Assurance Company of America et al v. Ironshore Specialty Insurance Company

Filing 67

ORDER Denying 55 Motion for Rule 60(b) Relief and 54 Motion for Attorneys' Fees and Costs. Signed by Judge Jennifer A. Dorsey on 9/18/2018. (Copies have been distributed pursuant to the NEF - MR)

1

UNITED STATES DISTRICT COURT

2

DISTRICT OF NEVADA

3 Assurance Co. of America, et al.,
4

Plaintiffs

5 v.
6 Ironshore Specialty Ins. Co.,
7

Case No.: 2:15-cv-00460-JAD-PAL
Order Denying Motion for Rule
60(b) Relief and Motion for
Attorneys’ Fees and Costs
[ECF Nos. 54, 55]

Defendant

8

In this insurer-versus-insurer coverage dispute, I granted summary judgment in

9 favor of the Ironshore Speciailty Insurance Company after concluding that its duty to
10 defend was not triggered in a handful of construction-defect lawsuits.1 Ironshore, having
11 made offers of judgment to each of its adversaries, now moves for attorneys’ fees and
12 costs. The losing carriers oppose that motion and ask me to set aside the judgment
13 because my conclusions differ from those reached by another judge in this district who
14 considered similar issues—a fact that they fully apprised me of before I made my
15 decision. I find no reason to set aside the judgment. And although I conclude that I have
16 discretion to award fees under Nevada law based on the offers of judgment that the
17 plaintiffs rejected in this case, I do not find that such an award is warranted here. So I
18 also deny Ironshore’s motion for attorneys’ fees and costs.
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1

ECF Nos. 50 (summary-judgment order), 51 (judgment).

1

Discussion

2 I.

Plaintiffs’ motion for relief from judgment

3

Rule 60(b) of the Federal Rules of Civil Procedure allows the court to “relieve a

4 party . . . from a final judgment, order, or proceeding” for a variety of reasons, including
5 the catchall “any other reason that justifies relief.”2 The Ninth Circuit has cautioned,
6 however, that “judgments are not often set aside” under this rule, and it “should be ‘used
7 sparingly as an equitable remedy to prevent manifest injustice.’”3
Plaintiffs ask me to reconsider my entry of judgment in favor of Ironshore4

8

9 because it “is contrary to and conflicts with rulings issued by Judge Navarro in” another
10 case between these parties in this district.5 But this is not news to me. I knew about
11 those other rulings when I issued mine because plaintiffs told me about those rulings in
12 their opposition to the motion for summary judgment.6 And they offered me the same
13 block-quoted passages in that opposition that they now offer in support of their Rule
14 60(b) motion.7 I was no more persuaded by these points then than I am now. Because
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16
17
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2

Fed. R. Civ. P. 60(b).

3

In re Int’l Fibercom, Inc., 503 F.3d 933, 941 (9th Cir. 2007) (quoting Latshaw v.
Trainer Wortham & Co., 452 F.3d 1097, 1103 (9th Cir. 2006), and United States v.
19 Washington, 394 F.3d 1152, 1157 (9th Cir. 2005)).

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22
23

4

ECF No. 50.

5

20

ECF No. 55.

6

See ECF No. 45 at 10.

7

Compare ECF No. 45 at 19–20 with ECF No. 60 at 7.
2

1 the plaintiffs have not demonstrated that they are deserving of Rule 60 relief from the
2 judgment, I deny their motion.
3 II.

