Lakeland Village Owners Association v. Great American Insurance Company et al

Filing 80

STIPULATION and ORDER signed by Judge Garland E. Burrell, Jr on 9/16/10 clarifying the Court's 7/22/10 Order. Summary judgment in favor of Great American is granted as to Lakeland's fifth, sixth, and seventh causes of action. Lakeland' s eighth cause of action is dismissed with prejudice. Partial judgment in favor of Great American as to Lakeland's fifth, sixth, and seventh causes of action is granted. The stay of this case will remain in force pending the Ninth Circuit's decision to allow the appeal. (Owen, K)

1 2 3 4 5 6 7 8 9 10 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA SACRAMENTO DIVISION Case No. 2:10-cv-00604-GEB-GGH

11 LAKELAND VILLAGE HOMEOWNERS ASSOCIATION, 12 13 14 15 v. Plaintiff,

STIPULATED [PROPOSED] ORDER: 1) CLARIFYING THE ORDER DENYING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT AND GRANTING GREAT AMERICAN'S CROSS-MOTION FOR SUMMARY JUDGMENT; AND 2) PERMITTING PLAINTIFF TO DISMISS ITS EIGHTH CAUSE OF ACTION FOR VIOLATION OF BUSINESS AND PROFESSIONS CODE ' 17200 WITH PREJUDICE AND ENTERING JUDGMENT IN FAVOR OF GREAT AMERICAN WITH RESPECT TO THE FIFTH, SIXTH, AND SEVENTH CAUSES OF ACTION FOR BREACH OF CONTRACT, BREACH OF THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING AND DECLARATORY RELIEF PURSUANT TO FED.R.CIV.PROC. RULE 54(B)

16 GREAT AMERICAN INSURANCE GROUP, TRAVELERS PROPERTY 17 CASUALTY COMPANY OF AMERICA and DOES 1 through 50, 18 Defendants. 19 20 21 22 23 24 25

On September 14, 2010, Plaintiff Lakeland Village Homeowners

26 Association ("Lakeland") and Defendant Great American Insurance Company 27 ("Great American") jointly requested that this court partially remove the 28 pending stay of this action for the sole purpose of clarifying this Court's
Case No. 2:10-cv-00604 STIPULATED [PROPOSED] ORDER __

1 ORDER DENYING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY 2 JUDGMENT AND GRANTING GREAT AMERICAN'S CROSS-MOTION FOR 3 SUMMARY JUDGMENT, entering partial judgment in favor of Great American 4 as to the fifth, sixth and seventh causes of action and entering a final judgment 5 in favor of Great American pursuant to Fed. R. Civ. Proc. Rule 54(b). This 6 court hereby grants said requests as set forth below. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

I.

CLARIFICATION OF ORDER

On July 22, 2010, the District Court issued its "Order Denying Plaintiffs Motion for Partial Summary Judgment and Granting Defendant's [Great American's] Cross-Motion for Summary Judgment ("The Order"). The Order states that Lakeland moved for partial summary judgment on its seventh cause of action for declaratory relief and that Great American "filed a cross motion for summary judgment, arguing it does not owe Plaintiff a defense and, therefore, is entitled to partial summary judgment on Plaintiff's declaratory relief claim." (pg.1:23-26). The Order concludes by stating: Since Defendant has shown the absence of any potential for coverage under the policy, it does not have a duty to defend Plaintiff in Hollows' pending Cross-complaint or related administrative proceeding. Plaintiffs partial motion for summary judgment is denied and Defendant's [Great American's] cross motion for summary judgment is granted." (Pg.14:2-6) The parties have asked the court to clarify whether the court granted summary judgment as to all claims against Great American or partial summary judgment as to the seventh cause of action for declaratory relief. The court intended to grant partial summary judgment as to the Seventh Cause of Action for Declaratory Relief only. Accordingly, the court's order as set forth above is modified by adding the word "partial" as follows: Since Defendant has shown the absence of any potential for coverage under the policy, it does not have a duty to defend Plaintiff in Hollows' pending Cross-complaint or related administrative proceeding. Plaintiffs partial motion for summary judgment is denied and Defendant's [Great American's] cross motion for partial summary judgment is granted." (Pg.14:2-6)
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STIPULATED [PROPOSED] ORDER Case No. 2:10-cv-00604

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II.

