LM Insurance Corporation et al v. Szuhay
Memorandum of Opinion and Order For the reasons set forth herein, Plaintiffs' Motion for Indicative Ruling Pursuant to Fed. R. Civ. P. 62.1 (ECF No. 41 ) is granted in part, and denied in part. The Court denies Defendant's request to issue a ruling indicating that Defendant's motion for relief from judgment raises a substantial issue and that, on remand, the Court would grant the motion. The Court indicates and hereby certifies under Fed. R. Civ. P. 62.1(a)(2) that it de nies Defendant's Motion for Relief from Judgment or Order, Pursuant to Fed. R. Civ. P. 60(b) (ECF No. 37 ) for the reasons previously discussed. Moreover, Defendant's request to "amend the counterclaim" (ECF No. 37 at PageID #: 442-43) is denied. Judge Benita Y. Pearson on 5/19/2017. (JLG)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
LM INSURANCE CORPORATION, et al.,
CASE NO. 5:15CV2647
JUDGE BENITA Y. PEARSON
MEMORANDUM OF OPINION AND
ORDER [Resolving ECF Nos. 37 and 41]
Pending is the Motion for Indicative Ruling Pursuant to Fed. R. Civ. P. 62.1 (ECF No.
41) filed by Defendant/Counter-Claimant Amanda Criss, Administratix for the Estate of George
Szuhay (“Defendant”).1 Plaintiff/Counter-Defendant LM Insurance Corporation (“Plaintiff”) has
responded (ECF No. 42); Defendant replied (ECF No. 43). Also pending is Defendant’s Motion
for Relief from Judgment or Order, Pursuant to Fed. R. Civ. P. 60(b) (ECF No. 37) to which
Plaintiff has responded (ECF No. 39); Defendant replied (ECF No. 40). The Court has been
advised, having reviewed the record, the parties’ briefs and the applicable law. For the reasons
Having entered final judgment and with an acknowledged appeal pending, the
Court denied without prejudice to it being re-filed before the Sixth Circuit (No. 16-4761)
the Notice of Suggestion of Death and Motion to Substitute Party (ECF No. 34) filed by
Amanda Criss, Administratix for the Estate of George Szuhay. See ECF No. 36.
Defendant subsequently filed a Motion to Substitute Party (ECF No. 43-1; Doc. 12 in No.
16-4761) and the Sixth Circuit granted substitution. See ECF No. 43-2; Doc 13 in No.
16-4761. Accordingly, the Court grants Defendant’s request to substitute Amanda Criss,
Administratix for the Estate of George Szuhay, as party before the Court solely for the
purpose of this indicative ruling. See ECF No. 43 at PageID #: 479.
set forth below, the Court grants, in part, Defendant’s motion for indicative ruling and denies
Defendant’s motion for relief from judgment.
I. Background & Procedural History
In this action, Plaintiff moved the Court to render judgment that it had no obligation
under a commercial general liability insurance policy (the “CGL Policy”) to satisfy the judgment
resulting from Defendant’s underlying action against non-party Empire Dies Casting Co., Inc.
(“Empire”) for employer intentional tort and premises liability. ECF No. 11. On November 29,
2016, the Court issued its Memorandum of Order and Opinion (ECF No. 31) and Judgment Entry
(ECF No. 32) in favor of Plaintiff and declaring that Plaintiff had no obligation under the CGL
Policy to satisfy the judgment. ECF No. 31 at PageID #: 418. On December 28, 2016,
Defendant filed a Notice of Appeal to the Sixth Circuit. ECF No. 35. On February 1, 2017,
Defendant filed a Motion for Relief from Judgment or Order, Pursuant to Fed. R. Civ. P. 60(b)
(ECF No. 37). Defendant acknowledges that, because an appeal has been docketed and is
pending before the Sixth Circuit (No. 16-4761), the Court does not presently have jurisdiction to
consider Defendant’s motion for relief. ECF No. 41 at PageID #: 469. Therefore, Defendant
moves the Court for an indicative ruling pursuant to Fed. R. Civ. P. 62.1. The matter is now ripe
II. Legal Standards
A. Indicative Ruling
Federal Rule of Civil Procedure 62.1(a) provides:
If a timely motion is made for relief that the court lacks authority to
grant because of an appeal that has been docketed and is pending, the
(1) defer considering the motion;
(2) deny the motion; or
(3) state either that it would grant the motion if the court of appeals
remands for that purpose or that the motion raises a substantial issue.
Fed. R. Civ. P. 62.1. Moreover, the Advisory Committee Notes to Rule 62.1 explain:
Often it will be wise for the district court to determine whether it in
fact would grant the motion if the court of appeals remands for that
purpose. But a motion may present complex issues that require
extensive litigation and that may either be mooted or be presented in
a different context by decision of the issues raised on appeal. In such
circumstances the district court may prefer to state that the motion
raises a substantial issue, and to state the reasons why it prefers to
decide only if the court of appeals agrees that it would be useful to
decide the motion before decision of the pending appeal. The district
court is not bound to grant the motion after stating that the motion
raises a substantial issue; further proceedings on remand may show
that the motion ought not be granted.
