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Alea London, and Atrium v. Pa Child Care

March 31, 2011

ALEA LONDON, AND ATRIUM UNDERWRITERS LIMITED, PLAINTIFFS,
v.
PA CHILD CARE, LLC, ROBERT POWELL, AND GREGORY ZAPPALA, DEFENDANTS.



The opinion of the court was delivered by: Judge Caputo

MEMORANDUM

Plaintiff Alea London moves for reconsideration of the Court's April 14, 2010 Order granting a motion to dismiss. For the reasons explained below, the motion will be granted.

I. Background

Insurers Alea London and Atrium Underwriters Limited brought this declaratory judgment action against insureds PA Child Care (PACC), Robert Powell, and Gregory Zappala. They sought a declaration that they owe no duty to defend or indemnify the defendants in a separate civil case. The circumstances surrounding this civil case have been discussed at length in this Court's orders elsewhere, and thus will be briefly summarized here.

PACC is a facility that houses detained juveniles. PACC was operated by Powell and Zappala. PACC, Powell, and Zappala were named defendants (among others) in civil actions alleging participation in a conspiracy to give two Luzerne County judges kickbacks for keeping PACC full. The actions have been consolidated and there are two complaints in play: one styled as the "Master Individual Complaint" (MIC) and one titled the Master Class Action Complaint (MCAC). See Wallace v. Powell, No. 3:09-cv-286, Docs. 134, 136. The plaintiffs have brought claims under civil RICO and Section 1983, as well as a claim for false imprisonment.

After receiving a demand for coverage, Alea and Atrium reviewed the civil complaints against PACC, Powell, and Zappala and concluded that the actions did not present claims covered under the relevant policies. Thus, they denied coverage and filed this declaratory judgment action. PACC and Zappala moved to dismiss. (Doc. 13.) The Court disposed of the motion in an opinion and order dated April 14, 2010.

As to Alea, the Court held that Alea has the duty to provide a defense under Coverage B of Alea policies 1037 and 1165. Because Alea had the duty to defend the entire underlying civil action, and the claim for declaratory judgment as to the duty to indemnify was not yet ripe (and thus did not present a live "case" or "controversy"), the motion to dismiss Alea's claim for declaratory judgment was granted. (Doc. 24.)

Alea moves for reconsideration. (Doc. 26.) Alea seeks reconsideration of the following issues:

! The Court's holding that the exceptions contained in policies 1037 and 1165-which excluded coverage for personal injury "arising out of the willful violation of a penal statute or ordinance committed by the insured or at the direction of the insured"-did not apply. ! The Court's dismissal of the Alea declaratory judgment action in its entirety, even though it held in its opinion that Alea had no duty to defend or indemnify the defendants under policy 1866.

! The Court's conclusion that the Lessor's Risk Only designation in the policies was ambiguous and thus should be construed against Alea. ! The Court's failure to reflect that Alea's duty to defend does not extend to Powell. Each of these issues will be discussed below.

II. Discussion

A. Legal Standard for a Motion for Reconsideration

Motions for reconsideration are governed by Federal Rule of Civil Procedure 59(e). A motion for reconsideration is not a procedural device enabling relitigation of issues already decided. Its purpose is to correct manifest errors of law or fact or 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 Cafe , 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. ...


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