Bridgestone Americas Tire Operations, LLC et al v. Pacific Employers Insurance Company

Filing 21

Memorandum Opinion and Order: Defendant's motion (Doc. No. 18 ) to reconsider this Court's Memorandum Opinion and Order dated March 23, 2012 is granted and, upon reconsideration, the Court vacates in part the March 23, 2012 Memorandum Opinion and Order (Doc. No. 16 ) denying defendant's motion to dismiss and, instead, grants that motion and dismisses the case as barred by the doctrine of res judicata. Judge Sara Lioi on 2/27/2013. (P,J)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

BRIDGESTONE AMERICAS TIRE
OPERATIONS, LLC, et al.,
PLAINTIFFS,
vs.
PACIFIC EMPLOYERS INSURANCE
COMPANY,
DEFENDANT.

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CASE NO. 5:11CV350

JUDGE SARA LIOI

MEMORANDUM OPINION
AND ORDER

Before the Court is defendant’s motion (Doc. No. 18) to reconsider this Court’s
Memorandum Opinion and Order dated March 23, 2012, plaintiff’s memorandum in opposition
(Doc. No. 19), and defendant’s reply (Doc. No. 20). For the reasons set forth herein, the motion
for reconsideration is granted and, upon reconsideration, the Court vacates in part1 the March 23,
2012 Memorandum Opinion and Order denying defendant’s motion to dismiss and, instead,
grants that motion and dismisses the case as barred by the doctrine of res judicata.

I. BACKGROUND
Plaintiffs (hereafter “Bridgestone/FP”) brought an action for declaratory judgment
and breach of contract against defendant (hereafter “PEIC”), alleging breach of two insurance
policies. PEIC filed a motion to dismiss, arguing that plaintiffs were attempting to re-litigate an
insurance coverage dispute previously litigated in the U.S. District Court for the Western District
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The Court adheres to its recitation of the factual and procedural background set forth in Section I of the order.
(Doc. No. 16 at 841-846.) That portion of the Memorandum Opinion and Order is not vacated and, rather than being
repeated, is incorporated herein by reference.

of Louisiana (“the Louisiana Coverage Action”), which had been resolved in PEIC’s favor and
affirmed on appeal. In its motion to dismiss, PEIC argued that the instant action was barred by
the doctrine of res judicata.
On March 23, 2012, after defendant’s motion was fully briefed, the Court issued
the Memorandum Opinion and Order now under reconsideration. (Doc. No. 16.) Therein, the
Court compared the Louisiana Coverage Action to the instant lawsuit and determined that the
subject matter of the Louisiana lawsuit did not include the two insurance policies at issue herein
and, therefore, the instant action was not barred by res judicata (i.e., claim preclusion). The
Court also determined that issue preclusion would apply, prohibiting relitigation of whether the
hearing loss at issue was “bodily injury by accident” or “bodily injury by disease,” concluding
that “[u]nder the ruling by the district court in the Louisiana Coverage action, the hearing loss
suffered by each Blackwell plaintiff was a ‘bodily injury by disease.’”
In the March 23rd order, the Court also directed Bridgestone/FP to show cause in
writing within seven (7) days why the case should not be transferred to the U.S. District Court
for the Western District of Louisiana. Bridgestone/FP subsequently sought and was granted an
extension of time to file its brief. On April 2, 2012, however, PEIC filed the instant motion. By
separate order, the Court stayed the briefing with respect to transfer until the reconsideration
motion could be resolved. That motion is now ripe for determination.

