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Litigation Associate, Seattle

20 Mar 2025

Our Seattle office has an opportunity for an associate attorney with at least three years of experience in all phases of commercial litigation. View the job description here.

Commercial Litigation Attorney, Kansas City

19 Mar 2025

Our Kansas City office has an opportunity for an attorney with at least five years of experience in all phases of commercial litigation. View the job description here.

Missouri Supreme Court Expands Insurers' Right to Intervene in Tort Actions

19 Mar 2025

ABSTRACT: Shortly before the end of 2024, the Missouri Supreme Court issued a significant ruling, changing the landscape surrounding Missouri insurers’ rights and abilities to intervene in an underlying action under Missouri Rule of Civil Procedure 52.12(a)(2).

Background on McCrackin v. Mullen

In Jeromy McCrackin v. Tynan Mullen, et al., the Supreme Court was tasked with determining whether a circuit court wrongfully overruled Safeco Insurance Company of America’s (“Safeco”) motion to intervene in a wrongful death action for the limited purpose of seeking to stay the wrongful death action until a separate declaratory judgment action filed in federal court could be resolved. McCrackin v. Mullen, et al., No. SC100578, 701 S.W.3d 868 (Mo. banc 2024).

In the circuit court matter, Jeromy McCrackin (“McCrackin”) filed a wrongful death action against Tynan Mullen (“Mullen”) for the death of McCrackin’s son, who was shot and killed by Mullen and several others outside a pool hall in 2019. Although Mullen never requested that Safeco defend him in the wrongful death action, McCrackin sent several letters to Safeco, identifying Mullen as an insured under a homeowners policy issued to Mullen’s grandmother and requesting that Safeco settle the wrongful death claim against Mullen in exchange for payment of the liability limits.

Safeco declined McCrackin’s demands pursuant to an intentional act exclusion in the homeowners policy and filed a declaratory judgment action in federal court, seeking a declaration that Safeco’s policy did not cover McCrackin’s claims against Mullen. After Mullen and McCrackin moved to stay the declaratory judgment action until Mullen’s criminal case reached its conclusion, Safeco moved to intervene in the wrongful death action as a matter of right “for the limited purpose of staying the proceedings in [the] action until final resolution of its declaratory judgment action.”

The circuit court denied Safeco’s Motion to Intervene, and the wrongful death action proceeded to a bench trial resulting in a $16.5 million judgment against Mullen. Safeco appealed the circuit court’s denial of its Motion to Intervene.

Missouri Supreme Court’s Ruling

Although Missouri’s appellate courts have previously confirmed an insurer’s right to intervene for the sole purpose of seeking a stay while coverage is litigated in a separate declaratory judgment action, McCrackin is the first time the Missouri Supreme Court weighed in directly on this issue. In McCrackin, the Supreme Court held that Rule 52.12(a) “should be construed liberally to permit broad intervention” as “insurers situated like Safeco have an interest in protecting their right to defend the underlying tort action pursuant to Rule 52.12(a)(2), which creates the right to intervene for the limited purpose of seeking a stay in the tort action while coverage questions are litigated in a separate declaratory judgment action.” Id. at 876. Furthermore, McCrackin held that to the extent other cases suggest an insurer does not have a right to intervene for the sole purpose of seeking a stay so that coverage can be litigated in a separate declaratory judgment action, “such cases should no longer be followed.” Id. at 876, fn. 10.

Implications for Insurers

Although the Court recognized that it is unsuitable for an insurer to “have its cake and eat it too by both refusing coverage and at the same time continuing to control the terms of settlement in defense of an action it had refused to defend,” this was not what Safeco sought. Id. at 876. Rather, the Supreme Court concluded that Safeco’s conduct was appropriate as “disposition of the tort action may, as a practical matter, impair or impede Safeco's ability to protect its interest because, if the tort action concludes prior to the declaratory judgment action, there is no longer a tort action to defend, even if the federal court determines Safeco had a duty to defend.” Id.

When faced with a coverage question, insurers should protect their interests and ensure they have an opportunity to control and manage the underlying litigation. Missouri insurers can and should lean on the intervention and stay procedure addressed in McCrackin. Given the disposition of the Missouri Supreme Court, it is clear that “[i]nsurers with good faith coverage questions should file a declaratory judgment action simultaneous with the underlying tort action and seek a stay of the tort action until the declaratory judgment action is resolved.” Id.

CFPB Rule Precluding Reporting of Consumer Medical Debt On Hold Until June or Later

17 Mar 2025

ABSTRACT: Texas federal court issues a 90-day halt on the final rule from the Consumer Financial Protection Bureau (“CFPB”), to prohibit collection and reporting of consumer medical debt.

We have an update regarding our recent blog post on the Consumer Financial Protection Bureau’s (“CFPB”) final rule amending Regulation V, which implements the Fair Credit Reporting Act (“FCRA”). The new rule which would have become effective on March 17, 2025 has been stayed by a Texas federal judge.

