Reliastar Life Insurance Company v. Laschkewitsch

Filing 159

ORDER DENYING 147 Defendant's Motion to Alter or Amend the Judgment, and DENYING 153 Defendant's Motion to Disallow Costs and Fees. Plaintiff is awarded costs in the amount of $19,758.20. Plaintiff is awarded attorney's fe es for its attorneys' work defending against the defendant's counterclaims. Plaintiff is ordered to brief the Court on its attorney's fees regarding the time spend defendant against these counterclaims and is ordered to supply the Court with the appropriate documentation supporting its briefing. Signed by US District Judge Terrence W. Boyle on 9/22/2014. Copy mailed to pro se defendant, via US Mail, to 1933 Ashridge Drive, Fayetteville, NC, 28304. (Fisher, M.)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
NO. 5:13-CV-210-BO

RELIASTAR LIFE INSURANCE COMPANY,

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Plaintiff,

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V.

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ORDER

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JOHN B. LASCHKEWITSCH,

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Defendant.

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This matter is before the Court on defendant's motion to amend judgment [DE 147] and
defendant's motion for disallowance of attorney fees and costs [DE 153]. The motions are now
ripe for consideration. For the following reasons, defendant's motions are DENIED.

BACKGROUND
This case arises from a dispute over a life insurance policy covering the life of Ben
Laschkewitsch ("the Insured"). Ben is defendant's brother. Defendant was the agent who sold
the policy to his brother and was paid a commission of $1,946.16 by ReliaStar Life Insurance
Company ("ReliaStar") for selling the policy. Ben applied for insurance through his brother on
January 22, 2010 and the policy became active on February 22, 2010. Ben died on January 15,
2012. ReliaStar then denied the claim for payment on the policy on October 10, 2012 because of
misrepresentations that had been made in the application. Defendant appealed ReliaStar' s
decision and ReliaStar responded to the appeal by filing this suit. The undisputed facts before
this Court on the motions for summary judgment reveal defendant's scheme to profit off of the
illness and death of his brother, for his sole personal gain, to the tune of $3.9 million. The facts
reveal that defendant contrived to acquire $3.9 million in potential life insurance payouts on the

life of his brother who was terminally ill with ALS. It is clear that defendant was aware that his
brother was suffering from ALS at the time he helped his brother to apply for life insurance and
that he made material misrepresentations to ReliaStar about both the health of his brother and the
amount of in force or pending life insurance coverage with other companies. These
misrepresentations caused ReliaStar to issue a policy to defendant's brother (the "insured") with
defendant as the named beneficiary.
On May 28, 2014, this Court granted summary judgment in favor of ReliaStar and
awarded it damages and costs. [DE 141]. The Court further ordered ReliaStar to brief the issue of
attorney's fees. !d.
DISCUSSION
I.

DEFENDANT'S MOTION TO AMEND.

Defendant's motion to amend judgment and judgment findings is nothing more than a
request for reconsideration under FED. R. Crv. P. 59(e). A Rule 59(e) motion to alter or amend
judgment must rest on one of the following three grounds: "(1) to accommodate an intervening
change in controlling law; (2) to account for new evidence not available at trial; or (3) to correct
a clear error of law or prevent manifest injustice." Pac. Ins. Co. v. Am. Nat'! Fire Ins. Co., 148
F.3d 396, 403 (4th Cir. 1998) (citations omitted). "Rule 59(e), in essence, gives the district court
a chance to correct its own mistake if it believes one has been made." Zinkand v. Brown, 4 78
F.3d 634, 637 (4th Cir. 2007). But such motions "may not be used [] to raise arguments which
could have been raised prior to the issuance of the judgment, nor may they be used to argue a
case under a novelle gal theory that the party had the ability to address in the first instance." Pac.

Ins. Co., 148 F.3d at 403. Rule 59(e) does not permit a party to simply relitigate old matters. !d.
While the Court has the discretion to permit additional evidence, "the court must satisfy itself as

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to the unavailability of the evidence and likewise examine the justification for its omission."
Zinkand, 478 F.3d at 637. Additionally, "reconsideration of a judgment after its entry is an

extraordinary remedy which should be used sparingly." Pac. Ins. Co., 148 F.3d at 403 (quotation
omitted).
Here, defendant's 30 page brief merely pieces together the same arguments he made in
the summary judgment briefings. He does not cite any case purporting to establish an
"intervening change in controlling law." He does not assert that there is new evidence which was
not previously available. Defendant also does not point to any clear error or manifest injustice.
He merely reiterates the position that he fully briefed before this Court previously and seeks to
relitigate that which was already ruled upon by this Court.
Although defendant does attach a new affidavit from his father, John M. Laschkewitsch,
it is not one that was previously unavailable and therefore the Court declines to consider it.
Although the Court struck John M. Laschkewitsch's previous affidavit because it was not
properly disclosed during discovery, defendant is not allowed to submit essentially the same
affidavit at this stage in the proceedings. Defendant also attaches two cases to his brief, but both
are dated well before this action, do not establish error, and do not disclose an intervening
change in controlling law.
Because defendant's Rule 59(e) motion does not make any new arguments, cites no case
law affecting a change to controlling law, submits no new evidence previously unavailable, and
instead just seeks a "re-do," it does not meet the requirements established by the Fourth Circuit
and must be denied.

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II.

PLAINTIFF IS ENTITLED TO ATTORNEY'S FEES.

