Oracle Corporation et al v. SAP AG et al

Filing 1151

Declaration of Tharan Gregory Lanier in Support of 1150 Opposition/Response to Motion,, 1149 Opposition/Response to Motion, Declaration of Tharan Gregory Lanier in Support of Defendants' Oppositions to Oracle's Motions for Leave to File Motions for Reconsideration Regarding (1) Saved Development Costs and (2) Up-Sell and Cross-Sell Projections, and Motion for Clarification filed bySAP AG, SAP America Inc, Tomorrownow Inc. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13, # 14 Exhibit 14)(Related document(s) 1150 , 1149 ) (Froyd, Jane) (Filed on 5/1/2012)

EXHIBIT 7

Page 1

NAPA COMMUNITY REDEVELOPMENT AGENCY, Plaintiff, v.
CONTINENTAL INSURANCE CO., PLANET INSURANCE CO., and DOES 1 50, Defendants.
No. C-94-3284 DLJ
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
CALIFORNIA
1995 U.S. Dist. LEXIS 22542

November 17, 1995, Decided
SUBSEQUENT HISTORY: Summary judgment
granted by, Judgment entered by NAPA Cmty.
Redevelopment Agency v. Cont'l Ins. Co., 1996 U.S. Dist.
LEXIS 22991 (N.D. Cal., Sept. 16, 1996)
COUNSEL: [*1] For Napa Community Redevelopment
Agency, Plaintiff: Kirk Edward Trost, LEAD
ATTORNEY, Hyde Miller & Owen, Sacramento, CA.

On November 15, 1995, the Court heard argument
on defendant Planet Insurance company's motion for
reconsideration, or in the alternative, for certification for
interlocutory appeal. Having considered the arguments of
counsel, the papers submitted, the applicable law, and the
record in this case, the Court hereby DENIES defendant's
motion for reconsideration and DENIES defendant's
request for certification for interlocutory appeal.

For Continental Insurance Company, The, Defendant:
James
Hugh
Wilkins,
LEAD
ATTORNEY,
Wilkins,Drolshagen & Czeshinski, Fresno, Ca.

I. BACKGROUND

For Planet Insurance Company, Defendant: Brian
Gearinger, LEAD ATTORNEY, Mosley & Gearinger
LLP, San Francisco, CA; Kelly L. Quigley, LEAD
ATTORNEY, Hancock Rothert & Bunshoft LLP, San
Francisco, CA.

1. Cal savings' Suit Against
Redevelopment Agency ("NCRA")

JUDGES: D. Lowell Jensen, United States District
Judge.
OPINION BY: D. Lowell Jensen
OPINION

ORDER

A. Factual Background and Procedural History
Napa

Community

On August 31, 1987, California Savings & Loan
("Cal Savings" or "CSL") filed a claim with plaintiff
NCRA. The Cal Savings [*2] action arose out of
NCRA's acquisition of a portion of the Cal Savings
property in downtown Napa for an urban redevelopment
project. The property acquired consisted of landscaping
and 12 on-site parking spaces adjacent to the Cal Savings
branch office. According to NCRA, when it acquired the
property in 1981, its redevelopment plans contemplated
the construction of a "sandwich-style" parking structure
on the acquired site. The proposed "sandwich-style"
parking structure would have underground parking on
one level, a department store on the main level, and

Page 2
1995 U.S. Dist. LEXIS 22542, *2

rooftop parking on the third level. The parties executed
an acquisition contract in November 1980, NCRA paid
$148,069, and a grant deed was recorded in February
1981.
Ultimately, NCRA did not construct the
"sandwich-style" parking structure. NCRA commenced
construction of alternative improvements on the acquired
site in September 1986 and completed construction in
November 1987. On August 31, 1987, Cal Savings filed a
government claim against NCRA and, on February 20,
1990, filed a complaint in Napa County Superior Court.
On November 16, 1990, Cal Savings filed a First
Amended Complaint for Inverse Condemnation and
Breach of Contract [*3] and Misrepresentation
(negligent and intentional). Among other things, Cal
Savings alleged that NCRA had represented that the
"sandwich-style" parking structure would be built without
a reasonable basis for believing that to be true.