Ironshore’s motion for attorneys’ fees and nontaxed costs

4

Ironshore moves for attorneys’ fees and nontaxed costs based offers of judgment

5 that it made to the plaintiffs under Nevada Rule of Civil Procedure 688 and NRS 17.115
6 in this diversity case.9 Five months after it removed this indemnity-and-contribution case
7 from state court, Ironshore served offers of judgment on the three plaintiffs.10 Each
8 offered to allow judgment to be entered in favor of the plaintiff carrier “and against
9 Ironshore in the amount of $13,000, inclusive of all costs, applicable interest, and
10 attorneys’ fees, in full satisfaction and in complete resultion of each and every claim
11 asserted by” that carrier.11 No plaintiff accepted the offer, so the case moved forward,12
12 the parties briefed competing summary-judgment motions in 2016,13 and I entered
13 summary judgment in Ironshore’s favor in the summer of 2017.14 Ironshore argues that
14 this was a case with “enormous factual and legal complexity” that it was “able to dispose
15
16

8

ECF No. 54. Nev. Rev. Stat. §17.115 was repealed effective October 1, 2015.
Nevertheless, because it was in effect at the time Ironshore served its offers, I consider it.
17
My conclusion does not change, however, whether I evaluate the request under NRCP 68
or the now-abrogated statute.
18
9
See ECF No. 1 at 2–3 (citing diversity as the basis for removal jurisdiction).
19 10 ECF No. 54-2 at 1–2.

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23

11

ECF Nos. 54-3, 54-4, 54-5.

12

20

ECF No. 54-2.

13

See ECF Nos. 28–38, 39–49.

14

ECF No. 50.
3

1 of” through motion practice instead of a more costly trial, and it asks for the $302,214.50
2 in attorneys’ fees and $3,863.53 in nontaxable costs that it incurred from the date of the
3 offers of judgment through the entry of judgment.15 The plaintiff carriers contend that
4 federal law does not permit an award of Ironshore’s fees and costs here and, even if these
5 amounts could be recovered, they are not justified in this case.16
6

A.

7

Rule 68 of the Nevada Rules of Civil Procedure authorizes a litigant to make an

This court can apply Nevada law to award fees in this case.

8 offer of judgment to resolve a case. If the defendant makes an unconditional offer under
9 the rule and the plaintiff rejects it and fails to beat it, the court can order the plaintiff to
10 pay the defendant’s attorneys’ fees “from the time of the offer.”17 “In making such an
11 award of attorney fees, the district court must carefully review” these factors established
12 by the Nevada Supreme Court in Beattie v. Thomas: “(1) whether the plaintiff brought the
13 claim in good faith, (2) whether the defendants’ offer of judgment was reasonable and
14 brought in good faith in both its amount and timing, (3) whether it was grossly
15 unreasonable or an act in bad faith for the plaintiff to reject the offer and proceed to trial,
16 and (4) whether the fees sought are reasonable and justifiable in amount.”18 When the
17 court “properly considers these Beattie factors, the award of attorney’s fees is
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15

ECF No. 54 at 9–10.

16

ECF No. 56.

17

Nev. R. Civ. P. 68(f)(2).

18

Ozawa v. Vision Airlines, Inc., 216 P.3d 788, 792 (Nev. 2009) (citing Beattie v.
22 Thomas, 668 P.2d 268, 274 (Nev. 1983)).
23

4

1 discretionary. . . .”19 Because this state offer-of-judgment rule is substantive and does not
2 conflict with the federal rule, it applies in this diversity case.20
3

B.

4

Though fees are available under NRCP 68 in a federal case like this in which the

Though procedurally available, an award of fees is not warranted here.

5 plaintiff fails to beat a defendant’s offer of judgment,21 after an analysis of the Beattie
6 factors, I conclude that an award of attorneys’ fees is not justified in this case. The first
7 Beattie factor requires the court to consider the plaintiffs’ litigation motives.22 When
8 doing so, I cannot say that the plaintiffs did not bring this action in good faith. Even
9 though I granted summary judgment in favor of Ironshore, there is nothing in this record
10 that suggests that the plaintiffs lacked a good-faith motive in bringing or maintaining this
11 lawsuit. Just a few months before they filed this lawsuit, they had received a favorable
12 ruling on the same legal issues in a separate action before a different judge in this
13
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16

19

LaForge v. State, Univ. & Cmty. Coll. Sys. of Nevada, 997 P.2d 130, 136 (Nev. 2000).

