Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Gallatin Fuels, Inc. v. Westchester Fire Insurance Co.

June 2, 2006


The opinion of the court was delivered by: Ambrose, Chief District Judge



Pending is Defendant Westchester Fire Insurance Company's Motion for Post-Judgment Relief. (Docket No. 250). In its Motion, Defendant requests judgment as a matter of law pursuant to Federal Rule of Civil Procedure 50, or, in the alternative, a new trial pursuant to Federal Rule of Civil Procedure 59. Plaintiff, Gallatin Fuels, Inc., filed a Brief in Opposition. (Docket No. 257). After a careful review of the submissions of the parties, Defendant's Motion is denied in its entirety.


The factual and procedural details of this case are well known to the parties, and I need not repeat them in detail here. In short, Plaintiff, Gallatin Fuels, Inc. ("Plaintiff" or "Gallatin"), filed this suit seeking payment under an insurance policy issued by Defendant Westchester Fire Insurance Company ("Defendant" or "Westchester") to Mon View Mining Corporation ("Mon View") for mining equipment that was destroyed or rendered unrecoverable on April 8, 2002, after the mine in which it was being used returned to its natural water level when the power to the mine was shut off after Mon View failed to pay outstanding utility bills. Gallatin was named as a loss payee under the policy. Gallatin also alleged that Westchester's actions constituted bad faith in violation of 42 Pa. Cons. Stat. Ann. § 8371.

A jury trial began in this case on February 6, 2006 and concluded on February 21, 2006. On February 14, 2006, after the close of Gallatin's case, Defendant moved for a directed verdict as to (1) Gallatin's intentional business decision not to exercise its contractual rights; (2) fortuity; (3) bad faith; and (4) external cause. (Docket Nos. 187, 189, 191, 193). Defendant's Motions for directed verdict were denied. (Docket Nos. 195-197, 203). I also denied Defendant's renewed Motions for directed verdict on the intentional business decision, fortuity, and external cause issues. (Docket Nos. 204-206).

At the conclusion of the trial, the jury returned a verdict in favor of Gallatin on both counts. With respect to Gallatin's bad-faith claim under § 8371, the jury found that Defendant lacked a reasonable basis for denying Gallatin benefits under the policy and that Defendant knew or recklessly disregarded its lack of reasonable basis in denying the claim. The jury awarded Gallatin a net total of $1.325 million on its claim for payment under the insurance policy and awarded Gallatin $20 million in punitive damages on the bad faith claim.*fn1 On March 28, 2006, I granted Defendant's Pre-Judgment Motion challenging Gallatin's punitive damages award and entered an Order reducing that award to $4.5 million because the original award was unconstitutionally excessive. See Docket No. 233. In accordance with the jury's verdict and my March 28, 2006 Order, I entered judgment in favor of Plaintiff on that same date in the amount of $1.325 million on the contract claim and $4.5 million on the bad faith claim in the form of punitive damages. See Docket No. 237.

On April 14, 2006, Defendant filed the instant Motion for Post-Judgment Relief and Brief in Support. (Docket Nos. 250-251). Gallatin filed its Brief in Opposition on May 3, 2006. (Docket No. 257). Defendant's Motion is now ripe for my review.*fn2


Rule 50(b) of the Federal Rules of Civil Procedure provides that a district court "may grant a renewed motion for judgment as a matter of law if 'there is no legally sufficient evidentiary basis for a reasonable jury to have found for' the prevailing party. Fed. R. Civ. P. 50(b); Olefins Trading v. Han Yang Chem. Corp., 9 F.3d 282, 288 (3d Cir. 1993). The 'legally sufficient evidentiary basis' has also been characterized as a 'minimum quantum of evidence,' Keith v. Truck Stops Corp., 909 F.2d 743, 745 (3d Cir.1990), or even as 'any rational basis for the verdict.' Bhaya v. Westinghouse Elec. Corp., 832 F.2d 258, 259 (3d Cir.1987)." PXRE Corp. v. Terra Nova Ins. Co. Ltd., 76 F. App'x 485, 2003 WL 22293204, at *4 (3d Cir. Oct. 06, 2003). The evidence must be viewed in the light most favorable to the non-moving party. Id. (citing Mosley v. Wilson, 102 F.3d 85, 89 (3d Cir.1996)).

Pursuant to Rule 59, a motion for a new trial may be granted "for any of the reasons for which new trials have heretofore been granted in actions at law in the courts of the United States." Fed. R. Civ. P. 59(a)(1). One such reason is where "the verdict is contrary to the great weight of the evidence." Roebuck v. Drexel Univ., 852 F.2d 715, 735 (3d Cir. 1988). In such a case, however, a motion for a new trial is limited to those circumstances "where 'a miscarriage of justice would result if the verdict were to stand.'" Olefins Trading,9 F.3d at 289.

When reviewing a jury verdict "a District Court . . .has an 'obligation . . . to uphold the jury's award if there exists a reasonable basis to do so.' Motter v. Everest & Jennings, Inc., 883 F.2d 1223, 1230 (3d Cir.1989). '[T]he court may not vacate or reduce the award merely because it would have granted a lesser amount of damages.' Id. A new trial is warranted based 'upon [a] showing that the jury verdict resulted from passion or prejudice.' Hurley v. Atlantic City Police Dep't, 174 F.3d 95, 114 (3d Cir.1999) (quoting Dunn v. HOVIC, 1 F.3d 1371, 1383 (3d Cir.1993)). '[T]he size of the award alone [is not] enough to prove prejudice and passion.' Id." Evans v. Port Auth., 273 F.3d 346, 351-52 (3d Cir. 2001).


A. Motion for Judgment as a Matter of Law

1. Breach of Contract Claim

a. Fortuity

In support of its Motion for Judgment as a Matter of Law on this issue, Defendant asserts that the evidence was insufficient to establish that Gallatin's loss was fortuitous from the standpoint of the putative insured. Westchester argues that it was undisputed that Mon View and Gallatin were aware that the power was being terminated, that the loss was inevitable, and that no one protected the property from inevitable loss. Motion at 3-4. Westschester also contends that the undisputed evidence shows that Gallatin could have prevented the power from being shut off and/or could have sought to have the power turned back on or to retrieve its equipment. Id.

Defendant's Motion is denied with respect to this issue. To the extent Defendant has raised these arguments in prior Motions in this case (including motions for summary judgment and motions for directed verdict), nothing in Defendant's instant Motion or Brief has persuaded me to reverse the previous rulings.

In addition, the parties agree that fortuity is a question of law for the court to decide. In my post-trial Opinion and Order dated March 28, 2006 (Docket No. 233), I indicated that my legal conclusion as to fortuity was based in part on the jury's findings, set forth on the verdict slip, that (1) Defendant did not prove by a preponderance of the evidence that Plaintiff made intentional business decisions in its dealings with Mon View Mining Corporation that resulted in the termination of power to the mine; and (2) Defendant did not prove by a preponderance of the evidence that after Plaintiff became aware that the power to the mine was to be shut off for non-payment of electrical service, Plaintiff made intentional business decisions not to exercise reasonably available contractual or legal rights that, if exercised, would have prevented the claimed loss. See Verdict Slip, questions 4-6. In addition, I found no other evidence presented at trial that, even when viewed in ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.