The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
UNITED SPECIALTY INSURANCE CIVIL ACTION
COMPANY
VERSUS NO. 21-480
OLIVIA Y. TRUONG, RICHARD E. KING, SECTION "B"(4)
JAMIE A. FUTRAL, MELCHIODE MARKS
KING, LLC, AND ABC INSURANCE COMPANY
ORDER AND REASONS
Before the Court is plaintiff’s motion for reconsideration
and/or new trial. Rec. Doc. 29. For the following reasons,
IT IS ORDERED that the motion (Rec. Doc. 29) is DENIED.
I. FACTS AND PROCEDURAL HISTORY
This suit involves a legal malpractice claim against
defendants Olivia Y. Truong, Richard E. King, Melchiode Marks King,
LLC, and Jamie Futral (collectively “defendants”). Rec. Doc. 1. On
or about January 15, 2018, plaintiff United Specialty Insurance
Company (“United”), through its Managing General Agent QEO
Insurance Group (“QEO”), retained defendants as counsel in the
matter entitled Diane Jackson v. United Specialty Insurance
Company, Vic 3 Enterprises, LLC and Napoleon White (“the Underlying
Suit”). Id. at 3.
On or about August 26, 2019, a four (4) day trial on the
merits was held in the underlying suit which concluded with a jury
entering a judgment against plaintiff in the amount of
$1,632,192.24 plus interest thereon and court costs. Id. at 5.
According to the complaint, the defendants approved the judgment,
casting Plaintiff for the entire amount instead of its policy limit
of $1,000,000 plus interest and court costs. Id.
Defendants then filed a motion for judgment notwithstanding
the verdict or alternatively for a new trial on behalf of the
plaintiff, which was ultimately denied on November 15, 2019. Id.
at 6. On December 19, 2019, defendants filed a notice and motion
for suspensive appeal. Rec. Doc. 1. Per the complaint, defendants
untimely furnished security by way of surety bond on January 16,
2020 – 28 days after the deadline outlined in Louisiana Civil Code
article 2123. Id. Moreover, the surety bond was for $1,800,000 and
bound only the plaintiff and not its co-defendants in the
underlying suit, who were also found liable. Id.
On or about January 24, 2020, plaintiff in the underlying
suit moved to dismiss the defendants’ suspensive appeal, which was
later granted on March 5, 2020, because the appeal bond was not
timely posted. Id. at 7. According to plaintiff, the defendants
failed to reasonably consult with plaintiff about the motion to
dismiss, its denial, and defendants’ recommendation to file a
supervisory writ application. Id.
On or about April 14, 2020, defendants filed a notice of
intent to apply for supervisory writ regarding the motion to
dismiss. Rec. Doc. 1 at 8. On or about May 13, 2020, the Louisiana
Fifth Circuit Court of Appeals denied the writ application based
on the untimely security furnishing. Id. The appellate court
further affirmed the lower court’s dismissal of the suspensive
appeal and converted the appeal to a devolutive appeal for which
security is not required. Id.
About two months after the appellate court’s decision, on
July 10, 2020, plaintiff’s insurance representative contacted
defendant Olivia Truong about the writ application, to which Truong
responded, “It completely slipped my mind to forward the writ
denial, which is attached for your file (sorry!).” Id. Per
plaintiff, because of the defendants’ delayed notice of the writ
denial and failure to advise them accordingly, plaintiff was unable
to challenge the writ denial with the Louisiana Supreme Court. Id.
at 8-9.
Moreover, the conversion of the suspensive appeal to a
devolutive appeal caused the August 29, 2019, judgment to be
executed immediately by Jackson. Rec. Doc. 1 at 9. Thus, Jackson
filed a motion to examine judgment debtor against United and its
co-defendants and a complaint against United alone with the
Louisiana Department of Insurance, alleging plaintiff’s failure to
pay a valid final judgment. Id. On or about September 28, 2020,
Truong received a demand letter from Jackson’s counsel for payment
of $1,903,986.37 from plaintiff. Id. In November 2020, Jackson
also filed two petitions for garnishment, requesting that the state
court issue a writ of fieri facias to seize and possess all
property rights and credits of United and its insured Napoleon
White. Id. at 9-10.