See Fed. R. Civ. P. 62.1 advisory committee’s note to 2009 adoption.
B. Relief from Judgment
Federal Rule of Civil Procedure 60(b) permits a district court to grant a motion for relief
from the judgment for any of the following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect; (2) newly
discovered evidence that, with reasonable diligence, could not have
been discovered in time to move for a new trial under Rule 59(b); (3)
fraud (whether previously called intrinsic or extrinsic),
misrepresentation, or misconduct by an opposing party; (4) the
judgment is void; (5) the judgment has been satisfied, released, or
discharged; it is based on an earlier judgment that has been reversed
or vacated; or applying it prospectively is no longer equitable; or (6)
any other reason that justifies relief.
Fed. R. Civ. P. 60(b).
“As a prerequisite to relief under Rule 60(b), a party must establish that the facts of its
case are within one of the enumerated reasons contained in Rule 60(b) that warrant relief from
judgment.” Lewis v. Alexander, 987 F.2d 392, 396 (6th Cir. 1993). Rule 60(b) does not permit
parties to relitigate the merits of claims, or to raise new claims that could have been raised during
the litigation of the case or in the initial complaint. Rather, the purpose of a Rule 60(b) motion is
to allow a district court to reconsider its judgment when that judgment rests on a defective
foundation. The factual predicate of a Rule 60(b) motion, therefore, deals with some irregularity
or procedural defect in the procurement of the judgment denying relief. See In re
Abdur’Rahman, 392 F.3d 174, 179-80 (6th Cir. 2004) (overruled on other grounds). It does not
afford a defeated litigant a second chance to convince the court to rule in his favor by presenting
new explanations, new legal theories, or proof. Jinks v. AlliedSignal, Inc., 250 F.3d 381, 385
(6th Cir. 2001).
III. Prior Ruling
Count One of Defendant’s counterclaim sought declaration that Defendant is entitled to
judgment and obligation of payment because the Leasing Agreement between non-parties Barnett
& Brown Personnel Services, Inc., d/b/a Integrity Staffing Services (“ISS”) and Empire was an
insured contract under the CGL Policy at issue in this action. ECF No. 31 at PageID #: 410; ECF
No. 8 at PageID #150, ¶¶ 26-31. In its prior ruling, the Court found that the CGL Policy excluded
coverage for bodily injury to a leased worker performing duties related to the conduct of Empire’s
business. See Memorandum of Opinion and Order, ECF No. 31 at PageID #: 403. The Court also
found that the CGL Policy included an exception to this bodily injury liability exclusion if Empire
assumed liability for bodily injury or property damage in an “insured contract.” Id. at PageID #: 404.
Moreover, the Court found that, the terms of the CGL Policy defined an “insured contract” as:
that part of any other . . . agreement pertaining to Empire’s business
. . . under which Empire assumes the tort liability of another party to
pay for “bodily injury” or “property damage” to a third person or
organization, provided the “bodily injury” or “property damage” is
caused, in whole or in part, by Empire or by those acting on Empire’s
Id. (emphasis added). See also id. at PageID #: 411.
The Court found that the Leasing Agreement included a reciprocal indemnification
clause that provided, in relevant part, that “[Empire] agrees that it will indemnify and hold ISS
harmless from any and all ‘Damages’ (as hereinafter defined) arising out of or related to . . . (iv)
claims of Leased Employees arising out of conduct of [Empire], such as (but not limited to) . . .
negligent or intentional (tortious) conduct[.]” Id. at PageID #: 402, 411. Accordingly, the Court
found that the Leasing Agreement is an insured contract under the CGL Policy issued by Plaintiff
because the Leasing Agreement required Empire, the insured, to assume the tort liability of
another party –namely, ISS. Id. at PageID #: 411. This finding, however, did not presume a
declaration in Defendant’s favor; nor did it preclude a declaration in Plaintiff’s favor.
The Court went on to proclaim: “Absent evidence in Defendant’s counterclaim, reply, or
the exhibits attached thereto of an action or judgment against ISS for Empire’s breach or tortious
conduct, the Court has no basis to find the indemnity clause between ISS and Empire was
triggered in Defendant’s case.” Id. From this latter point, Defendant somehow deduces that “the
Court ruled that an action or judgment against ISS is required to implicate the [Leasing
Agreement]’s indemnity provision.” ECF No. 37 at PageID #: 437.2 Based on this
(mis)understanding, Defendant alleges that “[t]he Court’s reading into the CGL that a civil action
or judgment against the indemnity is required to trigger the indemnity provision has created an
ambiguity in the CGL [Policy] because no where in the [CGL Policy] or [Leasing Agreement]
requires as such.” Id. at 439. The Court finds Defendant’s statements both troubling and
inaccurate. The Court made no such ruling. Nor did the Court import the alleged ambiguity.
