Martinez v. Hartford Underwriters Insurance Company
ORDER denying 58 Plaintiff's Motion for New Trial. Clerk of Court should proceed to consider Defendant's proposed bill of costs, by Magistrate Judge Michael J. Watanabe on 10/6/2014.(emill)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action 12-cv-02405-MJW
JOSEPH EDWARD MARTINEZ,
HARTFORD UNDERWRITERS INSURANCE COMPANY,
DEFENDANT’S MOTION FOR NEW TRIAL
(Docket No. 58)
MICHAEL J. WATANABE
United Stated Magistrate Judge
On May 15, 2014, the Court granted Defendant’s Motion for Summary Judgment
and denied Plaintiff’s Motion for Partial Summary Judgment (Docket No. 54). Plaintiff
filed a Motion for a New Trial (Docket No. 58), which the Court construes as a motion to
alter or amend a judgment under Federal Rule of Civil Procedure 59(e). Adams v.
Reliance Standard Life Ins. Co., 225 F.3d 1179, 1186 n.5 (10th Cir. 2000).
This is a bad-faith insurance case. Plaintiff and his adult son held a homeowners
policy from Defendant; they made a claim on that policy following a burglary at Plaintiff’s
home. Among the lost items was several thousand dollars’ worth of commercial-grade
welding equipment. Unfortunately, the policy included a sub-limit capping coverage for
business equipment to $2,500. During Defendant’s investigation, Plaintiff and his son
made a number of factually incorrect statements—some of which related to the
business-equipment sub-limit, and some did not. Defendant initially paid a portion of
the claim but then voided the check and refused to pay, citing the misstatements and
the policy’s fraud clause. Plaintiff sued to compel payment on his claim. On summary
judgment, the Court found no genuine factual dispute as to the misstatements,
concluded that the misstatements were material as a matter of law, and held that
Defendant was within its rights under the policy’s fraud clause.
“Grounds warranting a motion to reconsider include (1) an intervening change in
the controlling law, (2) new evidence previously unavailable, and (3) the need to correct
clear error or prevent manifest injustice. Thus, a motion for reconsideration is
appropriate where the court has misapprehended the facts, a party's position, or the
controlling law.” Servants of the Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir.
2000) (internal citation omitted).
A motion for reconsideration “is not at the disposal of parties who want to rehash
old arguments.” Nat’l Bus. Brokers Ltd. v. Jim Williamson Prods., Inc., 115 F. Supp. 2d
1250, 1256 (D. Colo. 2000) (citations and quotations omitted). Rather, such a motion is
proper only “when the court has made a mistake not of reasoning but of apprehension”
or “if there has been a significant change or development in the law or facts.” Rosenthal
v. Dean Witter Reynolds, Inc., 945 F. Supp. 1412, 1420 (D. Colo. 1996) (quotations and
citations omitted). The new matters introduced in support of the motion must be
“substantially different” than what was presented before, Bowe v. SMC Elec. Prods.,
Inc., 945 F. Supp. 1482, 1483 (D. Colo. 1996), so as to constitute “facts or law of a
strongly convincing nature” compelling the reversal of the prior decision. See Nat’l Bus.
Brokers, 115 F. Supp. 2d at 1256. As with motions for reconsideration in general, a
motion to alter or amend under Rule 59(e) “is not intended to allow the parties to
relitigate previous issues, advance new theories, or rehear the merits of the case.”
Brinkman v. State of Kan., Dep’t of Corrs., 869 F. Supp. 902, 904 (D. Kan. 1994).
Plaintiff urges two grounds for reconsideration. First, he provides a purported
self-authenticating declaration under Federal Rule of Evidence 902(11), along with
treatment records from Plaintiff’s physicians at the Department of Veterans Affairs
(“VA”). He argues that the declaration is new, and that once added to previously
provided exhibits it raises a dispute of fact as to Plaintiff level of intent or knowledge
behind the misstatements. Second, Plaintiff argues that the Court committed legal
errors that were manifestly unjust because they allow Defendant to void the entire
policy, not merely the business-equipment portion thereof.
Purported New Evidence
On summary judgment, Plaintiff argued that his factually incorrect statements
were not intentionally deceptive because he suffers from post-traumatic stress disorder
(“PTSD”), causing memory loss and extreme agitation. To support his argument,
Plaintiff provided a letter from a VA therapist describing his condition. The Court’s order
on summary judgment did not remark upon Plaintiff’s condition, nor the therapist’s letter.
