Walsh et al v. State Farm Fire and Casualty Company
MEMORANDUM OPINION OF THE COURT & ORDER re 41 MOTION to Alter Judgment and/or in the Alternative Rule 60(b) Motion for Relief from Final Judgment. For the foregoing reasons, the Homeowners' Motion to Alter or Amend Judgment and/or For Relief from Final Judgment is hereby DENIED. Signed by District Judge Aleta A. Trauger on 8/17/17. (DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(am)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF TENNESSEE
JAMES WALSH and BELINDA
STATE FARM FIRE AND CASUALTY )
Case No. 3:15-cv-1036
Judge Aleta A. Trauger
MEMORANDUM & ORDER
Pending before the court is a Rule 59(e) Motion to Alter or Amend Judgment and/or in
the Alternative Rule 60(b) Motion for Relief From Final Judgment (Docket No. 41) filed by the
plaintiffs, James and Belinda Walsh (the “Homeowners”). For the reasons discussed herein, this
motion will be denied.
BACKGROUND & PROCEDURAL HISTORY
This insurance dispute arises from allegations that the defendant, State Farm Fire &
Casualty Company (“State Farm”), denied the Homeowners’ insurance claim for damage to their
property that was caused by sinkhole activity, despite the fact that the Homeowners had met all
conditions of their insurance policy with State Farm and the policy covered sinkhole damage.
(Docket No. 1-2.) A breach of contract action was initially filed by the Homeowners on June 19,
2015 against State Farm (Docket No. 1-2) and was removed to federal court on September 28,
2015 (Docket No. 1). An Initial Case Management Order was entered on December 22, 2015.
(Docket No. 11 (the “CMO”).) Among other deadlines, the CMO ordered that the Homeowners
must identify and disclose all expert witnesses and reports by July 1, 2016; that all depositions of
expert witnesses must be taken by October 1, 2016, and that all dispositive motions must be filed
by October 1, 2016.
On August 11, 2016, after the CMO deadline for the Homeowner’s expert disclosures
had passed, the parties filed a Joint Mediation Report, indicating that they were attempting to
schedule mediation over the coming months. (Docket No. 12.) Then, on December 9, 2016,
after the CMO deadline for the filing of dispositive motions had passed, the parties filed a joint
Motion to Continue Trial Pending Mediation, indicating that the parties were in the process of
mediating a settlement and would move for a new case management order in the event the
mediation was unsuccessful and new deadlines were needed. (Docket No. 13.) The court
granted this motion. (Docket No. 14.)
On February 24, 2017, State Farm filed a Motion for Summary Judgment. (Docket No.
15.) Subsequently, the Homeowners filed a Motion for Extension of Time to Respond to
Defendant’s Motion for Summary Judgment, noting that depositions had been postponed during
mediation efforts, and asking to extend the response deadline until thirty days after the
Homeowners’ deposition of State Farm’s corporate representative in late March. (Docket No.
23.) The court entered an Order granting the Homeowners permission to respond to State Farm’s
Motion for Summary Judgment within 30 days after deposing State Farm’s corporate
representative and ordering the Homeowners to file notice with the court when the deposition
was scheduled. (Docket No. 24.) On April 27, 2017, the Homeowners filed a Notice with the
court stating that the deposition of State Farm’s corporate representative had taken place on April
5, 2017. (Docket No. 28.) The following day, the court entered an Order requiring the
Homeowners to respond to State Farm’s pending Motion for Summary Judgment by May 5,
2017 and allowing State Farm to file a Reply by May 19, 2017. (Docket No. 29.) The parties
filed their respective Response and Reply, briefing the merits of State Farm’s Motion for
Summary Judgment, in accordance with that Order. (Docket Nos. 30, 34.)
