Kras v. Dick's R U Crazy, Inc. et al

Filing 37

OPINION AND ORDER denying 35 Motion to Reconsider and Alternative Motion to Certify Question to the Indiana Supreme Court. Signed by Magistrate Judge John E Martin on 1/6/17. (nal)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
NATHAN KRAS,
Plaintiff/Judgment Creditor,

)
)
)
v.
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)
CONIFER INSURANCE COMPANY,
)
Garnishee-Defendant,
)
____________________________________)
)
CONIFER INSURANCE COMPANY,
)
Counter Claimant,
)
)
v.
)
)
NATHAN KRAS,
)
Counter Defendant.
)

CAUSE NO.:2:16-CV-224-JD-JEM

OPINION AND ORDER
This matter is before the Court on a Motion to Reconsider and Alternative Motion to Certify
Question to the Indiana Supreme Court [DE 35], filed by Plaintiff Nathan Kras on November 30,
2016. Kras asks the Court to reconsider its Opinion and Order of November 23, 2016 [DE 33], or
in the alternative to certify a relevant insurance law question to the Indiana Supreme Court.
Garnishee-Defendant Conifer Insurance Company has responded, urging the Court not to
reconsider its November 23 Opinion and Order and not to certify any question to the Indiana
Supreme Court. Kras has not replied, and the time to do so has passed.
I.

Background
In September 2013, Nathan Kras was shot in the leg and abdomen outside a Hammond,

Indiana nightclub. Two years later, in September 2015, Kras sued the nightclub and its owners in
state court, alleging negligence. The nightclub owners had insurance with Conifer Insurance
Company, but Conifer denied the nightclub owners’ request for coverage for the attack. In Conifer’s

view, the policy provided coverage for the nightclub property only, not for the adjoining gravel
parking lot where Conifer said the attack occurred.
The state court litigation proceeded without Conifer’s involvement. In March 2016, Kras
served 28 admissions requests on the nightclub owners—the Court will refer to them as the
insureds—regarding the nature, extent, and amount of Kras’s injuries and damages, the location of
the attack, and the insureds’ fault with respect to the attack. The insureds fairly quickly agreed to
a consent judgment by which they admitted negligence and admitted to all 28 admissions requests.
The state court entered judgment against the insureds for $2,955,056—the amount of damages
identified in the consent judgment and in the admissions requests.
Having received judgment in his favor, in April 2016 Kras filed a motion for a proceeding
supplemental. Kras sought to garnish $2,955,056 from Conifer in satisfaction of the state court
judgment against the insureds. Conifer removed the case to federal court.
On July 20, 2016, Kras filed a motion for summary judgment. At the time, neither party had
conducted any discovery. But two days later, on July 22, 2016, Conifer served interrogatories and
document production requests on Kras.
Conifer then sought to extend its deadline for responding to Kras’s summary judgment
motion until 30 days after the completion of discovery and the resolution of any discovery disputes.
See Fed. R. Civ. P. 56(d) (“If a nonmovant shows [that] it cannot present facts essential to justify
its opposition [to summary judgment], the court may: (1) defer considering the motion or deny it;
(2) allow time . . . to take discovery; or (3) issue any other appropriate order.”).
The Court granted Conifer’s motion and stayed Conifer’s summary judgment response
deadline until 30 days after the close of discovery or the resolution of any discovery disputes,

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whichever comes later. See DE 33. The Court held that the state court judgment did not necessarily
resolve that the attack on Kras occurred on the insureds’ property. The state court complaint was
drafted in a way that invited a verdict in Kras’s favor even if the attack occurred on the portion of
the nightclub’s parking area that Conifer says is not owned by the insureds, and the state court
judgment did not include any factual findings on the issue. So because the Court found that the
precise location of the attack was not “necessarily resolved” by the state court judgment, the Court
ruled that Conifer is entitled to discovery on the issue of the attack’s location.
Kras argued that the attack’s location had been established as a matter of law by virtue of
the insureds’ failure to respond to Kras’s state court admissions requests, in which Kras had asked
the insureds to admit that Kras was attacked on the insureds’ premises. The insureds’ failure to
answer, Kras argued, meant that that fact was admitted and therefore conclusively established.
The Court agreed that, in general, failing to respond to requests for admission causes those
matters to be admitted and conclusively established by law. Indiana Trial Rule 36; Henrichs v.
Pivarnik, 588 N.E.2d 537, 543 (Ind. Ct. App. 1992). But the Court disagreed that the insureds’
failure to respond to Kras’s admissions requests meant that the attack’s location was conclusively
established for the purpose of this proceeding supplemental against Conifer:
[W]hile the failure to respond to the requests for admission may have bound the
insureds going forward, Kras has not cited—and the Court has not found—authority
supporting the proposition that the failure to respond binds Conifer or overrules the
collateral estoppel analysis described [earlier in the Court’s Opinion and Order]. An
insurer that abandons its insured as Conifer did here will be bound to issues
necessarily determined in the underlying litigation, and as the Court has explained
the question of the attack’s precise location was not necessarily determined.
DE 33 at 11. So the Court granted Conifer’s motion and stayed Conifer’s summary judgment
response deadline until 30 days after the close of discovery or the resolution of any discovery

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disputes, whichever comes later. See DE 33.
II.

