Gilley et al v. Lowes Home Centers L L C

Filing 74

RULING re 59 MOTION to Alter Judgment filed by Lowes Home Centers L L C and 66 MOTION for Sanctions filed by 3i Corp Ltd, Liberty Surplus Insurance Corp. Signed by Judge Robert G James on 7/22/15. (crt,DickersonSld, D)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
MONROE DIVISION
JIMMY J. GILLEY AND PATRICIA
GILLEY

CIVIL ACTION NO. 14-0667

VERSUS

JUDGE ROBERT G. JAMES

LOWE’S HOME CENTERS, L.L.C.,
ET. AL.

MAG. JUDGE KAREN L. HAYES

RULING
This was a personal injury diversity case in which Plaintiff Jimmy Gilley (“Gilley”) fell from
a stool in the Defendant Lowe’s Home Centers, L.L.C. (“Lowe’s”) Ruston, Louisiana store.
Lowe’s filed a Third Party Complaint against 3i Corporation Limited (“3i”), contending that
3i manufactured the stool in question. The Court subsequently granted summary judgment in 3i’s
favor, dismissing, with prejudice, Lowe’s third party demand against 3i, but denying 3i’s
contemporaneous motion for attorney’s fees and costs. [Doc. No. 50]. After summary judgment was
granted, Lowe’s and the Gilleys reached a settlement, and the case was administratively closed.
Currently pending before the Court is Lowe’s Motion for Alteration or Amendment of
Judgment (“Motion for Alteration”) [Doc. No. 59], in which Lowe’s moves the Court to reinstate
its third party demand against 3i based on new evidence. Also pending before the Court is 3i’s
“Motion for Rule 11 Sanctions” against Lowe’s. [Doc. No. 66].
For the following reasons, the Motion for Alteration is DENIED. 3i’s Motion for Rule 11
Sanctions is also DENIED.
I.

FACTS AND PROCEDURAL HISTORY
On the evening of March 30, 2013, Gilley went with his wife and two friends to Lowe’s.

While there, Gilley decided to test out a bar stool in a patio display set. [Doc. No. 34, Exh. A, Gilley
Deposition (“Gilley Depo.”), pp. 45-46]. Gilley testified that he was particularly interested in the
stool because it was wooden and would complement his patio well. Id. at p. 49-51. When he
attempted to sit on the stool, it slid out from under him, and he fell to the floor. Id. at 31. Only
Gilley and his friend, Benson Bennett (“Bennett”), were present. Id. at pp. 62-63. Gilley alleges the
stool had metal inserts on the bottom of its legs and that the stool was displayed on Lowe’s concrete
floor. Id. at pp. 66, 57.
Approximately 20 minutes after the incident, Eddie Jones (“E. Jones”) and Romairo Jones
(“R. Jones”), both managers at Lowe’s, arrived. R. Jones completed an accident report, describing
the stool involved in the incident as item number 151737, a Safford chair-type stool manufactured
by 3i. He based his report on the apparently erroneous assumption that the stool closest to Gilley
was the one involved in the accident. [Doc. No. 34, Exh. C, Jones Depo., pp. 12, 34, 47]. R. Jones
did not ask Gilley if he fell from the 3i stool. Id. at pp. 12, 34; see also [Doc. No. 34, Exh. A, Gilley
Depo., pp. 148-49]. Gilley testified the stool recorded on the incident report was not the stool from
which he fell. Id. at pp. 48-54, 103, 107, 148-150. The 3i stool is aluminum, with arms and a back,
and has no seat cushion, while Gilley described the stool he fell from as wooden with no arms or
back. See [Doc. No. 34, Exh. E, Representation of 3i Stool].
Gilley initiated this action on February 21, 2014, in the Third Judicial District Court for the
Parish of Lincoln, State of Louisiana. [Doc. No. 1-1]. Lowe’s removed to this Court and
subsequently filed a Third Party Complaint against 3i, alleging that the stool Gilley fell from was
defective, and, accordingly, that 3i owed Lowe’s a defense and indemnity per the terms of the
parties’ Buying Agreement. [Doc. No. 15]. However, Lowe’s later conceded that the 3i stool was

