The Humane Society of the United States et al v. National Union Fire Insurance Company of Pittsburgh, PA
MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 4/21/2017. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
THE HUMANE SOCIETY OF THE
UNITED STATES, et al.
Civil Action No. DKC 13-1822
NATIONAL UNION FIRE INSURANCE
COMPANY OF PITTSBURGH, PA
insurance coverage dispute is the motion for reconsideration and
United States (“HSUS” or “Plaintiff”).
(ECF No. 138).
court now rules, no hearing being deemed necessary.
For the following reasons, Plaintiff’s motion will be
A more complete recitation of the factual background can be
found in the prior memorandum opinion resolving the motion for
(See ECF No. 84, at 1-7).
Plaintiff, along with
Plaintiffs Jonathon Lovvorn and Kimberly Ockene (collectively,
“Plaintiffs”), filed the initial complaint in this case in the
Circuit Court for Montgomery County, and Defendant removed the
action to this court.1
(ECF Nos. 1; 2).
Plaintiffs asserted a
with a lawsuit filed against HSUS by Feld Entertainment, Inc.
(ECF No. 2 ¶¶ 15; 36).
The original scheduling order set August
15, 2013, as the deadline for the amendment of pleadings.
No. 11, at 2).
The parties completed discovery on October 10,
2014, and Defendant moved for summary judgment on November 20,
memorandum opinion and order granting in part and denying in
part Defendant’s motion for summary judgment.
(ECF Nos. 84;
The court entered judgment in favor of Defendant on a
portion of the breach of contract claim, concluding that “no
coverage is available for HSUS under the 2009-2010 Policy,” but
denied Defendant’s summary judgment motion as to the individual
(ECF No. 84, at 25-39).
Mr. Lovvorn and Ms. Ockene were dismissed from this action
pursuant to a stipulation of voluntary dismissal with prejudice
under Fed.R.Civ.P. 41(a)(1)(A)(ii) on October 7, 2016.
Nos. 110; 111).
Trial of this claim was scheduled to begin on May 2, 2017.
(ECF No. 124).
Since Plaintiff filed its motion for
reconsideration, the parties have advised the court that they
have resolved the pending claim and that the instant motion is
the only unresolved matter in this action. (ECF Nos. 148, at 2
(“[A]ll of the claims in the initial complaint have been
resolved via dispositive motion or settlement.”); 150 (“The
claim . . . . No
On September 8, 2015, Plaintiffs expressed their intent to
seek leave to file an amended complaint for the first time (ECF
No. 86), and on September 28, Plaintiffs filed a motion for
leave to amend (ECF No. 90).
In the proposed amended complaint,
sold by Defendant to HSUS: Policy No. 965-95-51, for the period
January 1, 2007, to June 1, 2008 (the “2007-2008 Policy”); and
Professional Liability Insurance for Corporate Counsel, Policy
No. 01-950-29-84, for the period June 1, 2009, to June 1, 2010
(the “Employed Lawyers Policy”).
(See ECF No. 90-2).
On June 10, 2016, while Plaintiffs’ motion for leave to
amend was pending, Plaintiff HSUS filed the same claims it was
seeking leave to bring in this action as a new action against
Defendant in this court.
Complaint, The Humane Soc’y of the
U.S. v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., No. PWG
16-2029 (D.Md. June 10, 2016), ECF No. 1.
before the Honorable Paul W. Grimm.
That case is pending
Plaintiffs did not withdraw
their motion for leave to amend or inform the court of the
filing of the new action.
On July 11, 2016, the court denied the motion for leave to
standards of Rule 15(a) and not the good cause necessary to
modify the scheduling order under Rule 16(b).
(ECF Nos. 98;
The court held that, even considering the arguments on
exercised diligence in seeking leave to amend.
(ECF No. 98, at
underlying facts in this matter and could have either included
before the expiration of the scheduling order deadline.3
include any claim under either the 2007-2008 D&O Policy or the
Employed Lawyers Policy in the complaint” and had “waited until
more than two months following the summary judgment opinion to
seek leave to amend the complaint.”
(Id. at 11-12).
first sought leave to amend the complaint more than two years
Plaintiff incorrectly asserts that it first sought
coverage under the 2007-2008 Policy after the summary judgment
order was issued and did not seek leave to add a claim under
this policy until it had a “formal denial in hand.”
138-7, at 12-13).
After Plaintiffs sought coverage under the
2007-2008 Policy in August 2015 (ECF No. 138-19), Defendant
denied coverage on October 28, 2015 (ECF No. 138-20).
