contends, any failure to communicate did not cause the excess verdict. Therefore, a new trial is required to determine whether LaBosco would have chosen to go to trial even after full communication.
The only authority appellant cites for its argument that a fact issue regarding causation precluded summary judgment is a statement in Larson v. Anchor Cas. Co., 249 Minn. 339, 354, 82 N.W.2d 376, 387 (1957), that before there can be a cause of action for breach of the insurer’s duty to settle, “there must be bad faith with resulting injury.” Appellant understands this phrase to mean that a cause of action for breach of the duty to settle requires proof that the insurer’s bad faith caused the injury. But in Larson, causation was not an issue because the supreme court determined that the insurer acted in good faith. Id. at 355, 82 N.W.2d at 387. The phrase appellant cites was made during a discussion of whether an insurer considering an offer to settle within policy limits has an obligation only to act in good faith to the insured or whether the insurer is required to exercise due care and is liable for a negligent rejection of the offer. Id. at 353-54, 82 N.W.2d at 386. The phrase appellant relies on simply states the court’s conclusion that good faith is the test to apply. Larson does not specifically address whether causation is a separate element in any cause of action for breach of the insurer’s good-faith duty to settle, and we are not aware of any Minnesota authority that addresses this issue.
However, even if we assume that respondents must prove that appellant’s failure to fully inform LaBosco caused the underlying case to go to trial, which resulted in a verdict in excess of the policy limits, we conclude that the evidence appellant presented did not establish a fact issue regarding causation.
Summary judgment is not to be avoided simply because there is some metaphysical doubt as to a factual issue. The nonmoving party must demonstrate that there is indeed a genuine issue of material fact. * * * Mere speculation, without some concrete evidence, is not enough to avoid summary judgment.
Bob Useldinger & Sons, Inc. v. Hangsleben, 505 N.W.2d 323, 328 (Minn. 1993) (citations omitted).
Appellant’s evidence about what LaBosco would have done is based on speculation. Even though the evidence includes LaBosco’s statement that additional information would not have changed his decision to go to trial, this statement was made after the trial was over and is necessarily based on speculation about what LaBosco would have done if he had been fully informed about the possibility of an excess judgment before the trial began.
 Kissoondath, his wife, and Heinonen will be referred to collectively as Kissoondath or respondents.