Opinion ID: 2981463
Heading Depth: 2
Heading Rank: 1

Heading: rft’s standing

Text: The issue of whether RFT had standing is reviewed de novo by this Court. Standing is determined at the time the complaint is filed. The complaint being considered here is a counterclaim filed by RFT on October 2, 2008. RFT must have standing pursuant to both Article III and Michigan law.2 RFT had standing when its counterclaim was filed if it can show an injury-in-fact that was “fairly traceable to the defendant’s allegedly unlawful conduct” and is “likely to be redressed” via a favorable decision. At the time RFT’s counterclaim was filed, RFT was the owner and beneficiary 2 The district court held that RFT had standing under Michigan law to bring a breach-ofcontract claim arising out of the rescission of the insurance policies. Nothing is said by the district court specifically regarding Article III standing. - 11 - No. 11-2181 Ellias v. Phoenix Life Ins. Company of the policies but the policies had been rescinded by Phoenix. If the policies had been wrongfully rescinded, as claimed by RFT, RFT could show an injury in fact “fairly traceable” to Phoenix’s allegedly unlawful conduct. Further, this alleged injury could have been redressed by a favorable decision. Thus, RFT had Article III standing when its counterclaim was filed. Phoenix now argues that RFT never suffered an “injury in fact” because RFT never invested any money in the Policies and cannot identify a possible “windfall” that it might have obtained had it eventually decided to invest in the Policies. However, this argument is without merit. At the time the counterclaim was filed, LaSalle had not foreclosed on the Second Policy. Thus, at that time, RFT still had an interest in the Second Policy and could arguably have been injured by rescission of that policy. Presumably RFT had not yet reached the point where it was required to invest any money in the Second Policy to avoid foreclosure. Thus, whether or not RFT had invested any money in the Second Policy at the time its counterclaim was filed is irrelevant as to whether RFT had suffered an injury-in-fact regarding the Second Policy. Phoenix, therefore, has not shown that RFT did not have standing regarding the Second Policy when the counterclaim was filed. The First Policy had already been foreclosed upon by LaSalle when RFT’s counterclaim was filed. RFT presents expert testimony that RFT suffered certain damages by Phoenix’s alleged wrongful rescission of the First Policy. Although Phoenix attempts to discredit this expert’s opinion, it provides enough evidence to avoid summary judgment on this issue. Thus, Phoenix has not shown that RFT did not have standing regarding the First Policy when the counterclaim was filed. - 12 - No. 11-2181 Ellias v. Phoenix Life Ins. Company Phoenix also now argues that RFT cannot show that its alleged injury is “fairly traceable” to Phoenix’s conduct. However, RFT’s counterclaim alleges that Phoenix wrongfully rescinded the Policies. Thus, the counterclaim alleges an injury that is fairly traceable to Phoenix’s conduct. RFT had Article III standing to bring its counterclaim. RFT must also have standing under Michigan law to bring its counterclaim. RFT has standing under Michigan law if it has a legal course of action. Under Michigan law, RFT may bring a claim for breach of an insurance contract. Thus, RFT had standing under Michigan law to bring its counterclaim. In sum, RFT had standing under Article III and Michigan law to bring its counterclaim. Since the district court judge determined that RFT had standing under Michigan law at the time RFT’s Counterclaim was filed, that part of his order is affirmed.