Plaintiffs’ motion for leave to amend had already been filed on
the ground that Defendant was “likely to reject coverage.” (ECF
No. 90-1, at 3).
The court held that Plaintiffs could have
included claims under the 2007-2008 Policy “when they commenced
this action, and certainly before the expiration of the
scheduling order deadline.” (ECF No. 98, at 12).
summary judgment motion had been decided.
The court determined
that this delay showed a lack of diligence and would prejudice
scheduling order under Rule 16, the opinion also noted that
denial of leave to amend under Rule 15 was appropriate when the
“determine[d] that Defendant would be prejudiced by Plaintiffs’
(Id. at 16 & n.7).
Motion for Reconsideration
In the instant motion, HSUS asks for reconsideration of the
denial of leave to amend in light of the January 27, 2017,
decision by the Court of Appeals of Maryland in a case filed
against Defendant by The Fund for Animals (“FFA”), an affiliate
of HSUS, regarding coverage for the same Feld litigation under
HSUS’s 2007-2008 Policy.
(ECF No. 138); see Nat’l Union Fire
Ins. Co. of Pittsburgh, Pa. v. The Fund for Animals, Inc., 451
Md. 431 (2017).
Plaintiff argues that the decision of the Court
of Appeals affirming the entry of a judgment of liability on the
2007-2008 Policy in favor of FFA and against National Union is
entitled to collateral estoppel effect in this case.
138-7, at 17-18).
Plaintiff contends that it should be granted
National Union under the 2007-2008 Policy because liability has
would be no prejudice to Defendant and no impact on the imminent
incurred by the two individual plaintiffs.
(See id. at 17-22).
Standard of Review
54(b), which governs reconsideration of an interlocutory order.
See Fayetteville Inv’rs v. Commercial Builders, Inc., 936 F.2d
1462, 1469-70 (4th Cir. 1991).
Rule 54(b) provides that “any
order or other decision, however designated, that adjudicates
fewer than all the claims or the rights and liabilities of fewer
than all the parties . . . may be revised at any time before the
entry of a judgment adjudicating all the claims and all the
parties’ rights and liabilities.”
precise standard governing a motion for reconsideration of an
interlocutory order is unclear.
Fayetteville Inv’rs, 936 F.2d
While the standards articulated in Rules 59(e) and
60(b) are not binding in an analysis of Rule 54(b) motions, Am.
Canoe Ass’n v. Murphy Farms, Inc., 326 F.3d 505, 514 (4th Cir.
2003), courts frequently look to these standards for guidance in
considering such motions, Akeva, LLC v. Adidas Am., Inc., 385
F.Supp.2d 559, 565-66 (M.D.N.C. 2005).
Public policy favors an end to litigation
and recognizes that efficient operation
questions that have already been decided.
Most courts have adhered to a fairly narrow
set of grounds on which to reconsider their
interlocutory orders and opinions.
will reconsider an interlocutory order in
the following situations: (1) there has been
an intervening change in controlling law;
(2) there is additional evidence that was
not previously available; or (3) the prior
decision was based on clear error or would
work manifest injustice.
Akeva, 385 F.Supp.2d at 565-66 (citations omitted); see also
Beyond Sys., Inc. v. Kraft Foods, Inc., No. PJM–08–409, 2010 WL
3059344, at *1-2 (D.Md. Aug. 4, 2010) (applying this three-part
test when evaluating a motion for reconsideration under Rule
A motion for reconsideration under Rule 54(b) may not
be used merely to reiterate arguments previously rejected by the
Beyond Sys., Inc., 2010 WL 3059344, at *2.
A motion for reconsideration must be filed no later than
fourteen days after entry of the order under Local Rule 105.10.
Plaintiff’s motion was filed on March 15, 2017, 247 days after
entry of the court’s July 11, 2016, order denying leave to amend
and 47 days after the issuance of the Court of Appeals decision
on January 27, 2017.
Plaintiff acknowledges that its motion for
reconsideration is untimely, but urges the court to suspend the
Local Rule because its request “stems from the Court of Appeals’
recent decision and mandate.”
(ECF No. 138-7, at 19).
This argument for suspension of the Local Rule demonstrates
Plaintiff argues that the Court of Appeals’
decision in The Fund for Animals case justifies reconsideration
because it is both a controlling change in law and new evidence,
Appeals’ decision on the merits of Plaintiff’s proposed claim
identified no change in the law governing motions to modify a
scheduling order or for leave to amend a complaint that would
failed to show good cause for modifying the scheduling order and
showing of good cause.
