Hanover Insurance Company v. Superior Labor Services, Inc. et al

Filing 537

ORDER AND REASONS denying 532 Motion for Reconsideration. Signed by Judge Susie Morgan on 8/18/2017. (Reference: 16-2490)(clc)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
HANOVER INSURANCE COMPANY,
Plaintiff

CIVIL ACTION

VERSUS

No. 11-2375 c/w 14-1930
14-1933, 16-2490

SUPERIOR LABOR SERVICES,
INC., ET AL.
Defendants

SECTION “E”

Applies to: 16-2490

ORDER AND REASONS

Before the Court is Allied Shipyard, Inc.’s (“Allied”) motion for reconsideration. 1
On July 12, 2017, the Court granted State National Insurance Company’s (“State
National”) motions for summary judgment 2 with respect to Allied’s status as an additional
insured under the insurance policies State National issued to Masse Contracting Inc.
(“Masse”) for 2006–2007 and 2008–2009 (the “Masse Policies”) and the insurance
policies State National issued to Superior Labor Services, Inc. for 2007–2008 and 2008–
2009 (the “Superior Policies”). 3 In Allied’s motion, it asks the Court to reconsider its
ruling under Rule 59(e) of the Federal Rules of Civil Procedure.
Allied contends the Court committed a manifest error of law in granting State
National’s motions for summary judgment because the Court concluded that neither the
1995 Master Work Contract between Allied and Masse 4 nor the 2006 Master Work

R. Doc. 532.
R. Docs. 445 and 446.
3 R. Doc. 510.
4 The Court notes that Allied—for the first time, in its motion for reconsideration—mentions a 2007 Master
Work Contract between Allied and Masse. R. Doc. 532. Allied did not reference a 2007 Master Work
Contract between Allied and Masse in its answer to State National’s petition for declaratory judgment, R.
Doc. 194; in its response to State National’s statement of uncontested facts attached to State National’s
motion for summary judgment, R. Doc. 493; in its opposition to State National’s motion for summary
judgment, R. Doc. 452; or in the declaration attached to the instant motion for reconsideration, R. Doc.
532-4. The Court did not consider the 2007 Master Work Contract in connection with this Order.
1

2

1

Contract between Allied and Superior “were enforceable contracts absent evidence of
subsequent purchase or work orders.” 5 Allied further argues the Court’s ruling will result
in manifest injustice to Allied because the Master Work Contracts “contain express,
unequivocal agreements by Masse and Superior to obtain commercial liability insurance
and to name Allied as an additional insured.” 6
A motion for reconsideration pursuant to Rule 59(e) of the Federal Rules of Civil
Procedure “must clearly establish either a manifest error of law or fact or must present
newly discovered evidence and cannot be used to raise arguments which could, and
should, have been made before the judgment issued.” 7 A motion for reconsideration “is
‘not the proper vehicle for rehashing evidence, legal theories, or arguments that could
have been offered or raised before the entry of [the order].’”8 “The Court is mindful that
‘[r]econsideration of a judgment after its entry is an extraordinary remedy that should be
used sparingly.’” 9 “When there exists no independent reason for reconsideration other
than mere disagreement with a prior order, reconsideration is a waste of judicial time and
resources and should not be granted.” 10
In deciding motions under the Rule 59(e) standard, the courts in this district have
considered the following factors:
(1) whether the movant demonstrates the motion is necessary to correct
manifest errors of law or fact upon which the judgment is based;
(2) whether the movant presents new evidence;
R. Doc. 532-1 at 1–2.
R. Doc. 532-1 at 2.
7 Schiller v. Physicians Res. Grp. Inc., 342 F.3d 563, 567 (5th Cir. 2003) (citations and internal quotation
marks omitted).
8 Lacoste v. Pilgrim Int’l, No. 07-2904, 2009 WL 1565940, at *8 (E.D. La. June 3, 2009) (Vance, J.)
(alteration in original) (quoting Templet v. HydroChem Inc., 367 F.3d 473, 478–79 (5th Cir. 2004)).
9 Castrillo v. Am. Home Mortg. Servicing, Inc., No. 09-4369, 2010 WL 1424398, at *4 (E.D. La. April 5,
2010) (alteration in original) (quoting Templet, 367 F.3d at 479).
10 Lightfoot v. Hartford Fire Ins. Co., No. 07-4833, 2012 WL 711842, at *3 (E.D. La. Mar. 5, 2012) (Brown,
J.).
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(3) whether the motion is necessary in order to prevent manifest injustice;
and
(4) whether the motion is justified by an intervening change in the
controlling law. 11
Allied argues the Court committed a manifest error of law in concluding the Master
Work Contracts were not binding and enforceable and that the Court must reconsider its
granting of State National’s motions for summary judgment to prevent manifest injustice
to Allied. 12
I.