Nowhere in their briefing on State Farm’s Motion for Summary Judgment, or elsewhere
in the record, did the Homeowners argue that State Farm’s Motion for Summary Judgment
should be denied as untimely pursuant to the CMO or indicate any objection to the court’s
considering the motion on the merits. Nor did the Homeowners ever indicate to the court that
they needed additional time to develop the factual record prior to the consideration of the motion,
beyond their initial request to extend the briefing schedule until the deposition of State Farm’s
corporate representative was concluded.1
On July 17, 2017 the court granted State Farm’s Motion for Summary Judgment on the
merits. (Docket No. 37.) In the accompanying Memorandum, the court held that the
Homeowners had failed to meet their burden of demonstrating a triable issue of fact as to
whether State Farm had improperly denied their insurance claim. (Docket No. 36 (the “Prior
Opinion”).) In reaching this conclusion, the court first found that the expert report of Sonny
Gulati of Florida Testing and Environmental, Inc. proffered by the Homeowners (Docket No. 161) and the Affidavit of Sonny Gulati (Docket No. 30-3) (collectively, the “Gulati Opinions”)
comprised the sole evidence to support the Homeowners’ position but were inadmissible under
Rule 26(a)(2)(B), Federal Rule of Evidence 702, and Daubert v. Merrell Dow Pharm., Inc., 509
U.S. 579, 589-90 (1993). The court’s analysis regarding the admissibility of the Gulati Opinions
is discussed more fully in the Prior Opinion but, briefly, the court found that Mr. Gulati did not
properly explain his methodology for either his opinion that the damage to the Homeowner’s
The Homeowners assert that State Farm refused to “agree to allow the Homeowners to add a
geologist for trial” after State Farm filed its Motion for Summary Judgment. (Docket No. 41, p.
2, n. 2.) This request, however, was never before the court.
property may have been caused by sinkhole activity or for his opinion that the experts retained
by State Farm erred in concluding that the damage was not caused by sinkhole activity. On the
same day, the Clerk filed an Entry of Judgment dismissing the case. (Docket No. 38.)
On August 14, 2017, the Homeowners filed the currently pending Motion to Alter or
Amend Judgment and/or in the Alternative Motion for Relief From Final Judgment, arguing that
the final judgment against them should be set aside under Rule 59(e) or Rule 60(b)(1). (Docket
No. 41.) The Homeowners argue for the first time that the court was wrong to have considered
State Farm’s Motion for Summary Judgment because it was untimely under the CMO.
Alternatively, the Homeowners argue, also for the first time, that the court should have granted
the Homeowners additional time to supplement the Gulati Opinions because the dismantling of
the CMO in December of 2016 meant that no expert disclosure deadline had passed at the time
the Motion for Summary Judgment was considered. Finally, the Homeowners argue that the
court incorrectly reached the conclusion that Mr. Gulati’s report is inadmissible and that
summary judgment is proper. Attached to the Homeowners’ Motion is the transcript of the May
9, 2017 deposition of Sonny Gulati (Docket No. 41-1) as well as the transcript of the March 24,
2017 deposition of Bernd T. Rindermann in a separate action (Docket No. 41-2).2
Under Rule 59(e), a court may alter or amend a judgment based on: (1) a clear error of
law; (2) newly discovered evidence; (3) an intervening change in controlling law; or (4) a need to
The Rindermann Deposition transcript was previously attached to the Homeowners’ Response
to State Farm’s Motion for Summary Judgment. (Docket No. 30-4.) Mr. Rindermann is one of
the experts who prepared a report on behalf of State Farm that was used to support State Farm’s
initial denial of the Homeowners’ insurance claim. This report was also placed in the record in
support of State Farm’s Motion for Summary Judgment. The Homeowners cite to the
Rindermann Deposition to support their position that it is standard in the industry to rely on
subsurface data collected by others to opine about the presence or absence of sinkhole activity
and, therefore, the Gulati Opinions – which purportedly rely on data collected by State Farm’s
experts – are proper and admissible.
prevent manifest injustice. Leisure Caviar, LLC v. U.S. Fish & Wildlife Serv., 616 F.3d 612, 615
(6th Cir. 2010). A motion under Rule 59(e) is not, however, a vehicle for presenting new legal
arguments that could have been raised before a judgment was issued. Roger Miller Music, Inc. v.
