Stein et al v. Farmers Insurance Company of Arizona et al

Filing 327

ORDER denying 318 Defendant's Motion to Alter Judgment. Signed by Chief District Judge Dana M. Sabraw on 8/01/2022. (jpp)

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA

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BARBARA STEIN, an individual;
and STUART STEIN, an individual,

Case No.: 19-cv-00410-DMS-AHG
ORDER DENYING DEFENDANT’S
MOTION TO ALTER JUDGMENT

Plaintiffs,
v.
FARMERS INSURANCE COMPANY
OF ARIZONA, a corporation; and
FARMERS GROUP, INC., a
corporation,
Defendants.

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Pending before the Court is Defendant Farmers Insurance Company of Arizona’s

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(“Defendant”) Motion to Alter Judgment.

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(“Plaintiff”) filed a response and Defendant filed a reply. On March 15, 2022, the Court

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entered a Judgment in favor of Plaintiff. (ECF No. 303.)

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Judgment, and the appeal is presently pending with the Ninth Circuit. For the reasons

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discussed below, the Court denies Defendant’s Motion to Alter Judgment and declines to

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issue an indicative ruling.

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(ECF No. 318.)

Plaintiff Barbara Stein
Defendant appealed the

I.
BACKGROUND

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This action proceeded to an eight-day jury trial that began on July 26, 2021, and

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concluded on August 5, 2021. On August 8, 2021, the jury returned a verdict for Plaintiff,
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awarding $500,000 for her breach of contract claim, $2.5 million for bad faith and unfair

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insurance practices, and $3 million in punitive damages. (ECF Nos. 244-45.) The Court

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remitted, and the Plaintiff accepted, a punitive damages award of $500,000. (ECF No.

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286.) In total, Plaintiff was awarded $3.5 million in damages.

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In February 2022, the parties briefed Plaintiff’s proposed judgment and the

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calculations therein. On March 15, 2022, upon consideration of the parties’ arguments

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regarding pre-judgment interest, post-judgment interest, and attorneys’ fees, the Court

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issued a Judgment for damages, pre-judgment interest, post-judgment interest, attorney’s

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fees, and costs (“Judgment”). (ECF No. 302, 303). Defendant appealed the Judgment to

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the Ninth Circuit, and the appeal is presently pending. On May 19, 2022, Defendant filed

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the present motion. Defendant claims that the Court committed a clerical error in the

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Judgment, and while an appeal is pending, requests that the Court issue an indicative ruling

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stating that it would grant Defendant’s motion or that the motion raises a substantial issue.

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At the heart of Defendant’s argument is a $315,130.02 check (“the check”). On

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September 21, 2021, a month after the verdict and approximately five months before the

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Judgment, Defendant tendered the check to Plaintiff. (ECF No. 297 at 2.) However,

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Plaintiff did not cash the check for several months because of lien issues with her prior

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counsel. (ECF No. 295-2 at 2.) In its present motion, Defendant argues that the amount

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of the check should have been deducted from the damages figure of $3,306,948.02, which

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appeared in the Judgment. Both parties previously referenced the check in their arguments

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about the proper calculation of pre-judgment interest, but they did not make arguments

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about whether the check should be applied to the damages figure in the Judgment. (ECF

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Nos. 295, 297, 300.) Instead, both parties proposed the same damages award, which had

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not subtracted the amount of the check. (ECF No. 295-1 at 3, ECF No. 297 at 1, 8).

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The Court issued the Judgment based on the parties’ calculations. In their prior

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briefing, Plaintiff and Defendant had agreed to subtract $193,051.98 from the total

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compensatory damages award of $3 million to account for certain sums the Defendant had

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already paid Plaintiff.

This deduction accounted for three specific payments: (1) a
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$175,000 advance payment, (2) a $9,869.98 reimbursement to Medicare, and (3) $8,182.00

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under the medical payments coverage of the subject policy. (ECF No. 295-2 at 2; ECF No.

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297 at 1.) The resulting compensatory damages amounted to $2,806,948.02, as specified

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in the Court’s Order Regarding Pre-Judgment Interest and Costs. (ECF No. 302.)

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In its present motion, Defendant claims the Court committed an error and failed to

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deduct the amount of the check from the damages award before the Judgment was entered.

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Defendant states that the Judgment should have specified $2,991,818.00, not

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$3,306,948.02, in total damages, and argues that the Court intended for it to receive the

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credit. (ECF No. 318 at 5-6.) Pursuant to Federal Rules of Civil Procedure 60(a) and 62.1,

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Defendant requests the following: (1) amendment of the Judgment to reflect $2,991,818 in

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damages, and (2) an indicative ruling stating that the Court would correct the Judgment as

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requested if the Ninth Circuit were to remand the case for the limited purpose of deciding

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the motion. (ECF No. 318 at 2.)

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Plaintiff objects and claims she neither made a misrepresentation to the Court nor

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did the Court make a clerical error. Plaintiff argues that both parties were aware of the

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check and agreed to the Judgment as entered, which included the correct amount in

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compensatory damages. (ECF No. 323 at 2.) Plaintiff makes clear she will not seek

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double-recovery in the amount of $315,000. Id. at 5, 8. Finally, Plaintiff seeks reasonable

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attorneys’ fees for having to respond, “given the clear fallacies” upon which Defendant’s

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motion relies. Id. at 2, 9.

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II.

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DISCUSSION

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Under Federal Rule of Civil Procedure 60(a), the court may correct a clerical mistake

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or one arising from oversight or omission. However, if an appeal is pending, the district

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court may correct a mistake only with the appellate court’s leave. Fed. R. Civ. P. 60(a).