Defendant seeks to enforce a state court default judgment against Empire and, pursuant to
the default judgment entry, an award to Defendant of $696,937.09 for lost wages, medical bills,
and non-economic damages. Defendant seeks payment of the judgment by Plaintiff pursuant to
Plaintiff’s coverage of Non-party Empire under the CGL Policy. See Defendant’s Counterclaim,
ECF No. 8 at PageID #: 147, ¶¶ 17-21, 31 and 40; id. at PageID #: 152, ¶¶ A-B. See also ECF
No. 31 at PageID #: 406; ECF No. 1-7. Accordingly, it is Defendant—not the Court—who
confined the alleged “tort liability” in this action by proffering to Plaintiff and the Court a
judgment in an underlying state court action and seeking declaration from the Court that Plaintiff
is obligated to fulfill that judgment.
In its Memorandum of Opinion and Order, the Court gave full consideration to the
parties’ arguments with respect to Plaintiff’s obligation to pay the judgment. In so doing, the
One of the issues raised on appeal before the Sixth Circuit is: “In an insured
contract, does the term ‘tort liability’ require a judgment be had against the indemnitee in
order to trigger the indemnity clause under a leasing agreement?” See Civil Appeal
Statement of Parties and Issues, Doc. 9 in Case No. 16-4761.
Court considered at length Defendant’s arguments and the applicable law regarding the
indemnitor-indemnitee relationship that exists between non-parties ISS and Empire. ECF No. 31
at PageID #: 408-414. The Court explained, among other things that, “Empire—the
indemnitor—is required to indemnify ISS—the indemnitee—from damages for breach of
Empire’s obligations under the Leasing Agreement and for claims of Leased Employees arising
out of Empire’s tortious conduct.” Id. at PageID #: 411. To the extent that further clarification is
needed, the “claims of Leased Employees arising out of Empire’s tortious conduct” would have
been claims against ISS, not Empire, for which Empire is obligated to indemnify ISS under the
reciprocal indemnification clause of the Leasing Agreement. Moreover, Defendant concedes this
in its pending motions when Defendant argues for the indemnification of ISS’s—not
Empire’s—tort liability. See ECF No. 37 at PageID #: 437 (“All that is required
under the CGL is to show that ISS committed some act and suffered some loss or liability for
which Empire is obligated to indemnify.”).
In its counterclaims (ECF No. 8 at PageID #: 145-53), Defendant did not present the
Court with any claim of tort liability—whether as an action, judgment or in any other form—
against ISS to which Empire was obligated to indemnify ISS pursuant to the Leasing Agreement
and the insured contract exception of the CGL Policy. Accordingly, the Court maintains its
earlier ruling that “the Court has no basis to find the indemnity clause between ISS and Empire
was triggered in Defendant's case.” ECF No. 31 at PageID #: 411.
IV. Relief from Judgment
Defendant avers two grounds for relief in its motion for relief from judgment. First,
Defendant argues that, pursuant to Rule 60(b)(1), the Court made a mistake when it “ruled that
an action or judgment against ISS is required to implicate the [Leasing Agreement]'s indemnity
provision.” ECF No. 37 at PageID #: 437. As reiterated in this writing, the Court made no such
ruling. Accordingly, the Court finds this argument unavailing. Along this same line of
argument, Defendant contends that under the terms of Leasing Agreement between Empire and
ISS, Empire was required to indemnify ISS “from any and all damages arising out of or related to
[Defendant’s] claims arising out of Empire’s conduct.” Id. Defendant avers further that the
definition of “damages” in the Leasing Agreement includes “losses.” Thus, Defendant argues
anew that: (1) the indemnity clause of the Leasing Agreement was triggered by a “showing of
some loss suffered by the indemnitee[, ISS,] as a result of [Empire’s] conduct;” (2) “the loss or
damage suffered by ISS was [the deceased’s] non-productivity that would have benefitted ISS
and the workers’ compensation3 which [ISS] was required to pay, caused, in whole or in part, by
Empire’s conduct, or those acting on its behalf[;]” and, (3) “Empire is obligated to indemnify ISS
Defendant avers that because the Leasing Agreement “obligated ISS to pay
workers’ compensation claims, and that [the deceased] sought and received workers’
compensation benefits, the payment of benefits is a loss or damage which Empire is
obligated to indemnify ISS.” ECF No. 37 at PageID #: 438. The Court notes that, to
date, counsel only seeks leave of court to supplement the record pertaining to the
deceased’s alleged workers’ compensation claim with a copy of a document that it
purports is a “First Report of Injury form” (ECF No. 40-1) that was retrieved from the
Ohio Bureau of Workers’ compensation online portal in February. ECF No. 40 at PageID
#: 460 n.2. See also ECF No. 37 at PageID #: 438 n.1. The Court grants Defendant’s
request for leave to include the attachment as part of its motion for relief from judgment.
