Larson v. Auto Owners Insurance Company
Filing
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ORDER denying 31 Motion for Reconsideration. Signed by U.S. District Judge Karen E. Schreier on 10/11/2013. (KC)
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION
LAWRENCE W. LARSON,
Plaintiff,
vs.
AUTO OWNERS INSURANCE
COMPANY a Subsidiary of Parent
Company AUTO OWNERS
INSURANCE GROUP,
Defendant.
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CIV. 12-4020-KES
ORDER DENYING PLAINTIFF’S
MOTION FOR RECONSIDERATION
Plaintiff, Lawrence Larson, moves the court to reconsider its
September 12, 2012, order in which it found Minnesota law applied to his bad
faith failure to settle claim. Defendant, Auto Owners Insurance Company,
resists the motion. For the following reasons, the motion is denied.
BACKGROUND
In 2008, Larson obtained auto insurance from Auto Owners for himself
and his business, Minne-Bleha Drilling Company, because he was working
and temporarily living in Minnesota at that time. Docket 10 at 2, 14; Docket 73 at 2. Larson purchased the insurance from Auto Owners through an agent
located in St. Paul, Minnesota. Docket 1 at 1.
On May 15, 2008, while covered under the above-mentioned insurance
policy, Larson was involved in an automobile accident in Hugo, Minnesota.
The other driver was determined to be 100 percent at fault. Larson accepted
tender of $100,000 from the insurance company of the other driver, which was
the full auto-policy liability limit. Following acceptance of the $100,000,
Larson filed an underinsured motorist claim on July 27, 2011, with Auto
Owners pursuant to his insurance contract.
Auto Owners contacted Larson on September 15, 2011, indicating that
the claim was forwarded to attorney Timothy Tobin. Docket 10 at 4. Larson
then filed a complaint with the Minnesota Department of Revenue (MDR) on
October 19, 2011, asking the MDR to impose a penalty on Auto Owners for
their delayed response to Larson’s claim. The MDR imposed a penalty of
$2,500 on Auto Owners. Docket 10 at 4.
Because the parties do not agree on the value of Larson’s underinsured
motorist claim, Larson and Auto Owners have not reached a settlement on
such claim. Auto Owners filed an action seeking a declaratory judgment on
the value of the claim in the Fourth Judicial District Court, Hennepin County,
Minnesota.1 On February 7, 2012, one day after being served with Auto
Owners’s complaint, Larson filed an action in this court, alleging claims for
breach of contract, bad faith, and punitive damages. Docket 1.
Following Auto Owners’ motion to dismiss or, alternatively, stay Larson’s
claims, this court dismissed Larson’s bad faith and punitive damages claims
1
Auto Owners served Larson with a summons and complaint on
February 6, 2012, in Moody County, South Dakota. Docket 7-1.
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and stayed Larson’s breach of contract claim pending resolution of the
Minnesota state court proceeding. Applying South Dakota choice of law rules,
the court determined that Minnesota law applied to Larson’s claims for bad
faith and punitive damages. This finding resulted in the dismissal of such
claims.
On April 8, 2013, the Minnesota Court of Appeals dismissed Auto
Owners’ declaratory judgment action, finding that the dispute between the
parties is not appropriate for a declaratory judgment action. As a result of the
decision of the Minnesota Court of Appeals, Larson now moves this court to
reconsider its order dismissing his claims.
STANDARD OF REVIEW
The Federal Rules of Civil Procedure generally do not recognize uniform
standards for a court to analyze a motion to reconsider. It is clear, however,
that a “district court has the inherent power to reconsider and modify an
interlocutory order any time prior to the entry of judgment.” K.C. 1986 Ltd.