Issues
Kras asks the Court to reconsider its November 23 ruling, or in the alternative to certify to

the Indiana Supreme Court this question: “when an insurer denies coverage, but does not file a
declaratory judgment action nor continues to defend under a reservation of rights, is the insurer
bound by the application of collateral estoppel to its insured’s admissions under Ind. Trial Rule 36
because the admissions are matters conclusively established and therefore ‘necessarily determined’
in the underlying litigation?”
A.

The motion to reconsider

“A ‘motion to reconsider’ does not exist under the Federal Rules of Civil Procedure.”
Duehning v. Aurora East Unified Sch. Dist. 131, No. 13-5617, 2015 U.S. Dist. LEXIS 110679, *5
(N.D. Ill. Aug. 20, 2015). However, courts in the Seventh Circuit have used their “inherent power”
to reconsider non-final orders. See Brown v. Walker, No. 06-218, 2009 U.S. Dist. LEXIS 7827, *3
(N.D. Ind. Feb. 3, 2009) (“Where no final judgment has been rendered, the Court considers a motion
to reconsider under its inherent power . . .”).
Reconsideration is proper where: (1) the court has patently misunderstood a party; (2) the
court has made a decision outside the adversarial issues presented to the court by the parties; (3) the
court has made an error not of reasoning but of apprehension; or (4) there has been a controlling or
significant change in the law or in the facts since the submission of the issue to the court. Bank of
Waunakee v. Rochester Cheese Sales, Inc., 906 F.2d 1185, 1191 (7th Cir. 1990) (“Such problems
rarely arise and the motion to reconsider should be equally rare.”) (quotation omitted); Ramada
Franchise Sys. v. Royal Vale Hospitality of Cincinnati, Inc., No. 02-1941, 2004 U.S. Dist. LEXIS

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24036, *12 (N.D. Ill. Nov. 23, 2004) (citing Waunakee). A motion to reconsider serves a “limited
purpose . . . it is not a vehicle to rehash an argument the court has already rejected.” Geraty v. Vill.
of Antioch, No. 09-6992, 2015 U.S. Dist. LEXIS 1785, *2 (N.D. Ill. Jan. 8, 2015);
Here, Kras says that the Court made an error of “apprehension” in its November 23 order,
in the form of “a misreading of Indiana law with respect to admissions under Ind. Trial Rule 36.”
Kras says he “could not [have] anticipated” that such a misinterpretation “would possibly occur,”
so Kras asks the Court to reconsider its ruling based on the Court’s “manifest error of law.”
Specifically, Kras says that, once a plaintiff obtains an admission, the need to prove that fact at trial
is eliminated, because the fact is established automatically by operation of law. So a party’s failure
to respond to an admissions request makes that fact “necessarily determined” in the underlying
litigation, Kras says. But Kras made these same arguments in opposing Conifer’s motion to extend
its summary judgment response deadline, and the Court declines to reconsider arguments that it has
already rejected. See Geraty, 2015 U.S. Dist. LEXIS 1785 at *2; Quaker Alloy Casting Co. v. Gulfco
Indus., Inc., 123 F.R.D. 282, 288 (N.D. Ill. 1988) (judicial opinions “are not intended as mere first
drafts, subject to revision and reconsideration at a litigant’s pleasure”).
B.

The motion to certify a question to the Indiana Supreme Court

A federal district court may certify a question of Indiana law to the Indiana Supreme Court.
Ind. R. App. Proc. 64; see also Puerto Rico v. Shell Oil Co., 56 F. Supp. 3d 568, 570 (S.D.N.Y.
2014) (“the ability of a U.S. district court to certify a question of law to a state supreme court
depends largely on the law and procedures of the state receiving the question”). For certification to
be proper, the case must “appear[] to . . . present[] an issue of state law that is determinative of the
case and on which there is no clear controlling Indiana precedent.” Ind. R. App. Proc. 64; Cedar