2

not defective. [Doc. No. 46, Lowe’s Opposition to 3i’s Motion for Summary Judgment, p. 4].
Lowe’s did not retain the 3i stool in question; in fact, it is undisputed that it remained on display and
was sold after the accident.
The Court granted 3i’s motion for summary judgment on the issue of liability, reasoning that
Lowe’s had failed to generate “factual issues as to whether 3i manufactured the bar stool.” [Doc. No.
49, p. 4-5]. Alongside its motion for summary judgment, 3i also moved the Court to award
attorney’s fees and costs, contending that Lowe’s pursued a frivolous Third Party Complaint against
it, even after Gilley unequivocally stated in his deposition that the stool he fell from could not have
been manufactured by 3i. The Court did not consider the merits of 3i’s motion for sanctions at that
time because 3i failed to comply with Rule 11's procedural requirements.
Previously, Lowe’s had filed a motion for summary judgment on the issue of its potential
liability to Gilley [Doc. No. 32], which the Court denied. [Doc. No. 51]. The Court found that there
were factual questions as to whether Lowe’s placement of a stool with metal tipped legs on a
concrete floor created an unreasonably dangerous condition. Id. at p. 6.
On April 30, 2015–after the Court had dismissed all claims against 3i and denied Lowe’s
motion for summary judgment–Lowe’s and the Gilleys settled their dispute. [Doc. No. 58,
Settlement Letter]. Approximately two weeks later, Lowe’s filed the instant Motion for Alteration,
urging the Court to reinstate its third party demand against 3i on grounds that it had uncovered
evidence that a metal stool manufactured by 3i was the one involved in Gilley’s accident. [Doc. No.
59]. Specifically, counsel for Lowe’s tracked down Bennett, the only other eyewitness to Gilley’s
fall, and obtained an affidavit from him stating that the stool Gilley fell from was metal and matched
the picture of a 3i chair-type stool shown to him by Lowe’s counsel. [Doc. No. 59-2, Exh. 6, Bennett

3

Affidavit, at ¶ 7]. 3i filed an opposition memorandum [Doc. No. 62], to which Lowe’s replied. [Doc.
No. 65].
3i then filed the instant Motion for Rule 11 Sanctions, arguing that Lowe’s initially filed a
frivolous third party demand and maintained that frivolous demand after Gilley testified that a 3i
product was not involved in his accident. [Doc. No. 66]. Further, 3i contends that sanctions are also
appropriate because Lowe’s filed its Motion for Alteration for the improper purpose of avoiding
sanctions. Id. Lowe’s filed an opposition memorandum. [Doc. No. 68]. 3i filed a reply. [Doc. No.
73].
II.

LAW AND ANALYSIS
A.

Lowe’s Motion for Alteration

Because Bennett has averred that Gilley fell from a 3i stool after the Court granted summary
judgment in 3i’s favor, Lowe’s moves the Court to re-open this case, arguing that there are factual
issues as to whether 3i owes a defense and indemnity. 3i opposes on grounds that Bennett’s
testimony was available at the outset of this litigation, that Bennett’s affidavit is immaterial, and that
it will suffer prejudice should the case be re-opened.
District courts have “considerable discretion” in deciding whether to re-open a case under
motions to modify or amend a judgment or a motion to vacate a judgment under FED. R. CIV. P.
59(e). Edward H. Bohlin Co. v. Banning Co., 6 F.3d 350, 355 (5th Cir. 1993). However, the Court’s
discretion must be balanced between finality and the “need to render just decisions on the basis of
all the facts.” Id. In attempting to strike the proper balance between these competing goals, the Court
must consider: (1) the importance of the omitted evidence to Lowe’s case; (2) the reasons for Lowe’s
default; (3) whether the evidence was available to Lowe’s before responding to the summary

4

judgment motion; and (4) the likelihood that 3i will suffer unfair prejudice if the case is reopened.
Ford v. Elsbury, 32 F.3d 931, 937 (5th Cir. 1994).
1.

