Great America Insurance Company et al v. Chang et al

Filing 80

Order by Hon. Samuel Conti denying 78 Motion for Reconsideration.(sclc1, COURT STAFF) (Filed on 7/31/2013)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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United States District Court

For the Northern District of California

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GREAT AMERICAN INSURANCE
COMPANY, and GREAT AMERICAN
INSURANCE COMPANY OF NEW YORK,

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Plaintiffs,

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v.
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MICHAEL CHANG, d/b/a SUNRISE
CLEANERS, INC., and ROXANNE
CHANG, d/b/a SUNRISE CLEANERS,
INC.,

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Defendants.

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) Case No. 12-00833-SC
)
) ORDER DENYING MOTION FOR
) RECONSIDERATION
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I.

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INTRODUCTION
On June 19, 2013, the Court granted Great American Insurance

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Company and Great American Insurance Company of New York's

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(collectively, "Great American") motion for partial summary

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judgment.

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Roxanne Chang now move for reconsideration of the Summary Judgment

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Order.

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Motion, but the Changs declined to file a reply.

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("Opp'n").

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///

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ECF No. 77 ("SJ Order").

ECF No. 78 ("Mot.").

Defendants Michael Chang and

Great American has opposed the
ECF No. 79

For the reasons set forth below, the Motion is DENIED.

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II.

BACKGROUND
The Court assumes familiarity with the facts and legal

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opinions recited in the Summary Judgment Order.

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case involves an insurance coverage dispute arising from underlying

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state court actions and government orders concerning the alleged

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contamination of a property owned by Michael Chang (the

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"Property").

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(collectively, the "Changs"), operated a dry cleaning business on

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the property from 1977 to 1981.

In short, this

Michael Chang and his wife, Defendant Roxanne Chang

The Changs purchased third-party

United States District Court

For the Northern District of California

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liability insurance for the premises from Great American for the

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period of 1977 to 1983.

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About a decade later, the Changs leased the Property to Bilal

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Kartal, who operated an Italian restaurant on the premises.

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around 2002, a peculiar odor emanating from the restaurant began

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driving away Kartal's customers.

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that the odor was caused by underground storage tanks that were

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leaking dry cleaning solvent, Kartal brought a nuisance action

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against the Changs.

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judgment that it does not have a duty to defend or indemnify the

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Changs with respect to Kartal's nuisance action, as well as a

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number of related suits, because the property damage alleged by

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Kartal did not occur during the 1977 to 1983 policy period.

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In or

In 2006, after Kartal discovered

Great American now seeks a declaratory

The Court ultimately granted Great American's motion for

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partial summary judgment.

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relied on California case law distinguishing between causative

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events and resulting property damage.

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the latter injury or damage that must 'occur' during the policy

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period, and 'which results' from the accident or 'continuous and

In reaching its decision, the Court

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SJ Order at 14-15.

"It is

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repeated exposure to conditions.'"

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Corp. v. Admiral Ins. Co., 10 Cal. 4th 645, 669 (Cal. 1995)).

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Court held that Kartal's complaint did not trigger coverage because

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it alleged causative events -- not resulting property damage --

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that occurred during the Changs' policy period.

Id. (quoting Montrose Chem.
The

Id. at 15-16.

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III. DISCUSSION

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The Changs now move the Court to reconsider the Summary
Judgment Order.

Their motion fails on both procedural and

United States District Court

For the Northern District of California

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substantive grounds.

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violates Civil Local Rule 7-9.

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prohibits a party from moving for reconsideration without first

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obtaining leave of the Court.

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have done here.

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As a procedural matter, the Changs' motion
Subsection (a) of the rule

That is precisely what the Changs

The Changs have also violated Civil Local Rule 7-9(b), which

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provides that a party moving for reconsideration must specifically

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show:

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(1)

That at the time of the motion for leave, a
material difference in fact or law exists from
that which was presented to the Court before
entry of the interlocutory order for which
reconsideration is sought.
The party also must
show that in the exercise of reasonable diligence
the party applying for reconsideration did not
know such fact or law at the time of the
interlocutory order; or

(2)

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The emergence of new material facts or a change
of law occurring after the time of such order; or

(3)

A manifest failure by the Court to consider
material facts or dispositive legal arguments
which were presented to the Court before such
interlocutory order.

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The Changs have not shown a material difference in law or fact --

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they rely on many of the same cases and facts that they discussed

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in their opposition to Great American's motion for summary

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judgment.

