PNC Bank N.A. v. Fidelity National Title Insurance Company

Filing 17

ORDER & REASONS granting 14 MOTION for Reconsideration re 13 Order on Motion to Dismiss Case; and/or MOTION for New Trial. ORDERED that the case is reopened. FURTHER ORDERED that the case is transferred to the Middle District of Louisiana. Signed by Judge Martin L.C. Feldman.(clm, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
PNC BANK N.A.

CIVIL ACTION

VERSUS

NO. 13-19

FIDELITY NATIONAL TITLE
INSURANCE COMPANY

SECTION “F”

ORDER AND REASONS
Before the Court is plaintiff's motion for reconsideration
of the Court's August 7, 2013 Order and Reasons.

For the reasons

that follow, the motion is GRANTED and the case is reopened and
transferred to the Middle District of Louisiana.
Background
This case arises out of an insurance dispute.
BMC Capital, L.P. issued a $2.5 million loan to the Irvin
Family Partnership on August 29, 2007, and, to secure repayment,
Irvin Family Partnership granted BMC a mortgage security interest
in several parcels of property located in Gonzales, Louisiana.1
In connection with this property, BMC obtained a title insurance
policy with coverage limits of $2.5 million from Lawyers Title
Insurance Corporation on September 29, 2007.2

Fidelity National

1

Specifically, the mortgage secured an interest in parcels of
property located at "1026, 1028, 1056, 1060, 1064, 1068, and 1078
E. Worth."
2

The title insurance policy number is L20-000183.
1

Title Insurance Company subsequently acquired Lawyers Title
Insurance Corporation and the policy in question.
BMC later assigned the entire loan package, note, security
interest, and insurance policy to PNC Bank N.A., who is currently
the holder in due course of the loan and the security on the
Gonzalez property.

Irvin Family Partnership defaulted on its

loan in 2010, and PNC Bank made demand for payment and attempted
to foreclose on its mortgage, discovering numerous flaws with the
title in doing so.

As a result, on July 1, 2011, PNC Bank sent a

written notice of the defects to Lawyers Title Insurance
Corporation in accordance with the title insurance policy.

After

learning that Fidelity acquired Lawyers Title Insurance
Corporation, PNC Bank forwarded its demand letter to Fidelity,
who acknowledged receipt of PNC Bank's claim on August 18, 2011.
On November 22, 2011, approximately three months after
receipt of the claim, Fidelity accepted the tender of PNC Bank's
claim and agreed to defend title under the policy.

PNC Bank

contends that the policy "obligates Fidelity to pay the Insured
or tender payment of the amount of the insurance or purchase the
indebtedness, or to pay the Insured or otherwise settle the
insured claims with other parties, including the obligation to
pay for the costs of the effort to cure, losses, damages, and
attorneys' fees and expenses incurred by the Insured."

PNC Bank

alleges that Fidelity has failed to fulfil its obligations under

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the policy for the last seventeen months.
On January 1, 2013, PNC Bank sued Fidelity in this Court,
invoking diversity jurisdiction,3 and alleging that venue is
proper because a substantial part of the events or omissions
giving rise to the claim occurred in this district.

PNC Bank

asserts that fidelity breached the title policy and the insurer's
duty of good faith and fair dealing under Louisiana law.

On June

10, 2013, Fidelity moved to dismiss plaintiff's claims under
Federal Rule of Civil Procedure 12(b)(3) for improper venue,
which the Court granted on August 7, 2013.

PNC now moves the

Court to reconsider its August 7, 2013 Order and Reasons granting
defendant's motion to dismiss for improper venue.
Legal Standard
I.
Motions requesting reconsideration of court orders generally
fall under Rule 59(e) or Rule 60 of the Federal Rules of Civil
Procedure.

See Higgins v. Cain, No. 07-9729, 2012 WL 3309716, at

*1 (E.D. La. Aug. 13, 2012).

Rule 59(e) provides that a motion

to alter or amend a judgment must be filed no later than twentyeight days after the entry of judgment.

Fed. R. Civ. P. 59(e).

Rule 60(b), on the other hand, applies to motions filed after the
3

PNC Bank is a national banking association chartered in
Delaware with its principal place of business in Pittsburgh,
Pennsylvania. Fidelity is a California corporation with its
principal place of business in Jacksonville, Florida. The amount
in controversy exceeds $75,000.
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twenty-eight day period, but demands more “exacting substantive
requirements.”

See Lavespere v. Niagara Mach. & Tool Works,

Inc., 910 F.2d 167, 173-74 (5th Cir. 1990), abrogated on other
grounds, Little v. Liquid Air Corp., 37 F.3d 1069, 1078 (5th Cir.
1994) (en banc).
Because the Court entered the challenged Order and Reasons
on August 7, 2013, and PNC Bank filed its motion to reconsider
within twenty-eight days on August 15, 2013, the motion to
reconsider is timely under Rule 59(e), and such analysis is
appropriate.
II.
“A Rule 59(e) motion ‘calls into question the correctness of
a judgment.’”

