Gemini Insurance Company v. North American Capacity Insurance Company

Filing 36

ORDER granting # 35 Joint Motion to Strike and Vacate : Orders ## 26 , 32 are stricken and vacated. Signed by Judge Larry R. Hicks on 6/18/2015. (Copies have been distributed pursuant to the NEF - DRM)

Case 3:14-cv-00121-LRH-WGC Document 35 Filed 06/15/15 Page 1 of 24

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Amy K. Thomas, Esq.
Nevada Bar No. 9276
Wolkin Curran, LLP
555 Montgomery Street, Suite 1100
San Francisco, California 94111
Telephone: [phone]
Email: [e-mail]
Leonard T. Fink, Esq. - Designated for Nevada Service Only (Local Rule IA 10-1(b)(2))
Nevada Bar No. 6296
Springel & Fink, LLP
10655 Park Run Drive, Suite 275
Las Vegas, NV 89144

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Attorneys for Plaintiff GEMINI INSURANCE COMPANY

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Laleaque Grad, Esq.
Nevada Bar No.: 8475
THE GRAD LAW FIRM
8275 South Eastern Avenue
Suite 200-352
Las Vegas, NV 89123
Telephone: [phone]
Email: [e-mail]

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Attorney for Defendant NORTH AMERICAN CAPACITY INSURANCE COMPANY

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF NEVADA

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GEMINI INSURANCE COMPANY,

Case No. 3:14-cv-00121-LRH-WGC

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ORDER REGARDING

Plaintiff,

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STIPULATED MOTION TO
STRIKE AND VACATE ORDERS
[DOC. # 26 and 32] PURSUANT TO
CONDITIONAL SETTLEMENT
BETWEEN GEMINI INSURANCE
COMPANY AND NORTH
AMERICAN CAPACITY
INSURANCE COMPANY

v.
NORTH AMERICAN CAPACITY
INSURANCE COMPANY, AND DOES
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Defendants.

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Case 3:14-cv-00121-LRH-WGC Document 35 Filed 06/15/15 Page 2 of 24

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Plaintiff Gemini Insurance Company and Defendant North American Capacity

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Insurance Company (collectively “Parties”) have reached a conditional settlement, to

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eliminate continued litigation in this Court and subsequent appellate proceedings which

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would likely result in the Parties incurring fees and costs cumulatively exceeding the

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entire value of Plaintiff’s original claims. The settlement would also promote judicial

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efficiency. The settlement is particularly appropriate in this matter, which involves

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atypical facts and an insurance endorsement form created in December 2002, making it

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unlikely that the Parties’ specific disputes concerning the application of that
endorsement form will ever require similar litigation.
The settlement is conditioned on having two orders in this case vacated, namely:
(1)

The Court’s February 6, 2015 Order [Doc. 26] granting Plaintiff Gemini
Insurance Company’s (“Gemini”) Motion for Partial Summary Judgment
[Doc. 16] and denying North American Capacity Insurance’s (“North
American”) Counter-Motion for Summary Judgment [Doc. 21]; and

(2)

The Court’s April 3, 2015 Order [Doc. 32] denying North American’s
Motion for Reconsideration of the February 6, 2015 Order.

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The Parties’ stipulated request and joint motion to vacate those orders is supported

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by Federal Rules of Civil Procedure and federal precedent. The alternative is continued

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litigation and trial in this Court, followed by appellate proceedings and potential further

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litigation on remand, with cumulative fees and costs likely to exceed the dollars at issue.
I.

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PROCEDURAL BACKGROUND
On January 14, 2014, Gemini filed a Complaint for Declaratory Relief and

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Equitable Contribution against North American in the Second Judicial Court of the State
of Nevada (Case No. CV14 00096). Based on diversity of citizenship, the Complaint was
removed to the Federal District Court for the District of Nevada [Doc. No. 1].
In its Complaint, Gemini seeks reimbursement of defense expenses and settlement

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money paid on behalf of mutual insured Olsen General Contractors in an underlying

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construction defect action. The Parties filed Cross-Motions for Summary Judgment

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regarding North American’s Duty to Defend [Doc. Nos. 16 and 21].
On February 6, 2015, the Court issued an Order Granting Gemini’s Motion and

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Denying North American’s Motion [Doc. No. 26]. On February 20, 2015 North

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American filed a Motion for Reconsideration regarding the February 6, 2015 Order [Doc.