On or about November 29, 2020, Jackson seized three dump
trucks belonging to Vic 3, plaintiff’s insured and co-defendant,
which effectively put Vic 3 out of business. Id. at 10. To avoid
further harm to its insured, plaintiff paid the full value of the
judgment to secure the return of Vic 3’s trucks. Rec. Doc. 1 at
10. On December 10, 2020, defendants’ attorney-client relationship
with plaintiff ended. Id. at 5. Both parties indicate that the
underlying matter is currently pending on appeal before the
Louisiana Fifth Circuit Court of Appeal. Rec. Doc. 23 at 7.
On March 8, 2021, plaintiff brought a negligence cause of
action against defendants in this Court based on diversity
jurisdiction. Rec. Doc. 1 at 2. On May 31, 2021, defendants filed
a motion to dismiss for lack of subject matter jurisdiction, for
failure to state a claim, and for failure to join an indispensable
party, QEO Group, LLC. Rec. Doc. 20. Alternatively, defendants
moved for a more definite statement under Rule 12(e), arguing that
the factual basis, the measure of damages, and the legal theory in
this matter were unclear. Rec. Doc. 20-1 at 2.
On June 15, 2021, plaintiff timely filed its opposition. Rec.
Doc. 23. Plaintiff denied any failure to state a claim, failure to
join an indispensable party, or entitlement to a more definite
statement. Id. Additionally, the plaintiff argued that their
damages exceeded the required amount in controversy as it is
entitled to recover the paid judgment in excess of $1,900,000,
attorney’s fees associated with the underlying suit, and damages
to its reputation. Id. at 7.
On June 28, 2021, this Court granted defendants leave to file
a reply. Rec. Doc. 26. Because the underlying judgment was solely
rendered against United, Vic 3, and White, defendants deny any
responsibility to United to repay the damages owed to Jackson. Id.
at 2. Moreover, the defendants contended that plaintiff was not
entitled to damages for mental anguish, embarrassment, or damage
to reputation because those damages were not initially requested
in the complaint and could not be incurred by corporations. Id. at
2-3.
On August 26, 2021, this court issued an Order and Reasons
granting the defendants’ Rule 12(b)(6) motion to dismiss. Rec.
Doc. 27. Essentially, this Court held that the defendants’ motion
was proper given the plaintiff’s failure to plead the legal cause
element of its negligence claim. Id. Having granted defendants’
motion to dismiss, on August 27, 2021, this court entered judgment
in favor of the defendants and against the plaintiff, dismissing
all of United’s claims. Rec. Doc. 28.
On September 27, 2021, United filed the instant motion for
reconsideration and/or a new trial. Plaintiff asserts that this
Court ruled incorrectly on the defendant’s previously filed motion
to dismiss. Rec. Doc. 29. United claims it properly presented
evidence of causation and that the defendants’ negligent acts or
omissions caused Plaintiff’s damage. Id. at 5-10. Additionally,
plaintiff raised a new argument regarding the damage element of
its negligence claim. Id. at 10. Plaintiff claims this Court
should reverse its previously issued Judgment because even if
plaintiff is successful on its devolutive appeal, it may not be
able to recover the entire amount it paid to satisfy the judgment.
Id.
On October 5, 2021, defendants timely filed an opposition to
plaintiff’s motion. Rec. Doc. 30. Defendants present that
plaintiff’s motion should be denied because plaintiff failed to
show that its motion is necessary to correct a manifest error of
law or fact. Id. at 4-7. Defendant also argues that plaintiff’s
new argument regarding the damage element is irrelevant to the
present motion. Id. at 7. According to the defendants, this damage
argument does not support this Court amending its prior ruling
because said argument would still not establish causation, which
was the basis for this Court’s initial ruling. Id.