Sony/ATV Publ’g, LLC, 477 F.3d 383, 395 (6th Cir. 2007); Leisure Caviar, 616 F.3d at 616
(noting movant “cannot use a Rule 59 motion to raise arguments which could, and should, have
been made before judgment issued”). In the Sixth Circuit, “[t]he grant or denial of a Rule 59(e)
motion is within the informed discretion of the district court, reversible only for abuse.” Betts v.
Costco Wholesale Corp., 558 F.3d 461, 467 (6th Cir. 2009) (quoting Scotts Co. v. Central
Garden & Pet Co., 403 F.3d 781, 788 (6th Cir. 2005)).
Rule 60(b)(1) provides that relief from a final judgment may be granted due to “(1)
mistake, inadvertence, surprise, or excusable neglect.” The Sixth Circuit has stated that Rule
60(b)(1) “is intended to provide relief in only two situations: (1) when a party has made an
excusable mistake or an attorney has acted without authority, or (2) when the judge has made a
substantive mistake of law or fact in the final judgment or order.” United States v. Reyes, 307
F.3d 451, 455 (6th Cir. 2002) (citation omitted). “[R]elief under Rule 60(b) is circumscribed by
public policy favoring finality of judgments and termination of litigation.” Ford Motor Co. v.
Mustangs Unlimited, Inc., 487 F.3d 465, 468 (6th Cir. 2007) (citations and internal quotation
marks omitted). Whether to grant a motion under Rule 60(b) is left to the sound discretion of the
district court. Tyler v. Anderson, 749 F.3d 499, 509 (6th Cir. 2014).
The Homeowners, apparently dissatisfied with the court’s granting of State Farm’s
Motion for Summary Judgment, have now raised for the first time the argument that the court
should not have considered State Farm’s Motion for Summary Judgment on the merits because it
was untimely under the CMO or because the Homeowners had not yet had a full opportunity to
develop the record. This argument is without merit. When the court granted the parties’ jointly
filed Motion to Continue Trial Pending Mediation in December of 2016, the court understood the
parties to have made the mutual decision to disregard the CMO deadline for the filing of
dispositive motions in light of their ongoing efforts to resolve this dispute through mediation.
The parties had previously filed a Joint Mediation Report, bringing their mediation efforts to the
court’s attention, after the CMO deadline for the Homeowners’ expert disclosures had passed but
prior to the dispositive motion deadline. Once the court granted the parties’ Motion to Continue
Trial, the parties were no longer bound by the CMO deadlines, and it was the court’s
understanding that deadlines would be reset as needed to resolve this matter going forward. In
February of 2017, when State Farm filed its Motion for Summary Judgment, the Homeowners
should have immediately raised any objections to the court’s consideration of the Motion on the
merits or any request for additional time to supplement the record. The Homeowners did not,
however, raise any such arguments on the record.
Instead, the Homeowners responded to State Farm’s Motion for Summary Judgment by
expressly moving the court for an extension of time to respond, only to allow the Homeowners to
complete their deposition of State Farm’s corporate representative, a request that the court
granted. The subsequent briefing schedule set by the court for the Motion for Summary
Judgment clearly supplanted all deadlines previously indicated in the disregarded CMO. Indeed,
the Homeowners followed this briefing schedule and opposed State Farm’s Motion for Summary
Judgment solely on the merits and based on the record before the court at that time. The
Homeowners cannot now argue that the court’s consideration of this motion was unfair to them,
either due to their belief that the CMO should have applied to bar State Farm’s filing of a
dispositive motion or due to their need for additional time to supplement the record. The court
did not make a mistake of law or fact in deciding the Motion on the merits but, rather, followed
the parties’ representations on the record indicating that that was what they wished the court to
do. Simply because the Homeowners are displeased with the court’s ultimate decision does not
make it proper or equitable for the Homeowners to now ask for a second opportunity to
supplement the record or to rely on the CMO that they conceded to disregard as a basis for
overturning the court’s grant of summary judgment and allowing this case to proceed to trial.