Plaintiff also argues that it “must be able to assert a
(ECF No. 138-7, at 18).
Plaintiff contends that because the
Court of Appeals of Maryland has held that Defendant wrongfully
denied insurance coverage, it would be unjust to allow Defendant
to benefit from its wrongful denial by not reconsidering denial
of leave to amend in order to allow Plaintiff to add a claim
under the 2007-2008 Policy in this case.
Even if Plaintiff
injustice here; any benefit to Defendant would result solely
earlier in this case.
based on an apparent cost sharing agreement between it and FFA.
It states that Plaintiff and FFA agreed that FFA should pay the
entire $10.675 million settlement in the underlying litigation,
but that Plaintiff paid $4.475 million of the settlement because
FFA “is a small charity and lacked the financial resources”
necessary to satisfy the settlement.
(Id. at 3, 18).
states that FFA will recover only FFA’s share in its litigation,
and argues that it would be unjust if HSUS could not recover its
Plaintiff cannot recover the settlement payment it apparently
injustice in it not recovering on a claim that it failed to
As noted in the opinion denying leave to amend, it
could have included claims under both the 2007-2008 and 20092010 Policies in the complaint – as FFA did in its action, after
receiving the same denial letter in 20104 – or it could have
sought leave to amend years ago.
Instead, Plaintiff waited
until after summary judgment was granted against it on the 20092010 Policy belatedly to attempt to assert claims for the “same
damages” (ECF No. 149, at 12), under “totally separate” policies
(ECF No. 94, at 3).
FFA’s success in pursuing a claim under the
reconsideration of the court’s order denying leave to amend.
Plaintiff’s motion for reconsideration is untimely and offers no
persuasive justification for suspending Local Rule 105.10 or for
denial of leave to amend will be denied.
Fund for Animals, Inc. v. Nat’l Union Fire Ins. Co. of
Pittsburgh, Pa., 226 Md.App. 644, 655, 657 & n.7, aff’d, 451 Md.
431 (2017) (noting that FFA brought breach of contract claims
under both the 2007-2008 and 2009-2010 Policies after National
Union “informed HSUS and the FFA that National Union was
disclaiming coverage for both of them in the [Feld] Case under
the 2010 Policy and under the 2007 Policy” on May 26, 2010).
Leave to File an Amended Complaint
(Compare ECF No. 90-2, with ECF No. 138-3).
other differences, Plaintiff no longer seeks to add a claim
under the Employed Lawyers Policy.
(ECF No. 138-7, at 10 n.4).
reconsideration or as a new motion for leave to file an amended
complaint, the motion will be denied.
Plaintiff argues that it can demonstrate good cause under
Rule 16(b)(4) because it has acted in good faith, the length of
its delay has prevented unnecessary discovery and litigation,
and its proposed amendment would not prejudice Defendant because
it would prevent Defendant’s unjust enrichment.
(ECF No. 138-7,
question that HSUS can meet the liberal standard for amendment
under Rule 15(a)(2),” and makes the conclusory statements that
amendment would not prejudice Defendant or be futile.
Plaintiff has again failed to demonstrate good cause for
modifying the scheduling order under Rule 16.
noted, “[l]ack of diligence and carelessness are the ‘hallmarks
of failure to meet the good cause standard.’”
(ECF No. 98, at
13 (quoting W.Va. Hous. Dev. Fund v. Ocwen Tech. Xchange, Inc.,
200 F.R.D. 564, 567 (S.D.W.Va. 2001))).
Plaintiff could have
brought this claim before the scheduling order deadline, and
Plaintiff sought to add this new claim just six weeks before
trial was scheduled to begin, nearly 20 months after the court’s
summary judgment order.
Moreover, if the parties have in fact
resolved the remaining claim in this action, then Plaintiff is
seeking to delay disposition of this action solely to add this
Accordingly, construing the motion as a motion
for leave to amend, it is also denied.
III. Request for Clarification
“clarification” of the order denying leave to amend to state
that the decision was without prejudice to Plaintiff advancing
Instead, Plaintiff makes the creative but unconvincing
argument that the length of its delay in seeking leave to amend
weighs in favor of amendment because, by delaying until after
FFA’s claim under the 2007-2008 Policy had been litigated,
tried, and appealed, it has saved the parties in this action (or
at least has saved itself) from unnecessary discovery and
litigation. (ECF No. 138-7, at 21). Regardless of whether the
decision in FFA’s case would be entitled to collateral estoppel
effect here, the outcome of that proceeding has no bearing on
whether Plaintiff diligently pursued its own claim under the
2007-2008 Policy against Defendant.
that claim in a new action.