NCRA initially tendered the Cal Savings action to
Planet Insurance Company. Planet denied the tender on
the grounds, inter alia, that the relevant date of loss was
when the alleged misrepresentations were made or when
the property was sold. These actions happened in
1980-81. Planet's coverage period is from June 1986
forward.
NCRA then tendered defense of the Cal Savings
action to Continental Insurance Company. Continental
denied the tender on the grounds, inter alia, that the loss
did not occur until September 1986, when the new
parking structure was actually built, continental's
coverage period ended in June, 1986.
This action followed. In August 1994, NCRA sued
Planet [*5] and Continental for declaratory judgment,
breach of contract and bad faith failure to defend in state
court. Defendants removed the case to this Court.

After a bifurcated trial on all legal and equitable
issues, the trial court determined that (1) the doctrine of
estoppel by deed barred the cause of action for inverse
condemnation; and (2) the acquisition contract and deed
were fully integrated. NCRA then moved for summary
judgment on the breach of contract and misrepresentation
causes of action, which motion the trial court granted on
October 27, 1992. The trial court reasoned that as the
contract and deed were fully integrated and there was no
provision promising to build a parking structure, Cal
Savings' breach of contract claim must fail. The court
also found that Cal Savings' misrepresentation claim
sounded in tort and not contract. Accordingly, the court
found that as a public agency, NCRA was statutorily
immune from misrepresentation.

On May 17, 1995, the Court heard arguments on
defendants' motions for summary judgment and plaintiff's
crossmotions for partial summary judgment. By Order
dated August 1, 1995 ("the Order"), this Court granted
defendant Continental's motion for summary judgment
against NCRA, denied NCRA's crossmotion for partial
summary judgment against Continental, denied defendant
Planet's motion for summary judgment against NCRA,
and granted NCRA's motion for partial summary
judgment against Planet. On October 3, 1995, Planet filed
this motion for reconsideration, or in the alternative, for
certification for interlocutory appeal.

Cal Savings subsequently appealed the trial court
rulings and, on July 23, 1994, the Court of Appeal upheld
the judgment for NCRA. The court of appeal agreed that
estoppel [*4] by deed barred the inverse condemnation
cause of action and that as the contract was integrated,
there could be no claim for breach of contract. The court
of appeal affirmed judgment on the misrepresentation
claim on somewhat different grounds that the trial court.
To the extent the misrepresentation claim sounded in tort,
the court agreed that NCRA was statutorily immune. To
the extent the misrepresentation claim sounded in
contract, it failed for the same reason the contract claim
failed.

Under Rule 54(b), a court has discretion to review
orders prior to entry of final judgment: "[A]ny order
which . . . adjudicates fewer than all the claims or rights
or liabilities of fewer than all the parties . . is subject to
revision at any time before the entry of [final] judgment."
Fed.R.Civ.P 54(b).

2. NCRA's Tender of the Defense

B. Legal Standard
1. Motion for Reconsideration

Under Rule 60(b) of the Federal Rules of Civil
Procedure, motions to reconsider [*6] are committed to
the discretion of the trial court. Combs v. Nick Garin
Trucking, 825 F.2d 437, 441, 263 U.S. App. D.C. 300
(D.C. Cir. 1987). To succeed in a motion to reconsider, a
party must set forth facts or law of a strongly convincing
nature to induce the Court to reverse its prior decision.

