INGENCO Holdings, LLC, et al et al v. ACE American Insurance Company
Filing
391
ORDER granting Plaintiff's 353 Motion to Amend Judgment. The Court DENIES Defendant's Renewed Motion for Judgment as a Matter of Law and Alternative Motion for a New Trial at dkts 358 and 359 . Signed by Judge Richard A. Jones. (SS)
Case 2:13-cv-00543-RAJ Document 391 Filed 05/31/23 Page 1 of 7
HONORABLE RICHARD A. JONES
1
2
3
4
5
6
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
7
8
9
10
11
12
13
14
INGENCO HOLDINGS, LLC, a Delaware
limited liability company, and BIO ENERGY
(WASHINGTON), LLC, a Delaware limited
liability company,
Plaintiffs,
v.
ACE AMERICAN INSURANCE
COMPANY, a foreign insurance company,
15
Case No. 2:13-cv-00543-RAJ
ORDER ON DEFENDANT’S
RENEWED MOTION FOR
JUDGMENT AS A MATTER OF
LAW AND PLAINTIFFS’
MOTION TO AMEND
JUDGMENT
Defendant.
16
17
18
19
20
21
22
23
24
25
26
27
28
I.
INTRODUCTION
This matter comes before the Court on Defendant’s Renewed Motion for
Judgment as a Matter of Law and Alternative Motion for a New Trial (Dkt. ## 358, 359)
and Plaintiffs’ Motion to Amend Judgment (Dkt. # 353). The Court has considered the
pleadings filed regarding the motions and the remaining record. For the reasons below,
the Court DENIES Defendant’s motion and GRANTS Plaintiffs’ Motion.
II. BACKGROUND
Plaintiffs Ingenco Holdings, LLC and Bio Energy (Washington), LLC
(collectively, “Ingenco”) owned and operated a landfill gas plant that was damaged in
October 2010 and ultimately shut down in March 2011. See Dkt. # 333 at 16. In May
ORDER – 1
Case 2:13-cv-00543-RAJ Document 391 Filed 05/31/23 Page 2 of 7
1
2011, Ingenco tendered an insurance claim to Defendant ACE Insurance Co. (“ACE”) for
2
damages to the plant and for the subsequent shutdown. See id. In 2012 and 2013, ACE
3
issued letters denying Ingenco’s claim. See id. Plaintiffs then sued ACE for coverage
4
under its insurance policy.
5
After an 8-day trial, the jury returned a verdict in this case finding that ACE
6
breached the Boiler & Machinery Endorsement of the insurance policy. Dkt. # 339-1. The
7
Endorsement covered “Accident[s],” defined as a “sudden and accidental breakdown of
8
an Object,” exclusive of “depletion, deterioration, ... [and] wear and tear ....” Dkt. # 333
9
at 21-22. Ingenco’s witnesses opined that the sudden breakdown of a diffuser shield in
10
Vessel 32 (“V32”), which resulted in the destruction of the adsorbent beads in V32 and
11
throughout the system, was not foreseeable. See, e.g., Dkt. # 342 at 29; Dkt. # 345 at 26.
12
The jury awarded $10,974,232.56 in damages. Dkt. # 340. The award was broken down
13
into various categories: “Property Damage: $3,565,357.16”; “Expenses Related to
14
Reducing Loss: $2,969,330.00”; “Business Income”: $4,130,874.00 and “Extra
15
Expenses: $308,671.40.” Id.
16
ACE renews its motion for judgment as a matter of law, and alternatively moves
17
for a new trial or remittur. Dkt. ## 358, 359. ACE raises three main arguments. First,
18
ACE contends that the failure of a diffuser basket was not caused by an “Accident” as
19
required by the terms of the policy’s Boiler & Machinery Endorsement. Dkt. # 359 at 5.
20
Second, ACE objects to the $2.9 million that the jury awarded Ingenco for reconfiguring
21
its plant, which ACE claims was based on improper arguments by counsel. Dkt. # 359 at
22
8. Third, ACE claims the jury impermissibly awarded a windfall for Ingenco for the cost
23
of replacement media. Id. at 10.
24
In its own motion, Plaintiff moves to amend the judgment to seek prejudgment
25
interest at 12% per annum on three components of the judgment award, specifically: (1)
26
property damage; (2) expenses to reduce loss; and (3) extra expenses. Dkt. # 353.
27
28
ORDER – 2
Case 2:13-cv-00543-RAJ Document 391 Filed 05/31/23 Page 3 of 7
III. DISCUSSION
1
2
I.
Defendant’s Motion
3
Before a case is submitted to the jury, a party may move for judgment as a matter
4
of law. Fed. R. Civ. P. 50(a). “If the court does not grant a motion for judgment as a
5
matter of law under Rule 50(a), the court is considered to have submitted the action to the
6
jury subject to the court’s later deciding the legal questions raised by the motion.” Fed. R.