The stay was issued in response to litigation challenging the new rule filed by the Consumer Data Industry Association, and others, which represents the major consumer reporting agencies. The Court was also responding to a request from the CFPB’s new leadership requesting a 90-day extension of litigation deadlines to allow the new leadership time to review and consider the CFPB’s position on various agency actions after the presidential administration change.

We will keep our eyes on the litigation and the medical debt reporting rule.

Baker Sterchi’s Financial Services Practice Group is here to help you with any questions or concerns that may arise as a result of the new rule.

Max Mosley Quoted in MLM Article on Proposition A Legal Challenges

14 Mar 2025

Baker Sterchi attorney Max Mosley was recently quoted in a Missouri Lawyers Media article discussing Proposition A, a newly enacted law addressing tort reform in Missouri. While the measure has passed, it now faces legal challenges that will be heard by the Missouri Supreme Court in March. The article explores the potential implications of the law and uncertainties surrounding its implementation.

Mosley provides insight into how the changes could affect businesses and litigants, offering perspective on the broader legal landscape of tort reform. He notes, “It’s always very important for employers to be mindful that they have the responsibility of maintaining records as efficiently as possible to be able to demonstrate that they are abiding by all legal standards as well as we think, in the best interest of their employees.” He adds, “For example, for the sick paid leave, that comes with earned time. So, the emphasis really needs to be on the employer to make sure that they’re well aware of what all employee’s hours are, as well as how those hours are contributing to their sick (leave).”

A member of Baker Sterchi’s Employment & Labor Practice Group, Mosley previously wrote about Proposition A for the Baker Sterchi Employment & Labor Law Blog in December, 2024. That article can be found here.

In addition to handling employment matters, Mosley’s practice includes personal injury, trucking, premises liability and education law. Based in the firm’s Kansas City office, he is a member of the Missouri Bar Association’s Young Lawyers Division. He earned his law degree from the University of Missouri School of Law and his undergraduate degree from the University of Missouri-Kansas City. He is licensed to practice in Missouri and Kansas.

Missouri Lawyers Media delivers extensive legal news coverage and organizes events recognizing top professionals in Missouri’s legal community. Read the article here.

Court Issues Second Ruling on Illinois Credit Card Fee Capping Law: Out-of-State Banks Exempt, Credit Unions Not So Lucky

12 Mar 2025

ABSTRACT: As promised, a second Order issued by the Judge in this case determines whether an Illinois state law restricting credit card fees and use of transaction data is preempted by the Federal Credit Union Act (“FCUA”) and 12 U.S.C. Section 1831a(j) which regulate credit unions and out-of-state banks. The Court had already issued an Order in the case on December 20, 2024, that the National Banking Act preempts the Illinois law, however nothing preempts major card networks, like Visa and Mastercard, from compliance with the law.

INTRODUCTION

The Court in the U.S District Court for Northern District of Illinois Eastern Division issued a second Order in the case Illinois Bankers Association et al. v. Kwame Raou ruling that the Interchange Fee Prohibition Act (“IFPA”), an Illinois state law restricting credit card fees and transaction data, is preempted by 12 U.S.C. Section 1831a(j) which regulates out-of-state banks, however the IFPA is not preempted by the Federal Credit Union Act (“FCUA”).

The new Order stems from Plaintiffs’ suit to enjoin implementation of the IFPA arguing it is preempted by various federal laws. The result of which being a December 20, 2024 Order from the Court ruling IFPA preemption by the National Bank Act (“NBA”) and the Homeowners Credit Loan Act (“HOLA”), however the major card networks, such as Visa and Mastercard, had no valid claims of preemption. For more details on the court’s initial ruling, read our blog article of the first order [here].

FEDERAL CREDIT UNION ACT

Plaintiffs argue IFPA is preempted by various FCUA terms authorizing credit unions to loan, contract and issue lines of credit to its members. Additionally, FCUA language states the Act preempts “any state law purporting to limit or affect” credit union loans and lines of credit. The Court discusses various types of preemption, however, ultimately analyze the client claims as a conflict. The standard for “conflict” preemption is that “it would be impossible…to comply with both state and federal law or when state law constitutes and “obstacle”. Finally, they argue the National Credit Union Administration (“NCUA”) has the exclusive authority to regulate rates, repayment and other terms of repayment. The Court rejects these arguments stating simply the IFPA regulates credit union’s ability to collect fees on credit and debit card transactions from merchants, while the FCUA preemption statute regulates fees charged to members for initial lines of credit. The Court concludes Plaintiff failed to demonstrate it would likely prevail on its claim for IFPA preemption by FCUA.

12 U.S.C. SECTION 1831A(J)(1)

Plaintiffs also claim part of the Riegle-Neal Interstate Banking and Branching Efficiency Act (“RIBBE”) preempts IFPA. The RIBBE simply requires application of state law to out-of-state banks be equal to that of national banks in that state. Since the Court already ruled NBA preemption of IFPA for national banks in Illinois, RIBBE requires the same treatment as to out-of-state banks. The plain language of the statute supported this interpretation as well as prior case law interpreting RIBBE. Therefore, the Court concluded out-of-state banks would likely prevail on their preemption claim under RIBBE and enjoined application of IFPA as to those banks.

