Peterson v. Time Insurance Company et al
ORDER granting 68 Motion to Dismiss for Failure to State a Claim; granting 68 Motion for Summary Judgment; adopting Findings and Recommendations re 99 Findings and Recommendations; granting in part and denying in part 105 Motion to Dismis s; granting in part and denying in part 105 Motion to Dismiss for Failure to State a Claim; adopting Findings and Recommendations re 108 Findings and Recommendations. A show cause hearing is set for 5/31/2012 at 11:00AM in the Russell Smith Courthouse, Missoula, Montana. Signed by Judge Donald W. Molloy on 5/16/2012. (dle)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
individually, and as the personal
representative for the estate of
TIME INSURANCE COMPANY;
ASSURANT HEALTH; JOHN ALDEN
LIFE INSURANCE COMPANY; AETNA )
US HEALTH CARE; AETNA HEALTH )
& LIFE INSURANCE COMPANY;
and JOHN DOES 1, 2, and 3;
Michael Peterson filed this lawsuit, alleging that the defendants failed to
pay or unreasonably delayed payments under his medical insurance policy.
Defendants Time Insurance Company, Assurant Health, and John Alden Life
Insurance Company (collectively, “John Alden”) move to dismiss and move for
summary judgment. Judge Lynch recommends granting the motions. The Court
agrees and adopts Judge Lynch’s Findings and Recommendations in full.
Alternatively, the Court grants the motions based on Peterson’s counsel’s failure
to comply with the Local Rules.
Judge Lynch provided a detailed history of this case in his Findings and
Recommendation, so the Court recites the facts here only when necessary to
explain its decision.
Peterson alleges several counts against the defendants, who he claims failed
to pay his medical bills under his insurance policy or unreasonably delayed
payment of those bills. Specifically, he alleges breach of contract (Count I);
violations of Montana’s Unfair Trade Practices Act (Count II); tortious breach of
statutory duties (Count III); constructive fraud and breach of fiduciary duties
(Count IV); negligent infliction of emotional distress (Count V); and intentional
infliction of emotional distress (Count VI).
John Alden moves to dismiss Peterson’s claims for constructive fraud,
negligent and intentional infliction of emotional distress, and some of the Unfair
Trade Practices claims. John Alden moves for summary judgment on the
remaining Unfair Trade Practices claims and Peterson’s breach of contract claim.
Judge Lynch issued his Findings and Recommendation on March 8, 2012.
(See doc. 99.) He recommended granting John Alden’s motion to dismiss and
motion for summary judgment, with one caveat, reserving his recommendation on
one issue. At the hearing on the motions, Peterson offered two checks related to
two claims that Peterson had allegedly presented to John Alden. Peterson insists
that John Alden mishandled those claims. Judge Lynch permitted the parties to file
supplemental briefs addressing the significance of those two checks and those two
claims before he would make recommendations related to those claims.
John Alden and Peterson filed their supplemental briefs on March 19, 2012.
(See docs. 101, 102.) Peterson’s supplemental brief was 11 pages, well over the
five-page limit that Judge Lynch set. And Peterson’s supplemental brief had little
to do with the two checks. Instead, it was essentially an improper motion for
Judge Lynch issued supplemental Findings and Recommendations on
March 29, 2012. (See doc. 108.) He recommends granting in full John Alden’s
motion to dismiss and motion for summary judgment. He concluded that John
Alden had properly handled and processed the two claims at issue, based on the
information that it had at the time.
Peterson timely objected to Judge Lynch’s original Findings and
Recommendations on March 22, 2012. (See doc. 104.) He did not object to Judge
Lynch’s supplemental Findings and Recommendations. Peterson raises three
objections. He claims:
there are genuine issues of material fact as to how John Alden
paid and processed his claims, (Objections, doc. 104 at 2–3);
Judge Lynch misconstrued the law governing bad faith and
breach of contract claims, (id. at 4–5); and
Judge Lynch should have recused himself, (id. at 5–6).
