North American Capacity Insurance Company v Spiess Construction Co., Inc.

Filing 91

ORDER signed by Judge Garland E. Burrell, Jr., on 11/30/11 ORDERING that plaintiff's 75 motion to vacate the Court's 11/22/11 Order is DENIED. (Kastilahn, A)

1
2
3
4
5
IN THE UNITED STATES DISTRICT COURT
6
FOR THE EASTERN DISTRICT OF CALIFORNIA
7
8
9

NORTH AMERICAN CAPACITY
INSURANCE COMPANY,
Plaintiff,

10
11
12
13
14
15
16
17
18
19

v.
SPIESS CONSTRUCTION CO., INC.;
TRAVELERS CASUALTY AND SURETY
COMPANY OF AMERICA; GOOD VALUE
CONSTRUCTION, INC.; STARWOOD
CAPITAL GROUP GLOBAL I, LLC;
MAMMOTH MOUNTAIN SKI AREA, LLC;
LEXINGTON INSURANCE COMPANY;
TOWN OF MAMMOTH LAKES;
TRIAD/HOLMES ASSOCIATES; PSOMAS;
SIERRA GEOTECHNICAL SERVICES,
INC.; and DOES 1 through 100,
inclusive,
Defendants.
________________________________

)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)

2:11-cv-00521-GEB-EFB
ORDER

20

Plaintiff filed a motion under Federal Rule of Civil Procedure

21

(“Rule”) 59(e) to vacate the Court’s September 22, 2011 Order, arguing

22

“there was a manifest error of law.” (Notice of Pl.’s Mot. 1:6-7.)

23

Defendants Spiess Construction Co., Inc.; Travelers Casualty and Surety

24

Company of America; Good Value Construction, Inc.; Psomas; and the Town

25

of Mammoth Lakes oppose the motion, arguing, inter alia, “Plaintiff

26

fails to cite any legal authority in support of its position” that the

27

Court committed a manifest error of law. (Travelers’ Opp’n 4:18-19.)

28

“Under Rule 59(e), it is appropriate to alter or amend a

1

1

judgment if (1) the district court is presented with newly discovered

2

evidence, (2) the district court committed clear error or made an

3

initial

4

intervening

5

Spectrum Worldwide, Inc., 555 F.3d 772, 780 (9th Cir. 2009) (internal

6

quotation marks omitted).

decision

that

change

in

was

manifestly

controlling

unjust,

law.”

or

United

(3)

Nat’l

there

is

an

Ins.

Co.

v.

7

Here, Plaintiff argues the Court made a manifest error of law

8

since it relied upon cases that “analyze earth movement exclusions found

9

in a first party ‘all-risk’ property policy rather than [those] found in

10

a third party liability policy, which is at issue here.” (Pl.’s Mot.

11

1:13-15.)

12

policies, “because a third party liability policy only covers the

13

insured’s liability it would be superfluous to specify and distinguish

14

‘man-made’ causes of damage as opposed to ‘natural phenomena.’” Id.

15

12:15-17.

Specifically,

Plaintiff

argues

that

unlike

first

party

16

However, “[a]lthough such an argument has superficial appeal,

17

we cannot say that, as a rule, it is nonsensical for third party

18

policies to insure against losses resulting from natural causes. . . .

19

It seems that insurance companies would want to place such unforeseen

20

risks, such as damage and subsidence due to natural causes, outside the

21

scope of coverage so as not to be liable for unlikely risks.” Nautilus

22

Ins. Co. v. Vuk Builders, Inc., 406 F. Supp. 2d 899, 905 (N.D. Ill.

23

2005). “It is reasonable to believe that the subsidence exclusion would

24

apply to natural causes, unique hazards to which the construction

25

business is generally not subject, and therefore are appropriately

26

excluded from a construction insurance policy.” Id.; see also, e.g.,

27

Garvey v. State Farm Fire & Cas. Co., 48 Cal. 3d 395, 406 (1989) (“The

28

term ‘perils’ in traditional property insurance parlance refers to
2

1

fortuitous,

2

explosion, which bring about the loss. . . . On the other hand, the

3

right to coverage in the third party liability insurance context draws

4

on traditional tort concepts of fault, proximate cause, and duty.”);

5

Montrose Chem. Corp. v. Admiral Ins. Co., 10 Cal. 4th 645, 664 (1995)

6

(“This

7

analysis

8

relationship between perils that are either covered or excluded in the

9

contract. In liability insurance, by insuring for personal liability,

10

and agreeing to cover the insured for his own negligence, the insurer

11

agrees to cover the insured for a broader spectrum of risks.”) (emphasis

12

omitted).

active,

liability
in

the

physical

forces

analysis

differs

property

insurance

such

as

lightning,

substantially
context,

from

which

wind,

the
draws

and

coverage
on

the

13

For the stated reasons, Plaintiff has not shown that the Court

14

committed clear error or made an initial decision that was manifestly

15

unjust.

16

22, 2011 Order is DENIED.

17

Dated:

Therefore, Plaintiff’s motion to vacate the Court’s September

November 30, 2011

18
19
20

GARLAND E. BURRELL, JR.
United States District Judge

21
22
23
24
25
26
27
28
3