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No. 27]. On April 3, 2015, the Court issued an Order Denying North American’s Motion

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for Reconsideration [Doc. No. 32].
The Parties have since engaged in settlement discussions and have agreed on a

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monetary settlement number which is contingent on the Court granting the Stipulated
Motion to Strike and Vacate the Orders pertaining to the Parties’ Cross-Motions for
Summary Judgment [Doc. Nos. 26 and 32].
Due to its concerns that the Orders have the potential to cause confusion and

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generate future litigation regarding the application of Designated Work Exclusions
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(including versions of that exclusion not at issue in the instant matter), North American
had intended to seek appellate review of the duty to defend issue addressed in the Orders.

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Given the atypical underlying facts and the circumstance that the Parties’ primary
dispute in this case arises from an endorsement that is more than twelve years old, the

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specific disputes reflected in Gemini’s motion for summary judgment are unlikely to

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reoccur between the Parties. Gemini accordingly agreed with North American to stipulate

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and request that the Court strike and vacate the Orders to facilitate a settlement that

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would be efficient for this Court and the Parties. If the Court grants the Stipulated

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Motion, the Parties will fully settle all issues in this case, and there will be no trial or

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subsequent appellate process.
The Parties therefore submit the instant Stipulated Motion to Strike and Vacate the

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Orders [Doc. Nos. 26 and 32].

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II.

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LEGAL ARGUMENT
Federal Rule of Civil Procedure 54(b) governs non-final judgments, including

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"any order or other decision, however designated, that adjudicates fewer than all the

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claims or the rights and liabilities of fewer than all the parties." Fed. R. Civ. P. 54(b).1

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Under Rule 54(b), this Court has wide latitude to revise prior orders and an order "may

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be revised at any time before the entry of a judgment .... " Fed. R. Civ. P. 54(b).
Under Rule 54(b), district courts have complete power over non-final orders and

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may vacate or revise them at any time, if doing so would be consonant with equity.
United States Gypsum Co. v. Pac. Award Metals, Inc., No. C 04-04941 JSW, 2006 WL
1825705, at *1 (N.D. Cal. July 3, 2006); De la O v. Arnold-Williams, No. CV-04-0192EFS, 2008 WL 4192033, at * 1 (E.D. Wash. Aug. 27, 2008) (quotation marks omitted);

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See also, Cuviello v. Cal Expo, No. 2:11–CV–2456 KJM, 2014 WL 1379873 (E.D. Cal.
Apr. 8, 2014); Jaynes Corp. v. Amer. Safety Insurance Co. 2:10–cv–00764–MMD–
GWF, 2014 WL 8735102 (D.Nev. Dec. 2, 2014) (joint motion to vacate summary

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judgment order per parties’ conditional settlement, pursuant to FRCP 54(b) and 60(b)(6)

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granted by court). Copies of all Westlaw documents cited in this motion are collectively

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attached as Exhibit 1.

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Courts that exercise Rule 54(b) power in the context of settlement have found

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vacating a prior order is "consonant with equity" if there are no reasons suggesting the

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order should not be vacated. See, Midmoutain Contractors, Inc. v. American Safety

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Indem. No. C10–1239-JLR, 2013 WL 5492952 (W.D. Wash. Oct. 1, 2013).
In United States Gypsum, a district court in the Northern District of California

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vacated several orders under Rule 54(b), including a summary judgment order and a

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claims construction order, to facilitate settlement. (United States Gypsum, 2006 WL

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Federal Rule of Civil Procedure 60(b)(6) also authorizes federal courts to set aside final orders
when that relief is justified. See, In re International Fibercom, Inc. (9th Cir. 2007) 503 F.3d 933,
940 (recognizing that Rule 60(b) should be “liberally applied” to “accomplish justice.”) See
also, In re Nybo (D.Nev. 2001) 263 B.R. 905 (granting parties’ motion to vacate court opinion
per Stipulation for Settlement, pursuant to Rule 60(b)).
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1825705, at * 1.) The court in that case required only that the agreement to vacate "was a

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significant factor in successfully resolving this litigation," and that there were "no

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considerations that would justify denial of the motion." Id.