The Homeowners argue that the court acted inconsistently by disregarding the CMO with
respect to the dispositive motion deadline but simultaneously relying on the CMO deadline for
the Homeowners’ expert disclosures in finding the record to be fully developed at the time the
Motion for Summary Judgment was decided. The Homeowners, however, misunderstand the
court’s actions. The true reason the court considered the record to be fully developed at the time
State Farm’s Motion for Summary Judgment was decided is not solely because of the CMO
deadline but, rather, because of the parties’ representations that they agreed to the briefing
schedule and their filing of briefs that addressed the issues on the merits without requesting
additional time to supplement the record. In fact, the Homeowners specifically requested that the
deadline to respond to State Farm’s Motion for Summary Judgment be set within a particular
timeframe, and the court granted that request. The court, thus, had every reason to believe that
the Homeowners did not intend to supplement the record further and were prepared to defend
their claims based on the record at that point in time, which is what the Homeowners in fact did
in their Response to State Farm’s Motion for Summary Judgment. The Homeowners cannot now
argue that they have been unfairly harmed by the court’s consideration of the Motion on the
merits, based on the record before the court at the time, simply because the Homeowners’
opposition to the motion, also made on the merits and based on that same record, was
unsuccessful. To the contrary, it would be highly unfair to State Farm to now allow the
Homeowners a second bite at the apple after State Farm’s Motion for Summary Judgment has
already been decided based upon a briefing schedule that was apparently agreed to by the parties
and based solely on the issues raised in the parties’ briefs.
Finally, with respect to the Homeowner’s argument that the court improperly held the
Gulati Opinions to be inadmissible, the court finds that this argument is wholly without merit.
Without fully repeating the court’s grounds for finding the Gulati Opinions inadmissible, which
are discussed fully in the Prior Opinion, the court finds that the arguments now raised by the
Homeowners do not change the court’s conclusion with respect to this issue. First, the court
finds irrelevant the Homeowners’ argument that it is proper for an expert to rely on testing
conducted by someone else in reaching his or her conclusions, as Mr. Gulati did. What the
Homeowners overlook in making this argument is that the court did not find the Gulati Opinions
to be inadmissible simply because Mr. Gulati purportedly relied on testing data from State
Farm’s experts. Rather, the court found that Mr. Gulati did not sufficiently explain the
methodology supporting his opinions that were based on that data; nor did he explain the
methodology behind his opinion that State Farm experts’ conclusions were incorrect.
Second, the Homeowners’ argument that the Gulati Opinions are admissible because
State Farm has had the opportunity to depose Mr. Gulati about his methodology subsequent to
the filing of its Motion for Summary Judgment is equally without merit. For the reasons
discussed above, the court finds that the Gulati Opinions were properly held inadmissible based
on the evidence that was in the record at the time the Motion for Summary Judgment was
properly considered. Moreover, the Homeowners do not point to any particular testimony by
Mr. Gulati in his deposition transcript that serves to sufficiently explain his methodology so as to
render the Gulati Opinions admissible. Further, the court’s review of Mr. Gulati’s deposition
transcript that has now been placed in the record does not reveal any testimony that could serve
to rehabilitate the Gulati Opinions and, thus, the court finds that the record on the pending
Motion only further confirms the court’s finding in the Prior Opinion that the Gulati Opinions
are inadmissible. As a result, as stated in the Prior Opinion, absent the admissibility of the Gulati
Opinions, the plaintiffs cannot meet their burden to create a triable issue of fact, and this case
was properly dismissed.
For the foregoing reasons, the Homeowners’ Motion to Alter or Amend Judgment and/or
For Relief from Final Judgment is hereby DENIED.
It is so ORDERED.
Enter this 17th day of August 2017.
ALETA A. TRAUGER
United States District Judge
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