The Court Did Not Commit Manifest Legal Error in Concluding the
Master Work Contracts were Not Binding and Enforceable
State National sought summary judgment on Allied’s status as an additional

insured under the policies it issued to Masse and Superior and its duty to defend Allied as
an additional insured under the State National policies with respect to claims made in the
Adams and St. Pierre state-court lawsuits. 13 Allied has the burden of proving it is an
“additional insured” under State National’s policies. In its motion for summary judgment,
State National argued that Allied could not meet an essential element of its claim that it
is an additional insured—the existence of a complete and enforceable contract—pointing
to “[t]he failure of Allied to present a complete and enforceable contract with all pertinent
purchase orders or other agreements that incorporate the terms and conditions of the
blanket master contract.” 14

Castrillo, 2010 WL 1424398, at *4. The Court notes that the time limits of Rule 59 do not apply in this
matter because the order appealed is interlocutory. Rules 59 and 60 set forth deadlines for seeking
reconsideration of final judgments. See Carter v. Farmers Rice Milling Co., Inc., 33 F. App’x 704, at *2 (5th
Cir. 2002) (per curiam); Lightfoot, 2012 WL 711842, at *2.
12 R. Doc. 532-1, at 2.
13 R. Doc. 445, 446.
14 R. Doc. 445-1 at 11.
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Allied opposed the motions for summary judgment but, with respect to this
argument, said only that “Allied did offer Masse work at the shipyard and Masse accepted.
Masse performed work at the Allied Shipyard for years. Thus, the obligation in the Master
Work Contract was fulfilled, becoming ‘valid and enforceable.’” 15 Allied apparently takes
the position that any work performed by Masse after the execution of either Master Work
Contract, at any time, with or without purchase orders or other agreements, is sufficient
to establish that the work was done under the applicable Master Work Contract and that
the applicable Master Work Contract is a complete and enforceable contract for all
purposes thereafter. Without agreeing that this argument is correct, the court notes that
Allied failed to cite materials in the record to support this argument. 16
When the movant seeks summary judgment on the basis that the nonmovant has
no evidence to establish an essential element of its claim, the nonmoving party may defeat
a motion for summary judgment by “calling the Court’s attention to supporting evidence
already in the record that was overlooked or ignored by the moving party.” 17 Rule 56(c) of
the Federal Rules of Civil Procedure requires that Allied support its opposition to the
motions for summary judgment by citing to materials in the record, such as depositions,
documents, or stipulations, to establish that a genuine issue of disputed fact exists with
respect to whether Masse performed work under the Master Work Contracts. If Allied had
come forward with supporting evidence to show that a material fact was in dispute, the
R. Doc. 452 at 4.
Without citation, Allied contends that it is undisputed that “substantial work” was performed under the
Master Work Contracts by Masse and Superior. See R. Doc. 532-1 at 9–10. Presumably, Allied would ask
this Court to take it at its word. But Allied’s argument—without summary-judgment evidence—is
insufficient to create factual disputes. Johnson v. New S. Fed. Sav. Bank, 344 F. App’x 955, 956 (5th Cir.
2009) (per curiam) (“Appellant’s brief on appeal contains a number of rhetorical questions and
impassioned arguments, but it fails to cure the defect which proved fatal to Appellant’s case in the district
court: Appellant provides no competent summary judgment evidence sufficient to demonstrate that a
genuine issue for trial exists . . . .”).
17 Celotex Corp. v. Catrett, 477 U.S. 317, 332–33 (1986).
15