DISMISSAL OF EIGHTH CAUSE OF ACTION FOR VIOLATION OF BUSINESS & PROFESSIONS CODE SECTION 17200

Plaintiff Lakeland has requested that the Court allow Lakeland to dismiss its Eighth Cause of Action for violation of Business & Professions Code section 17200 with prejudice. Said request is hereby granted. III. FINAL JUDGMENT IN FAVOR GREAT AMERICAN The parties have requested that this court enter judgment in favor of Great American on the Fifth, Sixth and Seventh Causes of Action pursuant to

8 Fed. R. Civ. Proc. Rule 54(b) and have acknowledged that appeals normally 9 only lie from final judgments and not from interlocutory orders or rulings. 28 10 U.S.C. Section 1291. The Parties assert that this Court's ruling declaring an 11 absence of a duty to defend owed by Great American to Lakeland, effectively 12 defeats Lakeland's entire action against Great American. 13

California law provides that absent a duty to defend, there can be no

14 breach of contract. Construction Protective Services, Inc. v. TIG Specialty Ins. 15 Co., 29 Cal.4th 189, 198-199 (2002) and that coverage under the policy is a 16 necessary element of a cause of action for breach of the covenant of good 17 faith and fair dealing. Waller v. Truck Insurance Exchange, Inc., 11 Cal.4th 1, 18 36 (1995). When this Court adjudicated the declaratory relief cause of action in 19 favor of Great American, it essentially adjudicated all but the Section 17200 20 claims in Great American's favor. The Section 17200 claims have now been 21 dismissed with prejudice. Accordingly, the court hereby enters partial 22 judgment in favor of Great American only on the fifth, sixth and seventh 23 causes of action for breach of contract, breach of the implied covenant of good 24 faith and fair dealing, and declaratory relief pursuant to Fed. R. Civ. Proc. Rule 25 54(b). 26 /// 27 /// 28 3
STIPULATED [PROPOSED] ORDER Case No. 2:10-cv-00604

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IV.

PARTIAL JUDGMENT IS APPROPRIATE UNDER RULE 54(B)

Generally an order following a motion for partial summary judgment is not final

3 and ordinarily not appealable. Fed. R. Civ. Proc. Rule 54(b). Under limited 4 circumstances, a party can request that a district court certify the order on partial 5 summary judgment for interlocutory appeal. 28 U.S.C. Section 1292(b). However, 6 such motions are rarely granted and require a showing of "exceptional 7 circumstances." 8 A party that loses a motion for partial summary judgment cannot voluntarily

9 dismiss its remaining claims without prejudice in order to render the order 10 appealable. Such a dismissal is viewed as an attempt to "manufacture finality" and 11 thus "manipulate" appellate jurisdiction. Adonican v. City of Los Angeles, 297 F.3d 12 1106, 1107 (9th Cir. 2002). The Court is satisfied that Lakeland and Great American 13 have not attempted to manufacture finality or manipulate appellate jurisdiction, but 14 instead seek to follow the proper procedure for finally resolving the causes of action 15 asserted by Lakeland against Great American in order to pursue appellate review. 16 In multi-party or multi-claim cases, the district court will enter final judgment

