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Scottsdale Insurance Co. v. City of Hazleton

September 28, 2009

SCOTTSDALE INSURANCE CO., PLAINTIFF,
v.
THE CITY OF HAZLETON, ET AL., DEFENDANTS.



The opinion of the court was delivered by: A. Richard Caputo United States District Judge

(JUDGE CAPUTO)

MEMORANDUM

Presently before the Court is the Motion for Reconsideration of the Defendants, including the City of Hazleton (Doc. 59.) Defendants move the Court to reconsider its Memorandum and Opinion of May 28, 2009 (Doc. 57) under Federal Rule of Civil Procedure 59(e) to the extent it granted Plaintiff's motion for summary judgment on Counts II and III of Plaintiff's Complaint, and to the extent it ruled against Defendants' counter-claims.*fn1 Because there was no clear error of law in this Court's Memorandum and Order, Defendants' motion will be denied. The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332. The motion is fully briefed and ripe for disposition.

BACKGROUND

Scottsdale issued a public entity policy of insurance, effective January 1, 2005, to Hazleton, a political subdivision organized and existing under the laws of Pennsylvania. (Pl.'s Statement of Material Facts ¶¶ 5, 13, Doc. 19). The present coverage dispute arose out of a civil rights suit instituted against Hazleton in 2006. The parties do not dispute that the policy provided insurance to the city at that time. (Id. ¶ 6.) Following a bench trial on the underlying action from March 12, 2007 through March 22, 2007, before Judge Munley of this Court, the Court, on July 26, 2007 ruled in favor of plaintiffs on several claims, dismissed several claims, and determined that several plaintiffs lacked standing. (Dkt No. 06-cv-1586, Doc. 409 at 190-92.) The Court issued a permanent injunction enjoining Hazleton from enforcing any provision of the disputed ordinances. (Id. at 190.) The Court's verdict afforded no other relief. (Id. at 190-92.)*fn2

Scottsdale filed the present action on September 18, 2007, after the appeal was filed in the underlying action. (Doc. 1.) Scottsdale's complaint raises three (3) Counts. Each seeks declaratory relief regarding its coverage liability under the Hazleton policy. Count I seeks a declaration that Scottsdale owed no duty of defense or indemnity to Hazleton in the underlying action or its appeal. Count II seeks a declaration that it has no duty to pay any attorney's fees, costs, or expenses awarded to the underlying action plaintiffs against Hazleton. Count III seeks a declaration that Scottsdale has no duty to pay attorney's fees, costs, or expenses incurred by Hazleton for attorneys or consultants it retained directly without the prior written approval of the insurer in the underlying action or its appeal. Hazleton raises three (3) counterclaims. (Doc. 13.) The first is for breach of contract, alleging that Scottsdale breached its duties under the policy by refusing to pay for the services of Mr. Kobach and by refusing to pay costs and attorney's fees which may awarded to plaintiffs in the underlying action. The second counterclaim is for statutory bad faith under 42 Pa. Cons. Stat. § 8371. Hazleton alleges a variety of conduct it argues constitutes bad faith. The third counterclaim is a request for declaratory relief in the city's favor mirroring the relief requested in Counts I, III, and III of Scottsdale's complaint.*fn3

This Court dismissed Count I for lack of subject matter jurisdiction. (Doc. 57.) Presently before the Court is Defendants' motion to reconsider the May 28, 2009, Memorandum and Order granting partial summary judgment for Plaintiff Scottsdale as to Counts II, III, and the counter-claims by Hazleton. (Id.) (granting summary judgment); (Doc. 59) (requesting reconsideration).

LEGAL STANDARD

A motion for reconsideration is governed by Rule 59(e) of the Federal Rules of Civil Procedure, which allows a party to move to alter or amend a judgment within ten days of entry. FED. R. CIV. P. 59(e). The purpose of a motion for reconsideration is to correct manifest errors of law or fact or to present newly discovered evidence. Harsco Corp. v. Zlotnicki, 779 F.2d 906, 909 (3d Cir. 1985). A judgment may be altered or amended if the party seeking reconsideration establishes at least one of the following grounds: "(1) an intervening change in controlling law; (2) the availability of new evidence that was not available when the court granted the motion for summary judgment; or (3) the need to correct a clear error of law or fact or to prevent manifest injustice." Max's Seafood Café, by Lou-Ann, Inc., v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999). "A motion for reconsideration is not to be used as a means to reargue matters already argued and disposed of or as an attempt to relitigate a point of disagreement between the Court and the litigant." Ogden v. Keystone Residence, 226 F. Supp. 2d 588, 606 (M.D. Pa. 2002)."[R]econsideration motions may not be used to raise new arguments or present evidence that could have been raised prior to the entry of judgment." Hill v. Tammac Corp., Civ. A. No. 05-1148, 2006 WL 529044, at *2 (M.D. Pa. Mar. 3, 2006). Lastly, the reconsideration of a judgment is an extraordinary remedy, and such motions should be granted sparingly. D'Angio v. Borough of Nescopeck, 56 F. Supp. 2d 502, 504 (M.D. Pa. 1999).

DISCUSSION

Both parties agree that there has been no intervening change to controlling law and that no new evidence has been discovered since the grant of summary judgment. Defendants assert I committed four clear errors of law or fact, and for those reasons I should reverse. For the reasons discussed below, I will deny Defendants' motion.

I. Failure to Consider Evidence of Partial Damages Incurred While Monetary Damage Claims Survived

Hazleton first argues that this Court committed a clear error of law when it failed to consider its evidence that prior to the filing of the underlying second amended complaint, any attorney's fees and costs were incurred at least in part to defend the monetary damage claims. Hazleton made a similar argument when opposing the motion for summary judgment, and they present nothing new in their motion to reconsider. The policy's coverage of mixed claims was addressed by this Court in its Summary Judgment Memorandum:

[Exclusion Nine] provides that, although the insurer is not obliged to make payment for "fees, costs or expenses" resulting from an adverse judgment for declaratory or injunctive relief, it "will afford defense to the insured for 'suit(s)' in which monetary damages are requested if not otherwise excluded." (Policy, Sec. II ΒΆ 9.) This language contemplates a mixed-claim suit involving claims for both monetary and non-monetary relief. Under the terms of Exclusion Nine, the insurer would defend such a suit, but maintain an exclusion for the "fees, costs or expenses" resulting from judgments on non-monetary claims. (Doc ...


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