Bancroft Life & Casualty ICC, Ltd. v. FFD Resources III, LLC
Filing
65
ORDER DENYING CONSIDERATION. ORDERED that Counterclaim Plaintiff's FFD Resources III, LLC, and FFD Ventures LP Motion for Reconsideration of the Court's June 12, 2012 Order and Incorporated Memorandum of Law 55 is DENIED. (Signed by Judge Ewing Werlein, Jr) Parties notified.(chorace)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
BANCROFT LIFE
ICC, LTD.,
&
CASUALTY
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Plaintiff,
v.
FFD RESOURCES III, LLC,
Defendant,
FFD RESOURCES III, LLC and
FFD VENTURES, LP,
Counter-Plaintiffs,
v.
BANCROFT LIFE
ICC, LTD. ,
&
CASUALTY
Counter-Defendant.
CIVIL ACTION NO. H-11-2382
ORDER DENYING RECONSIDERATION
Pending is Counterclaim Plaintiffs'
("FFD3 " )
and
FFD
Ventures
LP
FFD Resources III,
("Ventures" )
Motion
LLC
for
Reconsideration of the Court's June 12, 2012 Order and Incorporated
Memorandum of Law (Document No. 55).
In its prior Order, the Court
found that a Saint Lucia forum selection clause prevented CounterPlaintiffs
from
District of Texas.
bringing
their
counterclaims
in
the
Southern
Counter-Plaintiffs allege that newly-discovered
evidence negates the basis for this finding.
Standard of Review
An interlocutory order is subject to revision at the Court's
discretion.
See
FED.
R.
CIV.
P.
54 (b)
("any
order
or
other
decision, however designated, that adjudicates fewer than all the
claims or the rights and liabilities of fewer than all the parties
does not end the action as to any of the claims or parties and may
be revised at any time before the entry of a judgment adjudicating
all
the claims and all the parties'
rights and liabilities.").
This discretion "is exercised sparingly in order to forestall the
perpetual reexamination of orders and the resulting burdens and
delays."
Dyson,
(E.D. La. 2009)
Inc.
v.
Oreck Corp.,
(Vance, J.).
647 F.
Supp.
2d 631,
643
"A motion for reconsideration may not
be used to rehash rejected arguments or introduce new arguments."
LeClerc v. Webb, 419 F.3d 405, 412 n.13
(5th Cir. 2005); see also
Lincoln Gen. Ins. Co. v. De La Luz Garcia, 501 F.3d 436, 442
(5th
Cir. 2007)
(" [G] enerally speaking, we will not consider an issue
raised
the
for
first
(citations omitted).
time
in
a
Motion
for
Reconsideration.")
A motion to reconsider can be based on the
discovery of new evidence, but such a motion should be granted only
if "(1) the facts discovered are of such a nature that they would
probably change the outcome;
(2)
the facts alleged are actually
newly discovered and could not have been discovered earlier by
proper diligence; and (3)
the facts are not merely cumulative or
2
impeaching."
Johnson v. Diversicare Afton Oaks, LLC, 597 F.3d 673,
677 (5th Cir. 2010)
(citation and internal quotations omitted) .
Discussion
Counter-Plaintiffs' alleged new evidence is that the version
of the Saint Lucia forum selection clause enforced in the Court's
previous order was not added to the Group Policy until November 18,
2010,1 after Counter-Plaintiffs' final insurance claim was filed.
Counter-Plaintiffs assert therefore that the pre-amendment clause
governs,
and Counter-Defendant waived its right
to enforce the
clause when it filed suit on the loans in the United States.
The amended forum selection clause analyzed in the Court's
Order of June 12, 2012, read in its entirety as follows:
D.
Any action at law or in equity based upon, arising
from or in any way related to the Policy or any
Claim, including, but not limited to, benefits
payable
under
the
policy,
coverage
issues,
termination issues and premium refunds (i) must be
brought in the Courts of St. Lucia, West Indies,
which shall have exclusive jurisdiction over such
matters and (ii) the law of St. Lucia, West Indies
shall be the choice of law for all legal, equitable
or administrative purposes and proceedings arising
out of or related in any manner whatsoever to the
Policy or any Claim.
This forum selection
provision shall not apply to an action brought by
the Company to enforce the terms of any loan made
by the Company to a Certificate Holder.2
1 Document No. 55, Ex. A at 3.
2 Document No. 39-4, Ex. E at 16.
3
Before adoption of the amendment, the forum selection clause read
as follows:
4.
CONTROLLING LAW AND JURISDICTION: Any action at law
or in equity must be brought only in the Courts of
Saint Lucia, West Indies, and the law of Saint
Lucia, West Indies shall be controlling law for all
legal, equitable, or administrative purposes and
proceedings. 3
Counter-Plaintiffs show that
the
amendment quoted first
above,
along with some other amendments not pertinent here, was not made
until
November 18,
2010,
which was
three weeks
after Counter-
Plaintiffs filed the last of their insurance claims.
Counter-
Plaintiffs contend that this shows they did not ratify or otherwise
agree to the amendments.
Counter-Plaintiffs assert that because
the pre-amendment forum selection clause did not explicitly exclude
the loan claims, Counter-Defendant waived its right to enforce the
Policy's pre-amendment clause when it
Lucia.
filed suit outside Saint
Counter-Defendant replies that it does not concede that the
pre-amendment clause governs,4 but argues that if it does, the preamendment clause applied only to suits brought on the insurance
policy itself and not to suits arising out of Counter-Defendant's
3
Document No. 39-3, Ex. D at 9.
4
Document No. 59 at 7, n. 5.
