LIBERTY INTERNATIONAL UNDERWRITERS CANADA v. SCOTTSDALE INSURANCE COMPANY et al

Filing 227

OPINION. Signed by Judge Noel L. Hillman on 9/29/2017. (tf, )

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

LIBERTY INTERNATIONAL
UNDERWRITERS CANADA,
Plaintiff,

Civil No. 12-4934 (NLH/JS)

OPINION

v.

SCOTTSDALE INSURANCE COMPANY
and INFINITY ACCESS LLC,
Defendants.

APPEARANCES:
STEPHEN ALLEN LONEY, JR.
HOGAN LOVELLS US LLP
1835 MARKET STREET, 29th FLOOR
PHILADELPHIA, PA 19103
MARK C. GOODMAN (pro hac vice)
HOGAN LOVELLS US LLP
3 EMBARCADERO CENTER, 15TH FLOOR
SAN FRANCISCO, CA 94111
On behalf of plaintiff Liberty International
Underwriters Canada
GARY S. KULL
APRIL T. VILLAVERDE
CARROLL, McNULTY & KULL LLC
120 MOUNTAIN VIEW BLVD.
P.O. BOX 650
BASKING RIDGE, NJ 07920
LISA MARTIN LAMPKIN (pro hac vice)
SELMAN BREITMAN LLP
11766 WILSHIRE BOULEVARD, 6TH FL.
LOS ANGELES, CA 90025

On behalf of defendants Scottsdale Insurance
Company and Infinity Access LLC

HILLMAN, District Judge
This action concerns claims by Plaintiff, Liberty
International Underwriters Canada (“Liberty” or “LIU”)), against
Defendants, Scottsdale Insurance Company (“Scottsdale”) and
Infinity Access LLC (“Infinity”), to recover $1 million plus
attorneys’ fees.

Liberty paid the principal funds in November

2011 to settle a lawsuit which alleged that Infinity, a
subcontractor to Liberty’s insured Tractel, LTD., started a fire
at the Borgata Hotel, Casino and Spa in Atlantic City, New
Jersey. 1
Liberty claims that Scottsdale and Infinity had a duty to
defend and indemnify Tractel for the underlying litigation and
that Liberty should be reimbursed for all amounts it paid and
expenses incurred in conjunction with the underlying litigation.
Defendants argue, among other defenses, that the settlement
agreement between Tractel and Borgata purportedly contained an
assignment of rights provision in which Liberty agreed to assign
any of its claims arising out of the Borgata litigation,
including its claims against Infinity and Scottsdale, to

1

The Court has subject matter jurisdiction over this matter
pursuant to 28 U.S.C. § 1332(a)(1).
2

Borgata.

Currently pending is Infinity’s motion for summary

judgment on Liberty’s claims against it. 2
On June 28, 2013, this Court issued an Opinion denying
Infinity’s motion for judgment on the pleadings.
46.)

(Docket No.

Infinity’s current motion for summary judgment argues that

the Court’s June 28, 2013 decision warrants the entry of
judgment in its favor for the following reasons:
1. This Court held that LIU has two potential avenues of
recovery against Infinity - equitable subrogation, or
equitable indemnity and contribution;
2. This Court held that LIU cannot maintain a subrogation
claim against Infinity, because Tractel assigned its rights
to pursue Infinity to Borgata;
3. This Court held that LIU cannot maintain an equitable
contribution or indemnity claim against Infinity, because
LIU and Infinity are not co-insurers of Tractel and they do
not have a contractual relationship; and,
4. Even if LIU was not otherwise precluded from maintaining
those claims against Infinity by the law and based on this
Court’s rulings, LIU nevertheless cannot maintain them
against Infinity because LIU itself assigned to Borgata all
its rights to make any claim against Infinity. This final
ground is an independent basis on which to grant this
motion.
(Docket No. 188 at 5.)

2

Summary judgment is appropriate where the Court is satisfied
that the materials in the record, including depositions,
documents, electronically stored information, affidavits or
declarations, stipulations, admissions, or interrogatory
answers, demonstrate that there is no genuine issue as to any
material fact and that the moving party is entitled to a
judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S.
317, 330 (1986); Fed. R. Civ. P. 56(a).
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In response, Liberty argues that even though this Court
opined on the remedies available to Liberty as Tractel’s
insurer, this Court’s discussion was dicta because the Court
ultimately concluded that the “fog of ambiguity” over the
settlement and assignment of rights, the lack of clarity
regarding whether the Liberty policy contained an antiassignment or other similar provision that would have barred the
assignment of rights, and the lack of the availability of the
actual insurance policies for the Court’s review rendered the
dismissal of Liberty’s claims against Infinity premature.
Therefore, Liberty argues that the Court did not make the
conclusions of law that Infinity contends serve as the “law of
the case.”
Liberty also points out that in its Opinion this Court
presumed that Tractel invoked the subrogation provision of the
policy when it tendered its defense to Borgata’s claims against
it, when the evidence obtained through discovery shows that
Liberty actually funded Tractel’s defense under the
indemnification provision.