Peterson is entitled to de novo review of the specified findings or
recommendations to which he objects. 28 U.S.C. § 636(b)(1). The Court reviews
portions of the Findings and Recommendation not specifically objected to for
clear error. McDonnell Douglas Corp. v. Commodore Bus. Mach., Inc., 656 F.2d
1309, 1313 (9th Cir. 1981).
The Court has reviewed de novo Peterson’s objections and adopts Judge
Lynch’s Findings and Recommendations in full. The Court finds no clear error in
the portions of the Findings and Recommendations to which Peterson did not
object. Judge Lynch analyzed the issues in great detail and reached the correct
conclusions in every respect. On that basis alone, the Court grants John Alden’s
motion to dismiss and motion for summary judgment. The Court alternatively
grants the motion to dismiss and motion for summary judgment because Peterson’s
counsel has repeatedly violated the Local Rules.
Federal Rule of Civil Procedure 83 authorizes district courts to adopt local
rules to govern their practice. “Local rules have the ‘force of law’ and are binding
upon the parties and upon the court . . . .” Prof. Programs Group v. Dept. of
Commerce, 29 F.3d 1349, 1353 (9th Cir. 1994) (citations omitted). The Local
Rules promote orderly and efficient process to all who come before the Court.
“Willful or reckless disregard of court rules justifies punitive action; such conduct
contributes to the glacial pace of litigation; when lawyers and litigants ignore the
procedures established by the court, they invite delay and conflict into the
courtroom.” Zambrano v. City of Tustin, 885 F.2d 1473, 1484 (9th Cir. 1989).
Here, Peterson’s counsel recklessly (if not willfully) violated the Local
Rules at virtually every step in this litigation. Ms. Morin’s proclivity for violating
local rules, rules of civil procedure, and court orders is not a matter of novelty to
this Court or others. See e.g. Arseneau v. Allstate Ins. Co., 2010 WL 4533335 (D.
Mont. Oct. 27, 2010) (observing that Ms. Morin failed to file a statement of
genuine issues, as required under Local Rule 56.1(b)); Peterson v. Time Ins. Co.,
2012 WL 704727 at *1 and n.1 (observing that Ms. Morin failed to timely file
objections to Judge Lynch’s Findings and Recommendations and attempted to file
an improper motion for reconsideration); Peterson v. Time Ins. Co., 2011 WL
5879456 at *4 n.2 (D. Mont. Nov. 1, 2011) (observing that Ms. Morin may have
attempted to use a response brief as an improper vehicle for seeking Rule 11
sanctions); W. v. St. Farm Mut. Auto. Ins., at 2011 WL 2559966 at *2, *24 (D.
Mont. June 28, 2011) (observing that Ms. Morin failed to file certifications of
counsel of record along with affidavits and failed to comply with the Court’s
scheduling order); Suda v. Harmon, at 2009 Mont. Dist. Lexis 121 at *4 (21st Jud.
Dist. of Mont. Mar. 2, 2009) (observing that Ms. Morin filed a “revised statement
of claim” nearly four-and-a-half months after the court-ordered deadline had
passed); see also Suda v. Harmon, 2008 Mont. Dist. Lexis 493 (21st Jud. Dist. of
Mont. Sept. 18, 2008).
Last month, the Ravalli County District Court sanctioned Ms. Morin for
filing several groundless, harassing documents after she had made false statements
in a related case before this Court. W. v. St. Farm Mut. Auto. Ins., DV–07–330
(21st Jud. Dist. of Mont. April 10, 2012). Because of Ms. Morin’s “wasteful” and
“abusive” conduct, the court ordered her to: (1) pay the opposing party’s
attorney’s fees and costs, (2) take the Multistate Professional Responsibility
Examination until she achieves a score of 100, and (3) pass a basic legal research
and writing course by June 30, 2013. Id. The court distributed its order to all the
district courts in the State and ordered her case referred to the Office of
Disciplinary Council, unless she could show cause for not doing so.
Here, each of Peterson’s objections fail because Ms. Morin has, once again,
failed to comply with the Local Rules.
