Lodholtz v. Granite State Ins. Co.

Lodholtz, injured in 2011 while working at a Pulliam plant in Indiana, filed suit against Pulliam in state court. Pulliam asked Granite State, its insurer, to defend and indemnify. Granite State declined, believing that Pulliam was not liable because Lodholtz could claim workers’ compensation. Lodholtz argued that he was employed by another firm although he was injured on Pulliam’s premises and obtained default judgment for $4 million. Pulliam assigned him its rights against Granite State, which had unsuccessfully moved to intervene in Lodholtz’s suit, then sought a federal declaratory judgment that it had no duty to indemnify. Meanwhile, the Indiana court of appeals affirmed, reasoning that Granite State had sought leave to intervene under a reservation of rights. Indiana courts forbid the insurer to control the defense of the insured without acknowledging coverage. The Indiana Supreme Court declined review. The federal district court subsequently ruled that because Lodholtz’s employer had “leased” Lodholtz to Pulliam, he had been Pulliam’s employee, and that the Indiana judgment should be “disregarded.” The Seventh Circuit granted a petition under 28 U.S.C. 1292(b) and dismissed Granite State’s suit. The U.S. Supreme Court is the only federal court with appellate authority over state courts, but would have had no authority in this case because it involved no issue of federal law.View "Lodholtz v. Granite State Ins. Co." on Justia Law