P’ship v. Reade Mfg., 472 F.3d 1009, 1017 (8th Cir. 2007). Here, Larson made
his motion pursuant to Rule 54(b), which provides that “any order or other
decision . . . that adjudicates fewer than all the claims or the rights and
liabilities of fewer than all the parties . . . may be revised at any time before
the entry of a judgment adjudicating all the claims and all the parties’ rights
and liabilities.” Auto Owners, on the other hand, contends Larson’s motion
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should be analyzed under the more rigorous standards of either Rule 59(e) or
Rule 60(b). The court finds the outcome here would be the same regardless of
which standard is applied. The court therefore applies the standard proposed
by Larson: “Motions for reconsideration serve a limited function: to correct
manifest errors of law or fact or to present newly discovered evidence. . . . [A]
motion for reconsideration should not serve as the occasion to tender new
legal theories for the first time.” Docket 32 at 2 (quoting Hagerman v. Yukon
Energy Corp., 839 F.2d 407, 414 (8th Cir. 1988)).
DISCUSSION
Larson argues the court should reconsider its choice of law analysis in
its September 12, 2012, order in which it determined Minnesota law applied to
Larson’s bad faith claim2 because of the recent decision of the Minnesota
Court of Appeals. Larson asserts the decision by the Minnesota Court of
Appeals affects the choice of law analysis and demands a different conclusion
as to which state’s law applies to Larson’s bad faith claim.
The issue before the Minnesota Court of Appeals was whether Auto
Owners could bring a declaratory judgment action against Larson when the
only dispute between the parties is how much Auto Owners owes Larson
under the insurance policy. Auto-Owners Ins. Co. v. Larson, A12-1509 (Minn.
Ct. App. Apr. 8, 2013), at Docket 27-1. The Minnesota Court of Appeals found
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Larson’s claim for punitive damages arises out of his bad faith claim.
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that this question was a dispute of fact and not merely a declaration of the
rights, status, or legal relations of the parties, and therefore, it was not
appropriate for a declaratory judgment action. Id. The Court of Appeals further
stated that allowing Auto Owners to initiate a declaratory judgment action
under this situation would circumvent the general public policy notion that
favors injured parties initiating lawsuits. Id. Thus, Auto Owners’ declaratory
judgment action was dismissed.
Larson argues that the decision of the Minnesota Court of Appeals
necessitates a different conclusion when this court applies the choice of law
analysis to Larson’s bad faith claim. But Larson’s argument fails because the
court did not rely on the fact that Auto Owners had filed a declaratory
judgment action when determining that Minnesota law applied to Larson’s bad
faith claim. Docket 23 at 6-13. Instead, the court employed the most
significant relationship test3 to the facts presented by the parties—which did
not rely on any facts pertaining to Auto Owners’ declaratory judgment action—
and found that Minnesota has the most significant relationship to Larson’s
3
As discussed in the September 12, 2012, order, South Dakota law
requires the court to consider the nature of the action to determine which
state’s law to apply. Larson’s bad faith claim is a hybrid between a contract
action and a tort action, and South Dakota has yet to determine which choice
of law provisions govern bad faith claims. The court previously found
Minnesota law would apply regardless of whether Larson’s bad faith claim was
analyzed as a contract or tort claim. Larson’s motion for reconsideration only
addresses the court’s tort analysis in which it applied the most significant
relationship test.
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claim. Larson has not provided the court with any new facts or law that would
alter the court’s previous determination. Rather, Larson simply attempts to
reargue the issues this court previously addressed.
The court finds Larson’s arguments equally as unpersuasive now as
they were over a year ago. Nothing pertinent to the issue has changed. No new
evidence has come to light that would change this court’s choice of law
analysis, and no new law has been formulated on the topic. Thus, the court’s
September 12, 2012, order remains in effect. Accordingly, it is
ORDERED that Larson’s motion for reconsideration (Docket 31) is
denied.
IT IS FURTHER ORDERED that the parties’ response to the court’s prior
Order for Form 52 Report (Docket 30) is due by November 1, 2013.
Dated October 11, 2013.
BY THE COURT:
/s/ Karen E. Schreier
KAREN E. SCHREIER
UNITED STATES DISTRICT JUDGE
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