Opinion
3:18-cv-00580-SB
03-02-2022
EXECUTIVE 1801 LLC, an Oregon limited liability company, Plaintiff, v. EAGLE WEST INSURANCE COMPANY, a California corporation, Defendant.
FINDINGS AND RECOMMENDATION
STACIE F. BECKERMAN, UNITED STATES MAGISTRATE JUDGE
Executive 1801 LLC (“Executive”) filed this action against Eagle West Insurance Company (“Eagle West”), alleging claims for breach of an insurance contract and breach of the implied covenant of good faith and fair dealing. Eagle West now moves for reconsideration of the Court's Amended Findings and Recommendation (ECF No. 63), in which the Court recommended that the district judge deny Eagle West's motion for summary judgment (ECF No. 43). For the reasons explained below, the Court recommends that the district judge deny Eagle West's motion for reconsideration (ECF No. 81).
The district judge has already adopted in part this Court's Amended Findings and Recommendation, including the finding that “collapse” under Oregon law means “to fall some distance” and the findings on Executive's rain damage claim. (See ECF No. 77.) The district judge, however, returned the remainder of the Amended Findings and Recommendation back to this Court to allow Eagle West to file a motion for reconsideration of the Amended Findings and Recommendation on the issue of whether a collapse occurred. (Id.) Eagle West filed its motion for reconsideration (ECF No. 81), the parties fully briefed the motion, and this Court held oral argument on the motion on March 1, 2022 (ECF No. 86).
Eagle West argues in its motion for reconsideration that it was improper for Executive to rely in its objections to this Court's original Findings and Recommendation (ECF No. 55) on Eagle West's and the Court's definition of “collapse” because Executive had relied on the “SISI” (substantial impairment of structural integrity) definition of collapse throughout the case. In fact, the parties' submissions to date reveal that both parties appear to have relied on the SISI definition of collapse throughout factual and expert discovery, despite the fact that Eagle West advocated in its summary judgment briefing for the definition of collapse the Court adopted. As a result, the current record is not fully developed with respect to the definition of collapse adopted by the Court.
As the moving party at summary judgment, it was Eagle West's burden to establish the absence of a genuine issue of material fact with respect to whether a collapse occurred. See Senn v. Multnomah Cnty., 527 F.Supp.3d 1255, 1260 (D. Or. 2021) (“The moving party has the burden of establishing the absence of a genuine issue of material fact.” (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986))). As the Court explained in its Amended Findings and Recommendation, the summary judgment record reveals that disputed issues of material fact remain with respect to whether a collapse occurred here.
With respect to Eagle West's motion for reconsideration, the Court disagrees that Executive did anything improper by responding to the Court's questions at oral argument about the testimony of Jeffrey Lewis and Mark Rose in the summary judgment record, nor by making the argument in Executive's objections to the original Findings and Recommendation that the evidence identified by the Court creates a material factual dispute based on the collapse definition the Court adopted. Notably, although the Court cited in its Amended Findings and Recommendation the supplemental declaration of Jeffrey Lewis that Executive filed with its objections, the supplemental declaration only confirmed what was already in the summary judgment record. (See Am. Findings & Rec. at 17.) Viewing all inferences to be drawn from the factual record in the light most favorable to Executive, this Court stands on its conclusion that Eagle West has not met its burden of establishing the absence of a genuine issue of material fact as to whether a collapse occurred here. SeeSenn, 527 F.Supp.3d at 1260 (“Special rules of construction apply when evaluating a summary judgment motion: (1) all reasonable doubts as to the existence of genuine issues of material fact should be resolved against the moving party; and (2) all inferences to be drawn from the underlying facts must be viewed in the light most favorable to the nonmoving party.”) (citation omitted).
Focused only on the testimony of Lewis and Rose, Eagle West argues in its reply in support of its motion for reconsideration that even if there is a factual dispute about the downward movement of building components, Executive has not presented sufficient evidence that hidden decay caused the downward movement. (Def.'s Reply at 13-15.) “The district court need not consider arguments raised for the first time in a reply brief.” Zamani v. Carnes, 491 F.3d 990, 997 (9th Cir. 2007). In any event, drawing all inferences from the factual record in the light most favorable to Executive, the Court concludes that the opinion of Executive's expert, Felix Martin, creates a triable issue of material fact with respect to causation. (See Executive 1801 Apartments Structural Condition Report, ECF No. 44-2 at 7 (“Marcon's investigation of the buildings at Executive 1801 revealed that a significant amount of structural damage exists to the buildings' access stairways, entry walkways, exterior walls, and balconies. Some of these areas have reached a state of structural instability due to the unexpected partial to complete structural collapse of their structural components. In some cases, this collapse condition exists mostly hidden from view by the architectural finishes and its full extent was not known until those finishes were removed and the structural framing was exposed. This structural collapse damage is extensive and systemic, with drastic reductions in structural capacity to areas of all buildings on site.”)).
By allowing Eagle West to file a motion for reconsideration, the Court has attempted to cure any prejudice caused by amending its original Findings and Recommendation without first allowing Eagle West to be heard on Executive's objections thereto (although Eagle West had the opportunity to file objections to the Court's Amended Findings and Recommendation). The more difficult question is how to cure the prejudice to both parties caused by the Court's adoption of a definition of collapse for which neither party prepared its case. Neither party appears to be positioned to move forward to trial applying the Court's definition of collapse.
For all of these reasons, the Court recommends that the district judge first resolve the summary judgment motion pending before the Court by adopting the remainder of the Amended Findings and Recommendation and finding that disputed factual issues remain with respect to whether a collapse occurred here. If the district judge adopts the Amended Findings and Recommendation, the Court recommends that the district judge then convene a case management conference to evaluate with the parties what additional factual and expert discovery is necessary to prepare this case for trial (or, perhaps, a second round of dispositive motions), now that the Court has resolved the threshold legal issues.
CONCLUSION
For the reasons stated, the Court recommends that the district judge ADOPT this Court's Amended Findings and Recommendation (ECF No. 63), DENY Eagle West's motion for reconsideration (ECF No. 81), and schedule a case management conference to determine how to proceed to trial.
At the March 1, 2022, hearing, the Court also offered the parties the option of a judicial settlement conference to attempt to resolve this dispute without additional litigation.
SCHEDULING ORDER
The Court will refer its Findings and Recommendation to a district judge. Objections, if any, are due within fourteen (14) days. If no objections are filed, the Findings and Recommendation will go under advisement on that date. If objections are filed, a response is due within fourteen (14) days. When the response is due or filed, whichever date is earlier, the Findings and Recommendation will go under advisement.