Washington International Insurance Company et al v. Ashton Agency, Inc.
Filing
80
ORDER denying 76 Motion for Reconsideration. Re: 75 Order on Motion for Summary Judgment. So Ordered by Magistrate Judge Landya B. McCafferty.(gla)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
Washington International
Insurance Company and North
American Specialty Insurance
Company
v.
Civil No. 10-cv-526-LM
Ashton Agency, Inc.
O R D E R
In an order dated September 10, 2012, the court granted
plaintiffs (hereinafter “Washington”) summary judgment as to
liability on their claims for breach of contract and breach of
fiduciary duty against Ashton Agency, Inc. (“Ashton”).
Those
claims were based on Ashton’s failure to remit premiums it
collected for 834 surety bonds that were issued by Washington.
In that same order, the court denied Washington’s motion as to
damages, ruling that Washington would receive an unwarranted
windfall if the court were to award it the full amount of the
premiums Ashton collected for 550 or more Washington bonds it
sold but later replaced with bonds issued by another insurance
company.
Before the court is Ashton’s motion for reconsideration of
the portion of the order pertaining to damages, i.e., the issue
on which it successfully defended against Washington’s summary-
judgment motion.
Specifically, Ashton asks the court to “[h]old
that the summary judgment briefing has concluded the dispute
between the parties, and that . . . plaintiffs failed to
demonstrate the right to receive the premiums for the replaced
MVD Bonds.”
Def.’s Mot. for Recons. (doc. no. 76) ¶ C.
Washington objects.
Because the court did not commit a
“manifest error of law or fact,” LR 7.2(e) by declining to rule
that its partial denial of summary judgment to Washington
concluded the dispute between the parties, Ashton’s motion for
reconsideration is denied.
In its motion, Ashton makes much of a stipulation that
provides, in pertinent part, “that the remaining issues in this
case can be resolved on a motion for summary judgment.”
(doc. no. 56), at 1.
Stip.
Among other things, the stipulation
established a deadline for Washington to file a motion for
summary judgment and also established a deadline for Ashton’s
“response and cross-motion, if any.”
no cross-motion.
Stip., at 1.
Ashton filed
To the contrary, it defended against
Washington’s motion, at least in part, by identifying various
facts in dispute.
See Def.’s Obj. (doc. no. 68), at 4.
That is
a litigation strategy wholly at odds with Ashton’s stipulation
that the remaining issues could be resolved on summary judgment.
See Sánchez-Rodríguez v AT&T Mobility P.R., Inc., 673 F.3d 1, 9
(1st Cir. 2012) (“The nonmovant may defeat a summary judgment
2
motion by demonstrating, through submissions of evidentiary
quality, that a trialworthy issue persists.”) (quoting Iverson
v. City of Boston, 452 F.3d 94, 98 (1st Cir. 2006)).
Similarly, because Ashton challenged the facts set out in
Washington’s memorandum rather than stipulating to a set of
facts to which the court would apply the relevant law, Ashton’s
reliance on García-Ayala v. Lederle Parenterals, Inc., 212 F.3d
638 (1st Cir. 2000), for the proposition that the parties
intended for resolution on a “case-stated” basis is misplaced.
“In a case stated, the parties waive trial and present the case
to the court on the undisputed facts in the pre-trial record.”
Sánchez-Rodríguez, 673 F.3d at 10-11 (quoting TLT Constr. Corp.
v. RI, Inc., 484 F.3d 130, 135 n.6 (1st Cir. 2007); citing
United Paperworkers Int’l Union, Local 14 v. Int’l Paper Co., 64
F.3d 28, 31 (1st Cir. 1995)).
Contesting the facts stated in
Washington’s motion, as Ashton did in its objection, hardly
seems consistent with its current claim that the parties’
dispute was submitted to the court on a case-stated basis.
In any event, the aspect of the court’s order that Ashton
challenges, i.e., its statement that the issue of damages
remains to be resolved, rests on nothing more than a
straightforward application of the rules of civil procedure.
When a party moves for summary judgment on a claim or an issue,
the court’s role is limited to granting or denying the motion
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before it.
See 11 James Wm. Moore et al., Moore’s Federal
Practice § 56.24[1] (3d ed. 2011).
When a motion for summary
judgment is denied, the claim or issue on which the movant has
not prevailed remains alive and subject to further litigation,
which can include additional summary-judgment practice.
Moore et al., supra, § 56.121[1][b] (3d ed. 2011).
has happened here.
That is what
Washington moved for summary judgment on
liability and damages.
to damages.
See
It prevailed as to liability, but not as
Thus, that issue remains to be resolved.
To be sure, Washington and Ashton have stipulated that this
case could be resolved on a motion for summary judgment.
may or may not have been correct about that.
They
Be that as it may,
the agreement only provided that the case could be resolved on a
motion for summary judgment; it did not specify any particular
motion for summary judgment or limit the number of summary
judgment motions it might take to resolve the case.
That is,
the stipulation merely identified summary judgment as the
procedural posture in which the case would be resolved.
Despite
Ashton’s argument that the stipulation “require[d] that the
Court’s resolution of the arguments presented [in document no.
64] be the final order in the case,” Def.’s Reply (doc. no. 79),
at 2, the parties were powerless to bind the court to issuing an
order on document no. 64 that concluded the case if it could not
do so in conformity with the Federal Rules of Civil Procedure.
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See King v. United States, 641 F.2d 253, 258 (5th Cir. 1981)
(declining to abide by stipulation concerning burden of proof
because “[a] court is not bound by the parties’ stipulations of
law, particularly when those stipulations are erroneous”)
(citing Swift & Co. v. Hocking Valley Ry. Co., 243 U.S. 281, 289
(1917); Equitable Life Assur. Soc’y of U.S. v. MacGill, 551 F.2d
978, 983 (5th Cir. 1977)).