Page 3
1995 U.S. Dist. LEXIS 22542, *6

See, e.g., Kern-Tulare Water Dist. v. City of Bakersfield,
634 F. Supp. 656, 665 (E.D. Cal. 1986), aff'd in part and
rev'd in part on other grounds, 828 F.2d 514 (9th Cir.
1987), cert. denied. 486 U.S. 1015, 108 S. Ct. 1752, 100
L. Ed. 2d 214 (1988).
An order may be reconsidered if the Court made a
clear error of law or if the prior order caused a manifest
injustice to occur. In order for a party to demonstrate
clear error, the moving party's arguments cannot be the
same as those made earlier. Great Hawaiian Fin. Corp. v.
Aiu, 116 F.R.D. 612, 617 (D.Haw. 1987) (citations
omitted). If a party simply inadvertently failed to raise the
arguments earlier, the arguments are deemed waived. Id.
To succeed on a such a motion to reconsider, a party
"must set forth facts or law of a strongly convincing
nature to induce the court to reverse its prior decision."
Id. at 616.
In the Northern District, a motion for reconsideration
is governed by Civil Local Rule 7-9. [*7] Rule 7-9(a)
first requires that "[n]o party shall notice a motion for
reconsideration without first obtaining leave of court to
file the motion." Rule 7-9(b) provides in relevant part
that:
The moving party must specifically show . . . . (3) A
manifest failure by the court to consider material facts
which were presented to the court before such
interlocutory order [for which reconsideration is sought]."
However, "[n]o motion . . . for reconsideration shall
repeat any oral or written argument made by the applying
party in support of or in opposition to the interlocutory
order which the party now seeks to have reconsidered."
civil L.R. 7-9(c).
2. Interlocutory Appeal - 28 U.S.C. § 1292(b)
The general rule is that an appellate court should not
review a district court ruling until after entry of a final
judgment. Coopers & Lybrand v. Livesay, 437 U.S. 463,
474, 98 S. Ct. 2454, 57 L. Ed. 2d 351 (1978); In re
Cement Antitrust Litig., 673 F.2d 1020, 1026 (9th Cir.
1982), aff'd sub nom. Arizona v. Ash Grove Cement Co.,
459 U.S. 1190, 103 S. Ct. 1172, 103 S. Ct. 1173, 75 L.
Ed. 2d 425 (1983); Fukuda v. County of Los Angeles, 630
F. Supp. 228, 229 (C.D. Cal. 1986); see 28 U.S.C. §
1291.
The Interlocutory Appeals Act of 1958 creates an

exception to the general rule. The statute states [*8] that:
When a district judge, in making in a
civil action an order not otherwise
appealable under this section, shall be of
the opinion that such order involves a
controlling question of law as to which
there is substantial ground for difference
of opinion and that an immediate appeal
from the order may materially advance the
ultimate termination of the litigation, he
shall so state in writing in such order. The
Court of Appeals . . . may thereupon . . .
permit an appeal . . . if application is made
to it within ten days. . . .
28 U.S.C. § 1292(b)[hereinafter "Section 1292(b)"]. This
statute exists for those exceptional circumstances where
considerations of judicial economy and fairness demand
interlocutory review of an order. The party seeking
certification of an interlocutory appeal has the burden to
show the presence of those exceptional circumstances.
Coopers & Lybrand, 437 U.S. at 474-75; Fukuda, 630 F.
Supp. at 229.
Section 1292 identifies three factors that must be
present in order for the Court to certify an appeal. First,
the issue to be certified must involve a controlling issue
of law. The Ninth Circuit has ruled that an issue is
"controlling" if "resolution of the issue on [*9] appeal
could materially affect the outcome of litigation in the
district court." In re Cement Antitrust Litig., 673 F.2d at
1026 (citing U.S. Rubber Co. v. Wright, 359 F.2d 784,
785 (9th Cir. 1966)); see Shurance v. Planning Control
Int'l. Inc., 839 F.2d 1347, 1347-48 (9th Cir. 1988).
Second, there must be substantial ground for
difference of opinion on that issue. A party's strong
disagreement with the Court's ruling is not sufficient for
there to be a "substantial ground for difference"; the
proponent of an appeal must make some greater showing.
Kern-Tulare Water Dist. v. Bakersfield, 634 F. Supp.
656, 667 (E.D. Cal. 1986), aff'd in part and rev'd in part
on other grounds, 828 F.2d 514 (9th Cir. 1987), cert.
denied, 486 U.S. 1015, 108 S. Ct. 1752, 100 L. Ed. 2d
214 (1988).
Third, an interlocutory appeal must be likely to
materially speed the termination of the litigation. This
factor is linked to whether an issue of law is "controlling"