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Even if a district court lacks authority to grant a motion because of a pending appeal, the

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court may deny or defer considering the motion, or issue an indicative ruling stating that it

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would grant the motion if the court of appeal remanded for that purpose or stating that the

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motion raises a substantial issue. Fed. R. Civ. P. 62.1.

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However, the Court determines its course of action by first considering whether an

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error is “clerical.” In contrast to Rule 60(a), Rule 59(e) requires the filing of a motion to

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alter or amend a judgment no later than 28 days after the entry of the judgment. Fed. R.

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Civ. P. 59(e). A clerical error involves a “failure to memorialize part of [the court’s]

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decision,” whereas a court’s alteration or amendment of a judgment involves a “substantive

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change of mind by the court.” Garamendi v. Henin, 683 F.3d 1069, 1077 (9th Cir. 2012),

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(citing Miller v. Transamerican Press, Inc., 709 F.2d 524, 527 (9th Cir.1983)). Here, the

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Court did not commit a clerical error and Defendant’s request amounts to a motion to alter

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or amend the Judgment.

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The Judgment reflects the damages calculation proposed in both Plaintiff’s and

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Defendant’s briefing. The Court denies Defendant’s motion because the parties stipulated

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to $3,306,948.02 in damages as the correct figure for entry in the Judgment. In its

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Objection to Plaintiff’s Proposed Judgment, Defendant agreed to compensatory damages

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in the amount of $2,806,948.02—not once, but twice.

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“Compensatory Damages,” Defendant cited to Plaintiff’s proposed judgment and stated,

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“Plaintiff’s proposed compensatory damages is in accordance with the Court’s order that

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the total compensatory damages award is $2,806,948.02, which accounts for the (1)

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$175,000 advance payment, (2) the $9,869.98 reimbursement to Medicare, and (3)

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$8,182.00 for payments under the Medical Payments coverage.” (ECF No. 297 at 1.)

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Second, in its conclusion, Defendant included a chart to illustrate “the proper entry of

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judgment,” which specified $2,806,948.02 as the correct amount of compensatory

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damages. Id. at 5. Combined with $500,000 in punitive damages, the total damages

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proposed by both parties amounted to $3,306,948.02.

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stipulation, the Court entered this amount as the total damages in the Judgment.

First, in a section titled

Consistent with the parties’

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Additionally, in their briefing addressing damages calculations, the parties

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mentioned the check only in the context of whether the amount should be credited for the
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purposes of determining pre-judgment interest. Neither Plaintiff nor Defendant adequately

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explained the lien issues surrounding the check to make clear whether the parties

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considered the amount paid for the purposes of deduction from compensatory damages, or

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whether the payment was still in progress. The Court stated, “Plaintiff credited the

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Defendant for the entirety of the check” in the “Pre-Judgment Interest” section of its Order

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Regarding Pre-Judgment Interest and Costs. (ECF No. 302 at 4.) The Court’s reference

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to the credit addressed Defendant’s objections to Plaintiff’s calculations of pre-judgment

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interest only, as Defendant had not raised any objections to Plaintiff’s calculation of

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compensatory damages.

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Under Rule 60(a), a district court can correct clerical errors it had made in prior

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orders but cannot make substantive changes. See, e.g., Hasbrouck v. Texaco, Inc., 879 F.2d

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632, 636 (9th Cir. 1989) (upholding the district court’s correction of agreed-upon costs and

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interest rates in its prior decision as a clerical error). A “failure to memorialize part of its

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decision” is a clerical error a court may correct under Rule 60(a), but a court’s “substantive

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change of mind” is an alteration or amendment requiring a motion under Rule 59(e). Miller

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v. Transamerican Press, Inc., 709 F.2d 524, 527 (9th Cir. 1983). The change requested by

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the Defendant reflects the latter. The Court intended to specify a damages figure of

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$3,306,948.02 in the Judgment. This amount was proposed by the parties, which had not

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excluded the amount of the check. For this reason, amending the Judgment at this stage to

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reflect $315,130.02 less in damages would be a change of “more substance” than a “mere

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clerical correction.” See Pinnacle Fitness & Recreation Mgmt., LLC v. Jerry & Vickie

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Moyes Fam. Tr., No. 3:08-CV-1368-GPC-BGS, 2013 WL 3283676, at *2 (S.D. Cal. June

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27, 2013).

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Furthermore, Defendant’s motion to amend the judgment is untimely. Defendant

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should have filed its motion to amend the Judgment within 28 days from the entry of the

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Judgment as required by Federal Rule of Civil Procedure Rule 59(e). Defendant failed to

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do so and has filed this motion more than two months after entry of the Judgment. The

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Court cannot extend time to act under Rule 59(e). See Fed. R. Civ. P. 59(e); see also
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Pinnacle Fitness & Recreation Mgmt., LLC v. Jerry & Vickie Moyes Fam. Tr., No. 3:08-

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CV-1368-GPC-BGS, 2013 WL 3283676, at *3 (S.D. Cal. June 27, 2013) (failing to raise

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an interest rate issue through the course of proposed judgments and objections barred such

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a change). Consequently, Defendant’s motion is denied.

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III.

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CONCLUSION

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For the foregoing reasons, Defendant’s Motion to Alter the Judgment is DENIED.

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Plaintiff makes clear that she will not attempt to double-recover the amount of the check—

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$315,130.02. Should she attempt to do so, Defendant can seek relief under Federal Rule

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of Civil Procedure 60(b), which expressly authorizes a motion to seek relief when a

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judgment has already been satisfied. The parties are instructed to bear their own costs.

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IT IS SO ORDERED.
Dated: August 1, 2022

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