Background
Randy Spitz, as assignee of Nancy Aguilar and Real Trucking, Inc., sued Starr Indemnity & Liability Company for bad faith and negligence after Starr paid only the policy limit in an underlying Oklahoma accident. Starr moved to transfer venue from the Northern District of Illinois to the Western District of Oklahoma and sought dismissal under Federal Rule of Civil Procedure twelve comma C. The district court granted the transfer and dismissed the claims, finding Oklahoma law applied and prohibited the assignment of the bad faith claim.
The court’s reasoning
The court reviewed the choice-of-law decision de novo, applying Illinois’s most significant relationship test. It found that the place of injury was neutral, the conduct causing injury occurred in Oklahoma, the domicile of parties was a wash, and the relationship was centered in Oklahoma due to the underlying litigation. Consequently, Oklahoma law governed. The court also held it lacked jurisdiction to review the venue transfer order from the Northern District of Illinois because the transferee court had not issued a ruling on a motion to retransfer.
What it means going forward
Insurers in Oklahoma may successfully defend against bad faith claims brought by assignees of insureds, as such assignments are prohibited under state law.