for losses, including all losses suffered by [the deceased].” Id. Defendant did not raise these
arguments in its counterclaims (ECF No. 8 at PageID #: 145-53) nor in its opposition to
judgment on the pleadings (ECF No. 12). Moreover, Rule 60(b) does not permit parties to
relitigate the merits of claims or to raise new claims, explanations, legal theories, or proof that
could have been raised during the litigation of the case or in the initial complaint. Accordingly,
the Court finds Defendant’s first ground for relief unavailing.4
Next, Defendant raises another new argument—one not raised in his counterclaims or in
opposition to judgment on the pleadings. For the first time, Defendant invokes the “Separation
of Insureds clause” of the CGL Policy to buttress its counterclaim seeking declaratory judgment
that ISS and/or Defendant are “additional insured” covered under the CGL Policy. ECF No. 37
at PageID #: 441. Defendant avers that, pursuant to Rule 60(b)(1), the “[t]he Court erred in
construing the [Leasing Agreement] and the policy coverage afforded to ISS as an additional
insured and further erred in failing to consider an additional occurrence that provided coverage.”
Id. Defendant contends further:
The Employer’s Liability exclusion under the CGL [Policy] does not
apply in the context of ISS as an additional insured because it is a
specific right assigned to Empire that is excepted by the Separation
of Insureds provision. . . . Under the Separation of Insureds provision,
ISS’s liability as an additional insured was implicated because a
claim, albeit a workers’ compensation claim, was brought against it.
Because the Court has already addressed Defendant’s argument regarding the
import of ambiguity, infra, the argument is deemed moot for the purposes of addressing
Defendant’s arguments for relief from judgment.
Id. at PageID #: 441-42. Rule 60(b) does not permit Defendant to present this new argument in
a motion for relief from judgment. Accordingly, the Court finds Defendant's second ground does
not warrant relief under Rule 60(b).
V. Indicative Ruling
In its Motion for Indicative Ruling (ECF No. 41), Defendant argues that, pursuant to Rule
62.1(a)(3), the Court should issue a ruling indicating that “if the case were remanded, [the Court]
would grant [Defendant’s] motion or [that] it raises a substantial issue [affecting] the
interpretation and construction of insurance contracts.” ECF No. 41 at PageID #: 471.
Specifically, Defendant contends that this case raises the substantial issue of whether there is
coverage under the two exceptions asserted in its counterclaims and that the case is “in the public
interest” because it impacts the “limits of policy interpretation, coverage and exclusions” in the
insurance industry. Id. Plaintiff urges the Court to deny Defendant’s motions for indicative
ruling and relief from judgment on grounds that: (1) Defendant concedes that it is no longer
asking Plaintiff to indemnify Empire for the judgment Defendant obtained against Empire in the
underlying state court action; and (2) Defendant has abandoned “the very justiciable controversy
which initially gave rise to this action” —Defendant sought payment by Plaintiff of the judgment
Defendant obtained against Non-party Empire in the underlying state court action and alleged
that Plaintiff refused to pay the judgment amount. ECF No. 42 at PageID #: 474.
As discussed in this writing, Defendant’s motion for relief from judgment misapprehends
the Court’s prior ruling on the merits of Defendant’s counterclaims and attempts to raise
arguments anew as to the tort liability of non-parties to this action. There is no substantive issue
that would warrant a remand to the Court. At best, Defendant invites the Court to re-adjudicate
the merits of its counterclaims by considering new explanations and legal theories, and to reissue a ruling in its favor. The Court declines the invitation.
Accordingly, Plaintiffs’ Motion for Indicative Ruling Pursuant to Fed. R. Civ. P. 62.1
(ECF No. 41) is granted in part, and denied in part. The Court denies Defendant’s request to
issue a ruling indicating that Defendant’s motion for relief from judgment raises a substantial
issue and that, on remand, the Court would grant the motion. The Court indicates and hereby
certifies under Fed. R. Civ. P. 62.1(a)(2) that it denies Defendant’s Motion for Relief from
Judgment or Order, Pursuant to Fed. R. Civ. P. 60(b) (ECF No. 37) for the reasons previously
discussed. Moreover, Defendant’s request to “amend the counterclaim” (ECF No. 37 at PageID
#: 442-43) is denied.
IT IS SO ORDERED.
May 19, 2017
/s/ Benita Y. Pearson
Benita Y. Pearson
United States District Judge
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