A court was right to acknowledge an insurance company’s settlement of a claim and dismiss the lawsuit against its insured without the insured’s approval, the Maine Supreme Judicial Court has ruled.
The insured, Patrick O’Brien, objected to the settlement and dismissal of a complaint alleging that he trespassed. Why? Because he wanted to establish a claim of wrongful use of civil process against the woman who accused him.
A lower court declined to keep the legal case alive after the insurer settled. O’Brien appealed, arguing that the court abused its discretion in dismissing the complaint with prejudice against him. Now the high court has affirmed that decision in a 6-0 ruling penned by Chief Justice Valerie Stanfill.
In August 2023, Carissa Daniels filed a complaint against O’Brien alleging that he had committed timber trespass by cutting trees and bushes on her property. O’Brien tendered the defense to his homeowner’s insurance company, MMG Insurance Co.
Although originally MMG assumed the defense with a reservation of rights, MMG withdrew the reservation and reached a $25,000 settlement agreement with Daniels.
O’Brien objected to the settlement. As part of the settlement, Daniels moved to dismiss her complaint with prejudice and MMG, which anticipated O’Brien’s objection to the dismissal, intervened in favor of Daniels’s motion to dismiss.
O’Brien moved to retain the matter on the docket, arguing that he should be entitled to his day in court to present his defenses to Daniels’s claim.
In February 2025, the court granted Daniels’s motion to dismiss her complaint with prejudice. O’Brien made a motion for further findings of fact and conclusions of law, which the court denied. O’Brien appealed.
Argument on Appeal
O’Brien argued that the court erred by not taking testimony and by denying his motion for further findings of fact. The high court found that the court’s refusal to take testimony was within its discretion and since the court did not take evidence, it had no obligation to make findings of fact. Thus, the lower court’s denial of O’Brien’s motion was appropriate.
O’Brien further argued that MMG did not have the contractual power to settle despite over his objection. However, O’Brien did not file a claim against MMG, thus the question of whether the insurer was authorized to settle Daniels’s claims was not before the court.
(In a footnote, the high court commented that the merits of any claim by O’Brien against MMG would depend on the language of the insurance policy. Where a policy grants to the insurer the right and duty to defend any claim or suit for covered injury or damage, even if groundless, false, or fraudulent. and the right to settle within the available limits of coverage, the insurer need not obtain the insureds’ consent prior to settling with a third party even if it leads to the loss of the insureds’ potential claim for malicious prosecution.)
Instead of focusing on the insurer, the issues became whether the trial court abused its discretion in dismissing the action, whether the court understood the applicable law, and whether it weighed the choices reasonably.
The court noted that they “crux” of O’Brien’s grievance is could not pursue a claim for wrongful use of civil process against Daniels because her claim had been dismissed. He argued that the dismissal was not favorable to him because it extinguished his potential claim.
Good Sense
According to the court, forcing plaintiffs to litigate a case against their will poses practical problems, especially where parties have settled. “It remains good sense and good law that plaintiffs, like defendants, should be able to refuse to offer evidence in support of their claims and likewise suffer the consequences of their decision,” the court commented, citing a 2023 federal opinion.
Indeed, the tort of wrongful use of civil process would require O’Brien to prove that Daniels “initiate[d], continue[d], or procure[d] civil proceedings without probable cause . . . with a primary purpose other than that of securing the proper adjudication of the claim upon which the proceedings are based,” the Supreme Court noted, citing a 2023 Maine case.
“It is hard to imagine why the defendant should be able to force the plaintiff to continue an action that she does not wish to continue for the sole purpose of establishing an alleged tort she apparently does not wish to commit,” the high court added.
In short, the high court found that “the only purpose in denying the motion to dismiss and continuing the action would be to try to force the establishment of an element of a claim of wrongful use of civil process. It was solidly within the court’s discretion to dismiss the complaint with prejudice.”
Background
According to the appeal memorandum, O’Brien and Daniels own adjoining residential property in Norway, Maine. In July of 2022, O’Brien says he initiated cutting along their common boundary after a joint site walk. O’Brien said that during that site walk, Daniels gave explicit permission for the cutting that occurred.
Daniels has denied giving consent to the cutting.
The Maine Forestry Service assessed the market value of the cut trees at $1,625.00.
According to O’Brien, the following year, he reported Daniels to local authorities after what he said were seven occasions of Daniels’ dogs running loose on his property. O’Brien also alleges he sustained serious injury In May of 2023 from an assault on his own property by a Daniels’ workman.
MMG’s coverage counsel and Daniels’ counsel settled Daniels’ claim for $25,000. O’Brien claims neither he nor his MMG-assigned counsel participated in those negotiations. Upon learning of the settlement, O’Brien objected.
Topics
Claims
Maine
