Allstate Insurance Company v. Richard Thacher et al
Filing
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ORDER by Judge Ronald S.W. Lew. The Court reasons that the interests of judicial economy mandate that the Court VACATE its November 23, 2009 Order 196 granting both Plaintiffs Motion for a New Trial on the sole issue of damages as well as Plaintiffs Motion to Alter or Amend the Judgment. The Court instead reinstates the September 18, 2009 Judgment 173 , and that Judgment will now serve as the Final Judgment that may be reviewed upon appeal. (Refer to attached docuemnt for details.) (lom)
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UNITED STATES DISTRICT COURT
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CENTRAL DISTRICT OF CALIFORNIA
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12 Allstate Insurance Co.,
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Plaintiff,
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v.
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18 Richard Thacher, et al.,
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Defendants.
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CV 08-3326-RSWL (FMOx)
ORDER
This Court concluded a seven day jury trial in this
matter on August 12, 2009.
The jury returned a verdict
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in favor of Defendants Richard Thacher, Valerie Ann
26 Thacher, and Guadalupe Trujillo on three issues.
The
27 jury found: 1) Plaintiff Allstate Insurance Company
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1 (“Plaintiff Allstate”) did not mail a notice of non2
renewal of the Comprehensive Personal Liability Policy
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(“CPL Policy”) to Richard and Valerie Thacher; 2)
5 Plaintiff Allstate denied coverage under the Personal
6 Umbrella Policy (“Umbrella Policy”); and 3) the
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arbitration award was not unreasonable or the product
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9 of fraud or collusion.
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On September 18, 2009, the Court entered Judgment
for Defendants on Plaintiff Allstate’s claim for
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Declaratory Relief, and for Defendants’ Counterclaims
14 for Breach of Contract and relief under California
15 Insurance Code § 11580 [173]. The September 18, 2009
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Judgment awarded Defendants the full amount of the
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18 underlying state court judgment in Trujillo v. Thacher,
19 the amount of attorneys’ fees and costs expended by Mr.
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Thacher in defending himself against Ms. Trujillo in
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Trujillo v. Thacher, and interest.
Plaintiff Allstate brought a Motion for Judgment as
24 a Matter of Law after the presentation of Defendants’
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case in chief at trial [145]. The Court denied the
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27 Motion. Subsequently, on October 6, 2009, Plaintiff
28 Allstate filed a Renewed Motion for Judgment as a
1 Matter of Law and, in the alternative, Motion for a New
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Trial [181] and a Motion to Alter or Amend the
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September 18, 2009 Judgment [183].
On November 23, 2009, the Court denied Plaintiff
6 Allstate’s Renewed Motion for Judgment as a Matter of
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Law [196]. First, the Court denied Plaintiff
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9 Allstate’s Renewed Motion on the grounds that the
10 mailing of notice was an issue of fact, and not law,
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which the jury reasonably determined at trial.
Second,
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the Court denied Plaintiff Allstate’s Renewed Motion on
14 the grounds that the jury’s determination of coverage
15 gave rise to Plaintiff Allstate’s duties to defend and
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indemnify.
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With regard to Plaintiff Allstate’s Motion for a
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19 New Trial, the Court granted, in part, Plaintiff’s
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Motion [196].
The Court held that the amount of
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damages awarded were excessive in light of the prior
23 settlement discussions between Defendant Trujillo and
24 Defendants Thacher. Therefore, the Court ordered a new
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trial for the sole purpose of determining the
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27 appropriate amount of damages.
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Moreover, the Court granted Plaintiff Allstate’s
1 Motion to Alter or Amend the Judgment [196].
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The Court
found that Defendants’ Section 998 offer was not made
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in good faith and held that it would not award
5 Defendants their post offer costs or interest under
6 California Civil Code section 3291. Accordingly, the
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Court granted Plaintiff’s Motion to Alter or Amend the
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9 Judgment to the extent that no post offer costs or
10 interest shall be awarded to Defendants.
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The Court
held that the amount of the actual judgment shall be
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determined by a jury in the new trial ordered by the
14 Court.
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On December 21, 2009, Defendants filed a Motion for
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Reconsideration of the Court’s November 23, 2009 and
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18 June 30, 2009 Orders [201].
On March 24, 2010, the
19 Court denied the Motion for Reconsideration as to both
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the June 30, 2009 Order and the November 23, 2009 Order
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On June 30, 2009, the Court issued an Order
regarding the Parties Cross-Motions for Summary
Judgment and/or Partial Summary Judgment. The Court
found that Plaintiff Allstate had received notice of
the claim and no separate notice was required to tender
under the umbrella policy. The Court further found
that the umbrella policy did not require the Thachers
to maintain primary coverage. Furthermore, the Court
found that Plaintiff Allstate had not acted in bad
faith [76].
1 because Defendants had failed to establish that there
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had been a significant change in the facts or law with
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regard to the Case [219].
