Westport Insurance Corporation v. Pennsyvlania National Mutual Insurance Company

Filing 155

MEMORANDUM OPINION AND ORDER striking 152 Westport's MOTION to Dismiss [Westport's Rule 12(h)(2)(C) Motion to Dismiss Penn's Amended Counterclaim]. The court will not entertain a subsequent motion to amend the scheduling order, and Westport may raise its Rule 12 defense at trial. (Signed by Judge Gray H Miller) Parties notified.(rguerrero, 4)

Case 4:16-cv-01947 Document 155 Filed on 12/21/21 in TXSD Page 1 of 4
United States District Court
Southern District of Texas

ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
WESTPORT INSURANCE CORPORATION,
on its own behalf and Assignee of
Houstoun, Woodward, Eason, Gentle,
Tomforde and Anderson, Inc. d/b/a
INSURANCE ALLIANCE,
Plaintiff,
v.
PENNSYLVANIA NATIONAL MUTUAL
CASUALTY INSURANCE COMPANY d/b/a
PENN NATIONAL INSURANCE,
Defendant.

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December 21, 2021
Nathan Ochsner, Clerk

Civil Action H-16-1947

MEMORANDUM OPINION AND ORDER
Pending before the court is realigned defendant Westport Insurance Corporation’s
(“Westport”) motion to dismiss for failure to state a claim upon which relief can be granted.
Dkt. 152. After reviewing the motion and the applicable law, the court STRIKES Westport’s
motion.

I. BACKGROUND
Realigned plaintiff Pennsylvania National Mutual Casualty Insurance Company (“Penn
National”) raised counterclaims against Westport for breach of its Stowers duty on February 15,
2017. Dkt. 63. The dispositive motion deadline for this case was January 10, 2018. Dkt. 101. On
the deadline date, the parties filed cross-motions for partial summary judgment. Dkts. 103, 104,
106.
Magistrate Judge Johnson made her Memorandum and Recommendation (“M&R”) on
August 31, 2018. Dkt. 122. The M&R recommended granting in part and denying in part

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Westport’s motions for partial summary judgment on Penn National’s claim for breach of its
Stowers duty and Westport’s breach of contract claim. Id. The M&R found a genuine dispute of
material fact for whether Westport breached its Stowers duty regarding three settlement offers in
2009 and 2010. Id. Further, the M&R concluded that Penn National breached its duties to defend
in February 2016 and indemnify starting June 2016. Id. This court adopted the M&R in full. Dkt.
130. On December 17, 2021, Westport filed the instant motion to dismiss without seeking leave
to amend the scheduling order. Dkt. 152.

II. LEGAL STANDARD
“[A] schedule may be modified only for good cause and with the judge’s consent.” Fed. R.
Civ. P. 16(b)(4). “The good cause standard requires the ‘party seeking relief to show that the
deadlines cannot reasonably be met despite the diligence of the party needing the extension.’”
S & W Enters., L.L.C. v. SouthTrust Bank of Ala. N.A., 315 F.3d 533, 535 (5th Cir. 2003) (quoting
6A Wright and Miller, Federal Practice and Procedure § 1522.1 (2d ed. 1990)). The court may
“prohibit introduction of evidence or strike pleadings for failure to obey [a] scheduling order under
rule 16(f).” Geiserman v. MacDonald, 893.Fd 787, 793 (5th Cir. 1990).

III. ANALYSIS
Westport argues it is permitted to bring the instant motion to dismiss under Federal Rule
of Civil Procedure 12(h)(2)(C). “Rule 12 expressly provides that a defendant not pursuing a Rule
12(b)(6) defense at the pleading stage may raise it later in the litigation, including at trial.” C&C
Inv. Props., L.L.C. v. Trustmark Nat'l Bank, 838 F.3d 655, 660 (5th Cir. 2016). Rule 12(h)(2) does
not grant a right to file a motion to dismiss at a particular time but instead “preserves three defenses
against waiver during the pleading, motion, discovery, and trial stages of the action.” Wright and
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Miller, Federal Practice and Procedure § 1392 (3d ed. 2004). Thus, while the defense itself is
not waived under Rule 12(h)(2), the instant motion is nevertheless improper because it is filed
nearly four years after the deadline imposed by the court’s scheduling order. See Woodson v.
Surgiteck, Inc., 57 F.3d 1406, 1417 (5th Cir. 1995) (“The federal courts are vested with the inherent
power ‘to manage their own affairs so as to achieve the orderly and expeditious disposition of
cases.’” (quoting Link v. Wabash R. Co., 370 U.S. 626, 630, 82 S. Ct. 1386 (1962))).
A scheduling order “may be modified only for good cause and with the judge’s consent.”
Fed. R. Civ. P. 16(b)(4). However, Westport did not move to amend the scheduling order before
filing its motion. See Dkt. 152. Further, Westport’s motion argues that Penn National is not
entitled to equitable subrogation because Penn National comes with unclean hands following the
M&R’s award of summary judgment for breach. Id. The M&R’s analysis of how summary
judgment for Westport on the breach of contract claim affects Penn National’s Stowers claim runs
counter to this argument. See Dkt. 122 at 76–77. Critically, the M&R was adopted in full over
three years ago. See Dkt. 130. Thus, Westport has not been diligent and could not show good
cause if it had requested leave to amend. See S & W Enters., 315 F.3d at 535.
Therefore, the court STRIKES Westport’s motion to dismiss for failure to state a claim
upon which relief can be granted.

IV. CONCLUSION
The scheduling order’s motion deadline passed almost four years ago. Dkt. 101. Westport
nevertheless filed a motion to dismiss without leave to amend the scheduling order and without
good cause. Dkt. 152. Therefore, the court STRIKES Westport’s motion to dismiss.

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The court will not entertain a subsequent motion to amend the scheduling order, and
Westport may raise its Rule 12 defense at trial.
Signed at Houston, Texas on December 21, 2021.

_________________________________
Gray H. Miller
Senior United States District Judge

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