CONCLUSION

This Court likes to “split the baby” by applying preemption of IFPA to different financial institutions, involved in the same transactions, in separate orders and issued at different times in the case. Interpreting and applying preemption this way makes an already confusing area of the law even more so. It may be intellectually honest to just apply the law and let the chips fall where they may. At some point, my hope is a practical and uniform approach is adopted by Courts in applying preemption to these types of state law seeking to eliminate excessive fees. Perhaps Congress could act by limiting fees charged to consumers for everyday and necessary services provided by businesses in markets dominated by a few large institutions which provide consumers little to no real choice with whom they do business with.

J. Tanner Murphy Joins Baker Sterchi in Kansas City

11 Mar 2025

J. Tanner Murphy joins Baker Sterchi as an associate in the firm’s Kansas City office. His practice focuses on personal injury, employment, construction and commercial matters. He also has experience advising insurers on coverage issues and handling insurance coverage disputes, premises liability claims with a focus on negligent security and employment discrimination claims for state entities.

Murphy earned his law degree from the University of Missouri-Kansas City School of Law and holds an undergraduate degree from the University of Missouri. He is licensed to practice in Missouri.

Heather Shore to Serve as Chair of KBA Construction Law Section

11 Mar 2025

The Kansas Bar Association (KBA) has named Baker Sterchi Member Heather Shore chair of the Construction Law Section, which develops continuing legal education programs and supports attorneys handling construction law contracts and disputes.

Based in Kansas City, Shore has nearly 30 years of experience handling complex construction, surety and commercial litigation. She actively participates in professional organizations related to her practice, serving on the American Arbitration Association’s Panel of Construction and Commercial Arbitrators and as a member of the ABA’s Construction and Surety sections. Shore is co-chair of Baker Sterchi’s Construction Practice Group and frequently speaks and writes on legal and business issues affecting the construction and surety industries at national and state levels. She is licensed to practice in Missouri, Kansas, Colorado and Texas.

Founded in 1882, the KBA is a voluntary association of more than 5,000 members, including lawyers, judges, law students and paralegals, dedicated to supporting the legal profession in Kansas.

Challenging Venue and Timely Filing

10 Mar 2025

ABSTRACT: In State of Missouri ex. Rel. ArchCity Defenders, Inc., v. Whyte, the Missouri Court of Appeals ruled that motions for change of venue based on improper venue brought by plaintiffs are untimely and prohibited under Missouri law.

In November 2023, Plaintiff filed a lawsuit in Jefferson County, Missouri, against multiple Defendants. In response to the lawsuit, Defendants claimed venue in Jefferson County was improper and timely moved to transfer the case to St. Louis City. The Jefferson County Court did not rule on the motion for 90 days. Under Missouri Law, the motion for change of venue was automatically granted once 90 days had passed without a ruling, and the case was transferred to St. Louis City.

Plaintiff then filed a motion for change of venue to transfer the case from St. Louis City back to Jefferson County. The St. Louis City Court did not rule on Plaintiff’s motion within 90 days, and the case was re-transferred back to Jefferson County. In response, Defendants asked the Missouri Court of Appeals for a writ of mandamus directing that the case be sent back to St. Louis City.

The issue for the Court of Appeals was whether Plaintiff’s motion to re-transfer the case back to Jefferson County was permissible and was timely filed under Missouri law. The appellate court granted Defendants’ writ, holding that Plaintiff’s motion for change of venue was untimely.

Missouri’s Rules of Civil Procedure state that any motion to transfer based on improper venue shall be filed within 60 days of service on the party seeking transfer. In ruling that Plaintiff’s motion for change of venue was filed out of time, the Court of Appeals gave some important insight into this rule regarding who can file a motion for change of venue.

The Court reasoned that Missouri Law implies that because petitioners are the master of the petition and can choose where to file suit, only respondents and third parties can file a motion for change of venue based on improper venue. In this case, Plaintiff was never served with the case and the sixty-day period never started. Thus, the Court of Appeals concluded that Plaintiff’s motion could not be considered timely under Missouri law.

The Court of Appeals further noted that passage of 90 days without a court ruling does not mean that a motion for change of venue must in all instances be granted. Rather, if the transfer motion was not procedurally valid and timely filed in the first place, the 90-day timeframe for the trial court to rule was never triggered.

Key takeaways: Here, the Missouri Court of Appeals ruled that because plaintiffs are the masters of their complaint and presumably know what they are doing when they file the case in a particular court, only respondents and third parties can move to change venue based on improper venue. Counsel should pay close attention to the 90-day timeframe for the trial court to rule on a motion to change venue. If Plaintiff wants to oppose the change of venue, counsel should make sure that the motion is set for hearing, and a ruling is issued before 90 days elapse. And if the moving party sees nothing happening on the docket as the 90-day deadline approaches, the best strategy may be to sit and wait for the time to expire, which will generally result in the case being automatically transferred.

Litigation Paralegal, Kansas City

06 Mar 2025

Our Kansas City office has an opportunity for a highly motivated and skilled litigation paralegal. View the job description here.