Collins v. National General Insurance Company
Filing
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OPINION AND ORDER denying as moot 34 Defendant's Motion for Contempt; denying 35 Defendant's Second Motion for Reconsideration. Signed by District Judge Robert H. Cleland. (LWag)
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
NAOMI COLLINS, Personal Representative of
the Estate of Edward Collins, Jr., Deceased,
Plaintiff,
Case No. 10-13344
v.
NATIONAL GENERAL INSURANCE
COMPANY, a/k/a GMAC INSURANCE,
Defendant.
/
OPINION AND ORDER DENYING
DEFENDANT’S SECOND MOTION FOR RECONSIDERATION AND DENYING AS
MOOT DEFENDANT’S “MOTION FOR CONTEMPT”
Pending before the court are two motions filed by Defendant National General
Insurance Company: (1) a second motion for reconsideration; and (2) a motion to hold
Citizens Insurance Company of the Midwest (“Citizens”), a nonparty, in contempt of
court for failing to comply with a subpoena. On October 13, 2011, Citizens filed a
response to Defendant’s contempt motion. Having considered the briefs and exhibits,
the court concludes that a hearing is unnecessary. See E.D. Mich. LR 7.1(f)(2), (h)(2).
For the reasons stated below, the court will deny both motions.
I. BACKGROUND
Below is a brief summary of the facts as set forth in the court’s previous order
denying Defendant’s first motion for reconsideration:
Plaintiff Naomi Collins is the personal representative of the deceased
policyholder and insured of Defendant. Prior to the insured’s death, he entered a
contract with Defendant for an uninsured motorist insurance policy (“National General
Policy”). Among other things, the National General Policy provides for insurance
coverage in the event of the insured’s injury or death caused by another motorist whose
insurer “denies coverage” for compensatory damages the insured is “legally entitled to
recover from the owner or operator” of the vehicle for which liability insurance coverage
at the minimum level required by Michigan law is denied. Plaintiff alleged Defendant
breached this contract provision. Defendant argued that there was no denial of
coverage upon which to base a claim under the National General Policy uninsured
motorist provision. On July 1, 2011, the court granted summary judgment in favor of
Plaintiff, and Defendant filed a motion for reconsideration on July 15, 2011. At the
direction of the court, Plaintiff filed a response on August 17, 2011. The court denied
Defendant’s first motion for reconsideration on September 28, 2011, and now before the
court is Defendant’s second motion for reconsideration.
On July 29, 2009, the insured was riding a motorcycle when he was struck and
killed by a car driven by Calvin Smith, who was intoxicated. The vehicle which struck
the insured was owned by Dorothy Lee Berrien, who had insured it in her name under a
policy written by Citizens. However, the policy was obtained through a multitude of
false statements, for which reason Citizens eventually rescinded the policy. Plaintiff
sought personal injury protection benefits from Citizens. In a letter dated September 14,
2009, Citizens informed Plaintiff Naomi Collins that it was “denying Personal Injury
Protection (PIP) benefits . . . because there was no coverage on the date of loss.
Plaintiff brought suit against Smith and Berrien in Wayne County Circuit Court on
October 1, 2009. Collins v. Smith, Case No. 09-024063-NI (Wayne Cnty. Cir. Ct.) On
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January 26, 2010, Smith and Berrien tendered an offer of judgment in the amount of the
minimum mandatory liability insurance coverage required under Michigan law. Nothing
indicates whether Citizens agreed to coverage of such offer. Although Citizens
defended Smith and Berrien, it eventually commenced a separate declaratory judgment
action on June 24, 2010. In that action, Citizens sought a declaration of no liability for
any claims under the Citizens Policy, including those arising from Plaintiff’s claims
against Smith and Berrien. After summary disposition was denied, Citizens moved for
rehearing, and its motion was granted. Citizens Ins. Co. v. Jackson, Case No. 10007334-CK (Wayne Cnty. Cir. Ct. Jan. 11, 2011). The Wayne County Circuit Court
reformed the Citizens Policy to provide coverage of no more than the minimum required
under Michigan law for Plaintiff’s claims against Smith and Berrien, pursuant to
Michigan Compiled Laws § 257.520(f)(1).
II. STANDARD
Federal Rule of Civil Procedure 60 permits a court to grant relief from an order
for several reasons, including “excusable neglect” and “newly discovered evidence that,
with reasonable diligence, could not have been discovered in time to move for a new
trial.” Fed. R. Civ. P. 60(b). Eastern District of Michigan Local Rule 7.1 provides that a
motion for reconsideration shall be granted if the movant can (1) “demonstrate a
palpable defect by which the court and the parties have been misled,” and (2) “show
that correcting the defect will result in a different disposition of the case.” E.D. Mich. LR
7.1(h)(3). “A ‘palpable defect’ is ‘a defect that is obvious, clear, unmistakable, manifest,
or plain.’” United States v. Lockett, 328 F. Supp. 2d 682, 684 (E.D. Mich. 2004) (citing
United States v. Cican, 156 F. Supp. 2d 661, 668 (E.D. Mich. 2001)). A motion for
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reconsideration that presents “the same issues ruled upon by the court, either expressly
or by reasonable implication,” will not be granted. E.D. Mich. LR 7.1(h)(3); Czajkowski
v. Tindall & Assocs., P.C., 967 F. Supp. 951, 952 (E.D. Mich. 1997).