Bennett’s Affidavit is Immaterial

Lowe’s argues that 3i owes it a defense and indemnity per the parties’ Buying Agreement
because Bennett’s affidavit generates factual issues that a 3i product was involved in the incident.
In response, 3i asserts that the manufacturer of the stool is immaterial because, even if a 3i stool were
involved, Lowe’s has conceded that the stool was not defective.
While Bennett’s affidavit creates factual questions as to whether Gilley fell from a 3i stool,
the affidavit is irrelevant to the issue of whether 3i owes Lowe’s a defense and indemnity. As this
Court previously stated in its Ruling on 3i’s Motion for Summary Judgment, “an indemnification
agreement cannot be construed to indemnify the indemnitee (here, Lowe’s) against losses resulting
from the indemnitee’s own negligence absent a clear, unequivocal statement to that effect in the
indemnity agreement.” [Doc. No. 49, p. 4 (citing Perkins v. Rubicon, Inc., 563 So. 2d 258, 259 (La.
1990))]. The Court finds that, under the parties’ Buying Agreement, 3i is not required to indemnify
Lowe’s for disputes arising from Lowe’s own acts of negligence. Because it is undisputed that the
subject stool was not defective,1 and because the Court finds that only Lowe’s was potentially
negligent, Louisiana precedent is clear that 3i has no duty to indemnify,2 even if a 3i product was
1

Lowe’s concedes that “the patio stool at issue was not defective.” [Doc. No. 46, Lowe’s
Opposition to 3i’s Motion for Summary Judgment, p. 4]. Further, discovery has closed, and it is
undisputed that the stool Gilley fell from was sold soon after the accident. Thus, Lowe’s cannot,
under any circumstances, create factual issues that the stool was defective.
2

The Court notes that, under Louisiana law, the duty to defend is broader than the duty to
indemnify, and would be determined by the factual allegations in Gilley’s Petition. See Henly v.
Phillips Abita Lumber Co., 2006–1856 (La.App. 1st Cir.10/3/07), 971 So.2d 1104, 1109.
Lowe’s did not make any arguments that the duty to defend was greater than the duty to
indemnify in this case.
5

involved.
For these reasons alone, Lowe’s Motion for Alteration could be denied. However, the Court
has also considered the other factors under Rule 59(e) and finds that they also support denial.
2.

Bennett’s Testimony was Previously Available and Relevant and 3i Would
Suffer Considerable Prejudice if this Case Was Re-Opened.

Lowe’s asserts that it should be excused for its failure to obtain Bennett’s testimony before
summary judgment was rendered, contending that his testimony was not relevant until Lowe’s was
first aware that the identity of the stool’s manufacturer was at issue (at Gilley’s deposition).3
Counsel for Lowe’s avers that he attempted to contact Bennett multiple times before and after he was
aware the stool’s manufacturer was relevant, but was unable to reach him. See [Doc. No. 59-2, Exh.
4, Affidavit of David Harpole, ¶ 3]. In opposition, 3i asserts that Bennett’s testimony was both
available and relevant prior to the Court’s ruling on 3i’s motion for summary judgment.
The Fifth Circuit has held that a Rule 59(e) motion is not the proper vehicle for rehashing
evidence or arguments that could have been offered or raised before the entry of judgment. See
Simon v. United States, 891 F.2d 1154, 1159 (5th Cir. 1990). Rather, Rule 59(e) serves the narrow
purpose of allowing a party to correct manifest errors of law or fact or to present evidence that was
not previously available. Waltman v. Int’l Paper Co., 875 F.2d 468, 473 (5th Cir. 1989); see also
Schiller v. Physicians Resource Group, Inc., 342 F.3d 563, 567 (5th Cir. 2003).
Bennett’s testimony was always available and relevant. Bennett’s phone number was listed
on the 2013 Incident Report (approximately two years before 3i filed its motion for summary

3

The deposition took place on February 10, 2015, 30 days before 3i filed its Motion for
Summary Judgment. Counsel for Lowe’s did not contact Bennett until May 30, 2015.
6

judgment). Counsel for 3i, Andrew Baer (“Baer”), avers that he called this same number on May
18, 2015, reached Bennett’s wife on the first try, and left a message. See [Doc. No. 62, Exh. A, Baer
Affidavit, at ¶¶ 4-12]. Bennett called Baer back later that same evening and informed him that his
wife typically stays home during the day to care for her mother.
Moreover, as 3i points out, Bennett’s testimony was always relevant regarding the facts and
circumstances of Gilley’s fall. Indeed, Lowe’s counsel admits he attempted to contact Bennett
several times before Gilley’s deposition. See [Doc. No. 59, Exh. 4, Harpole Affidavit, ¶ 3]. To the
extent Lowe’s contends that it was unaware that Bennett might offer relevant testimony on the
particular stool that Gilley fell from, that contention is without merit. R. Jones’ Report had no
attached photographs, and Lowe’s knew the stool described in the Report had been sold as nondefective.4 Thus, from the outset of litigation, Bennett’s testimony was relevant to all the facts
surrounding Gilley’s fall, including to the issue of who manufactured the stool.
Finally, because Lowe’s settled with Gilley after 3i had been released, 3i had no opportunity
to participate in the settlement. Consequently, the Court finds that 3i would suffer substantial
prejudice should the case be re-opened. For the foregoing reasons, Lowe’s Motion for Alteration is
DENIED.
B.