While Ashton asks the court to rule that its dispute with
Washington has reached its endpoint, denial of summary judgment
to a moving party does not result in judgment in favor of the
nonmovant, which is the relief Ashton seeks in its motion for
reconsideration.1
To be entitled to summary judgment, a party
generally must move for it and carry its burden of proof.
See
Fed. R. Civ. P. 56(a); Markel Am. Ins. Co. v. Díaz-Santiago, 674
F.3d 21, 29 (1st Cir. 2012).
Ashton did not move for summary
judgment, and its objection to Washington’s motion provided no
occasion to argue for such relief.
See LR 7.1(a)(1)
(“Objections to pending motions and affirmative motions for
affirmative relief shall not be combined in one filing.”).
Thus, this case remains alive not as a result of any ruling by
this court, but as a result of Ashton’s litigation strategy and,
1
Indeed, even when both parties move for summary judgment,
which is not what happened in this case, “[t]he fact that
opposing parties file cross-motions for summary judgment does
not mean that one of the moving parties will prevail.” Moore et
al., supra, § 56.120[3].
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in particular, its failure to file a cross-motion for summary
judgment, as was provided for in the stipulation.
This court
cannot grant on reconsideration what Ashton never properly
requested in the proceeding that resulted in the order it now
asks the court to reconsider.
Various arguments Ashton raises
in its motion for reconsideration may have merit, but still, the
existence of potentially meritorious arguments does not relieve
Ashton of the burden of presenting those arguments in accordance
with the relevant rules of procedure.
Without a proper motion
to serve as a vehicle for Ashton’s arguments, there is no
mechanism for granting Ashton the relief it seeks.
Ashton also devotes considerable attention to an argument
that Washington’s “claim” for lost profits is new to the case
and, for that reason should be disregarded.
persuaded.
The court is not
From the outset, Washington has asserted a claim for
breach of contract.
It has prevailed on that claim, and it is
difficult to imagine that Washington has not been damaged by
Ashton’s breach.
As of July 16, 2010, Ashton, without a lawful
excuse, had failed to remit the premiums it had collected for
834 surety bonds it sold in Washington’s name.
Washington spent
several months on the risk without the benefit of those premiums
and, by virtue of Ashton’s unilateral actions, it lost the
benefit of its bargain, i.e., the profits it would have earned
from the bonds it issued.
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Viewed in the correct light, “lost profits” is not a cause
of action, but rather, a measure of damages.
Cf. Minion Inc. v.
Burdin, 929 F. Supp. 521, 523 (D.H.H. 1996) (“Under New
Hampshire law, a claim for enhanced damages is not a separate
cause of action; it is a request for a particular remedy.”).
Moreover, the remedy of lost profits is fairly encompassed by
the breach-of-contract claim on which Washington has prevailed.
See George v. Al Hoyt & Sons, Inc., 162 N.H. 123, 134 (2011).
Washington may or may not be able to establish its lost profits
on the summary judgment record as it currently exists, but that
is a question to be resolved if and when: (1) Washington
attempts to establish its lost profits in a subsequent summaryjudgment motion; or (2) Ashton moves for summary judgment on
grounds that Washington cannot establish its lost profits.
But,
again, the fact that Washington has not prevailed on its
argument that it is entitled to all the premiums Ashton
collected for the replaced bonds does not, without more, entitle
Ashton to judgment as a matter of law that Washington is
entitled to no damages, which is what Ashton seeks in its motion
for reconsideration.
In support of its argument that the court was obligated to
issue a summary judgment order that concluded the case, Ashton
states that it “would scarcely have agreed to the stipulation if
. . . the summary judgment proceeding would not conclude the
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case.”
Def.’s Mot. for Recons. ¶ 16.
As the court has
explained, it is not necessary to grant Ashton’s motion for
reconsideration for this case to be resolved in the procedural
posture of summary judgment.
When the parties stipulated to resolution on summary
judgment, all they agreed to was that the case would not
progress to trial.
They did not stipulate, nor could they have
stipulated, that this court would deviate from the established
principles of summary-judgment adjudication by granting judgment
to a nonmovant, based upon the moving party’s failure to
demonstrate its entitlement to judgment as a matter of law.
Similarly, Washington did not agree to abandon its right to
recovery under the circumstances that ultimately came to pass,
partial but incomplete success on its first summary-judgment
motion.
Finally, while Ashton asserts that it would not have
agreed to the stipulation if it thought there was a possibility
that the court’s decision on document no. 64 would not conclude
the case, it seems unlikely that Washington would have agreed to
the stipulation if it understood that agreement to provide that
if it failed to demonstrate its entitlement to all the premiums
Ashton collected for the replaced bonds, it would not be
entitled to any damages at all for Ashton’s breach of contract.
To conclude, the court did not commit a manifest error of
law when it stated that Washington’s failure to demonstrate its
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entitlement to summary judgment on the issue of damages resulted
in the continued vitality of that issue.
Accordingly, Ashton’s
motion for reconsideration, document no. 76, is denied.
Thus, the matter of damages for Ashton’s failure to remit
premiums for the replaced bonds remains open and subject to
further summary-judgment practice.
The court shall schedule a
telephone conference to set deadlines for further briefing in
the event that Washington wishes to continue its pursuit of
damages above and beyond those Ashton has already conceded it
must pay.
SO ORDERED.
__________________________
Landya McCafferty
United States Magistrate Judge
October 19, 2012
cc:
Bradford R. Carver, Esq.
Geoffrey M. Coan, Esq.
Eric H. Loeffler, Esq.
Jeffrey C. Spear, Esq.
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