Local Rule 56.1(b): Statement of Genuine Issues
In Peterson’s objections, Ms. Morin writes that Judge Lynch ignored
genuine issues of material fact that preclude summary judgment. As stated above,
the Court has reviewed de novo Judge Lynch’s Findings and Recommendations
and agrees with them in full. That being said, Ms. Morin has waived any argument
that there is a genuine issue of material fact because she failed to file a statement
of genuine issues.
Local Rule 56.1(b) reads:
Any party opposing a motion for summary judgment must also
file a Statement of Genuine Issues. The Statement must:
set forth in serial form each fact on which the party relies
to oppose the motion;
cite a specific pleading, deposition, answer to
interrogatory, admission or affidavit before the Court to
support each fact; and
be filed separately from the motion and brief.
The Central District of California, addressing a similar local rule, concluded
that when a party fails to file a statement of genuine issues, that party is deemed
“not to raise a triable issue of material fact as to the claims on which the moving
party seeks summary judgment.” Deirmenjian v. Deutsche Bank, A.G., 2010 WL
3034060 at *7 (C.D. Cal. July 30, 2010) (citations and internal quotation marks
omitted). The same reasoning applies here. See also Fed. R. Civ. P. 56(e).
This is not the first time that Ms. Morin has failed to comply with Local
Rule 56.1(b) by not filing a statement of genuine issues. See Arseneau, 2010 WL
4533335. And after Judge Lynch noted the deficiency here, Ms. Morin failed to
seek leave to file the statement.
Given Ms. Morin’s failure to comply with Local Rule 56.1(b) she has
waived any argument that this case presents genuine issues of material fact. That
being said, the Court also agrees with Judge Lynch’s conclusions that there are, in
fact, no genuine issues in dispute and summary judgment is appropriate.
Local Rule 72.3: supporting authority
Peterson also objects that Judge Lynch misconstrued the law governing bad
faith and breach of contract claims. Judge Lynch’s construction of that law is
correct, and the Court adopts it in full. Again, though, Peterson has waived her
argument because Ms. Morin failed to comply with the Local Rules.
Under Local Rule 72.3, an objection to a finding or recommendation must
(1) each factual finding of the Magistrate Judge to which objection is
made, identifying the evidence in the record the party relies on to
contradict that finding; and
(2) each recommendation of the Magistrate Judge to which objection is
made, setting forth the authority the party relies on to contradict that
Ms. Morin provides no authority whatsoever to support her argument that
Judge Lynch somehow misconstrued the applicable law. Instead, she provides
only unhelpful hyperbole and a conclusory recounting of the factual allegations.
Without providing any authority to support her client’s position, Ms. Morin
has failed to offer a reasoned, legal explanation for why Judge Lynch
misconstrued the law. As stated above, Judge Lynch did not misconstrue the law,
but Ms. Morin’s failure to comply with the Local Rules is yet another reason why
Peterson’s claim fails.
Local Rule 7.3: Motion for Reconsideration
Finally, Ms. Morin once again asks the Court to order Judge Lynch to
recuse himself from this case. The Court has repeatedly addressed this issue in this
case (and in others). (See e.g. doc. 96.) Ms. Morin now asks the Court to
reconsider those rulings.
Local Rule 7.3 requires a party to first seek leave of the Court before
moving for reconsideration. L.R. 7.3(a). It also requires the party to identify
changed facts or law that would justify reconsideration or to show that the party
could not have been aware of applicable facts or law before the order was entered.
Id. at 7.3(b). And, finally, the rule expressly prohibits parties from merely
repeating arguments they have already made. Id. at 7.3(c). “Violation of this
restriction subjects the offending party to appropriate sanctions.” Id.
Despite previous warnings that her repeated requests for recusal are
improper (see doc. 96 at 2), Ms. Morin has once again failed to comply with Local
Rule 7.3(b) in every respect. She did not seek leave before asking the Court to
reconsider its earlier ruling. She identifies no new or changed facts or law. Instead,
she merely parrots the same arguments she has already made on several occasions
(both in this case and others).