II. LAW AND ANALYSIS
A. Motion for New Trial
In the present motion, plaintiff presents that this Court
should grant its motion for reconsideration or, in the alternative,
grant a new trial. Rec. Doc. 29. The defendants, however, argue
such a motion is improper given no trial has taken place in this
matter, nor has a judgment been entered arising from the same.
Rec. Doc. 30. Upon review, this Court finds that the plaintiff is
not entitled to seek relief under the provisions pertaining to
motions for new trials.
Rule 59(a)(1)(A) of the Federal Rules of Civil Procedure
provides that “[t]he court may...grant a new trial on all or some
of the issues...after a jury trial, for any reason for which a new
trial has heretofore been granted in an action at law in federal
court.” Fed R. Civ. P. Rule 59(a)(1)(A). Likewise, Rule 59(a)(1)(B)
of the Federal Rules of civil Procedure provides that “[t]he court
may...grant a new trial on all or some of the issues...after a
nonjury trial, for any reason for which a rehearing has heretofore
been granted in a suit in equity in federal court.” Fed R. Civ. P.
Rule 59(a)(1)(B). Though “[t]he rule does not specify what grounds
are necessary to support such a decision,” the Fifth Circuit has
found that a new trial is justified if “the district court finds
the verdict is against the weight of the evidence, the damages
awarded are excessive, the trial was unfair, or prejudicial error
was committed in its course.” Smith v. Transworld Drilling Co.,
773 F.2d 610, 613 (5th Cir. 1985) (citations omitted).
Not only has no jury trial ever taken place, but also no
nonjury trial has taken place in this matter; thus, plaintiff's
motion for a new trial is procedurally deficient. Although
plaintiff alternatively requested a new trial, it’s clear
plaintiff’s motion is seeking relief from dismissal. Because the
relief sought by plaintiff and the grounds on which such relief
can be granted is unavailable, plaintiff’s motion will only be
analyzed as a rule 59(e) motion to reconsider entry of a dismissal.
Williams v. Walmart, Inc., No. CV 20-2722, 2021 WL 4290743 (E.D.
La. Sept. 21, 2021) (analyzing the plaintiff’s motion for a new
trial as a motion for reconsideration under rule 59(e) where no
trial had ever occurred; rather, the case was dismissed on a motion
for summary judgment.)
B. Motion for Reconsideration
The Federal Rules of Civil Procedure do not recognize a
general motion for reconsideration. St. Paul Mercury Ins. Co. v.
Fair Grounds Corp., 123 F.3d 336 (5th Cir. 1997). Nevertheless, a
party may submit a motion seeking reconsideration under Federal
Rule of Civil Procedure 54(b), 59(e), or 60(b) depending on the
circumstances. Fed. R. Civ. Proc. 54(b); Adams v. United Ass'n of
Journeymen & Apprentices of the Plumbing & Pipefitting Indus. of
the United States & Canada, AFL-CIO, Loc. 198, 495 F. Supp. 3d
392, 395 (M.D. La. 2020). Motions to reconsider, whether analyzed
under Rule 54(b), Rule 59(e) or Rule 60(b), “serve the narrow
purpose of allowing a party to correct manifest errors of law or
fact or to present newly discovered evidence.” Waltman v. Int'l
Paper Co., 875 F.2d 468, 473 (5th Cir. 1989). This Court weighs
four factors in deciding a motion to reconsider under Rule 59(e):
(1) the judgment is based upon a manifest error of fact or law;
(2) newly discovered or previously unavailable evidence exists;
(3) the initial decision was manifestly unjust; or (4) an
intervening change in law alters the appropriate outcome. Wiley v.
Dep't of Energy, No. CV 21-933, 2021 WL 2291135 (E.D. La. June 4,
2021); Hightower v. Grp. 1 Auto., Inc, No. CV 15-1284, 2016 WL
3430569 (E.D. La. June 22, 2016).