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burden would have shifted to State National to demonstrate the inadequacy of the
evidence Allied relied upon, but this did not occur. Allied’s statement that “Masse has
performed work at the Allied shipyard for years” without citation to record evidence is
insufficient for Allied to meet its burden as the non-movant on summary judgment.
Now, Allied asks that the Court reexamine its ruling on the motions for summary
judgment in light of evidence that could have been submitted to support its oppositions
to the motions for summary judgment but, instead, was attached to its motion for
reconsideration. Specifically, Allied seeks consideration of the declaration of Gavin Callais
and the checks from Allied to Masse and Superior, which Allied contends commemorate
payments for work performed under the 1995 and 2006 Master Work Contracts during
the policy periods. 18 Allied makes no argument that this evidence was “newly discovered,”
or that it was previously unavailable. 19 The Fifth Circuit has held that the unexcused
failure to present evidence available at the time of summary judgment is a valid basis for
denying a motion to reconsider. 20
Allied next contends the Court committed manifest legal error when it held that
the Master Work Contracts were not enforceable absent the existence of purchase
orders. 21 Allied disagrees with the Court’s ruling and argues that it was not required to
provide written purchase orders or work orders or to show work was actually done under
the Master Work Contracts during the State National policy periods. According to Allied,

R. Doc. 532-4.
See Schiller, 342 F.3d at 567.
20 Russ v. Int’l Paper Co., 943 F.2d 589, 593 (5th Cir. 1991); see also Knight v. Kellogg Brown & Root Inc.,
333 F. App’x 1, 8 (5th Cir. 2009) (“[T]he plaintiffs fail to adequately explain why they did not obtain these
documents before summary judgment, and an unexcused failure to present evidence available at the time
of summary judgment provides a valid basis for denying a subsequent motion for reconsideration.”
(internal quotation marks omitted)). In this case, there is no reason to believe that Allied did not have these
documents at the time it filed oppositions to the motions for summary judgment as Gavin Callais is the
president of Allied and the checks were issued by Allied. R. Doc. 532-4.
21 R. Doc. 532-1 at 4.
18
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“[t]here is no blanket requirement under Louisiana law (or analogous law) that [Master
Work Contracts] be followed by purchase or work orders in order for the [Master Work
Contract] to be a valid, binding, and enforceable contract.” 22
Each of the cases Allied cites in support of its argument is distinguishable; the cases
do not support a finding that this Court committed an error of law. First, Allied cites
Freret Marine Supply v. M/V Enchanted Capri, in which the court stated the master
services agreement between a bank and a vessel operator was the “operative
agreement.” 23 Allied, however, presumably neglected to read the rest of the Freret court’s
sentence. The Freret court expressly distinguished the master services agreement in
Freret, stating the master services agreement in Freret was the operative agreement, “and
unlike a blanket Master Service Agreement, it did not contemplate future work orders
which would modify the terms or services it provided.” 24
Unlike the master services agreement in Freret, each of the Master Work Contracts
between Allied and Masse and Allied and Superior contain the following language:
[Allied] shall pay Contractor for the work performed at the rate and for the
consideration provided for in [Allied’s] purchase order or through other
agreement. Payment of invoices will be made in accordance with the
established [Allied] procedures following acceptance by [Allied] of work
done by Contractor as being in full compliance with all terms, conditions
and requirements of the Contract and the specific job or project undertaken.
In the event of a conflict between the terms of a[n] [Allied] purchase order
issued in connection herewith and this Contract, the terms and conditions
of the purchase order shall govern the agreement of the parties. 25
The Freret court referred to the type of Master Work Contracts at issue in this case as
“blanket” agreements, as they contemplate future work orders. As a result, Allied bore the