III. DISCUSSION
Defendant’s second motion for reconsideration presents “the same issues ruled
upon by the court” in the order denying Defendant’s first motion for reconsideration.
E.D. Mich. LR 7.1(h)(3). Defendant fails to present any new grounds for
reconsideration, but challenges the court’s holding that Defendant’s argument regarding
the offer of judgment in Collins v. Smith, Case No. 09-024063-NI (Wayne Cnty. Cir. Ct.),
was not sufficient to rise to the level of showing a “palpable defect.” In the September
28, 2011 order, the court alluded to two independent flaws in Defendant’s offer of
judgment evidence: (1) Defendant failed to timely present the offer of judgment as
evidence that Citizens provided coverage to Plaintiff; and (2) even assuming, arguendo,
that the offer of judgment was properly before the court on a motion for reconsideration,
the evidence did not rise to the level of showing a “palpable defect.” Defendant
challenges each of these flaws, arguing that the evidence was properly presented on a
motion for reconsideration, and alleging that the court admitted that the offer of
judgment created a genuine issue of material fact.
A. Timeliness of Presentation of Offer of Judgment Evidence
Throughout the litigation process, Defendant has been less than fully consistent
concerning its discovery of the offer of judgment. In its reply brief to the first motion for
reconsideration, filed on August 31, 2011, Defendant averred that it “only learned of the
offer of judgment recently.” The court rejected this statement, noting that exhibit nine of
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Defendant’s motion for summary judgment, which was filed on February 25, 2011,
contained an entry entitled “Offer of Judgment, Filed.” The court concluded that
Defendant must be presumed to have reviewed its own exhibits before filing the motion
for summary judgment, and therefore, Defendant had knowledge of the offer of
judgment in February 2011. (09/28/2011 Order at 5 n.1.) In its current motion
Defendant has thrown two other arguments at the wall. It asserts that it either
presented the offer of judgment as evidence supporting its motion for summary
judgment, or alternatively that the offer of judgment is new evidence properly before the
court on a motion for reconsideration. Neither argument sticks.
Contrary to Defendant’s argument, Defendant did not proffer the offer of
judgment as evidence that Citizens provided coverage to Plaintiff until its first motion for
reconsideration. Defendant asserts that simply because it attached the “Register of
Actions” in Collins v. Smith, Case No. 09-024063-NI (Wayne Cnty. Cir. Ct.), as an
exhibit to its motion for summary judgment, the offer of judgment was evidence before
the court on summary judgment proving that Citizens provided coverage to Plaintiff.
(Def.’s Second Mot. Recons. at 6.) The “Register of Actions” did contain a generic text
entry entitled “Offer of Judgment, Filed,” but Defendant did not aver in its motion for
summary judgment that the offer of judgment listed in the “Register of Actions” was
made by Citizens. Indeed, Defendant did not even mention the offer of judgment in the
“Register of Actions” before filing its motion for reconsideration. Because Defendant
never presented the offer of judgment as evidence supporting a finding that Citizens
provided Plaintiff coverage in its motion for summary judgment, the court concludes that
the evidence was not presented in Defendant’s motion for summary judgment.
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Further, the offer of judgment was not “newly discovered” evidence properly
before the court on a motion for reconsideration. In denying Defendant’s first motion for
reconsideration, the court acknowledged the untimeliness of Defendant’s offer of
judgment evidence, but merely assumed, arguendo, that the offer of judgment was
newly discovered evidence properly presented on a motion for reconsideration.
Defendant now argues that the evidence was in fact newly discovered, and thus,
properly before the court on reconsideration. After reviewing Defendant’s brief, the
court now concludes that the evidence was not properly presented on a motion for
reconsideration.
“[A] motion for reconsideration is not an appropriate vehicle for raising new facts
or arguments.” United States v. A.F.F., 144 F. Supp. 2d 809, 811 (citing Salopek v.
Comm'r of Internal Revenue, No. 99–9012, 2000 WL 350263, at *2 (10th Cir. Apr.5,
2000)). Like motions pursuant to Federal Rule of Civil Procedure 59, motions under
Local Rule 7.1(h) “are aimed at re consideration, not initial consideration.” Sault Ste.
Marie Tribe of Chippewa Indians v. Engler, 146 F.3d 367, 374 (6th Cir. 1998) (quoting
FDIC v. World Univ. Inc., 978 F.2d 10, 16 (1st Cir.1992)). Here, Defendant had ample
time and opportunity to discover and proffer the facts underlying the offer of judgment to
the court, having had knowledge of the existence of the offer of judgment since at least
February 2011. However, Defendant failed to present the offer of judgment argument in
its original motion for summary judgment filed on February 25, 2011. It again failed to
present the argument in its reply to Plaintiff’s response to Defendant’s motion for
summary judgment filed on April 4, 2011. Defendant, whether as a result of strategy or
neglect, waited to assert the argument until it filed its first motion for reconsideration,
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and then unconvincingly asserted that it had “only learned of the offer of judgment
recently.”
