Catlin Syndicated Limited v. Ramuji, LLC et al
MEMORANDUM OPINION AND ORDER GRANTING IN PART and DENYING IN PART 147 MOTION to Amend/Correct 114 Amended Complaint, Third Amended Answer/Counterclaim/Third Party Claim, 165 Second MOTION to Amend/Correct Third Amended Complain t/Answer. The Court DENIES the Motion for Reconsideration. The Court GRANTS the Motion to Amend Peoples Independent Banks Answer. The Court GRANTS the Motion to Amend the Third- Party Complaint. The Court GRANTS the Motion to add Cross-Claims again st Ramuji. The Court DIRECTS Peoples Independent Bank to file its third Amended Answer, Counterclaim, Cross-Claim, and Third-Party Complaint in accordance with this Order. That filing will become Peoples Independent Banks operative pleading. Signed by Judge Annemarie Carney Axon on 6/29/2018. (JLC)
2018 Jun-29 AM 10:37
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
CATLIN SYNDICATED LIMITED,
RAMUJI, LLC, et al.,
MEMORANDUM OPINION AND ORDER
Defendant-Counterclaim-Plaintiff Peoples Independent Bank (PIB) filed
motions seeking (1) reconsideration of the court’s earlier order dismissing with
prejudice a number of its claims against the plaintiff and four third-party
defendants; (2) to amend its answer; (3) to amend its third-party complaint; and
(4) to raise cross-claims against its co-defendant, Ramuji, LLC. (Docs. 147, 165).
For the reasons set out below, the court GRANTS IN PART AND DENIES IN
PART PIB’s motions. The court DENIES the motion for reconsideration. The
court GRANTS the motion to amend PIB’s answer. The court GRANTS the
motion to amend the third-party complaint. The court GRANTS the motion to add
cross-claims against Ramuji.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
This case arises from a fire that occurred on April 2, 2016, at a motel owned
by Ramuji. (Doc. 144 at 5–6). In 2004, Ramuji executed a mortgage on the real
property in favor of PIB. (Doc. 114). Ramuji also maintained a commercial
insurance policy covering the property. (Doc. 144 at 11). That policy requires that
the insurer must pay claims to a mortgagee if that mortgagee is named in either the
declarations of the policy or by endorsement. (See Doc. 105 at 13). At the time of
the fire, the commercial insurance policy’s declarations and endorsements pages
did not list PIB as a mortgagee. (See id. at 14). Ramuji did not request the
addition of PIB to the policy until April 25, 2016, three weeks after the fire loss.
(Doc. 144 at 15).
Two days later, the underwriters of the policy issued an
endorsement adding PIB as a mortgagee effective as of the date of Ramuji’s
One of the underwriters of Ramuji’s policy, Plaintiff Catlin Syndicate
Limited (Catlin), filed this lawsuit against Ramuji and PIB, seeking declaratory
judgment on various grounds. (Doc. 144). Catlin’s lawsuit sparked a flurry of
counterclaims and third-party complaints by Ramuji, PIB, and an intervenor. This
memorandum opinion addresses only PIB’s attempt to amend its answer,
counterclaim, and third party complaint.
In PIB’s first amended counterclaim and third-party complaint, it asserted
seven claims against Catlin and four counterclaim-defendants that it refers to as the
“Underwriters,” and seven claims against Third-Party Defendants Jon Pair and
Randy Jones & Associates. (Doc. 46 at 1, 5–23). Of relevance to the instant set of
motions, PIB raised claims of breach of contract (both as a party to the contract
and as a third-party beneficiary), negligent procurement of insurance, wantonness,
bad faith, fraud, and conspiracy to commit fraud.
Catlin and the
Underwriters each moved to dismiss the amended counterclaim, and the court
granted those motions in part. (Docs. 53, 63, 105).
The court dismissed the breach of contract claim as to the direct theory of
liability, finding that PIB was not a named insured because it did not appear in an
endorsement to the policy, but it permitted PIB’s third-party beneficiary breach of
contract claim to proceed. (Doc. 105 at 16–17). The court dismissed the negligent
procurement of insurance claim because PIB never applied for insurance and
because PIB’s contributory negligence barred its claim. (Id. at 20–22). The court
dismissed the fraud claims because, as a matter of law, PIB could not have
reasonably relied on the alleged misrepresentations or omissions; and it dismissed
the conspiracy to commit fraud claims because, without a viable underlying fraud
claim, PIB could not state a claim for conspiracy. (Id. at 26–27). Finally, the court
dismissed the bad faith claims because PIB was not a party to the insurance
contract. (Id. at 28–31).
PIB then moved to amend its second amended counterclaim and third-party
complaint, seeking to reassert the claims that the court dismissed. (Doc. 106). The
court clarified that the dismissal of PIB’s claims was with prejudice, and denied in
part PIB’s motion to amend. (Doc. 110). The court did, however, allow PIB to
amend its already-existing claims. (Id.). As a result, PIB filed its second amended
counterclaim and third-party complaint.
That pleading is PIB’s
current operative pleading, which it now seeks to amend again. 1
PIB seeks reconsideration of the court’s orders dismissing with prejudice a
number of its claims against Catlin and the Underwriters; to amend its second
amended counterclaim; to amend its second amended answer and third-party
complaint; and to add cross-claims against Ramuji. (Docs. 147, 165). The court
will first address the motion for reconsideration and to amend the counterclaim,
followed by the rest of the requests to amend.