R. Doc. 532-1 at 5.
No. 00-3805, 2002 WL 392801, *3 (E.D. La. Mar. 11, 2002) (Engelhardt, J.).
24 Id. (emphasis added).
25 R. Docs. 532-2 at 2 (1995 Master Work Contract with Masse); 532-2 at 10 (2007 Master Work Contract
with Masse); 532-3 at 2 (2006 Master Work Contract with Superior) (emphasis added).
22
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burden on summary judgment to present evidence of purchase orders or other
agreements to create a genuine issue of material fact with respect to whether work was
actually completed by Masse or Superior during State National’s policy periods. Freret
does not support Allied’s argument.
Second, Allied points to In re Elevating Boats, Inc., in which the court determined
whether a master service agreement was subject to maritime law. 26 Like the Master Work
Contracts in this case, the master services agreement in Elevating Boats contained
general provisions governing work and services the contractor would perform under
separate individual assignments and work orders. 27 On summary judgment, the parties
agreed that there was no specific work order for the date at issue. 28 Elevating Boats differs
from this case in that the contractor in Elevating Boats provided summary-judgement
evidence that it actually performed work under the master services agreement on the
date in question. 29 Again, Allied failed to provide any summary-judgment evidence in its
opposition to State National’s motion for summary judgment that purchase orders existed
or that work was actually performed under the Master Work Contracts during the policy
periods. Elevating Boats is inapplicable.
Third, Allied points to cases in support of its argument that formal work or
purchase orders are not necessary, but instead, informal verbal “work orders” are
sufficient. 30 In Amoco Production Co. v. Wireline Consultants, Inc., the master contract
at issue expressly provided that it “shall control and govern all work performed by
Contractor for Amoco, under verbal or written orders, at all times until canceled by either

No. 00-2282, 2002 WL 272372 (E.D. La. Feb. 22, 2002) (Vance, J.).
Id. at *1.
28 Id. at *3.
29 Id.
30 R. Doc. 532-1 at 7.
26
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party.” 31 The Master Work Contracts between Allied and Masse and Allied and Superior
do not contain express language allowing the use of verbal work orders, and even so,
Allied presented no evidence in opposition to State National’s summary judgment that
verbal work orders existed or were Allied’s common practice or that this practice prevailed
during the relevant policy periods. 32
Each of the cases cited by Allied is inapposite. The Master Work Contracts in this
case provide: “If at any time during the term hereof, [Allied] desires work to be performed
for a particular job or project, [Allied] shall advise contractor of the particulars of the work
and the location thereof.” 33 Further, as discussed above, the Master Work Contracts
contemplate that Allied will be paid for work performed at the rate and for the
consideration “provided for in [Allied’s] purchase order or through other agreement”
and that “the terms and conditions of the purchase order shall govern the agreement of
the parties.” 34 It is clear that the Master Work Contracts contemplated that separate
purchase orders would be entered into, and that work under the contract would be
performed only if Allied sought work to be performed for a particular job or project. The