Following the court’s denial of the first motion for reconsideration, Defendant
argues for the first time that it “presented the information it could gather to the Court at
the first opportunity,” and has attempted to discover the facts underlying the offer of
judgment but Citizens has been uncooperative. (Def.’s Second Mot. Recons. at 5.) To
support its claim, Defendant now proffers evidence that it issued a subpoena to Citizens
on September 6, 2011, seeking the production of documents and a deposition of a
Citizens representative familiar with the underlying state court case. (Id. at 4.)
According to Defendant, Citizens failed to comply with the subpoena, and Defendant,
simultaneously with its second motion for reconsideration, filed a motion asking the
court to hold Citizens in contempt. (See Def.’s Mot. To Hold Citizens in Contempt.)
Defendant’s argument that it presented the offer of judgment to the court at the
“first opportunity” is not true. Despite having knowledge of the offer in February 2011,
Defendant did not raise the issue until its motion for reconsideration, and in the interim
filed numerous motions and briefs without ever raising the offer of judgment as a
relevant issue. Additionally, the court finds Defendant’s assertion that it diligently
attempted to discover the facts underlying the offer of judgment unpersuasive.
Defendant’s first documented attempt—the subpoena served on Citizens in September
2011—to discover the facts related to the offer of judgment came more than seven
months after Defendant filed its motion for summary judgment, more than two months
after the court granted Plaintiff summary judgment, and more than one month after
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Defendant filed its first motion for reconsideration. Thus, the evidence was not newly
discovered, and is not properly presented on a motion for reconsideration.
B. Offer of Judgment Did Not Create a “Palpable Defect” in the
Court’s September 28, 2011 Order
Defendant also argues that the court purportedly admitted that the offer of
judgment created a genuine issue of material fact, and therefore, Plaintiff was not
entitled to summary judgment. In the September 28, 2011 order, the court observed
that the offer of judgment “would, at most, support only a finding of a genuine issue of
material fact; it could not suffice to support summary judgment for Defendant.”
(09/28/2011 Order at 5.) Defendant mistakes this observation for a finding by the court
that the offer of judgment created a genuine issue of material fact. The purpose of the
court’s statement, however, was only to frame the issue presented in Defendant’s first
motion for reconsideration.
The July 1, 2011 order challenged by Defendant ruled on two separate motions
for summary judgment; the court granted Plaintiff’s motion and denied Defendant’s.
Because Defendant challenged both rulings, the court placed Defendant’s motion in the
proper context. Specifically, the court stated that it would consider whether the
evidence, if it had been properly presented, could have created a genuine issue of
material fact sufficient to withstand Plaintiff’s motion. The evidence, paltry as it was,
could not support a grant of summary judgment in favor of Defendant. In other words,
the challenged language did not purport to actually find a genuine issue of fact, but
framed the issue as applying to Plaintiff’s motion rather than Defendant’s. This should
be plainly evident from the subsequent paragraphs which proceeded to analyze that
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issue. If the challenged language had, as the Defendant suggests, actually been a
finding, the court would not have continued to discuss the issue and find that no
“palpable defect” had been identified.
The court found that the offer of judgment, on its face, did not indicate that
Citizens would agree to coverage of the judgment if accepted by Plaintiff because
Citizens, shortly thereafter, sought a declaration of no liability. (See 09/28/2011 Order
at 6.) The evidence presented by Defendant in its first motion for reconsideration was
that Smith and Berrien made an offer of judgment in the underlying state court case.
Even if the court were aware of the offer of judgment at the time Defendant filed its
motion for summary judgment, the one-line, generic notation simply indicating that an
offer of judgment was filed in the case against Smith and Berrien, not Citizens, did not
create a material issue of fact. Because Defendant merely speculated, without offering
any supporting evidence, that Citizens made the offer of judgment, the court concluded
that the evidence, even if it had been properly presented, failed to show a “palpable
defect.”
III. CONCLUSION
Defendant has not established that a “palpable defect” exists in the court’s
September 28, 2011 order, and thus, the court will deny Defendant’s second motion for
reconsideration. The court will also deny as moot Defendant’s motion to hold Citizens
in contempt. Accordingly,
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IT IS ORDERED that Defendant’s second motion for reconsideration [Dkt # 35 ]
is DENIED.
IT IS FURTHER ORDERED that Defendant’s “Motion for Contempt” [Dkt. # 34] is
DENIED AS MOOT.
s/Robert H. Cleland
ROBERT H. CLELAND
UNITED STATES DISTRICT JUDGE
Dated: October 24, 2011
I hereby certify that a copy of the foregoing document was mailed to counsel of record
on this date, October 24, 2011, by electronic and/or ordinary mail.
s/Lisa Wagner
Case Manager and Deputy Clerk
(313) 234-5522
S:\Cleland\JUDGE'S DESK\C1 ORDERS\10-13344.COLLINS.Deny.Second.Reconsideration.jrc.2.wpd
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