Moreover, the Court denied
5 Defendants’ request for appellate review pursuant to
6 Federal Rule of Civil Procedure 54(b).
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With respect to Defendants’ request for
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9 certification pursuant to 28 U.S.C. § 1292(b),
10 Defendants sought certification of two questions, one
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for the June 30, 2009 Order and one for the November
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23, 2009 Order.
The June 30, 2009 Order addressed the
14 Motion for Summary Judgment on Defendants’ bad faith
15 counterclaim. In its March 24, 2010 Order [219], the
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Court denied Defendants’ request to certify the issue
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18 of bad faith for interlocutory appeal. However, as to
19 the November 23, 2009 Order, the Court granted
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Defendants’ request for interlocutory appeal.
The
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Court certified the following issue for appeal:
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Can this Court order a new trial, based solely on
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the excessiveness of the damages awarded, if the
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jury did not find the arbitration award
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unreasonable or the product of fraud or collusion.
28 On June 15, 2010, the Ninth Circuit issued an Order
1 denying the petition for permission to appeal pursuant
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to 28 U.S.C. § 1292(b) [220].
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In its November 23, 2009 Order, the Court GRANTED
5 Plaintiff’s Motion for a New Trial to determine the
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appropriate amount of damages.
A Court trial on the
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issue of damages was set for March 15, 2011.
On
9 March 1, 2011, the Court held a status conference with
10 the Parties and vacated the Court trial set for March
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15, 2011. The Court instructed counsel to meet and
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13 confer to determine whether this Case would proceed as
14 a trial de novo or a Court trial on the issue of
15 damages only.
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On April 8, 2011, the Parties submitted a Joint
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18 Status Report to the Court. Defendants informed the
19 Court that they would seek a Court trial on the issue
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of damages only. However, Plaintiff Allstate elected
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to have this Case proceed as a trial de novo. On May
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23 16, 2011, the Court informed the Parties that it was
24 contemplating vacating its November 23, 2009 Order
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[196] granting Plaintiff’s Motion for a New Trial on
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27 the sole issue of damages as well as Plaintiff’s Motion
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1 to Alter or Amend the Judgment.
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On May 31, 2011, the
Parties submitted further briefing to the Court with
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regard to their respective positions on this issue.
Upon further review of the arguments presented and
6 the overall litigation history in this Action, the
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Court now VACATES its November 23, 2009 Order [196]
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9 granting both Plaintiff’s Motion for a New Trial on the
10 sole issue of damages as well as Plaintiff’s Motion to
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Alter or Amend the Judgment. An order granting a new
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13 trial is interlocutory and not immediately appealable.
14 Allied Chemical Corp. v. Daiflon, Inc., 449 U.S. 33, 34
15 (1980). Furthermore, an order granting a new trial may
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be set aside after the expiration of the term at which
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18 it was entered, and judgment rendered on the verdict.
19 Storey v. Storey, 221 F. 262, 263 (D.C. Wis. 1915).
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Upon further consideration, the Court finds that
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the jury could not determine the amount of damages to
23 award to the Defendants in the first trial.
Rather,
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arbitration award was unreasonable or the product of
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27 fraud or collusion. The jury in a new trial will be
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1 limited to resolving this same issue, which could
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potentially lead to a similar verdict to the one
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returned by the jury in the first trial, thereby not
5 resolving this Court’s disagreement with regard to
6 Defendant Trujillo receiving an excessively high
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damages award.
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While the Court found the damages awarded to
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10 Defendant Trujillo in the arbitration were excessive in
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light of Defendant’s actual injuries and the settlement
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figures proposed initially, upon further review of the
14 arguments presented, the Court finds that proceeding
15 with a trial de novo could lead to a similar verdict to
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the one returned by the jury in the first trial.
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Moreover, contrary to Plaintiff Allstate’s
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19 contentions, the Court did not err in presenting the
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jury the following question in the special verdict form
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[163] in the first trial: “Was the arbitration award
23 unreasonable or the product of fraud or collusion?”
In
24 Plaintiff Allstate’s initial filing of a proposed
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special verdict form, Question No. 3 inquired as to
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27 whether the arbitration award was the product of fraud
28 or collusion while Question No. 4 inquired, separately,
1 as to whether the arbitration award was unreasonable
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[139].
The Court finds that it did not err in
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combining these two questions into a single question
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6 otherwise are not compelling.
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Accordingly, the Court reasons that the interests
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9 of judicial economy mandate that the Court VACATE
10 its November 23, 2009 Order [196] granting both
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Plaintiff’s Motion for a New Trial on the sole issue of
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13 damages as well as Plaintiff’s Motion to Alter or Amend
14 the Judgment.
The Court instead reinstates the
15 September 18, 2009 Judgment [173], and that Judgment
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will now serve as the Final Judgment that may be
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18 reviewed upon appeal.
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DATED: June 30, 2011
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IT IS SO ORDERED.
/S/
RONALD S.W. LEW
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HONORABLE RONALD S.W. LEW
Senior, U.S. District Court Judge
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