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Farm v. Louisville Gas and Elec. Co., 658 F.3d 807, 813 (7th Cir. 2011) (Rule 64 “authoriz[es]
certified questions from federal courts [but] imposes two requirements: the state-law issue must be
‘determinative’ of the case and not governed by ‘clear controlling’ precedent ”); Patel v. United Fire
& Cas. Co., 80 F. Supp. 2d 948, 955 (N.D. Ind. 2000) (“the rule’s language . . . anticipates, at the
very least, that the question be potentially dispositive of the case”).
Arguably, there is not “clear controlling” precedent on the question at issue here. See DE 33
at 11 (granting Conifer’s motion because “Kras has not cited—and the Court has not
found—authority supporting the proposition that the [insureds’] failure to respond [to Kras’s
admissions requests in the state court case] binds Conifer”). But even when there is “no clear
guidance” from the state court, “certification is neither mandated nor always necessary.” State Farm
Mut. Auto. Ins. Co. v. Pate, 275 F.3d 666, 673 (7th Cir. 2001). In deciding whether to certify a
question, the most important consideration is whether the Court “finds itself genuinely uncertain
about a question of state law that is vital to a correct disposition of the case.” Id. (quotation omitted).
Here, the Court does not find itself “genuinely uncertain” about the question at issue. Kras has not
cited a single case that supports his position, and public policy counsels against it because allowing
an insured’s admissions to bind an insurer in a subsequent proceeding supplemental would invite
collusion between insureds and tort plaintiffs. Indeed, such a rule would “cause an insurer’s fate to
hinge arbitrarily on the insured’s decision to respond or not and would fail to guard against
‘outrageous efforts to overreach’ by underlying tort plaintiffs.” DE 33 at 13 (quoting Midwestern
Indem. Co. v. Laikin, 119 F. Supp. 2d 831, 842 (S.D. Ind. 2000)). The Court has already rejected that
view, and the Court does not harbor “serious doubt” as to whether the Indiana Supreme Court would
reach the same conclusion. Patz v. St. Paul Fire & Marine Ins. Co., 15 F.3d 699, 705 (7th Cir.

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1994) (certification inappropriate where there was no room for “serious doubt” about how the state’s
highest court would resolve the question); see also Pate, 275 F.3d at 672 (“At some level there is
uncertainty in every application of state law. There is always a chance that a state supreme court,
if it had the same case before it, might decide the case differently. [But t]his ever-present possibility
is not sufficient to warrant certification.”).
And even aside from how certainly or uncertainly the Indiana Supreme Court would rule on
the question, Rule 64’s requirements are not met regardless because the question at issue is not
potentially determinative or dispositive of the case: even if the attack’s precise location was
necessarily determined by the state court lawsuit, Conifer would still be entitled to discovery on the
state court judgment’s reasonableness. See DE 33 at 13 (“[I]t would be senseless to evaluate . . . a
judgment’s reasonableness only where the insured responded to the tort plaintiff’s admissions
requests and not to evaluate the judgment’s reasonableness where the insured ignored the admissions
requests.”); see also Carpenter v. Lovell’s Lounge & Grill, LLC, 59 N.E.3d 330, 240 (Ind. Ct. App.
2016) (“Appellant’s position would actually encourage insureds to engage in collusion if it was clear
that no coverage was available and the insurer had not done anything to protect its interests.”). So
even if Kras were to “win” on certification and receive a ruling that the state court judgment
necessarily determined the attack’s precise location, Conifer would still be entitled to discovery, and
the summary judgment briefing would remain stayed while discovery proceeds. So the question Kras
proposes to certify is not potentially dispositive, and consequently the question is not appropriate
for certification. Ind. R. App. Proc. 64 (certification question must “appear[] to . . . present[] an issue
of state law that is determinative of the case”); see also LTV Steel Co., Inc. v. Northwest Eng’g &
Constr., 41 F.3d 332, 338 (7th Cir. 1994) (declining to certify because question “would not be

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dispositive in this case”); Pate, 275 F.3d at 672 (“[o]f course, if a question may not be dispositive
to a case, then it is a weak candidate for certification”).
Because there is no genuine uncertainty about a question of state law that justifies
certification, and because even if there were the question at issue would not be dispositive,
certification would be improper.
III.

Conclusion
For the reasons above, the Court DENIES Kras’s Motion to Reconsider and Alternative

Motion to Certify Question to the Indiana Supreme Court [DE 35]. The Court also DENIES Kras’s
request, see DE 35 at 12, to stay discovery in this case.
SO ORDERED this 6th day of January, 2017.
s/ John E. Martin
MAGISTRATE JUDGE JOHN E. MARTIN
UNITED STATES DISTRICT COURT
cc:

All counsel of record

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