The Court agrees with Judge Lynch that there is no need for him to recuse
himself from this case. But Ms. Morin’s flagrant violations of Local Rule 7.3(b)
are an additional reason why Peterson’s objection fails.
On March 15, 2012, the Court granted summary judgment in favor of Aetna
Life Insurance Company because Peterson’s state law claims against Aetna were
preempted under ERISA. (Doc. 96.) The Court, however, allowed Peterson to file
an amended complaint within 14 days that states a claim under ERISA. Peterson
did not file an amended complaint. Instead, Ms. Morin opened a new case on
Peterson’s behalf and filed a new complaint. See Peterson v. Aetna US Health
Care, 9:12–cv–40–DLC–JCL (D. Mont.).
Aetna now moves to dismiss because Peterson failed to file an amended
complaint, in compliance with the Court’s order. The Court grants the motion. See
Mashek v. Snell, 2010 WL 3925983 (D. Mont. Aug. 27, 2010) (dismissing
complaint where plaintiff failed to file an amended complaint within the ordered
time period). The parties are ordered to appear at a hearing to show cause as to
whether the complaint against Aetna should be dismissed with or without
Repeated failures to comply with the Local Rules, Rules of Civil Procedure,
and court orders are inexcusable. They result in only wasteful litigation, delay,
and, most importantly, a dangerous disservice to clients. Wading through such
violations detracts from the merits of the case and, in some instances, might mean
that the merits are never adjudicated.
Here, despite Ms. Morin’s repeated violations of the Local Rules, Judge
Lynch addressed the merits of her client’s claims. The Court agrees with Judge
Lynch’s assessment of the merits and adopts his Findings and Recommendations
in full. Nevertheless, after reviewing the objections de novo, the Court
alternatively rejects all of Peterson’s arguments on account of Ms. Morin’s
repeated violations of the Local Rules, Rules of Civil Procedure, and this Court’s
Given Ms. Morin’s violations (e.g., her repeated, improper motions to
reconsider the recusal issue), the Court orders Ms. Morin to show cause why it
should not impose a $1,000 fine as a sanction under Local Rule 1.1(c) (“A judge
may impose sanctions for violations of these Rules.”) or Local Rule 7.3(c)
(“Violation of this restriction subjects the offending party to appropriate
sanctions.”). See also L.R. Appx. B
In the past, the Court has granted latitude to Ms. Morin, addressing the
merits of her clients’ arguments, despite her violations of the Local Rules, Rules
of Civil Procedure, and court orders. See cases, supra. As this order makes clear,
that era has passed. Ms. Morin needs to step back and reflect on her lack of
professionalism, her truculent attitude toward counsel and the courts, and she
needs to positively hit the books—i.e., follow the rules and the law. She needs to
recognize that there is a purpose to the law and the rules, and she needs to realize
the impact that her lack of professionalism has on the administration of justice.
IT IS ORDERED that Judge Lynch’s Findings and Recommendations (doc.
99) and Supplemental Findings and Recommendations (doc. 108) are ADOPTED
IT IS FURTHER ORDERED that the motion to dismiss and motion for
summary judgment filed by Time Insurance Company, Assurant Health, and John
Alden Life Insurance Company (doc. 68) are GRANTED.
IT IS FURTHER ORDERED that Aetna Life Insurance Company’s motion
to dismiss (doc. 105) is GRANTED IN PART. The Court DISMISSES the
complaint against Aetna. The parties are ordered to appear at a hearing on May 31,
2012, at 11:00 a.m. to determine whether the complaint against Aetna shall be
dismissed with prejudice or without prejudice.
IT IS FURTHER ORDERED that, at the May 31, 2012 hearing, Tracey
Morin is ordered to show cause why Court should not impose a $1,000 fine as a
sanction for her repeated violations of the Local Rules, Rules of Civil Procedure,
and this Court’s orders.
Dated this 16th day of May 2012.
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