Templet v. Hydrochem, Inc., 367 F.3d 473, 478 (5th

Cir. 2004) (quoting In re Transtexas Gas Corp., 303 F.3d 571, 581
(5th Cir. 2002)).

Because of the interest in finality, Rule

59(e) motions may only be granted if the moving party shows there
was a mistake of law or fact or presents newly discovered
evidence that could not have been discovered previously. Id. at
478-79.

Moreover, Rule 59 motions should not be used to

relitigate old matters, raise new arguments, or submit evidence
that could have been presented earlier in the proceedings.

See

id. at 479; Rosenblatt v. United Way of Greater Houston, 607 F.3d
413, 419 (5th Cir. 2010) (“[A] motion to alter or amend the
judgment under Rule 59(e) ‘must clearly establish either a

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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’”) (citing
Rosenzweig v. Azurix Corp., 332 F.3d 854, 864 (5th Cir. 2003)
(quoting Simon v. United States, 891 F.2d 1154, 1159 (5th Cir.
1990)).

The grant of such a motion is an “extraordinary remedy

that should be used sparingly.”

Indep. Coca-Cola Employees’

Union of Lake Charles, No. 1060 v. Coca-Cola Bottling Co. United,
Inc., 114 F. App’x 137, 143 (5th Cir. Nov. 11, 2004) (citing
Templet, 367 F.3d at 479).

The Court must balance two important

judicial imperatives in deciding whether to reopen a case in
response to a motion for reconsideration: “(1) the need to bring
the litigation to an end; and (2) the need to render just
decisions on the basis of all the facts.”

Templet, 367 F.3d at

479.
I.

Discussion

PNC moves the Court to reconsider its earlier decision,
which dismissed plaintiff's case on the basis of improper venue,
in favor of transferring the case to the Middle District of
Louisiana.

Notably, plaintiff is not challenging the correctness

of the Court's decision as to venue being improper in the Eastern
District of Louisiana; rather, plaintiff is merely requesting a
transfer of the case.

The Court agrees that transfer is

warranted.

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The Court recognizes the importance of finality, and it
admonishes plaintiff for failing to request a transfer in
opposing the defendant's original motion; however, the Court
finds transfer to be proper, especially because the claims were
never considered on the merits and may be time-barred if
plaintiff is forced to re-file.

Therefore, after weighing the

importance of finality with the justice-function of the courts,
the Court reopens the case.

See, e.g., Roberts v. Hartman, No.

11-1119, 2012 WL 5499553, at *1-2 (W.D. Tex. Nov. 13, 2012)
(granting plaintiff's motion for reconsideration and ordering the
case to be reopened after it was dismissed for improper venue
because plaintiff's claims might be time-barred and no issues had
been decided on the merits).

Although the Court has granted

plaintiff relief by reopening the case, venue in the Eastern
District of Louisiana is nevertheless improper, for reasons more
fully explained in the Court's August 7, 2013 Order and Reasons.
Under 28 U.S.C. § 1406(a), if a case is filed in an improper
venue, a district court may, if in the interest of justice,
transfer the case to any district in which it could have been
brought.

Here, plaintiff submits that re-filing the case may

result in some of its claims being prescribed, specifically,
plaintiff's claims for breach of the insurer's duty of good faith
and fair dealing under Louisiana Revised Statute 22:1973, which
is subject to a one-year prescription period.

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See Harrell v.

Fid. Sec. Life Ins. Co., No. 07-1439, 2008 WL 170269, at *5 (E.D.
La. Jan. 16, 2008) (noting that a claim against an insurance
company for breach of its fiduciary duties are delictual in
nature and therefore subject to the one-year prescriptive
period); Marketplace Annunciation, LLC v. United Fire & Cas. Co.,
No. 06-7232, 2007 WL 837202, at *1 (E.D. La. Mar. 15, 2007) ("The
Court has no reason to dispute that a violation of the Insurance
Code sounds in tort.").

In response, defendant merely asserts

that "PNC cites no limitations period that would preclude it from
re-filing," and because the Court was not erroneous in dismissing
plaintiff's claims, the motion for reconsideration should be
denied.
Because the plaintiff's claims may be time-barred, the Court
finds that it is interest of justice to transfer the case to the
Middle District of Louisiana, which is a district where this case
could have been properly brought. See 28 U.S.C § 1391(b)(2) ("A
civil action may be brought in . . . a judicial district in which
a substantial part of the events or omissions giving rise to the
claim occurred, or a substantial part of property that is the
subject of the action is situated.").

As the Court mentioned in

its August 7, 2013 Order and Reasons, a substantial part of the
events giving rise to plaintiff's claim occurred in Baton Rouge;
a point that the defendant emphasized in its original motion.
Further, the property at issue in the case is also located in

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Baton Rouge.

As a result, the Court finds that this case should

be transferred to the Middle District of Louisiana.
Accordingly, the plaintiff's motion for reconsideration is
GRANTED.

IT IS ORDERED that the case is reopened.

IT IS FURTHER

ORDERED that the case is transferred to the Middle District of
Louisiana.

New Orleans, Louisiana, August 30, 2013

______________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE

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