Wichita Firemen's Relief Association v. Kansas City Life Insurance Company
Filing
572
MEMORANDUM AND ORDER granting 551 Motion to Alter or Amend Judgment. Signed by Magistrate Judge Kenneth G. Gale on 5/8/17. (df)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
WICHITA FIREMAN’S RELIEF
ASSOCIATION,
)
)
)
Plaintiff,
)
)
v.
)
)
KANSAS CITY LIFE INSURANCE CO., )
)
Defendant.
)
___________________________________ )
Case No. 11-1029-KGG
MEMORANDUM AND ORDER
Before the Court are the “Rule 59(e) Motion to Alter or Amend Judgment”
(Doc. 551) filed by Defendant as well as the competing Bill of Costs filed by both
parties (Docs. 552, 554). Having reviewed the submissions of the parties, the
Court GRANTS Defendant’s Motion to Alter or Amend Judgment and ORDERS
the Clerk to enter Defendant’s Bill of Costs, minus the revision discussed below.
BACKGROUND
Plaintiff’s claim in the underlying lawsuit is for payment of an Accidental
Death and Dismemberment insurance benefit arising out of the death of Wichita
firefighter Captain Urban Eck. Given its lengthy and contentious history, the
factual background of this case has been summarized numerous times. Those
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summaries are incorporated herein by reference. (See e.g., Doc. 140, at 1-2, Doc.
189, at 1-3, Doc. 311, at 1-3, Doc. 401, at 3-11, Doc. 440, at 3-5; Doc. 544, at 311.) The following are the facts relevant to the matter before the Court.
Plaintiff filed the present action on December 17, 2010, in Sedgwick
County, Kansas, District Court. (Doc. 1-1, at 1.) It was removed to Federal Court
by Defendant in January 2011. (Doc. 1.)
Pursuant to Fed.R.Civ.P. 68, Defendant served Plaintiff with an Offer of
Judgment on September 22, 2011. (Doc. 90; Doc. 558-1, at 3-4.) The offer was
for a principal amount of $101,000, including Plaintiff’s request for attorneys’
fees, as well as prejudgment interests and costs then accrued (not to include
attorneys’ fees). (Doc. 558-1, at 3.)
Plaintiff rejected the offer and instead filed its “Motion to Clarify Offer of
Judgment and to Strike.” (Doc. 93.) Plaintiff argued that the offer was “defective,
creating an ambiguity” and was not made in good faith. (Id.) The Court denied
Plaintiff’s motion, finding the Offer to be appropriate pursuant to Fed.R.Civ.P. 68.
(See Doc. 128, at 11-15.)
The case proceeded and the undersigned Magistrate Judge granted
Defendant’s Motion for Summary Judgment in February 2014, dismissing
Plaintiff’s claims for breach of contract and attorney’s fees claims (Doc. 401) and
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entering judgment in favor of Defendant (Doc. 402). Plaintiff appealed this ruling
to the Tenth Circuit Court of Appeals (Doc. 403, 405), which reversed and
remanded in May, 2015. (Doc. 414.)
Plaintiff submitted a bill of costs to the Tenth Circuit pursuant to
Fed.R.App.Proc. 39(a)(3), which provides that appellate costs are taxed against the
appellee when the judgment of the District Court is reversed. Although Defendant
opposed the bill of costs and requested that the Tenth Circuit wait until the
conclusion of the District Court proceedings, the Tenth Circuit declined to do so.
Defendant was taxed $4,366 in appellate costs (Doc. 416), which Defendant paid.
Proceedings resumed in this Court in June 2015, with the case ultimately
going to trial in May 2016. The jury eventually returned a verdict in favor of
Plaintiff in the amount of $100,000. (Doc. 491.) The issue of attorneys fees was
subsequently brought for a bench trial, with the undersigned Magistrate Judge
denying Plaintiff’s request for attorneys’ fees. (See Doc. 544.) The final judgment
was entered on February 21, 2017, awarding Plaintiff $100,000 plus prejudgment
interest, the costs of this action, and post-judgment interest. (Doc. 545.)
DISCUSSION
Fed.R.Civ.P. 59(e) allows a party to file a motion to alter or amend a
judgment within 28 days after the entry of judgment for one of the following
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grounds: (1) an intervening change in law; (2) new evidence that was previously
unavailable; and (3) the need to correct clear error or prevent manifest injustice.
See Servants of the Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000)
(listing Rule 59(e) factors). Defendant brings its present “Rule 59(e) Motion to
Alter or Amend Judgment” pursuant to the final of the listed grounds, arguing that
Plaintiff
is not entitled to such costs after September 22, 2011[,]
due to [Defendant’s] offer of judgment. [Defendant]
therefore respectfully requests that the Final Judgment be
altered or amended to award WFRA only its pre-offer
costs (other than attorney’s fees), and to award
[Defendant] its post-offer costs.