The Court ordered plaintiff to brief the matter of costs and attorney's fees because,
although requesting fees, it did not lay a statutory basis for an award of fees in its summary
judgment briefing. Silicon Knights, Inc. v. Epic Games, Inc., 917 F. Supp. 2d 503,516 (E.D.N.C.
2012) (quoting Stillwell Enter. v. Interstate Equip. Co., 266 S.E.2d 812, 814 (N.C. 1980).
Plaintiff now points to two statutory grounds to support its claim for attorney's fees.
First, plaintiff cites defendant's counterclaim for violations of N.C. Gen. Stat. § 75-1.1.
North Carolina law allows that "[i]n any suit instituted by a person who alleges that the
defendant violated G.S. 75-1.1, the presiding judge may, in his discretion, allow a reasonable
attorney fee to the duly licensed attorney representing the prevailing party ... upon a finding by
the presiding judge that ... (2) The party instituting the suit knew, or should have known the
action was frivolous and malicious." N.C. Gen. Stat.§ 75-16.1. The Court must support ay award
of fees by making findings of fact that the claimant knew or should have known that the action
was frivolous and malicious and that the attorney fee award is reasonable, including findings
regarding the time and labor expended, the skill required to perform the services rendered, the
customary fee for like work, and the experience and ability of the attorneys. McKinnon v. CV
Indus., Inc., 745 S.E.2d 343, 350-51 (N.C. App. 2013); Cotton v. Stanley, 380 S.E.2d 419, 421
(N.C. App. 1989). An award of fees under§ 75-16.1 is within the sound discretion of the trial
judge. Birmingham v. H&H Home Consultants and Designs, Inc., 658 S.E.2d 513, 518 (N.C.
App. 2008).
Second, plaintiff cites defendant's counterclaim for punitive damages. "The court shall
award reasonable attorneys' fees, resulting from the defense against the punitive damages claim,

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against a claimant who files a claim for punitive damages that the claimant knows or should have
known to be frivolous or malicious." N.C. Gen. Stat. § 1D-45.
Here, plaintiff ReliaStar initiated this suit to which defendant responded with an answer
and counterclaim. [DE 12]. Although defendant's counterclaim for violations of§ 75-1.1 was
clearly frivolous, as was his claim for punitive damages, defendant did not initiate this action and
using those statutory provisions pertaining to defendant's counterclaims as a hook to lay all of
the costs of this litigation at defendant's feet is unjust. Even though defendant is a fraudster and
fought this litigation as an attempt to obtain his ill-gotten insurance proceeds, plaintiff cannot lay
all of the costs of a suit that it initiated onto defendant. Due to defendant's fraud and plaintiffs
need to defend its interests proactively in court through this litigation, costs are awarded to
plaintiff. N.C. Gen. Stat. § 7A-305(d). However, attorney's fees will be limited to those incurred
defending against defendant's counterclaims for violations of § 75-1.1 (including his
counterclaims for violations of§ 58-63-15(11) which are actionable under§ 75-1.1) and punitive
damages.
The Court finds that defendant knew he was engaged in fraudulent activities throughout
his scheme to obtain insurance coverage on the life of the Insured from ReliaStar. Therefore,
defendant knew or should have known that his counterclaims were frivolous and malicious.
Defendant could "present no rational argument based upon the evidence or law in support" of
these counterclaims. Blyth v. McCrary, 646 S.E. 2d 813, 819 n.5 (N.C. App. 2007). Against the
background of his elaborate fraud scheme against ReliaStar and other insurers, defendant's
deceptive practices claims proved to be no more than desperate, but obviously meritless
procedural "gotcha" arguments, for which his only harm was not reaping an §800,000 reward for
his fraud. While ReliaStar spent substantial time and expense to uncover the various aspects of

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his fraud, defendant knew all along about his brother's ALS, the other existing and pending
policies, his brother's disclosure of ALS to a prior insurer, and even, with all of that knowledge,
submitted an altered medical record as part of the fraudulent application to ReliaStar. His claims
were not filed in good faith, but maliciously because they were filed only for the purpose of
trying to perpetuate and secure the benefit of his fraud. !d. Accordingly reasonable attorney's
fees are recoverable under N.C. Gen. Stat.§ 75-16.1 and N.C. Gen. Stat.§ 1D-45.
However, the Court does not have enough evidence in front of it to determine what a
"reasonable" amount of attorney's fees is. Plaintiffs briefing and supporting affidavits are
focused on the total amount of time spent on this litigation and are not in any way broken down
into the amount of time spent on different discrete tasks. Accordingly the Court orders plaintiff
to submit additional briefing and supporting documents that delineates how much time plaintiffs
attorneys spent on defending plaintiff against defendant's § 75-1.1 and punitive damages
counterclaims and how much in attorney's fees it believes is owed for that work. On matters like
the briefing for summary judgment where the time spent is comingled with time spent pursuing
litigation topics that the Court is not awarding attorney's fees for, a percentage breakdown of the
portion of the briefing and research dedicated to the recoverable tasks and the total amount of
time spent on the overall task will suffice.
Costs are awarded to plaintiff in the amount it seeks of$19,758.20.
CONCLUSION

For the foregoing reasons, the defendant's motion to alter or amend judgment is DENIED
and defendant's motion to disallow costs and fees is DENIED. Plaintiff is AWARDED costs in
the amount of $19,758.20. Plaintiff is AWARDED attorney's fees for its attorneys' work
defending against defendant's counterclaims for violations of§ 75-1.1 and for punitive damages.

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Plaintiff is ORDERED to brief the Court on its attorney's fees regarding the time spent
defending against these counterclaims and is ORDERED to supply the Court with appropriate
documentation supporting its briefing.
SO ORDERED.
This the &day of September, 2014.

RRENCE W. BOYLE
UNITED STATES DISTRICT JUD

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