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Likewise, in De la O, the court considered factors such as (1) whether all parties

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have agreed to vacate the order as a condition of the proposed settlement; (2) whether a

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former party to the action would be adversely affected by vacating the order; and (3)

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whether the costs of continuing the action with uncertain results are outweighed by the

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benefits of the proposed settlement. (De la O, 2008 WL 4192033, at * 1.)

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In this case, all of the factors weigh in favor of vacating the Orders. First, all

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parties, Gemini and North American, have joined in the Stipulated Motion requesting

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that the Court strike and vacate the Orders. Next, there are no former parties to this

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action, and thus there is no party that can be adversely impacted if the Orders are

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vacated.

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Finally, and most importantly, the benefits of the settlement outweigh costs of

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continuing the litigation, both in terms of litigation costs to the Parties as well as use of

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this Court’s judicial resources. While the monetary settlement amount agreed to by the

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parties is confidential, the Parties represent that they would be expected to collectively

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expend more than the monetary settlement amount in litigation expenses if this matter

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were to proceed through trial. The Parties also agree that the duty to defend issue in this

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matter creates a high risk of appeal after trial, which would generate further litigation

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expenses, and possible remand to this Court.

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Therefore, the Parties submit that granting the Stipulated Motion pursuant to Rule

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54 is proper under the instant circumstance. In granting this Stipulated Motion, the

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Court will fully dispose of the case. This will allow the Parties to efficiently resolve

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their dispute without the use of any further judicial resources.

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III.

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CONCLUSION
The Parties hereby stipulate and jointly request that the Court strike and vacate

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the Orders on the Cross-Motions for Summary Judgment [Docs. 26 and 32], which is a

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condition to the settlement of this action. If the Stipulated Motion is not granted, the

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Parties will necessarily proceed with litigation and trial, followed by appellate

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proceedings. Given the limited scope of the Parties’ legal disputes, and the dollars

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actually at issue versus the time and money that will be spent through conclusion of this
action, the Court’s approval of the Parties’ request is in the interests of equity and
efficiency, including judicial efficiency .

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Date: June 15, 2015

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WOLKIN CURRAN, LLP

By:

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/s/ Amy K. Thomas
Amy K. Thomas

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Amy K. Thomas, Esq.
Nevada Bar No. 9276
Wolkin Curran, LLP
555 Montgomery Street, Suite 1100
San Francisco, California 94111
Telephone: [phone]
Facsimile: [phone]
Email: [e-mail]
Attorney for Plaintiff GEMINI INSURANCE
COMPANY

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Case 3:14-cv-00121-LRH-WGC Document 35 Filed 06/15/15 Page 7 of 24

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Date: June 15, 2015

THE GRAD LAW FIRM

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By:

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/s/ Laleaque Grad
Laleaque Grad

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Nevada Bar No.: 8475
8275 South Eastern Avenue
Suite 200-352
Las Vegas, NV 89123
Telephone: [phone]
Email: [e-mail]

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Attorney for Defendant NORTH AMERICAN
CAPACITY INSURANCE COMPANY

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IT IS SO ORDERED.

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Dated:______________ 2015.
this 18th day of June,

___________________________________
U.S. District Judge
LARRY R. HICKS
UNITED STATES DISTRICT JUDGE

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Case 3:14-cv-00121-LRH-WGC Document 35 Filed 06/15/15 Page 8 of 24

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Exhibit 1

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Appendix of Unpublished Federal Decisions

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 United States Gypsum Co. v. Pac. Award Metals, Inc., No. C 04-04941 JSW,
2006 WL 1825705 (N.D. Cal. July 3, 2006);

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 De la O v. Arnold-Williams, No. CV-04-0192-EFS, 2008 WL 4192033 (E.D.
Wash. Aug. 27, 2008);

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 Cuviello v. Cal Expo, No. 2:11–CV–2456 KJM, 2014 WL 1379873 (E.D. Cal.
Apr. 8, 2014);

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 Jaynes Corp. v. Amer. Safety Insurance Co., 2:10–cv–00764–MMD–GWF, 2014
WL 8735102 (D.Nev. Dec. 2, 2014); and

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 Midmoutain Contractors, Inc. v. American Safety Indem. No. C10–1239-JLR,
2013 WL 5492952 (W.D. Wash. Oct. 1, 2013).

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