Doc. 551, at 1.)
Fed.R.Civ.P. 68 sets out the procedure for making an offer of judgment as
follows:
(a)
(b)
Making an Offer; Judgment on an Accepted Offer.
At least 14 days before the date set for trial, a party
defending against a claim may serve on an opposing
party an offer to allow judgment on specified terms, with
the costs then accrued. If, within 14 days after being
served, the opposing party serves written notice
accepting the offer, either party may then file the offer
and notice of acceptance, plus proof of service. The clerk
must then enter judgment.
Unaccepted Offer. An unaccepted offer is considered
withdrawn, but it does not preclude a later offer.
Evidence of an unaccepted offer is not admissible except
in a proceeding to determine costs.
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(c)
(d)
Offer After Liability is Determined. When one party's
liability to another has been determined but the extent of
liability remains to be determined by further proceedings,
the party held liable may make an offer of judgment. It
must be served within a reasonable time – but at least 14
days – before the date set for a hearing to determine the
extent of liability.
Paying Costs After an Unaccepted Offer. If the
judgment that the offeree finally obtains is not more
favorable than the unaccepted offer, the offeree must
pay the costs incurred after the offer was made.
(Emphasis added.)
Defendant served its Offer of Judgment on September 22, 2011. (Doc. 90.)
As discussed above, the offer was phrased in pertinent part:
(1)
(2)
(3)
The principal amount of $101,000, such amount to
include WFRA’s request for attorneys’ fees; plus
Prejudgment interest upon the amount set forth in
Paragraph (1), pursuant to K.S.A. § 16-201, from January
25, 2010 through October 10, 2011, such interest being in
the amount of $17,266.85; plus
WFRA’s costs now accrued, not to include attorneys’
fees.
Acceptance of the offer set forth above shall act as a complete
release of any and all claims WFRA may have or has asserted
against KCL.
(Doc. 94, at 1.) As to the present motion, Defendant argues
the judgment finally obtained by Plaintiff ($100,000,
interest, and costs other than fees) was not more
favorable than the Offer ($101,000, interest, and costs
other than fees). (Doc. 551, at 2; see also, Ex. 1, ¶ 2 &
Ex. A; Dkt. #545.) WFRA must therefore bear its own
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post-Offer costs, and must pay KCL’s post-Offer costs.
(Doc. 551, at 2.)
In the memorandum in support of its Bill of Costs, Plaintiff seeks its costs
and argues that Defendant’s Offer is inapplicable because Defendant was the
prevailing party on Plaintiff’s claim for attorneys’ fees pursuant to K.S.A. §40-256.
(Doc. 555, at 10.) According to Plaintiff, “[a]n offer of judgment has no
application when the defendant prevails.” (Id., at 10-11 (emphasis in original).)
Plaintiff contends that offer is inapplicable because Defendant “was the prevailing
party on [Plaintiff’s] attorneys’ fees claim, and because [Plaintiff’s] judgment on
the contract claim was not less favorable than the insurance company’s policy
limits offer.” (Id., at 11.) Plaintiff continues,
On the breach of contract claim, WFRA recovered
policy limits. It was not possible in 2011 nor is it possible
in 2017 for WFRA to recover more than the “principal
amount” of coverage; and in 2011, WFRA accepted the
policy limits offer contingent upon being able to litigate
its claim for attorneys’ fees pursuant to K.S.A. 40-256.
[Doc. 94, p. 11]. WFRA responded to the offer of
judgment five years ago by saying that it accepted the
insurance company’s offer ‘if the issue of costs pursuant
to K.S.A. 40-256 is to be determined at a hearing, or
through briefing, following the acceptance of the Offer of
Judgment. It seems obvious that this is where this case
should be, on the merits.’ [Doc. 94, p. 11].
If KCL’s offer was intended to include attorneys’
fees as costs, it was not made clear in the offer of
judgment. But more to the point now – in 2017 –
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defendant eventually prevailed on WFRA’s claim for
attorneys’ fees, and therefore KCL’s Rule 68 motion
simply has no legal effect.
(Id.)
Defendant responds that Plaintiff’s argument is flawed because Fed.R.Civ.P.
68 is inapplicable in cases in which Defendant prevails entirely and Plaintiff
recovers nothing. (Doc. 558, at 3.) As Defendant points out, it did not prevail
entirely because Plaintiff obtained a judgment of $100,000. The Court agrees that
Rule 68 is applicable.
Plaintiff contends that its judgment was more favorable than the Offer “[a]s
a consequence of [Defendant] including the condition of a complete release of any
and all claims in the offer of judgment – over plaintiff’s objection . . . .” (Doc.