Page 4
1995 U.S. Dist. LEXIS 22542, *9

in that the Court should consider the effect of a reversal
by the Ninth Circuit on the management of the case. In
addition, in light of the legislative policy that the statute
only be used in exceptional circumstances, the Court
should consider whether litigation in reliance on its order
[*10] permitting an interlocutory appeal would be
"protracted and expensive." In re Cement Antitrust Litig.,
673 F.2d at 1026; see 16 Charles A. Wright & Arthur
Miller, Federal Practice and Procedure § 3930, at 163-66
(1977). If an interlocutory appeal would actually delay
the conclusion of the litigation, the Court should not
certify the appeal. See Shurance, 839 F.2d at 1348
(refusing to hear certified appeal in part because decision
of Ninth Circuit might come after scheduled trial date).
II. ARGUMENTS
A. Procedural Defects
1. Failure to Comply with Local Rules
The Local Rules require that a party moving for
reconsideration must first seek leave of the court. Civil
L.R. 7-9(a). Planet has not done so. Therefore, Planet's
motion is technically deficient and not properly before
this Court.
NCRA contends that this failure to comply with the
Local Rules is fatal to Planet's motion. They also have
asked for sanctions pursuant to Civil Local Rule 7-9(c) in
the amount of attorney's fees and costs. However, there
does not appear to have been any prejudice to NCRA or
to Continental as a result of Planet's procedurally
improper motion. Because all parties have had an
adequate opportunity to respond, [*11] and have in fact
done so, it is not inappropriate to consider Planet's
motion on the merits.

1442 (9th Cir. 1991) (citations omitted). Under Rule
59(e), a motion for reconsideration must be brought
within ten (10) days of the entry of summary judgment.
Fed.R.Civ.P. 59(e). This Court's Order of summary
judgment was entered August 1, 1995. Planet filed its
motion for reconsideration on October 3, 1995, and the
motion is therefore untimely under Rule 59(e).
Consequently, for this Court to give effect to Planet's
motion, it must be considered as a motion for
reconsideration pursuant to Rule 60(b).
Rule 60(b) "provides for [*12] reconsideration upon
a showing of (1) mistake, surprise, or excusable neglect;
(2) newly discovered evidence; (3) fraud; (4) a void
judgment; (5) a satisfied or discharged judgment; or (6)
'extraordinary circumstances' which would justify relief."
Id. (citing Fed.R.Civ.P. 60(b); Backlund v. Barnhart, 778
F.2d 1386, 1388 (9th Cir. 1985). The factors relied upon
by Planet in Civil Local Rule 7-9, "a manifest failure . . .
to consider material facts," are sufficiently similar to Rule
60(b) to warrant consideration under that Rule.
B. Motion for Reconsideration
Planet asserts that this Court failed to consider
material facts in connection with the Planet policy that
indicated Planet had no duty to defend NCRA against Cal
Savings. Planet posits four different "facts" that this
Court allegedly neglected to evaluate. 1
1
Most of the "material facts" identified in
Planet's motion were expressly considered in the
Court's prior Order. As such, these facts so not
provide sufficient basis for reconsideration.
Nonetheless, for the benefit of the parties, this
order reviews all of Planet's grounds for
reconsideration.

2. Failure to Identify a Federal Rule

1. Date of Occurrence

Planet has also given no indication which Federal
Rule governs its motion for reconsideration. Planet
apparently relies on Rule 54(b) as the foundation for its
motion. Under Rule 54(b), this Court does have the
authority to "revise" any order that adjudicates fewer than
all the claims. Rule 54(b) does not, however, provide a
mechanism by which parties may seek reconsideration.

Planet first alleges that this Court failed to consider
facts [*13] relating to the date of the insurance policy
"occurrence."

Rather, "a motion for reconsideration of summary
judgment is appropriately brought under either Rule 59(e)
or Rule 60(b)." Fuller v. M.G. Jewelry, 950 F.2d 1437,

On motion for summary judgment, Planet claimed
that it was not liable under the policy because the alleged
misrepresentation occurred in 1980 or 1981, prior to the
Planet policy period. It argued that for purposes of
negligent misrepresentation, damage occurs at the time
the representations are made and not when the
complaining party is actually injured.