Now, Plaintiff presents a Rule 902(11) declaration from a VA custodian of records along
with selected pages from his treatment records as new evidence. He argues that the
declaration is new evidence, procured after the Court’s order on summary judgment;
further, he argues that it helps establish the admissibility of his therapist’s letter.
The Rule 902(11) declaration is not enough for reconsideration. The declaration
itself is new, to be sure, but it merely establishes foundation for the underlying treatment
records—which Plaintiff’s counsel has had since January 2014, at least two weeks
before the cross-motions for summary judgment were filed (see Docket No. 62-4, ¶1). It
is the treatment records, not the foundation thereof, that are probative. Further, the
Rule 902(11) declaration is not relevant at the summary-judgment stage; even without
the declaration, the treatment records would have been properly before the Court had
Plaintiff provided them. See Adams v. Am. Guarantee & Liability Ins. Co., 233 F.3d
1242, 1246 (10th Cir. 2000) (A party “does not have to produce evidence in a form that
would be admissible at trial, but the content or substance of the evidence must be
admissible.”). Finally, the records are Plaintiff’s own treatment records. Plaintiff has
been aware at least since Defendant’s Answer was filed in September 2012 that
Defendant intended to assert fraudulent or false statements (see Docket No. 8, ¶16),
and Plaintiff has made no showing that these treatment records could not or should not
have been procured by Plaintiff prior to January 2014 through the exercise of due
diligence. Procuring a Rule 902(11) declaration, to establish the foundation of records
previously in Plaintiff’s possession, is insufficient to warrant reconsideration.
Purported Errors of Law
Plaintiff alleges two errors of law. First, he argues that the Court did not correctly
interpret the business-equipment sub-limit, and therefore failed to recognize the
unresolved facts underlying its application. However, the interpretation of the businessequipment sub-limit is not at issue in this case. The dispositive question is whether the
fraud clause applied; the sub-limit is relevant only insofar as it gives context to Plaintiff’s
material misstatements. For misstatements to be “material,” they need not significantly
impact the outcome of the insurer’s investigation; they need only bear on facts that “a
reasonable insurance company, in determining its course of action, would attach
importance to.” Wagnon v. State Farm Fire & Cas. Co., 146 F.3d 764, 768 (10th Cir.
1998). The Court held that Plaintiff’s misstatements were material as a matter of law—
and that holding stands, even if Plaintiff’s interpretation of the sub-limit is right. Further,
Plaintiff already argued this point on summary judgment (see Docket No. 47, pp. 16–
17). Although Plaintiff now provides greater emphasis on the portion of the policy he
relies on, he does not explain how the Court misapprehended the content of the policy.
It is the same argument as before, based on the same facts as before, and it provides
no grounds for reconsideration.
Second, Plaintiff argues that Defendant violated Plaintiff’s reasonable
expectations when it considered facts and statements not directly pertaining to the
business-equipment sub-limit. Plaintiff made a functionally identical argument in
opposing summary judgment. There, he argued that Defendant’s act of initially paying
part of Plaintiff’s claim estopped Defendant from investigating, or from relying on
misstatements relating to, anything other than the remaining business-equipment
portion of his claim (see Docket No. 47, pp. 1–12). Now, he argues that the same limit
applies—not because of some sort of estoppel, but because of the “reasonable
expectations of the insured” principle for construing policy exclusions (see Docket No.
58, pp. 13–17; Docket No. 62, pp. 7–9). Motions for reconsideration are not for
rehashing old arguments, or presenting new ones. Here, the Court has considered, and
rejected, Plaintiff’s argument that Defendant was not allowed to consider facts not
relating to the business-equipment sub-limit when investigating Plaintiff’s apparent
fraud. That Plaintiff has thought of a different way of presenting the same argument is
insufficient to warrant reconsideration.
Finally, although Plaintiff finds it manifestly unjust that he be denied all coverage
under his policy as a result of factual misstatements related to only one portion of it, the
Court disagrees. See, e.g., Am. Diver’s Supply & Manuf. Corp. v. Boltz, 482 F.2d 795,
798 (10th Cir. 1973); Northwestern Nat. Ins. Co. v. Barnhart, 713 P.2d 1360 (Colo. App.
For the foregoing reasons, it is hereby ORDERED that Plaintiff’s Motion for New
Trial (Docket No. 58) is DENIED. It is further ORDERED that the Clerk of Court should
proceed to consider Defendant’s proposed bill of costs (Docket No. 56; see Docket No.
60 (staying consideration of costs until motion for reconsideration is resolved)).
October 6, 2014
/s/ Michael J. Watanabe
Michael J. Watanabe
United States Magistrate Judge
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