555, at 14.) According to Plaintiff, “[n]o general release has been or will be
executed, and KCL will never be given a complete and full release. Judgment
against KCL did not give it a complete release from any and all claims WFRA
might bring now or in the future (known or unknown) nor does it permit KCL to
deny liability.” (Id.)
Plaintiff is unnecessarily complicating the issue. The simple fact is that
Defendant submitted an Offer of Judgment for $101,000, which Plaintiff declined,
and Plaintiff ultimately received a jury verdict and judgment of $100,000.
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Plaintiff’s judgment was per se not “more favorable” than Defendant’s Offer. As
stated by Defendant, “[t]he Judgment is monetarily less favorable than the Offer,
and nothing about the preclusive effect of the Offer or Judgment changes this
analysis.” (Doc. 558, at 5.) Defendant continues that the issue of a release is
irrelevant because judgment in this case “preclude[s] [Plaintiff] from any future
litigation arising out of the same ‘series of factual transactions’ that led to this
litigation regardless of legal theory.” (Id., at 4 (emphasis in original).) The Court
agrees.
Plaintiff’s memorandum next “renews” and rehashes many of the objections
it initially made to Defendant’s Offer – that the Offer was ambiguous, incomplete,
defective, frivolous, and that it contains impermissible conditions – and critiques
the Court’s prior Order (Doc. 128) on Plaintiff’s motion to strike the Offer.1
(Compare Doc. 94, at 6-11 to Doc. 555, at 13-23.) The Court has already
overruled these objections (Doc. Doc. 128, at 11-15) and the time to revisit them or
request their reconsideration has long since passed. The Court sees no reason to
revisit these arguments herein but rather incorporates, by reference, its prior ruling.
1
Plaintiff also contends that it “conditionally accepted” the Offer. The Court is
not persuaded by this argument, which borders on the nonsensical. The fact remains that
the Offer was not accepted, thus the litigation continued for more than five years after the
offer was made.
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(Id.)
Finally, Plaintiff argues that Defendant waived its right to invoke the Offer
of Judgment when it previously paid costs to Plaintiff of approximately $4,300 as
assessed by the Tenth Circuit following Plaintiff’s appeal. (Doc. 555, at 23.)
Plaintiff argues that “[b]ecause it failed to raise the defense of the insurance
company’s Rule 68 offer with the Tenth Circuit, and because it voluntarily paid
WFRA’s costs on appeal, KCL waived its right to invoke the protection of the
September 22, 2011 offer of judgment, and should now be estopped from doing
so.” (Id.)
Defendant responds that it
did not waive its Rule 68 argument by failing to raise it
during these 2014-2015 proceedings because there
simply was no Rule 68 argument to raise at that time.
The trigger for Rule 68 is a final judgment in plaintiff’s
favor, but in an amount less than the offer. Fed.R.Civ.P.
68(d); Delta Airlines, Inc. v. August, 450 U.S. 346,
348-51 (1981). The Court’s 2014 judgment was in
defendant’s favor, and following the Tenth Circuit’s
2015 reversal there was no judgment at all. It was the
Court’s February 21, 2017 Judgment (Dkt. #545) that
gave rise to [Defendant’s] Rule 68 argument, which
[Defendant] has timely raised. (Dkt. #551-553.)
[Defendant] could not have asserted this argument before
2017, and the failure to do so was not a waiver.
(Doc. 558, at 6.) The Court agrees that Defendant did not waive its right to enforce
the underlying Offer of Judgment by following the unrelated appellate instructions
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from the Tenth Circuit.
The Court therefore finds that Plaintiff’s refusal of Defendant’s prior Offer
of Judgment precludes Plaintiff from seeking its costs from September 22, 2011,
forward and requires Plaintiff to pay Defendant’s costs from that date.2 The
Court’s analysis thus turns to Plaintiff’s objections to Defendant’s Bill of Costs.
(See Doc. 560, at 16-19.)
1.
Cost of videotaping Chief Aaron’s deposition.
Defendant incurred $804.37 for the videotape of the deposition of Ronald
Lee Aaron, which is on top of $1,132.15 for the deposition transcript. Plaintiff
contends the video was “unnecessary and duplicative because it was not used in
any fashion, either in dispositive motions or at either trial, and because KCL has
not proved necessity.” (Doc. 560, at 16.)
Defendant correctly points out that “actual use” is not the relevant standard.
Rather, this cost is recoverable if the “facts known when the deposition was taken
made it appear reasonably necessary to record the deposition on videotape.” See
Griffith v. Mt. Carmel Med. Ctr., 157 F.R.D. 499, 502 (D. Kan. 1994). Defendant
argues that given Chief Aaron’s lengthy tenure with the Fire Department (40
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Plaintiff’s submitted Bill of Costs is unclear concerning which costs were
incurred prior to September 22, 2011. Plaintiff shall, therefore, file an amended Bill of
Costs on that basis, without prejudice to its right to challenge this ruling on appeal.