4
commercial loan program. s
The 2010 amendment, they contend, simply
made this more explicit. 6
Assuming that the pre-amendment forum
selection clause in the Policy applies to the Policy as CounterPlaintiffs contend,
the Court will consider whether such should
change the holding of the Order signed June 12, 2012.
Federal
law governs not only whether an enforceable
forum
selection clause exists, but also whether a lawsuit falls within
the scope of the clause.
Blueskygreenland Envtl. Solutions, LLC v.
Rentar Envtl. Solutions, Inc., 4:11-CV-01745, 2011 WL 6372842, at
*4 (S.D. Tex. Dec. 20, 2011) reconsideration denied, 4:11-CV-01745,
2012 WL 423399
(S.D. Tex. Feb. 8, 2012).
Courts should "look to
the language of the parties' contracts to determine which causes of
action are governed" by a forum selection clause.
Shipping, Ltd. V. Sebastian, 143 F.3d 216, 222
Marinechance
(5th Cir. 1998).
The language of the Policy's pre-amendment forum selection
clause--entitled
"CONTROLLING LAW AND JURISDICTION" --is
one
of
numerous clauses in the Claims Made Group Business Income and Risk
Policy issued by Bancroft.
It is therefore in the context of the
Policy itself that the clause requires that "[a]ny action at law or
in equity must be brought only in the Courts of Saint Lucia.
There
is no
extends
the
language
shown to be
Policy's
forum
S
Id.
selection
Id. at 5-8.
6
included
at 7.
5
in the
clause
to
"
Policy that
any
separate
contract, in this instance, the loan transactions, made by Bancroft
and FFD3.
See,
e.g., National Union Fire Ins. Co. of Pittsburgh,
PA. v. United Transp. Union Ins. Ass'n, No. Civ. A. H-05-4159, 2006
WL 456267,
at *1,
*2
(S.D. Tex.
Feb.
23,2006)
(Forum selection
clause in a separate Undertaking Agreement was not binding on the
insurance company because" [t] he Policy is a separate contract from
the Undertaking Agreement,
and the dispute regarding the Policy
does not involve interpretation of the Undertaking Agreement in any
way.") . 7
Like the dispute in National Union, the disputes here involve
obligations
under
two
separate
contracts. 8
The
"Membership
Application for Group Benefits" ("Application"), which resulted in
the Policy being issued, was signed by Richard Clay as "President
of the General Manager" of Ventures. 9
Neither the Application nor
Compare Blueskygreenland Envtl. Solutions, LLC v. Rentar
Envtl. Solutions, Inc., 4:11-CV-01745, 2011 WL 6372842 (S.D. Tex.
Nov. 14, 2011)
(holding that forum selection clause in sole
agreement between the plaintiff and defendant, which stated "[i]f
any lawsuit between the parties should arise, the dispute will be
resolved exclusively in Florida State courts
" (emphasis
added), applied to action against defendant for his having made
separate agreements with others to launch a new business enterprise
in India to the detriment of the plaintiff) .
7
Compare Bancroft Life & Casualty ICC, Ltd. v. FFD Resources
II, LLC., 4:11-cv-02384, 2012 WL 3185965, at *16 (S.D. Tex. Aug. 2,
2012) (Harmon, J.) ("[t]he loan dispute and the insurance dispute
involve different parties, different transactions, and different
time periods.
. Moreover, the Notes do not mention Ventures nor
any Certificate of Insurance involved in the insurance dispute.")
8
9
Document 21, Ex. N.
6
the pre-2010 Group Policy issued under it is shown at any point to
reference Counter-Defendant' s loan program. 10
other hand,
Application or Policy.11
executed by FFD3' s
in
on the
are separate contracts between Counter-Defendant as
Holder and FFD3 as Maker,
Public
The Notes,
Harris
and make no mention of the insurance
The Notes and Security Agreements were all
representative Jeanne Wint,
County,
Texas. 12
before a Notary
Furthermore,
observed in its June 12,2012 Order,
as
the
Court
"[t]he Notes and Security
Agreements expressly provide that they are governed by Texas law. 1113
Although Counter-Plaintiffs are correct that these documents do not
select a forum,14 the facts that the parties agreed that Texas law
shall
govern
the
Notes
and
Security Agreements,
and
that
the
obligor executed those Notes and Security Agreements in the State
of Texas ,
persuasively imply the absence of any intent by the
parties to incorporate the Policy's clause that actions under the
Policy "must be brought only in the Courts of Saint Lucia, West
Indies,
and
10
the
law
of
(Application)
Saint
i
Lucia,
Document
No.
West
Indies
shall
39-3,
Ex.
(pre-2010
D
be
Policy)
11
Document No.1, Exs. A-1, A-2, A-3, A-4, B-1, B-2, B-3, and
B-4.
12
Id.
13
Document No. 53 at 10-11, citing
Document No.1, Exs. A-1
B-2 ~ 6.01, B-3 ~
~ 11, A-2 ~ 11, A-3 ~ 11, A-4 ~ 11, B-1 ~ 6.01,
6.01, and B-4
14
~
6.01.
Document No. 64 at 5.
7
controlling law . . .
II
Hence, Counter-Defendant did not waive the
Policy's pre-amendment forum selection clause by filing suit on the
separate loan documents in the United States.
Accordingly, it is
ORDERED that Counterclaim Plaintiffs' FFD Resources III, LLC,
and FFD Ventures LP Motion for Reconsideration of the Court's June
12, 2012 Order and Incorporated Memorandum of Law (Document No. 55)
is DENIED.
The Clerk shall notify all parties and provide them with a
true copy of this Order.
SIGNED at Houston, Texas, on this
~~ of
October, 2012.
•
G WERLEIN, JR.
TES DISTRICT JUDGE
8
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