Page 5
1995 U.S. Dist. LEXIS 22542, *13

This Court disagreed, finding that "Cal Savings did
not sustain any damage until NCRA began construction
without including 'sandwich-style' parking facilities."
Thus, the date of the "occurrence" for purposes of
coverage was found to be September, 1986.
Planet now claims that this Court ignored "the crux
of [its] motion . . . which is that actual damage to [Cal
Savings] took place at least by the time the property was
sold in 1980." The focus of Planet's argument centers
around two "facts" that this Court allegedly failed to
consider.
a. Cal Savings's Lost Use Claim
Planet argues that this Court ignored facts alleged by
Cal Savings in the original complaint that indicate the
"occurrence" was in 1980 or 1981 when the actual
misrepresentation was made.
Planet contends that the damages [*14] flowing
from the misrepresentation claim are different from either
the breach of contract or inverse condemnation damages,
and that the only possible damage arising from Cal
Savings' misrepresentation claim is the loss of use of the
parking spots. It asserts that Cal Savings' complaint
alleged that it lost use of the parking spots in 1980/81.
Planet argues that this loss amounted to "property
damage" within the terms of the Continental policy, so
that liability for the misrepresentation should have been
triggered well before 1986. Planet now claims that "[i]t is
without reason that the Court then finds the date of
construction as the date of actual damage -- especially
where CSL clearly lost use of the property by 1981."
This argument is unconvincing because it assumes
that Cal Savings suffered injury when it allegedly "lost
use" of the parking slots in 1980/81. The only evidence
Planet presents on this issue is a letter indicating that Cal
Savings would lose "exclusive" use of the parking spots
when escrow closed. (See Planet's Exhibit D). This is not
evidence that Cal Savings was injured by the loss of
exclusive use at that time. Planet does not dispute the fact
that Cal Savings consented [*15] to at least a temporary
"lost use" of those spots. As such, this Court remains
convinced that the misrepresentation at issue in the
underlying action did not manifest itself as injury to Cal
Savings until it became apparent that the
"sandwich-style" parking structure would not be built.
Second, Planet's argument also fails in the context of

a motion for reconsideration because it is essentially the
same argument that Planet made in its motion for
summary judgment. Planet does not point to any fact or
allegation that was not already considered by this Court.
It simply disagrees with this Court's finding based on the
same facts now presented for reconsideration. Presenting
the same argument that has previously been considered
and rejected is inappropriate in a motion for
reconsideration. See Backlund, 778 F.2d at 1388.
b. NCRA's Allegations against Continental
Planet also claims that this Court failed to consider
NCRA's "admission" that the occurrence "indisputably
occurred" in 1980/81. This plainly mischaracterizes
NCRA's claim. NCRA does not state that the relevant
"occurrence" "indisputably" took place in 1980/81.
NCRA does allege that there was "arguably" an
"occurrence" in 1980/81. [*16] It also claims that there
was an occurrence in 1986. However, the fact that NCRA
argues that 1980/81 was a relevant "occurrence" date is
not dispositive of the issue.
NCRA's pleadings were clearly considered by this
Court when it determined that Cal Savings had been
damaged in 1986, and not in 1980/81. The Order plainly
notes that "[p]laintiff contends that both [1980/81 and
1986] are relevant 'occurrence' dates." Thus, it is
inapposite for Planet to claim that this Court, in making
its decision, did not consider Cal Savings' arguments to
the effect that 1980/81 was also an 'occurrence' date. That
consideration was at the heart of the Order.
Planet argues that judicial estoppel should bar NCRA
from arguing that there were two "occurrences." Planet
contends that by alleging "occurrences" in 1980/81 and
1986, NCRA has taken impermissibly inconsistent legal
positions with respect to the "meaning and effect" of the
facts of this case.
The law of judicial estoppel is unclear in the Ninth
Circuit. Yanez v. United States, 989 F.2d 323, 326 (9th
Cir. 1993). "As a general principle, the doctrine of
judicial estoppel bars a party from taking inconsistent
positions in the same litigation." Id. (quoting [*17]
Morris v. California, 966 F.2d 448 (9th Cir. 1991)). The
majority of courts hold that judicial estoppel does not
apply unless the assertion inconsistent with the claim
made in the subsequent litigation was adopted in some
manner by the court in the prior litigation. See In re
Corey, 892 F.2d 829, 836 (9th Cir. 1989). A minority of