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years), the likelihood that he may have retired and/or moved by the time of trial
was a reasonable consideration. Considering the importance of Chief Aaron’s
testimony, coupled with the fact that this was the only deposition Defendant saw
necessary to have recorded (showing that Defendant did not abuse this option), the
Court finds the decision to do so was reasonable. Plaintiff’s objection is
overruled.
2.
Transcript and recording of the 8/30/12 hearing.
Defendant ordered a transcript and recording of the hearing on Plaintiff’s
“Motion for Protective Order and a Determination as a Matter of Law that Plaintiff
is Entitled to a De Novo Review of Defendant’s Decision to Deny Coverage on the
Administrative Record and Quashing and Staying Defendant’s Discovery of Post
Administrative Appeal Matters.” Plaintiff argues that there was no showing of
necessity by Defendant to have transcribed the recording of the hearing, which was
five pages in total. (See Doc. 231.)
Defendant responds that “[a]t the hearing in question, [Plaintiff’s] counsel
explained at great length, in a discussion with the Court, [Plaintiff’s] new
ERISA-based theory of the case, and how (according to [Plaintiff]) that new theory
limited the scope of review and discovery in this case.” (Doc. 562, at 9.) As such,
Defendant desired a record of Plaintiff’s position. The Court finds Defendant’s
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position regarding the transcript to be reasonable given the nature and importance
of the statements of Plaintiff’s counsel contained therein. Plaintiff’s objection is
overruled and the amount is recoverable.
Plaintiff also argues that it is unnecessary for Defendant to have requested
both a transcript and a recording of the hearing when “[o]nly one was necessary.”
(Doc. 560, at 17.) The Court agrees and sustains Plaintiff’s objection as to the
$30.00 cost for a CD of the 8/30/12 hearing.
3.
Daily real-time transcripts of the jury trial.
Plaintiff next argues that it should not be charged for the cost of real time
transcripts from the trial. According to Plaintiff, it chose not to request the
transcripts because they were unnecessary “for a trial of this length.” (Id.) Rather,
Plaintiff characterizes these transcripts as “a luxury the insurance company could
afford with its deep pockets, but the plaintiff should not be forced to pay for the
insurance company’s luxuries.” (Id.)
Defendant responds that the transcripts were necessary because it “put on
nine live witnesses during four separate days” of trial. (Doc. 562, at 10 (citing Doc.
490).) According to Defendant, daily transcripts are recoverable as they were
“reasonably necessary to keep track of this testimony as it came in live, and to
assist [defense] counsel in tasks such as the preparation of cross-examinations, the
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direct examination of [Defendant’s] expert, and [Defendant’s] closing argument.”
(Id.) Defendant argues that it is irrelevant that Plaintiff “chose not to order daily
transcripts” because the “parties faced very different evidentiary presentations at
trial.” (Id.) Defendant points out, for instance, that it was “faced with nine live
[Plaintiff] witnesses in seven days” while Plaintiff was faced with one live witness
from Defendant. (Id.) Under these circumstances, the Court finds this cost to be
both reasonable and recoverable. Plaintiff’s objection to the cost of the daily realtime jury transcripts is overruled.
4.
Witness fees for Defendant’s expert.
Finally, Plaintiff objects to the $120.00 in witness fees for Defendant’s
expert Dr. Meshkov to attend trial. (Doc. 560, at 17.) According to 28 U.S.C. §
1821(b), a
witness shall be paid an attendance fee of $40 per day for
each day's attendance. A witness shall also be paid the
attendance fee for the time necessarily occupied in going
to and returning from the place of attendance at the
beginning and end of such attendance or at any time
during such attendance.
This District has specifically held that §1821(b) applies to expert witnesses, and
the prevailing party may tax fees of $40 per day to cover attendance, travel, and
subsistence of such witnesses. See Griffith v. Mt. Carmel Med. Cntr., 157, F.R.D.
499, at 503 (D. Kan. 1994). Plaintiff’s objection is, therefore, overruled.
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IT IS THEREFORE ORDERED that Defendant’s “Rule 59(e) Motion to
Alter or Amend Judgment” (Doc. 551) is GRANTED. The Judgment for the
principal amount plus interest ($169,863.00) is reaffirmed. Plaintiff is awarded
costs incurred prior to September 22, 2011, and is ordered to re-submit its Bill of
Costs on that basis.
IT IS FURTHER ORDERED that Defendant’s Bill of Costs be entered by
the Clerk in the amount of $24,557.11 (total listed by Defendant (Doc. 552) minus
$30.00 fee for recording of August 30, 2012, hearing).
IT IS SO ORDERED.
Dated at Wichita, Kansas, on this 8th day of May, 2017.
S/ KENNETH G. GALE
KENNETH G. GALE
United States Magistrate Judge
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