3i’s Motion for Rule 11 Sanctions

3i moves for Rule 11 sanctions against Lowe’s on numerous grounds. Rule 11(b) provides
in relevant part that when filing a pleading or motion, an attorney certifies to the best of his

4

The Court does not conclude, however, that Lowe’s failure to obtain Bennett’s
testimony before filing its third party demand was objectively unreasonable for purposes of
levying sanctions.
7

knowledge, information, and belief, formed after a reasonable inquiry under the circumstances,
(1)

it is not being presented for any improper purpose, such as to
harass, cause unnecessary delay, or needlessly increase the
cost of litigation;

(2)

the claims, defenses, and other legal contentions are
warranted by existing law or by a nonfrivolous argument for
extending, modifying, or reversing existing law or for
establishing new law; [and]

(3)

the factual contentions have evidentiary support or, if
specifically so identified, will likely have evidentiary support
after a reasonable opportunity for further investigation or
discovery.

FED. R. CIV. P. 11(b). At issue here is whether Lowe’s counsel violated subpart (b)(1), (b)(2), or
(b)(3). A violation of any subpart justifies sanctions as each provides an independent basis for
sanctions. Whitehead v. Food Max of Miss., Inc., 332 F.3d 796, 802–04 (5th Cir. 2003) (en banc).
In determining compliance with Rule 11, an attorney is measured under a standard of objective
reasonableness based on the circumstances. Whitehead, 332 F.3d at 802–03. The reasonableness
of the conduct involved is to be viewed at the time counsel signed the document alleged to be the
basis for the Rule 11 violation, commonly referred to as the “snapshot rule.” Marceaux v. Lafayette
City Par. Consol. Gov’t, 14 F. Supp. 3d 760, 766 (W.D. La. 2014). This rule “ensures that Rule 11
liability is assessed only for a violation existing at the moment of filing.” Skidmore Energy, Inc. v.
KPMG, 455 F.3d 564, 570 (5th Cir. 2006).
The key issues this motion presents are (1) whether, based on the information reasonably
available to Lowe’s at that time, it was objectively reasonable for Lowe’s to file its Third Party
Complaint; (2) if so, whether it was objectively reasonable for Lowe’s to maintain suit after it

8

became aware that Gilley claimed a 3i product was not involved; and (3) whether Lowe’s Motion
for Alteration was presented for an improper purpose.
1.

Lowe’s Had Objectively Reasonable Grounds for its Third Party
Complaint.

3i argues Lowe’s did not conduct a reasonable investigation before filing its Third Party
Complaint, which, they contend, would have revealed that a 3i product was not involved. Lowe’s
refers the Court to R. Jones’ Incident Report, which unambiguously identified a 3i stool as being
involved in Gilley’s accident.
The Court finds that the Incident Report alone provided Lowe’s with objectively reasonable
grounds for filing its Third Party Complaint. Although the Incident Report did not have attached
photographs, it was not unreasonable for Lowe’s to rely on a report prepared by an employee charged
with investigating Gilley’s accident.5 Until Gilley’s deposition (three months after Lowe’s initiated
its demand against 3i), there was nothing to suggest that the subject stool was anything but a 3i
product; further, 3i did not argue that the stool had been misidentified until after Gilley’s deposition.
Lowe’s, therefore, had sufficient “evidentiary support” under Rule 11 to avoid sanctions for the
initial filing of its Third Party Complaint.
2.

Likewise, Lowe’s Maintenance of its Third Party Demand After Gilley’s
Deposition is not Sanctionable.

3i asserts sanctions are also appropriate because Lowe’s maintained its claims against 3i after
Gilley’s deposition. Refusal to dismiss a party when there exists “no affirmative evidence” for the
basis of the claim is sanctionable under Rule 11. See, e.g, Worrell v. Houston CanA Acad., 287 F.