(ECF No. 138-7, at 22-23).
noted above, Plaintiff has already advanced its proposed claim
in a separate action.
At the time it filed the
instant motion, Defendant’s motion to dismiss that action as
barred by res judicata was pending and ripe for disposition.
Motion to Dismiss or Stay, The Humane Soc’y of the U.S. v. Nat’l
Union Fire Ins. Co. of Pittsburgh, Pa., No. PWG 16-2029 (D.Md.
September 19, 2016), ECF No. 9.
Plaintiff requests that this
prejudice, in order to “avoid unnecessary litigation about the
potential preclusive effects of the order.”
(ECF No. 138-7, at
In support of its request, Plaintiff cites to Wright &
Miller, to the effect that a court may direct that leave to
amend is without prejudice to advancing the new matter in a
separate action, and a single unpublished decision from Nevada.
(Id. (citing Reed v. Tracy, 2013 WL 4875949, at *2 (D.Nev. Sept.
plaintiff to assert unrelated claims against new defendants in a
separate action), aff’d, 647 F.App’x 730 (9th Cir. 2016) (mem.);
18 Charles Alan Wright, Arthur R. Miller, & Edward H. Cooper,
Plaintiff’s citation to a fragment from Wright & Miller clouds
what is at issue.
The entire sentence is:
“Unless the court
can be persuaded to direct that denial of leave to amend is
without prejudice to advancing the new matter in a separate
illustrates, the decision turns on often difficult concepts of
claim preclusion, or res judicata, and those issues have not
adequately been addressed by the parties in this case.
addressed the relevant issues in the second case.
Plaintiff’s filing of a second action while this case was
pending and before leave to amend had been denied implicated the
rule against duplicative litigation.
It is undisputed that it is within a
district court’s power to stay or dismiss a
suit that is duplicative of another federal
See Colorado River Water
Conservation Dist. v. United States, 424
U.S. 800, 817 (1976) (“As between federal
district courts, . . . the general principle
is to avoid duplicative litigation.”). This
rule against duplicative litigation, also
referred to as “claim splitting,” is the
“‘other action pending’ facet of the res
Davis v. Sun Oil Co.,
148 F.3d 606, 613 (6th Cir. 1998). Like res
piecemeal, and requires that all claims
arising out of a single wrong be presented
in one action.”
Myers v. Colgate–Palmolive
Co., 102 F.Supp.2d 1208, 1224 (D.Kan. 2000)
(internal citations omitted).
Thus, when a
plaintiff has no right to assert another
action “on the same subject in the same
court, against the same defendant at the
Curtis v. Citibank, N.A., 226
F.3d 133, 138–39 (2d Cir. 2000).
In a claim splitting case, as with the
second suit will be barred if the claim
involves the same parties or their privies
and “arises out of the same transaction or
series of transactions” as the first claim.
See Trustmark Insur. Co. v. ESLU, Inc., 299
F.3d 1265, 1269–70 (11th Cir. 2002).
court must “assess whether the second suit
raises issues that should have been brought
in the first.” Curtis, 226 F.3d at 140.
Very often, the doctrine of claim
splitting applies to bar a plaintiff from
filing a new lawsuit after the court in an
earlier action denied leave to amend the
complaint to add those claims. See Northern
Assurance Co. of Am. v. Square D. Co., 201
F.3d 84, 87–88 (2d Cir. 2000) (citing string
of cases dismissing claim in second suit
that was duplicative of claim sought to be
amended to first suit); In re Kevco, Inc.,
309 B.R. 458, 465–66 (Bkrtcy.N.D.Tex. 2004)
(same). The preclusion of a claim not only
duplicative suits and from circumventing an
earlier ruling of the court, it is in
keeping with “the rule that a plaintiff must
bring suit against the same defendant on all
claims that relate to the same conduct,
transaction or event at the same time.”
Curtis, 226 F.3d at 139.
F.Supp.2d 574, 579 (D.Md. 2004).
Thus, the issue of whether
claim preclusion or some other doctrine precludes Plaintiff from
pursuing a separate action must be decided by Judge Grimm in the
It would not be appropriate to address it in
Plaintiffs had established good cause to alter the scheduling
order and satisfied the liberal standards regarding amendments
to pleadings in this action.
The court will decline Plaintiff’s
before him by “clarifying” its denial of leave to amend the
For the foregoing reasons, the motion for reconsideration
and clarification filed by Plaintiff HSUS will be denied.
separate order will follow.
DEBORAH K. CHASANOW
United States District Judge
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