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to consider dispositive arguments.

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with the Court's ultimate conclusions.

Nor have they pointed to a manifest failure by the Court
Rather, they merely disagree

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Even if reconsideration of the Court's conclusions was

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procedurally proper, as a substantive matter, the Changs have yet

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to present any persuasive arguments in favor of finding that Great

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For the Northern District of California

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American has a duty to defend or indemnify.

The Changs' motion for

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reconsideration, like their opposition to Great American's motion

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for summary judgment, ignores the distinction between causative

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events and resulting property damage.

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down to the following: Kartal's alleged property damage must have

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occurred during the 1977 to 1983 policy period because Kartal

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alleges that the pollution discharge on the property began "at

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least as far back as 1969" and continued through 2005.

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the Court held in the Summary Judgment Order, the pollution

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discharge is only a causative event, which is irrelevant for the

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purpose of determining coverage.1

Their arguments largely boil

However, as

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The only new argument advanced by the Motion is that Kartal's
action could trigger coverage if Kartal amended his complaint to
allege new facts identified through discovery. Mot. at 4-7.
However, the Changs have not identified any new facts that Kartal
could possibly allege, other than additional facts concerning when
the solvent leak started. As discussed above, these facts are
irrelevant for the purpose of determining coverage. Moreover, the
cases cited by the Changs do not support their contention that the
Court should consider hypothetical amendments. Rather they stand
for the proposition that, in assessing the potential for coverage,
courts should consider the facts alleged rather than the causes of
action asserted. See Hudson Ins. Co. v. Colony Ins. Co., 624 F.3d
1264, 1267 (9th Cir. 2010); Dobrin v. Allstate Ins. Co., 897 F.
Supp. 442, 444 (C.D. Cal. 1995).

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The Changs also haphazardly cite to a number of cases that
See Mot. at 7-10.

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they contend require "further consideration."

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The Court already considered and distinguished many of these cases

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in its Summary Judgment Order and declines to revisit them again.

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The other cases cited by the Changs, including Standard Fire Ins.

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Co. v. Spectrum Cmty. Ass'n, 141 Cal. App. 4th 1117 (Cal. Ct. App.

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2006), and State v. Allstate Ins. Co., 45 Cal. 4th 1008 (Cal.

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2009), do not support reversal of the Summary Judgment Order.

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example, the Court in Standard Fire recognized the distinction

For

United States District Court

For the Northern District of California

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between causative events and resulting property damage, and found

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for the insured because the alleged property damage occurred during

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the policy period.

141 Cal. App. 4th at 1126-27.

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Since the motion for reconsideration repeats many of the

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arguments set forth in the Changs' opposition to Great American's

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motion for summary judgment, the Changs have also violated Civil

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Local Rule 7-9(c), which provides: "No motion for leave to file a

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motion for reconsideration may repeat any oral or written argument

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made by the applying party in support of or in opposition to the

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interlocutory order which the party now seeks to have

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reconsidered."

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Rule 7-9(c) warrants sanctions.

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the rule provides that "[a]ny party who violates this restriction

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shall be subject to appropriate sanctions."

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Great American argues that the Changs' violation of
The Court agrees, especially since

Civ. L.R. 7-9(c).

Even if Rule 7-9(c) did not expressly require sanctions, this

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is not the only time that the Changs have blatantly disregarded the

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Local Rules.

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Rule 7-9(a) and 7-9(b) in connection with this motion.

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Additionally, they violated Civil Local Rule 7-3(a) when they filed

As noted above, the Changs also violated Civil Local

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a surreply brief in connection with Great American's motion for

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summary judgment without first seeking leave of the Court.

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Order at 3 n.1.

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case, also noted that the Changs failed to comply with several

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local rules when they filed a motion to dismiss on May 16, 2012.

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ECF No. 14.

SJ

Judge Beeler, who was previously assigned to this

While the Changs' violations are numerous, they are not

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altogether serious.

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Accordingly, the Court limits the sanction

award to $500.

United States District Court

For the Northern District of California

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IV.

CONCLUSION
For the foregoing reasons, the Changs' motion for

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reconsideration is DENIED.

The Court awards Great American

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sanctions in the amount of $500.

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responsible for paying these sanctions.

The Changs' counsel alone is

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IT IS SO ORDERED.

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Dated:

July 31, 2013
UNITED STATES DISTRICT JUDGE

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