II. DISCUSSION
While a motion for reconsideration is not mentioned in the Federal Rules of Civil
Procedure, it serves a legitimate and valuable role in certain situations. Nat’l Union Fire Ins. Co.
v. Continental Illinois Corp., 116 F.R.D. 252, 253 (N.D. Ill. 1987) (citing Above The Belt, Inc. v.
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Mel Bohannan Roofing, Inc., 99 F.R.D. 99 (E.D. Va. 1983)). Such a motion is typically treated
as a motion to alter or amend the judgment under Fed. R. Civ. P. 59(e). McDowell v. Dynamics
Corp. of America, 931 F.2d 380, 382 (6th Cir. 1991) (citing Smith v. Hudson, 600 F.2d 60, 62
(6th Cir. 1979)). As such, it is not an opportunity for an unhappy litigant to reargue the case.
Sault Ste. Marie Tribe of Chippewa Indians v. Engler, 146 F.3d 367, 374 (6th Cir. 1998).
Motions for reconsideration are not substitutes for appeal nor are they vehicles whereby a party
may present arguments inexplicably omitted in prior proceedings. Karr v. Castle, 768 F. Supp.
1087, 1093 (D. Del. 1991), aff’d sub nom U.S. v. Carper, 22 F.3d 303 (3d Cir. 1994), cert.
denied sub nom Karr v. Carper, 513 U.S. 1084 (1995).
Generally, three situations justify a district court reconsidering one of its orders:
“(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 to prevent a manifest injustice.”
Sherwood v. Royal Ins. Co. of Am., 290 F. Supp. 2d 856, 858 (N.D. Ohio 2003) (internal
citations omitted). The motion for reconsideration must demonstrate to the court why it should
reconsider its decision and set forth strongly convincing facts or law which would induce it to
reverse its prior decision. Shields v. Shetler, 120 F.R.D. 123, 126 (D. Colo. 1988).
In its motion for reconsideration, PEIC argues that the third situation cited above
is operative. It argues that the March 23rd order improperly applied the declaratory judgment
exception to the doctrine of res judicata and failed to address PEIC’s argument that the
exception does not apply here because the Louisiana Coverage Action was not limited to seeking
declaratory relief. PEIC argues in the alternative that, even if this Court were to apply the
declaratory judgment exception, reconsideration would be warranted because the post-1984
policies at issue in the instant action were also at issue in the prior action.
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In support of its argument that the declaratory judgment exception does not apply,
PEIC points to the Restatement (Second) of Judgment § 22, comment c, which states: “When a
plaintiff seeks solely declaratory relief, the weight of authority does not view [the plaintiff] as
seeking to enforce a claim against the defendant.” (emphasis added.) PEIC argues that “it is
beyond dispute that [Bridgestone/FP] sought coercive relief in addition to seeking a declaratory
judgment in the Louisiana Coverage Action because its Complaint also asserted a separate cause
of action for breach of contract against [PEIC] and sought compensatory damages, penalties and
attorney’s fees.” (Doc. No. 18-1 at 859-60.)
After studying PEIC’s argument on reconsideration, the Court concludes that its
original Memorandum Opinion and Order erred in two respects: (1) by concentrating too much
on the entire record of the Louisiana Coverage Action rather than simply comparing the scope of
its complaint with that of the instant complaint;2 and (2) by discussing the declaratory judgment
exception at all, because it does not apply here where the Louisiana Coverage Action did not
seek solely declaratory relief.
In its Memorandum Opinion and Order of March 23, 2012 (Doc. No. 16), this
Court erred in concluding that the claims and policies in the instant action were not included in
the Louisiana Coverage Action. The Court’s error was in concentrating on the entire record of
that case, rather than confining the inquiry to a comparison of the two complaints. When the
proper comparison is made, it is apparent that the instant action is barred by res judicata.
To establish the defense of res judicata, defendant must show: (1) there is a final
decision on the merits in the first action by a court of competent jurisdiction; (2) the second
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In considering the original motion to dismiss, as well as on reconsideration, the Court is permitted to “take judicial
notice of other court proceedings without converting the motion into one for summary judgment.” Buck v. Thomas
M. Cooley Law Sch., 597 F.3d 812, 816 (6th Cir. 2010) (citing Winget v. JP Morgan Chase Bank, N.A., 537 F.3d
565, 576 (6th Cir. 2008)).

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action involves the same parties, or their privies, as the first; (3) the second action raises an issue
actually litigated or which should have been litigated in the first action; and (4) there is identity
of claims. Walker v. Gen. Tel. Co., 25 Fed. App’x 332, 336 (6th Cir. 2001). Defendant has made
all four showings.
First, there was a final decision on the merits in the Louisiana Coverage Action,
including an affirmance on appeal. Second, the parties or their privies are the same in both cases.
Third and fourth, although the complaint in the Louisiana Coverage Action never specifically
identified the insurance policies under which Bridgestone/FP asserted its rights and the
defendants’ obligations, the complaint therein was very broadly written to include all the
insurance policies covering the plaintiffs in the so-called Blackwell Lawsuit. See Doc. No. 12-2
at 298-99, ¶¶ 12-14.3 The Louisiana district court ruled first on the issue of “bodily injury by
disease” and subsequently declared all claims barred by res judicata. It entered final judgment
stating that it had “resolved all of the remaining issues . . . through summary judgment rulings
issued orally on April 20, 2009[,]” (Doc. No. 16 at 845). The appeal to the Fifth Circuit “from
the district court’s final order disposing of all parties’ claims[]” was unsuccessful; the Fifth
Circuit affirmed the judgment of the district court. If the plaintiffs there thought that the district
court’s dismissal of all the claims was improper, the appropriate forum for immediately
addressing any such error was in that district court and/or the court of appeals.

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It is clear from the record that the plaintiffs (Bridgestone/FP) in the Louisiana Coverage Action (who are also the
plaintiffs herein) were well aware of the existence of all of the insurance policies, including the two at issue in the
instant action, prior to the time the Louisiana Coverage Action was filed on February 1, 2008, because William
Victory, Claims Manager at Marsh USA, Inc. filed an affidavit on behalf of plaintiffs with an attached letter that he
sent to ACE USA, Inc. (the successor to PEIC), that specifically identified the policies. The letter, dated August 17,
2005, notified the insurance company of the Blackwell Lawsuit and the claims being made against Bridgestone/FP.
See Doc. No. 12-3 at 334, 335 (referencing the two policies).

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In light of this revised conclusion that all of the insurance policies, including the
two at issue here, were in fact within the scope of the Louisiana Coverage Action, PEIC is
correct that the declaratory judgment exception does not apply here to save the instant complaint
from dismissal because the Louisiana Coverage Action was one for both declaratory relief and
breach of contract against PEIC and the other insurance companies.

III. CONCLUSION
For the reasons set forth above, Doc. No. 18 is GRANTED and, upon
reconsideration, the Court VACATES Doc. No. 16 to the extent it denied defendant’s motion to
dismiss. This case is hereby DISMISSED on the grounds of res judicata.

IT IS SO ORDERED.

Dated: February 27, 2013
HONORABLE SARA LIOI
UNITED STATES DISTRICT JUDGE

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