20

See MRO Commc’ns, Inc. v. Am. Tel. & Tel. Co., 197 F.3d 1276, 1284 (9th Cir. 1999);
17 Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 259 n.31 (1975) (“In an
ordinary diversity case where the state law does not run counter to a valid federal statute
18 or rule of court, . . . state law denying the right to attorney’s fees or giving a right thereto,
which reflects a substantial policy of the state, should be followed.”) (citations omitted);
19 see also Cheffins v. Stewart, 825 F.3d 588, 597 (9th Cir. 2016).
20

21

I also find that Ironshore’s motion complies with LR 54-14 and that its offers were
unconditional.
22

Frazier v. Drake, 131 Nev. Adv. Op. 64, 357 P.3d 365, 372 (Nev. Ct. App. 2015)
(noting that the first three Beattie factors “all relate to the parties’ motives in making or
22 rejecting the offer and continuing the litigation”).
21

23

5

1 district.23 So, the timing suggests that the plaintiffs brought and pursued this case in good
2 faith.
3

Those same circumstances—and the path that the other cases between these

4 litigants were taking—make it difficult for me to conclude that Ironshore’s offer of
5 judgment was reasonable and brought in good faith in both its amount and timing. When
6 Ironshore served its offers in August of 2015, the plaintiffs had at least one more
7 favorable ruling in the parallel litigation in their pockets.24 So, I cannot say that
8 Ironshore’s offer to have judgment entered against it in the amount of $13,000 for each of
9 the three plaintiffs ($13,000 x 3 = $39,000), when Ironshore’s potential exposure was
10 $835,000, was made in good faith. This sum likely didn’t even cover the plaintiffs’ costs
11 of defense at that point.
12

For the same reasons, I cannot say that it was grossly unreasonable for the

13 plaintiffs to reject Ironshore’s offers or that they acted in bad faith by doing so. Because
14 the first three Beattie factors weigh against an award of attorneys’ fees and persuade me
15 to deny Ironshore’s request for fees, it makes no difference whether I find the amount of
16 Ironshore’s request reasonable. Even if I were to conclude that the more than $300,000
17 in attorneys’ fees that Ironshore is requesting in this case are reasonable, the balance of
18
19
20

23

See Assurance Co. of Am. v. Ironshore Specialty Ins. Co., No. 2:13-cv-02191-GMN,
2014 WL 4829709, at *1 (D. Nev. Sept. 30, 2014).
21
24
See ECF No. 72 in Assurance Co. of Amer. v. Ironshore Spec. Ins. Co., 2:13-cv-0219122 GMN-CWH (order dated July 29, 2015).
23

6

1 the Beattie factors tips heavily against a fee award here. I thus deny Ironshore’s request
2 for an award of attorneys’ fees.
3

C.

4

Although Ironshore also requests an award of nontaxable costs, it fails to establish

Ironshore’s nontaxable costs motion is not sufficiently developed.

5 the legal basis for that award. Ironshore devotes the entirety of its argument to
6 demonstrating its entitlement to attorneys’ fees, leaving the legal basis for its nontaxable
7 fees request unclear.25 This makes it impossible for the court to evaluate whether those
8 costs should be awarded in this case. For this reason, I deny Ironshore’s motion for
9 nontaxable costs. But I do so without prejudice to Ironshore’s ability to file a renewed
10 motion for those costs that specifically sets for the legal basis for their recoverability no
11 later than October 1, 2018.
12

Conclusion

13

Accordingly, IT IS HEREBY ORDERED that Plaintiffs’ Motion for Relief from

14 Judgment [ECF No. 55] is DENIED; and
15

IT IS FURTHER ORDERED that Ironshore’s Motion for Attorneys’ Fees and

16 Nontaxable Costs [ECF No. 54] is DENIED; Ironshore has until October 1, 2018, to file
17 a renewed motion for nontaxable costs consistent with this order.
18

Dated: September 18, 2018

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_______________
_ _ _ _ _
_______________________________
ct Judge Jennifer
n
U.S. District Judge Jennifer A. Dorsey

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25

See ECF Nos. 54 (motion), 57 (reply).
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