31 No. 90-4940, 1993 WL 8611, *1 n.4 (E.D. La. Jan. 4, 1993) (Arceneaux, J.) (emphasis added). The Amoco
court was faced with whether—on a motion in limine—it should consider outside evidence regarding
industry custom in determining whether verbal work orders modified the contract. Id. at *1.
32 Allied also cites Wallace v. Oceaneering International, in which the Fifth Circuit considered a claim for
contractual indemnity under a master service contract. 727 F.2d 427, 437–38 (5th Cir. 1984). The Wallace
court found that the master services contract at issue “demonstrate[d] that the parties contemplated that
the contract would not become effective until Zapata issued a verbal or written work order and [the
contractor] accepted the assignment.” Id. at 438. In that case, “there was no work order given by Zapata in
connection with the job on which [the contractor] was injured.” Id. Thus, the court held the “inapplicability
of the master service contract also defeats Zapata’s claim for indemnity.” Id. Again, in this case, Allied
produced no summary-judgment evidence in its opposition to State National’s summary judgment motions
to create a factual dispute with respect to whether work orders—verbal or written—existed during the time
of the Masse and Superior Policies, or that any work was actually done under the Master Work Contracts
by Masse or Superior during State National’s policy periods.
33 R. Docs. 532-2 at 2 (1995 Master Work Contract with Masse); 532-2 at 10 (2007 Master Work Contract
with Masse); 532-3 at 2 (2006 Master Work Contract with Superior) (emphasis added).
34 R. Docs. 532-2 at 2 (1995 Master Work Contract with Masse); 532-2 at 10 (2007 Master Work Contract
with Masse); 532-3 at 2 (2006 Master Work Contract with Superior) (emphasis added).

8

Master Work Contract, therefore, is not—standing alone— an enforceable contract for the
purposes of affording additional insured status. 35
The Court committed no manifest error of fact or law in granting State National’s
motions for summary judgment.
II.

Declining to Reconsider the Court’s Order will not Result in Manifest
Injustice
In its motion for reconsideration, Allied argues “[e]ven if the Court concludes that

its Order granting State National’s Motions for Summary Judgment was not manifest
legal error, reconsideration under Rule 59(e) is nevertheless warranted to avoid manifest
injustice to Allied.” 36 According to Allied, the Court’s granting of State National’s motions
for summary judgment “voids Allied’s contractually-agreed upon right to additionalinsured coverage on the basis that Allied failed to introduce evidence of purchase or work
orders.” 37
Although few cases discuss manifest injustice standard, the Southern District of
Texas has offered its well-supported thoughts on the topic:
There is no general definition of manifest injustice; rather, courts evaluate
whether there has been a manifest injustice on a case-by-case basis.
Alvarado v. Texas Rangers, No. 03-0305, 2005 WL 1420846, at *3; In re
Cusano, 431 B.R. 726, 734 (6th Cir. 2010) (“Manifest injustice, as
contemplated by Rule 59(e), is an amorphous concept with no hard line
definition. However, courts have established various guidelines to be used
on a case-by-case basis to determine whether the necessary manifest
injustice has been shown.” (quotations and citations omitted)). According
to some courts, “‘[w]hat is clear from the case law, and from a natural
reading of the term itself, is that a showing of manifest injustice requires
that there exist a fundamental flaw in the court’s decision that without
correction would lead to a result that is both inequitable and not in line with
applicable policy.;” Id. (quoting Bunting Bearings Corp., 321 B.R. 420
(Bankr. N.D. Oh. 2004)). See also In re UBS AG ERISA Litig., No. 08-6696,
35 The Court does not determine whether a course of conducting business without written purchase orders
would be sufficient to render the Master Service Contracts valid and enforceable without written purchase
orders because the issue was not presented in this case.
36 R. Doc. 532-1 at 9.
37 R. Doc. 532-1 at 10.