17 against some but not all parties only if it determines under Rule 54(b) "that there is no 18 just reason for delay" and then expressly directs entry of judgment on that basis. Fed. 19 R. Civ. Proc. Rule 54(b); Noel v. Hall, 568 F.3d 743, 747 (9th Cir. 2009). Partial 20 judgments are proper under Rule 54(b) where there are distinct and severable claims 21 and immediate review of the portion ruled upon will not result in later duplicative 22 proceedings in the trial or appellate court. Wood v. GCC Bend, LLC, 422 F.3d 873, 23 878-879 (9th Cir. 2005). A Rule 54(b) judgment is also appropriate where the 24 remaining claim was related entirely to a different transaction. Stauffer Chem. Co. v. 25 Keysor-Century Corp., 541 F.Supp. 234 (D DE 1982). It is appropriate to enter 26 partial judgment under Rule 54(b) as to the fifth, sixth and seventh causes of action 27 for breach of contract, breach of the implied covenant of good faith and fair dealing, 28 and declaratory relief against Lakeland and in favor of Great American since these 4
STIPULATED [PROPOSED] ORDER Case No. 2:10-cv-00604

1 claims are unrelated both factually and legally from the claims asserted against 2 Travelers. 3

Lakeland could have brought separate actions against Travelers and

4 Great America, had it so desired and not joined them together in this action. 5 Lakeland's claims asserted against Great American relate to a different 6 insurance policy and involve different policy provisions from those involved in 7 the claims against Travelers. The resolution of insurance coverage issues 8 regarding Great American has no impact on the resolution of the issues 9 regarding Travelers. As such, those causes of action are ripe for a partial 10 judgment under Rule 54(b). Furthermore, there is "no just reason for delay" 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5
STIPULATED [PROPOSED] ORDER Case No. 2:10-cv-00604

since resolution of Great American's duty to defend Lakeland is determinative of the entire action as regards Great American. On September 9, 2010, this Court granted Travelers' Motion for Certification of the Court's July 22, 2010 Order regarding Travelers' duty to defend, and stayed these proceedings pending the Ninth Circuit's review of Travelers' Motion for Certification and/or the Ninth Circuit's decision on Travelers' appeal. As such, there is "no just reason for delay" of resolution of the issues regarding Great American's duty to defend and partial judgment is appropriate under Rule 54(b). V. CONCLUSION For the foregoing reasons and to avoid unnecessary litigation expenses, Lakeland's and Great American's joint request is granted and this Court provides the following relief: 1. 2. The Court's July 22, 2010 Order is clarified as set forth above; Summary judgment in favor of Great American is granted as to

Lakeland's fifth, sixth and seventh causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, and declaratory relief;

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3.

Lakeland's eighth cause of action for violation of Business &

2 Professions Code Section 17200 against Great American is dismissed with 3 prejudice ; 4

4.

A partial judgment in favor of Great American pursuant to Fed. R.

5 Civ. Proc. Rule 54(b) as to Lakeland's fifth, sixth and seventh causes of action 6 for breach of contract, breach of the implied covenant of good faith and fair 7 dealing, and declaratory relief is granted so that Lakeland can go forward with 8 an appeal to the Ninth Circuit; and 9

5.

The stay of this case will remain in force pending the Ninth

10 Circuit's decision on whether it will allow this appeal and/or Travelers' appeal, 11 or if either or both appeals are permitted, or the decisions(s) on appeal. 12 Date: 9/16/2010 13 14 15 16
DEAC _Sig n at ur e- END:

_________________________ GARLAND E. BURRELL, JR. United States District Judge

Approved as to form: HIRSCH CLOSSON McMILLAN & SCHROEDER A Professional Corporation By: __/s/______________________ Clifford Hirsch Attorney for Plaintiff LAKELAND VILLAGE HOMEOWNERS ASSOCIATION Dated: September 15, 2010 CLYDE & CO US, LLP By: ___/s/ (as authorized on 9-15-10)_ Peter J. Whalen Attorney for Defendant GREAT AMERICAN INSURANCE COMPANY
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STIPULATED [PROPOSED] ORDER Case No. 2:10-cv-00604

17 Dated: September 15, 2010 18 19 20 21 22 23 24 25 26 27 28

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Case No. 2:10-cv-00604

STIPULATED [PROPOSED] ORDER