Page 6
1995 U.S. Dist. LEXIS 22542, *17

courts follow the less rigorous rule that applies judicial
estoppel where a party is playing 'fast and loose' with the
court. Id. The Ninth Circuit has not adopted either the
"majority" position or the "minority" position in
determining when judicial estoppel applies. See Britton v.
Coop Banking Group, 4 F.3d 742, 744 (9th Cir. 1993).
In either case, a threshold requirement for judicial
estoppel to apply is the "inconsistency" of the factual or
legal positions. Yanez, 989 F.2d at 326. It is not entirely
clear that NCRA's pleadings are inconsistent. It is
possible that NCRA could have pursued claims against
both continental and Planet on a "continuous injury
trigger" theory. See e.g., Montrose Chemical Corp. v.
Admiral Ins. Co., 10 Cal.4th 645, 42 Cal. Rptr. 2d 324,
913 P.2d 878 (1995) (applying continuous injury trigger
to coverage under a comprehensive general liability
(CGL) insurance policy [*18] where injury or damage is
continuous over successive policy periods).
Most continuous injury trigger cases involve
repeated injury or progressive deterioration as the
triggering events. See Id. at 686, n.22 (discussing cases
such as asbestos exposure or environmental
contamination). While it is not certain whether or not this
case involves the type of "continuous" injury
contemplated by Montrose, it is not necessary that this
Court decide the issue. For purposes of this motion,
NCRA's pleadings could not be said to be so inconsistent
as to be "playing 'fast and loose'" with the Court. Britton,
4 F.3d at 744 (citations omitted). Thus, judicial estoppel
does not apply.
The crux of Planet's motion appears to be that
Court picked the wrong date when it found that
"occurrence" was in 1986. This disagreement with
Court's finding alone does not provide a basis
reconsideration. See Backlund, 778 F.2d at 1388.

the
the
the
for

2. This Court's Interpretation of "Coverage C"
Planet next argues that footnote four in the Order
was "blatantly" erroneous. Footnote four states that:
[i]n the alternative, if Cal Savings' claim
against Napa were considered one not for
property damage but rather for economic
[*19] injury, then the suit would fall
within the scope of Planet policy Coverage
C which provides coverage for "any actual
or alleged error or misstatement or

misleading
statement"
excluding
"damages because of 'bodily injury,'
'property damage,' personal injury' or
'advertising injury.
Planet argues that the Court ignored unambiguous
language in the policy that would not allow for recovery
under Coverage C. However, it is unlikely that the Court
failed to consider the terms of the Coverage C policy in
light of the fact that much of the language Planet claims
was not considered by this Court is quoted in the
offending footnote.
Planet also apparently believes that the Coverage C
liability noted in footnote four was necessary to the
Court's decision to grant partial summary judgment.
Liability under Coverage C was only relevant if this
Court found that Cal Savings had alleged economic
injury rather than property damage. Because this Court
found that Cal Savings' claim amounted to property
damage, Planet had a duty to defend under Coverage A
whether or not Coverage C applied.
Planet's attempts to read Coverage C exclusions into
Coverage A are misguided. Different liability and
different exclusions [*20] attach to each Coverage.
Planet cannot deny its obligation to defend under
Coverage A through an exclusion that applies only to
Coverage C. To so read the policy would mean that
Planet could always deny coverage for property damage
through the exclusion in Coverage C. In any event, Planet
is unable to show that this Court failed to consider the
terms of Coverage C, and thus its motion for
reconsideration fails.
4. Contractual Misrepresentation
Planet finally argues that the misrepresentation claim
asserted by Cal Savings was contractual in nature, and is
therefore barred a matter of law. It is true that Cal
Savings tried to argue its misrepresentation claim at least
in part as a claim for contractual misrepresentation. This
appears to have been an attempt to avoid the statutory
governmental immunity afforded to NCRA against tort
claims. However, Planet relies only on the arguments of
Cal Savings, and not on the complaint itself, to support
the proposition that it had no duty to defend. This
misconstrues an insurer's obligations. The duty to defend
attaches where the facts suggest even the possibility that
a claim may arise under any conceivable theory. See
Montrose, 6 Cal. 4th at 295-300; [*21] Gray v. Zurich