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2012 WL 1034445, at *4 (S.D.N.Y. March 23, 2012) (“[A] district court has
not committed a ‘manifest injustice’ unless its error was ‘direct, obvious,
and observable.’” (quoting BLACK’S LAW DICTIONARY 1048; citing U.S. v.
Luciano, 329 F.3d 1, 5 (1st Cir. 2003))); In re Roemmele, 466 B.R. 706, 712
(Bankr. E.D. Pa. 2012) (“A party may only be granted reconsideration based
on manifest injustice if the error is apparent to the point of being
indisputable. In order for a court to reconsider a decision due to manifest
injustice, the record presented must be so patently unfair and tainted that
the error is manifestly clear to all who view [it].” (quotations and citations
omitted)).
***
Of course, “[t]he manifest injustice standard presents plaintiff with a high
hurdle.” Westerfield v. U.S., 366 Fed. App’x 614, 619 (6th Cir. 2010)
(unpublished). “[R]eliance on an unsettled area of law does not amount to
manifest injustice.” Adams v. District of Columbia, 793 F. Supp. 2d 392,
399 (D. D.C. 2011) (citing Qwest Serv’s Corp. v. Fed. Commc’n Comm’n,
509 F.3d 531, 540 (D.C. Cir. 2007)). Importantly, “[t]here is no manifest
injustice for purposes of a Rule 59(e) motion ‘where . . . a party could easily
have avoided the outcome, but instead elected not to act until after a final
order had been entered.’” In re Enron Corporation Securities, Derivative,
& “ERISA” Litigation, No. MDL–1446, 2011 WL 3489599, at *5 (S.D. Tex.
Aug. 9, 2011) (quoting In re Young, No. 08–41515, 2009 WL 2855766, at *4
(Bankr. E.D. Tex. Sept. 2, 2009)). Nor is there manifest injustice “‘if the only
error the movant seeks to correct is a poor strategic decision.’” In re Cusano,
431 B.R. at 734 (quoting In re Henning, 420 B.R. 773, 785 (Bankr. W.D.
Tenn. 2009)). See also Courtade v. Harrah’s Operating Co., Inc., No. 10–
4036, 2011 WL 2446454, at *4 (E.D. La. June 15, 2011) (“[T]he negligence
or erroneous strategy choices of a party’s attorney or the party herself,
which contributed to the court’s dismissal of the party’s claims, do not
amount to manifest injustice.” (citing Robinson v. Wix Filtration Corp.,
LLC, 599 F.3d 403, 409 (4th Cir. 2010); Gayle v. United Parcel Serv., Inc.,
401 F.3d 222, 226–27 (4th Cir. 2005); Universal Film Exchs., Inc. v. Lust,
479 F.2d 573, 577 (4th Cir. 1973); Fox v. Am. Airlines, 389 F.3d 1291, 1296
(D.C. Cir. 2004); Ciralsky v. Cent. Intelligence Agency, 355 F.3d 661, 673
(D.C. Cir. 2004))). 38
A showing of manifest injustice requires that there exist a fundamental flaw in the
Court’s decision, which, as discussed above, did not occur. Allied could have provided
evidence in support of its oppositions to the motions to dismiss but, apparently, elected

Bender Square Partners v. Factory Mut. Ins. Co., No. 4:10-CV-4295, 2012 WL 1952265, at *4 (S.D. Tex.
May 30, 2012).
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not to act until the Court’s order granting the motions had been entered. A party’s
erroneous strategical choices do not amount to manifest injustice. 39
Accordingly;
CONCLUSION
IT IS ORDERED that Allied’s motion for reconsideration 40 is DENIED.
New Orleans, Louisiana, this 18th day of August, 2017.
_____________________ _______
SUSIE MORGAN
UNITED STATES DISTRICT JUDGE

Shnewer v. United States, No. 13-3769, 2016 WL 4424949, at *6 (D.N.J. Aug. 18, 2016), aff’d, No. 163659, 2017 WL 3411812 (3d Cir. Aug. 9, 2017) (citing (“[I]t is not the job of courts deciding motion for
reconsideration to rescue parties from their strategic litigation choices . . . [nor] rescue parties from their
own errors.”) (alterations in original); Zarcone v. United States, No. C 04-01428, 2004 WL 2196560, at *2
(N.D. Cal. Sept. 27, 2004) (“Rule 59(e) does not require a court to rescue parties from the consequences of
their own choices.”).
40 R. Doc. 531.
39

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