7
Civ. P. 50(b). No later than 28 days after the entry of judgment, the party may file
8
a renewed motion for judgment as a matter of law. Id.
9
A court should grant a Rule 50 motion only if “there is no legally sufficient basis
10
for a reasonable jury to find for that party on that issue.” Reeves v. Sanderson Plumbing
11
Prods., Inc., 530 U.S. 133, 149 (2000). In deciding the motion, the court “must draw all
12
reasonable inferences in favor of the nonmoving party, and it may not make credibility
13
determinations or weigh the evidence.” Id. Those functions “are jury functions, not those
14
of a judge.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). White v. Ford
15
Motor Co., 312 F.3d 998, 1010 (9th Cir. 2002) (quoting Forrett v. Richardson, 112 F.3d
16
416, 419 (9th Cir. 1997)).
17
A party may include “an alternative or joint request for a new trial under Rule
18
59.” Fed. R. Civ. P. 50(b). The decision to grant a new trial “is confided almost entirely
19
to the exercise of discretion on the part of the trial court.” Allied Chem. Corp. v. Daiflon,
20
Inc., 449 U.S. 33, 36 (1980).
21
A.
Renewed Motion for Judgment as a Matter of Law
22
ACE claims there is insufficient evidence that the damage to the diffuser basket
23
resulted from an “Accident.” Dkt. # 359 at 5. The Court is not persuaded to depart from
24
the jury’s findings. Indeed, the jury heard testimony from Ingenco witnesses David
25
Palumbo and Matthew Schneider that the diffuser basket should have lasted twenty years
26
under normal operating conditions and was not subject to an abnormal range of pressure
27
at the time of the incident. Dkt. # 342 at 29. The jury also heard testimony from Dr.
28
ORDER – 3
Case 2:13-cv-00543-RAJ Document 391 Filed 05/31/23 Page 4 of 7
1
2
3
James Ritter that the basket failure was sudden and unexpected. Dkt. # 345 at 26.
Given this testimony, in addition to other evidence, the jury was reasonable in
finding for Plaintiffs. As such, judgment as a matter of law is not warranted.
4
B.
Motion for a New Trial
5
Under Fed. R. Civ. P. 59(a)(1), “[t]he court may, on motion, grant a new trial on
6
all or some of the issues – and to any party – as follows ... for any reason for which a new
7
trial has heretofore been granted in an action at law in federal court.” ACE claims that it
8
is entitled to a new trial because Ingenco’s closing argument regarding the definition of
9
“Accident” was contrary to the Court’s instructions and misled the jury. Dkt. # 359 at 8
10
ACE also argues that a new trial is warranted because the jury’s award of compensatory
11
damages for the replacement media and business income loss are unsupported by the
12
evidence. Id. at 10. The Court addresses each in turn.
13
Federal courts erect a “high threshold” to claims of improper closing arguments in
14
civil cases raised for the first time after trial. Hemmings v. Tidyman’s Inc., 285 F.3d
15
1174, 1193 (9th Cir. 2002). Ninth Circuit precedent instructs that ACE’s allegations of
16
misconduct are insufficient. The alleged misconduct here occurred only in the argument
17
phase of the trial; additionally, the remarks were isolated and not objected to, and ACE
18
did not move for a mistrial at the end of the argument. See id. at 1195 (“The fact that
19
counsel did not object before the jury was instructed strongly suggests that counsel made
20
a strategic decision to gamble on the verdict and suspected that the comments would not
21
sway the jury.”). Furthermore, the Court specifically instructed the jury that attorney
22
arguments are not evidence. See Dkt. # 333 at 5.
23
The Court also finds no basis for a new trial on the jury’s award of damages. The
24
jury heard testimony that the cost to reconfigure the plant was a necessary expenditure to
25
reduce business interruption loss. In fact, Ingenco witness David Palumbo specifically
26
testified that Ingenco would not have been able to restart the plant absent these expenses.
27
Dkt. # 342 at 65-67. As for the replacement media, several witnesses provided testimony
28
ORDER – 4
Case 2:13-cv-00543-RAJ Document 391 Filed 05/31/23 Page 5 of 7
1
regarding both the cost and the inability to obtain it from other sources. See Dkt. # 346 at
2
46-48; Dkt. # 374 at 63-66. In addition, the jury was presented with a detailed table of
3
damage calculations. See Dkt. # 336 (noting Exhibit 133 as a summary of monetary
4
damages). Ultimately, the jury heard and rejected ACE’s contention that the damages for
5
the media should’ve been limited to payment for the first installment. The Court must
6
“afford substantial deference to a jury’s finding of the appropriate amount of damages,”
7
and “uphold the jury’s findings unless the amount is grossly excessive or monstrous,
8
clearly not supported by the evidence, or based only on speculation or guesswork.” In re
9
Exxon Valdez, 270 F.3d 1215, 1247–48 (9th Cir. 2001) (citation and quotation omitted).