Further, Liberty points out that

this Court presumed that Liberty selected Tractel’s counsel,
while the evidence now shows that Tractel hired its own counsel
to defend it in the Borgata litigation.
When the Court issued its June 28, 2013 Opinion, the matter
was in the early stages of discovery, and the Court only
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considered Liberty’s complaint and the stipulation of dismissal
and assignment of claims filed in the underlying state court
action.

Since then, more than four years of comprehensive, and

contentious, discovery has been conducted.

That discovery, and

the posture in which this Court may again assess Liberty’s
claims against Infinity, completely changes the landscape from
the limited information before the Court in June 2013.
As an over-riding matter, the Court’s prior Opinion did not
set forth the “law of the case” as argued by Infinity because
ultimately the Court concluded that all of Liberty’s claims were
viable to proceed past the initial pleading stage.

The law of

the case doctrine “‘expresses the practice of courts generally
to refuse to reopen what has been decided.’”

Williams v.

Runyon, 130 F.3d 568, 573 (3d Cir. 1997) (quoting Messenger v.
Anderson, 225 U.S. 436, 444 (1912)).

Even though “the law of

the case doctrine does not limit the power of trial judges to
reconsider their prior decision,” id., here the Court does not
need to reconsider the June 2013 decision because the law of the
case doctrine acts to preclude review of only those legal issues
that the Court actually decided, either expressly or by
implication - it does not apply to dicta.

In re City of

Philadelphia Litigation, 158 F.3d 711, 718 (3d Cir. 1998).
Although the Court expressed skepticism over the viability of
Liberty’s claims against Infinity, the Court concluded that they
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were sufficient to proceed through discovery.

Thus, the Court

did not determine affirmatively or conclusively that Liberty’s
claims were barred under any legal principals.
Even if this Court’s analysis was not classified as dicta,
however, the Court finds that Liberty has presented substantive
evidence gathered through discovery that refutes the premises
relied upon by the Court in its analysis of Liberty’s claims.
The purpose of the doctrine is “[t]o preclude parties from
contesting matters that they have had a full and fair
opportunity to litigate[, which] protects their adversaries from
the expense and vexation attending multiple lawsuits, conserves
judicial resources, and fosters reliance on judicial action by
minimizing the possibility of inconsistent decisions.”

Arizona

v. California, 460 U.S. 605, 619 (1983).
Accordingly, the Third Circuit has recognized several
“extraordinary circumstances” that warrant a court's
reconsideration of an issue decided earlier in the course of
litigation: (1) where new evidence is available; (2) where a
supervening new law has been announced; or (3) where the earlier
decision was clearly erroneous and would create manifest
injustice.

Public Interest Research Group of New Jersey, Inc.

v. Magnesium Elektron, Inc., 123 F.3d 111, 116–17 (3d 1997)
(citation omitted).
Here, all the evidence presented in Liberty’s opposition to
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Infinity’s motion, including evidence that most likely would
have affected this Court’s analysis of Liberty’s claims in June
2013, compels the reanalysis of Liberty’s claims against
Infinity at the current stage in the case.

Even though the

Court may ultimately come to the same conclusion as its analysis
in the June 2013 decision, the Court must view them in the
summary judgment context so that Liberty has a full and fair
opportunity to litigate its claims against Infinity.
In that context, a party moving for summary judgment has
the burden of demonstrating the absence of a genuine issue of
material fact, the nonmoving party has the burden of identifying
specific facts and affirmative evidence that contradict those
offered by the moving party, and the non-moving party's evidence
“is to be believed and all justifiable inferences are to be
drawn in his favor.”

Celotex Corp. v. Catrett, 477 U.S. 317,

323 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255
(1986).
Infinity’s current motion does not follow that procedure
and essentially relies upon the Court’s prior decision as
evidence of the absence of genuine issue of fact as to Liberty’s
claims against it.

That course is not proper in this case.

The

Court will therefore deny Infinity’s motion, but afford it leave
to file a summary judgment motion under Rule 56(a) arguing how
at this stage of the case with discovery concluded it is
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entitled to judgment in its favor on Liberty’s claims against
it.
An appropriate Order will be entered.

Date:
September 29, 2017
At Camden, New Jersey

s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.

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