A motion for reconsideration is an extraordinary remedy and
should be used sparingly in the interest of finality and
conservation of judicial resources. Carroll v. Nakatani, 342 F.3d
943, 945 (9th Cir. 2003). They are not the proper vehicle for
rehashing evidence, legal theories, or arguments. Simon v. United
States, 891 F.2d 1154, 1159 (5th Cir. 1990). Nor should a motion
for reconsideration be used to raise arguments that could have and
should have been made before entry of an order or to re-urge
matters that have already been advanced by a party. See Browning
v. Navarro, 894 F.2d 99, 100 (5th Cir. 1990). Furthermore, when
there exists no independent reason for reconsideration other than
mere disagreement with a prior order, reconsideration is a waste
of judicial time and resources and should not be granted.
Livingston Downs Racing Ass'n v. Jefferson Downs Corp., 259 F.
Supp. 2d 471 (M.D. La. 2002).
Here, plaintiff’s motion reiterates the arguments previously
raised in opposition to the defendant’s motion to dismiss, arguing
that all the elements of its negligence claim (including causation)
have been met. In support of this argument, the plaintiff echoes
the same refrain from its previously filed opposition.
Essentially, United presents that had defendants properly advised
it of the time delays for filing a suspensive appeal bond and
timely filed the Application for Suspensive Appeal, with the
required surety, a suspensive appeal would have been issued, and
United would not have had to pay the entirety of the judgment.
However, as outlined by the above authority, parties are
procedurally prohibited from rehashing previously raised and
unsuccessful arguments in the form of a motion for reconsideration.
This Court has already expended considerable time and effort
addressing plaintiff's contentions.
Still further, even if this Court were to consider the merits
of the plaintiff's arguments, there is no question that the
Judgment rendered by this Court in granting Defendants motion to
dismiss was wholly appropriate and entirely consistent with
controlling law and authority. United relies heavily on the
Louisiana Appellate Court decision in Bowen v. Government
Employees Ins. Co., 451 So.2d 1196, 1198 (La. App. 5 Cir. 1984).
Plaintiff claims that this Court misapplied the case to the present
matter, and upon a proper application of the law, this Court will
find that dismissal of plaintiff’s claim was done in error.
In Bowen, the initial lawsuit arose out of an automobile
accident that was filed against Bowen and his insurer, GEICO, whose
policy limit was $5,000. 451 So.2d at 1197. Settlement negotiations
failed with GEICO's offer of a nuisance value of $500 countered by
the original plaintiff's refusal to accept less than GEICO's policy
limits. Id. The district court rendered judgment against Bowen
and GEICO in the amount of $23,557.76. Id. Subsequently, GEICO
filed a suspensive appeal on behalf of itself and Bowen to the
extent of its policy limits and a devolutive appeal as to the
excess for Bowen. Id. It posted a suspensive appeal bond only in
the amount of its $5,000 policy limits. Id. GEICO's attorney
recommended to Bowen that he post a suspensive appeal bond for the
excess amount of the judgment. Bowen, 451 So.2d at 1197. After
several unsuccessful attempts to obtain such a bond, Bowen settled
with the original plaintiff for $17,000. Id. On appeal, the
original judgment was reversed in its entirety, leaving Bowen in
the position of having to fund a $17,000 settlement in a case in
which he was ultimately exonerated. Id.
Bowen then filed suit against GEICO, alleging that its duty
to defend included the obligation to provide a bond sufficient to
suspensively appeal the entire judgment. Id. The trial court
dismissed Bowen’s claim and plaintiff appealed. Id. Upon review,
the appellate court affirmed the trial court’s ruling and
ultimately held that GEICO had discharged its duty and had no
further responsibility to Bowen. Bowen, 451 So.2d at 1198. The
court began its analysis by noting that Louisiana courts impose a
jurisdictional duty on insurance companies to adequately defend an
insured’s interest. Id. at 1197. Additionally, this duty has been
extended to include the appeal of a judgment in excess of the
insurer’s policy limits. Id. The court then recognized that an
insurance company's duty to act in good faith requires it to assist
the insured in attempting to arrange bond for the amount of a
judgment in excess of the policy limits; it cannot merely abandon
the insured's interest on appeal. Id. at 1198. In other words,
the insurance company should make a reasonable effort to help the
insured protect his or her property pending the outcome of an
appeal. See id. The court reasoned that GEICO had discharged its
duty to assist Bowen by keeping Bowen fully informed of settlement
negotiations and the status of his appeal. Bowen, 451 So.2d at
1198. Therefore, holding GEICO had no further duty to the plaintiff
and dismissing Plaintiff’s claim. Id.
