MEMPHIS (LN) — U.S. District Judge Sheryl H. Lipman granted Mid-America Apartment Communities’ motion to file a first amended complaint in its insurance coverage dispute, rejecting Liberty Insurance Underwriters’ arguments that the changes were futile and would unduly prejudice the insurer.
The case centers on a $2.09 million state court verdict against Mid-America for a resident’s slip-and-fall injury, which the insurer denied coverage for, citing untimely notice.
Mid-America sought to amend the complaint to add Marsh USA LLC as a defendant, clarify claims against Liberty and other defendants, and address Liberty’s motion to dismiss.
Liberty argued the amendment should be denied because the plaintiff’s statutory bad faith claim was time-barred under Tennessee’s one-year statute of limitations and because the claim was not assignable.
Lipman held the futility argument unpersuasive, noting that the amended complaint alleged Liberty was equitably estopped from asserting the limitations defense by inducing delay through post-demand reconsideration communications, meaning the claim was not affirmatively time-barred on its face.
The judge also rejected Liberty’s contention that the bad faith claim could not be assigned, pointing to the insurance policy which listed both Mid-America Apartment Communities, Inc. and Mid America Apartments, LP as named insureds.
Lipman dismissed Liberty’s prejudice arguments, ruling that the need to file a second motion to dismiss is a cost of litigation and that Liberty’s concerns about accessing evidence were mere speculation.
The court denied Liberty’s request to impose conditions on the amendment, including striking the bad faith claim or awarding Liberty attorneys’ fees for its motion to dismiss.
The filing of the amended complaint renders Liberty’s motion to dismiss, along with two other pending motions, moot.
Lipman is a Bill Clinton appointee.