Page 7
1995 U.S. Dist. LEXIS 22542, *21

Ins. Co., 65 Cal.2d 263, 276-77, 54 Cal. Rptr. 104, 419
P.2d 168 (1966). It is clear from Cal Savings' complaint
that the misrepresentation claim could sound in tort. The
fact that the insured likely has a valid defense to that
claim does not absolve the insurer from its obligation to
provide that defense. See Horace Mann Ins. Co. v.
Barbara B., 4 Cal. 4th 1076, 1081-88, 17 Cal. Rptr. 2d
210, 846 P.2d 792. Thus, even if it was unlikely Cal
Savings could succeed on its tort Claim, Planet
nonetheless had a duty to defend.
In any event, this claim too appears to have been
considered and rejected by this Court:
Planet contends that even if the
negligent misrepresentation claim by Cal
Savings against NCRA is an occurrence
within the relevant policy period, Planet
did not have a duty to defend against Cal
Savings' claim because the claim was
without legal merit. The Court disagrees.
As the California supreme Court has said,
"If [the] claims were indeed so
insubstantial as not to warrant any
damages, [the insurer] should have raised
that defense in the underlying action for
[the insured's] benefit, rather than in this . .
. action to his detriment (citations). Order
at 15:8-22.
Having judged Planet's claim to be without merit, this
Court need not [*22] grant a motion to reconsider the
identical argument.
C. Certification for Interlocutory Appeal
Planet requests that, if this Court denies its motion
for reconsideration, the question of whether or not it had
a duty to defend be certified for appeal to the Ninth
circuit under Section 1292(b). Planet contends that this
issue is "controlling" within the meaning of the statute. It
claims that a Ninth Circuit decision could dispose of the
entire action. If the Ninth Circuit were to find that Planet
did not have a duty to defend, according to Planet, there
would be no claim against it for failure to tender a
defense in bad faith.
NCRA counters that the question of whether Planet
had a duty to defend is not necessarily the only issue left
open by the Order. NCRA has argued that Planet waived
defenses to its coverage obligation. It claims that it can

still maintain a cause of action for bad faith failure to
defend even if this court finds no coverage. It argues that
these issues would not be resolved by appeal to the Ninth
Circuit, and thus there is no "controlling" issue to be
certified.
It is possible that the question of Planet's duty to
defend is controlling here. Planet correctly points out
[*23] that this Court denied NCRA's claim of waiver as
to Continental's right to deny coverage. The Court found
that NCRA had not established either intentional or
implied waiver of Continental's defenses. While the
Order did not address the question of waiver as it relates
to Planet, it is possible that the same reasoning would
apply to both insurers, and Planet would not be said to
have waived its defenses to its coverage obligation. In
that case, the question of whether Planet had a duty to
defend would "materially affect the outcome of the
litigation . . . ." In re Cement Antitrust Litig., 673 F.2d at
1026 (citations omitted).
However, even if Planet could establish that the only
remaining question was its duty to defend, it has not
demonstrated a substantial ground for difference of
opinion. Planet's motion for reconsideration is evidence
of little more than a strong disagreement with a decision
of this Court. The fact that Planet does not agree with this
Court's order, however, is not sufficient to justify
certification. See Kern-Tulare Water Dist., 634 F.Supp.
at 667.
In addition, appeal does not seem certain to hasten
the outcome of this case. There is no guarantee that the
Ninth Circuit [*24] would agree with Planet. If it does
not, only one of several issues regarding Planet's liability
will have been settled. Trial will still be necessary, and
will have been unnecessarily delayed. Moreover, if as
Planet contends, the only issue remaining to be decided is
NCRA's bad faith claim, a trial might resolve that
question more quickly than would an appeal to the Ninth
circuit for a decision that may or may not be dispositive
of the entire case. Therefore, Planet's motion to certify for
appeal under Section 1292(b) is denied.
D. Motion to Stay Pending Appeal
Planet also requests that this action be stayed
pending the outcome of an appeal to the Ninth Circuit.
Obviously, because Planet's motion to seek appellate
review is denied, there is no reason to stay the
proceedings.

Page 8
1995 U.S. Dist. LEXIS 22542, *24

III. CONCLUSION
Planet did not comply with the Local Rules in its
motion for reconsideration. However, the Court does not
find it appropriate to deny Planet's motion or impose
sanctions on those grounds.
Although Planet contends that its motion is based on
this Court's failure to consider material facts in granting
partial summary judgment for NCRA, the facts identified
by Planet in its motion were either expressly [*25]
considered by this Court's prior Order or immaterial to
the summary judgment decision. That Planet disagrees
with this court's findings is evident. However, this
disagreement alone does not entitle it to seek
reconsideration of claims that have been considered and
ruled upon by this Court. The motion for reconsideration
is DENIED.

Planet also has requested that this Court certify the
question of Planet's duty to defend for interlocutory
review. However, this case is neither so complicated nor
likely to be so protracted as to warrant such "exceptional"
treatment. Therefore, Planet's motion for certification,
and its motion to stay the proceedings, are also DENIED.
IT IS SO ORDERED.
Dated: November 17, 1995.
/s/ D. Lowell Jensen
D. Lowell Jensen
United States District Judge