Here, plaintiff argues that Bowen stands for the notion that
an insurance company is not obligated to furnish a suspensive
appeal bond for an amount above its policy limits. This is
incorrect. First and foremost, Bowen stands for the proposition
that: (1) an insurer owes a duty to its insured to adequately
defend the insured’s interest; (2) the duty to defend includes the
appeal of a judgment in excess of the insurer’s policy limits; and
(3) the insurer may fulfill its duty in one of two ways. An insurer
can fulfill its duty to defend by “post[ing] a bond on the entire
amount of the judgment,” or an insurer may choose to post a bond
equal to its policy limits. Bowen, 451 So.2d at 1198. If the
insurer decides the latter, the duty is not automatically
dislodged; instead, the insurer will need to take an additional
step. This extra step requires the insurer to “assist the insured
in attempting to arrange bond for the amount of the judgment over
the policy limits.” Bowen, 451 So.2d at 1198.
This case can also be distinguished from Bowen. In Bowen,
GEICO chose not to furnish a suspensive appeal bond in excess of
its policy limits; however, in this case, United elected to post
a bond in the entire amount of $1,800,000.00, which was $800,000.00
over its policy limit. QEO, plaintiff’s representative, also
authorized this bond amount. According to plaintiff, it should
not have been responsible for posting the entire amount of the
bond. However, United had a choice and agreed to post the entire
amount of the bond. United could have chosen the alternative
option, which entailed posting a bond in the amount equal to its
policy limit and assisting the insured to arrange a bond for the
remaining amount. Nevertheless, the plaintiff did not take that
route. By posting the bond above its policy limits, United
fulfilled its duty to the insured.
Additionally, plaintiff still has not established causation.
Plaintiff argues that the defendants alleged negligent acts of
casting plaintiff for the entire amount of the judgment and failing
to timely post the suspensive appeal surety bond were the causes
in fact of plaintiff’s damage (the amount paid in excess of its
policy limit). Even if the defendants had timely posted the
necessary security to file the suspensive appeal, plaintiff still
would have been liable for the entire judgment anyway given that
plaintiff authorized the bond over its limit. See Rec. doc. 27 at
p. 27. Because plaintiff would have suffered the same loss
irrespective of the defendants’ alleged negligence, plaintiff’s
allegations are not actionable as a cause in fact. See Colonial
Freight systems, Inc. v. Adams & Reese LLP, No. 11-1755, 2012 WL
1570103, at *2 (E.D. La. May 3, 2012) (“if the alleged loss would
have resulted irrespective of any alleged negligence, that alleged
negligence is not actionable as a substantial factor or a cause in
fact.”)
Plaintiff also asserts this court should grant
reconsideration because plaintiff will be unlikely to collect the
entire amount of the judgment it paid even if United is successful
on appeal. First, this argument is rooted in damage calculations.
Given that the defendants’ motion to dismiss was granted because
plaintiff had not alleged proper factual support for causation,
this argument is immaterial and does not support reconsideration
of this Court’s prior Judgment. Second, plaintiff could have
asserted this argument in its previously filed opposition and
failed to show cause for not doing so there. Because this is a
newly asserted argument raised for the first time in plaintiff’s
motion for reconsideration, this argument is deemed waived and
improper. See Wiley v. Dep’t of energy, No. CV 21-933, 2021 WL
2291135, at *1 (E.D. La. June 4, 2021) (“Nor should a motion for
reconsideration be used to raise arguments that could have and
should have been made before entry of an order or re-urge matters
that have already been advanced”) (emphasis added).
New Orleans, Louisiana this 15th day of December, 2021
___________________________________
SENIOR UNITED STATES DISTRICT JUDGE