PIB refers to its operative pleading as its “Third Amended Answer and Complaint.”
(See Doc. 147 at 1). The court refers to that pleading as PIB’s second amended answer,
counterclaim, and third-party complaint. PIB filed its initial pleading (composed of an answer,
counterclaim, and third-party complaint) at Doc. 12; its amended pleading (composed of a
counterclaim and third-party complaint) at Doc. 46; and its second amended pleading (composed
of an answer, counterclaim, and third-party complaint) at Doc. 114. That makes Doc. 114—the
second amended answer, counterclaim, and third-party complaint—its operative pleading. Its
newest proposed pleading would be its third amended answer, counterclaim, and third-party
Reconsideration of this Court’s Orders Dismissing With Prejudice
PIB’s Claims of Negligent Procurement, Bad Faith, Fraud, and
PIB contends that the court should reconsider the dismissal with prejudice of
a number of its claims against Catlin and the Underwriters because it has learned
new facts through discovery. (Doc. 147 at 2). Specifically, PIB asserts that new
evidence shows that PIB should have been listed on the commercial insurance
policy; that the commercial insurance policy at issue does not prohibit backdating
an endorsement; and that Catlin and the Underwriters have at times backdated
coverage. (Id. at 3–4). As a result, PIB argues, Catlin and the Underwriters could
have backdated the endorsement listing it as a mortgagee to the date the policy was
issued, making it a named insured as of the time of the fire. (Id. at 5). PIB also
argues that the policy is vague and should be construed against the drafter to
include PIB as a named insured. (Id. at 6–7).
“[R]econsideration of an order is an extraordinary remedy and is employed
sparingly.” Rueter v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 440 F. Supp. 2d
1256, 1267–68 (N.D. Ala. 2006). A motion for reconsideration is not “a platform
to relitigate arguments previously considered and rejected.”
Id. at 1268 n.9.
Indeed, reconsideration is available only “when a party presents the court with
evidence of an intervening change in controlling law, the availability of new
evidence, or the need to correct clear error or manifest injustice.” Summit Medical
Center of Alabama, Inc. v. Riley, 284 F. Supp. 2d 1350, 1355 (M.D. Ala. 2003).
Although PIB contends that its motion for reconsideration is based on newly
discovered evidence, all of its arguments were available to PIB before the court
ruled on the motions to dismiss. Furthermore, although PIB asserts that Catlin and
the Underwriters could and should have backdated the endorsement listing it as a
named insured, it does not argue that Catlin and the Underwriters had an obligation
to do so. The court finds that PIB has not shown any of the factors warranting
reconsideration. As a result, the court DENIES the motion for reconsideration and
DENIES PIB’s motion to amend its second amended counterclaim to reassert
claims that the court has already dismissed with prejudice.
Amending PIB’s Second Amended Answer
PIB seeks to add several sentences to its second amended answer. (See Doc.
165-1 at 2–3, 11). Although Catlin and the Underwriters indicate that they oppose
the motion to amend PIB’s answer, their arguments relate only to the motion for
reconsideration. (See Doc. 151). And PIB’s amendment to its answer would be its
first since Catlin filed its second amended complaint. (See Doc. 144). The court
Fed. R. Civ. P. 15(a)(2). Here, justice requires allowing amendment. The court
GRANTS the motion to amend PIB’s second amended answer.
Amending PIB’s Third-Party Complaint and Adding Cross-Claims
PIB seeks to amend its pleading to raise two cross-claims against its
codefendant, Ramuji LLC, and to add three claims against a new third-party
defendant, Suresh Desai a/k/a Sam Patel, who is the sole member of Ramuji. (See
Doc. 165 at 2; Doc. 165-1 at 56–60). The proposed new claims against Mr. Desai
and Ramuji relate to PIB’s note, mortgage, and individual guaranty for the
purchase of the real property at issue in this case. According to PIB, Ramuji does
not oppose the motion. (Doc. 165 at 2).
The court concludes that PIB may assert its proposed cross-claims against
Ramuji because those claims “relate[s] to [the] property that is the subject matter
of the original action.” Fed. R. Civ. P. 13(g). Likewise, the court finds that joinder
of Mr. Desai is proper because PIB asserts its right to relief against them “with
respect to or arising out of the same transaction, occurrence, or series of
transactions or occurrences” and there are “question[s] of law or fact common to”
Ramuji and Mr. Desai. Fed. R. Civ. P. 20(a)(2)(B). As a result, the court finds
that the interest of justice requires it to permit PIB to amend its pleading to assert
its cross-claims against Ramuji and to add Mr. Desai as a third-party defendant.
Accordingly, the court GRANTS PIB’s motion to add cross-claims against Ramuji
LLC and third-party claims against Suresh Desai a/k/a Sam Patel.
The court GRANTS IN PART AND DENIES IN PART PIB’s motions.
(Docs. 147, 165). The court DENIES PIB’s motion for reconsideration and to
amend its second amended counterclaim.
The court GRANTS the motion to
amend PIB’s answer. The court GRANTS the motion to amend PIB’s third-party
complaint. The court GRANTS the motion to add cross-claims against Ramuji.
The court DIRECTS PIB to file its third amended answer, counterclaim,
cross-claim, and third-party complaint in accordance with this order. That filing
will become PIB’s operative pleading.
DONE and ORDERED this June 29, 2018.
ANNEMARIE CARNEY AXON
UNITED STATES DISTRICT JUDGE
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