5

There is no tension between this conclusion and the Court’s Ruling on Lowe’s Motion
for Alteration, (supra, p. 7), because different standards apply.
9

App’x 320, 326 (5th Cir. 2008) (sanctions awarded where attorney refused to dismiss claims after
he was presented with evidence that he had sued the wrong defendant and had “no affirmative
evidence” that inclusion of that defendant was proper). Further, even if a filing was initially
objectively reasonable, maintenance of suit may nonetheless be sanctionable if an attorney fails to
dismiss claims after it becomes clear those claims lack evidentiary and legal support. See, e.g.,
Sorapuru v. Sheraton New Orleans Hotel, CIV.A.No. 12-0326, 2013 WL 2404595, at *3 (E.D. La.
May 30, 2013) (awarding sanctions for counsel’s refusal to withdraw claims after all of the plaintiff’s
treating doctors testified that the plaintiff’s injuries could not have been caused by the alleged
incident).
Under the facts of this case, Lowe’s decision to maintain its third party demand is not
sanctionable because, unlike the circumstances in Worrell and Sorapuru, Lowe’s had some evidence
indicating that preserving its demand was proper. The Buying Agreement dictated that 3i had the
duty to defend and indemnify Lowe’s for legal actions arising out of the “possession or use of any
[3i] product . . . [or] any other allegation arising directly or indirectly from any product originating
from [3i].” [Doc. No. 68, Exh. C, Buying Agreement, p. 16]. Because of R. Jones’ Incident Report,
it was a debatable position–even after Gilley’s deposition–that Gilley fell from a 3i stool.
Further, Lowe’s had an arguable legal position for preserving its demand after Gilley’s
deposition. Lowe’s argued that the Buying Agreement provided for indemnification, even if Lowe’s
negligence alone caused Gilley’s injuries. The Agreement states that 3i’s duty to defend or indemnify
is invoked when “use” of a 3i product gives rise to litigation, even if the claim is “groundless, false
or fraudulent.” [Doc. No. 68, Exh. C, Buying Agreement, p. 16]. Although, in retrospect, it was not

10

a strong legal position, Lowe’s could not have known how the Court was going to rule.6 Thus,
Lowe’s maintenance of its third party demand after Gilley’s deposition is not sanctionable.
3.

Sanctions Are not Otherwise Appropriate.

Finally, 3i argues sanctions are otherwise appropriate because Lowe’s filing of its Motion
for Alteration was presented for the “improper purpose” of avoiding sanctions. “If it is objectively
ascertainable that an attorney submitted a paper to the court for any improper purpose, even if the
paper contains nonfrivolous representations of papers well-founded in fact and law, sanctions may
still be warranted.” Marceaux, 14 F. Supp. 3d 760, at 766. In support of its claim, 3i points the
Court to the events leading up to Lowe’s filing of the motion. Specifically, the time line shows that
Lowe’s counsel did not contact Gilley until after receiving a Rule 11 letter from 3i.7
While the circumstances surrounding Lowe’s Motion for Alteration are somewhat suspect,
Lowe’s had other reasons to file that motion. This Court’s previous Ruling on 3i’s Motion for
Summary Judgment emphasized that Lowe’s had failed to create factual issues that a 3i stool was
involved in Gilley’s accident. The Ruling, however, failed to clearly articulate that, even if a 3i
product was implicated, 3i would have no duty to indemnify because it was undisputed that the 3i
stool in question was not defective, and, therefore, only Lowe’s could potentially be held liable under
the Court’s interpretation of the parties’ Buying Agreement. Because of this ambiguity, 3i

6

The Court ruled that there were no factual issues as to whether a 3i product was
involved and, albeit not clearly, also ruled that the parties’ Buying Agreement did not provide for
indemnification for Lowe’s own acts of negligence. See [Doc. No. 49, p. 6].
7

The Court dismissed 3i on April 15, 2015. One week later, on April 23, 2015, 3i sent its
Rule 11 letter to Lowe’s. On April 27, 2015, Lowe’s settled with the Gilleys. Lowe’s contacted
Bennett and obtained his affidavit on May 7, 2015, and then filed its Motion for Alteration on
May 11, 2015.
11

understandably moved to re-open the case based on Bennett’s testimony that Gilley indeed fell from
a 3i stool. Consequently, 3i’s Motion for Rule 11 Sanctions is DENIED.
MONROE, LOUISIANA, this 22nd day of July, 2015.

12