10
In light of the evidence presented at trial, the Court finds no basis to set aside the jury’s
11
determination as to the award and finds no basis for remittitur.
12
II.
13
A motion to amend judgment may only be granted where: 1) the motion is
14
necessary to correct manifest errors of law or fact upon which the judgment is based; 2)
15
the moving party presents newly discovered or previously unavailable evidence, 3) the
16
motion is necessary to prevent manifest injustice, or 4) there is an intervening change in
17
controlling law. Hiken v. Dep’t of Def., 836 F.3d 1037, 1042 (9th Cir. 2016). Rule 59(e)
18
provides that “[a] motion to alter or amend a judgment must be filed no later than 28 days
19
after entry of the judgment.”
20
Plaintiffs’ Motion to Amend Judgment
Here, Ingenco seeks prejudgment interest at 12% per annum on three components
21
of the judgment award, specifically: (1) property damage; (2) expenses to reduce loss;
22
and (3) extra expenses. Dkt. # 353.
23
In diversity cases, pre-judgment interest is governed by state law. Fid. Fed. Bank,
24
FSB v. Durga Ma Corp., 387 F.3d 1021, 1024 (9th Cir. 2004). In Washington, a “court
25
may award a party prejudgment interest when the claimed amount is ‘liquidated’ or when
26
an unliquidated claim is otherwise determinable by reference to a fixed contractual
27
standard, without reliance on opinion or discretion.” Forbes v. Am. Bldg. Maint. Co. W.,
28
ORDER – 5
Case 2:13-cv-00543-RAJ Document 391 Filed 05/31/23 Page 6 of 7
1
240 P.3d 790, 793-94 (Wash. 2010). A claim is liquidated when the amount of
2
prejudgment interest can be computed with exactness from the evidence, without reliance
3
on opinion or discretion.” Id. A claim is unliquidated where “the exact amount of the sum
4
to be allowed cannot be definitely fixed from the facts proved, disputed or undisputed,
5
but must in the last analysis depend upon the opinion or discretion of the judge or jury as
6
to whether a larger or a smaller amount should be allowed.” Prier v. Refrigeration Eng’g
7
Co., 442 P.2d 621, 626 (Wash. 1968). However, the fact that a claim is disputed does not
8
render the amount unliquidated. Id. Rather, “it is the character of the claim and not of the
9
defense that is determinative of the question whether an amount of money sued for is a
10
11
‘liquidated sum.’ ” Id.
The Court finds that Plaintiffs’ monetary damages were liquidated as the measure
12
of damages was not within the jury’s discretion. Aker Verdal A/S v. Lampson, 65
13
Wash.App.188, 191 (1992). The amounts that Plaintiffs expended for the property
14
damage, the expenses to reduce loss, and the extra expenses were clearly established at
15
trial through the introduction of invoices, or by summary charts reflecting the same. See
16
Dkt. # 336 (noting Trial Exhibits 133 and 519 as summary documents supporting
17
damages claims). These documents allowed the jury to fix its damages determination
18
based on the facts presented. Prier, 442 P.2d at 626.
19
Washington courts apply the statutory provisions that currently provide for 12
20
percent interest for breach of contract where the contract fails to specify a rate. TJ
21
Landco, LLC v. Harley C. Douglass, Inc., 186 Wash. App. 249, 254–55, (2015).
22
Plaintiffs suggest that appropriate starting points for the calculation of prejudgment
23
interest are April 26, 2013 for the “Property Damage” award and November 9, 2013 for
24
the “Expenses Related to Reducing Loss” and “Extra Expenses” awards, which reflect 30
25
days after ACE received documentation supporting those claims. Dkt. # 353 at 10.
26
Interest runs from when the payment obligation was breached. See MKB Constructors v.
27
American Zurich Ins. Co., 83 F.Supp.3d 1078, 1084 (W.D. Wash. 2015); Weyerhaeuser
28
ORDER – 6
Case 2:13-cv-00543-RAJ Document 391 Filed 05/31/23 Page 7 of 7
1
Co. v. Com. Union Ins. Co., 142 Wash. 2d 654, 686 (2000), as amended (Jan. 16, 2001).
2
The Court finds these dates appropriate and awards interest in the amount of
3
$4,174,120.50 for “Property Damage,” $3,283,983.96 for “Expenses Related to Reducing
4
Loss,” and $341,380.69 for Extra Expenses.” The total award for prejudgment interest is
5
$7,799.485.15.
6
IV. CONCLUSION
7
For the reasons stated above, the Court DENIES Defendant’s Motion for
8
Renewed Judgment as a Matter of Law and Alternative Motion for a New Trial (Dkt. ##
9
358, 359) and GRANTS Plaintiffs’ Motion to Amend Judgment (Dkt. # 353).
10
11
DATED this 31st day of May, 2023.
12
A
13
14
The Honorable Richard A. Jones
United States District Judge
15
16
17
18
19
20
21
22
23
24
25
26
27
28
ORDER – 7
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?