Opinion
CIVIL ACTION NO 97-775 c/w 97-803 c/w 98-2200, Section: "R"(4).
October 16, 2000.
ORDER AND REASONS
Before the Court are motions by third party defendants MacFrugal's Bargain *Close-outs, Inc. and National Union Fire Insurance Company of Pittsburgh for summary judgment to dismiss the third-party demands of Grinnell Fire Protection Systems Company. Grinnell does not oppose National Union's motion. For the following reasons the Court grants MacFrugal's and National Union's motions for summary judgment.
I. Background
On March 21, 1996, a fire ravaged a warehouse facility leased and operated by West Coast Liquidators, Inc. ("WCL"), for which MacFrugal's had executed a Lease Guaranty Agreement. At the time of the fire, WCL had insured the merchandise in the warehouse through plaintiffs — certain London-based insurance companies and Underwriters at Lloyd's, London. The insurance policies also named as an insured MacFrugal's, the parent corporation and sole shareholder of WCL. After the fire, WCL presented a $27,375,000 claim for the loss of the merchandise to its insurers. Plaintiffs paid the claim, and WCL and MacFrugal's executed a receipt and release in their favor. Plaintiffs then initiated this subrogation action against various defendants, including Grinnell, to allocate responsibility and recover from the alleged tortfeasors.
Grinnell later filed a cross-claim and third-party demand against various parties, including MacFrugal's and National Union. Grinnell asserts that if it is liable to plaintiffs, then it is entitled to judgment against MacFrugal's and National Union (as MacFrugal's liability insurer).
MacFrugal's now moves for summary judgment, arguing that as it has no employees, it could not commit any acts of negligence. MacFrugal's further argues that any fault assessed to it diminishes plaintiffs' recovery by operation of law.
National Union moves for summary judgment on three grounds. First, MacFrugal's is a named insured under the policies upon which plaintiffs filed suit. Therefore, any fault assessed against MacFrugal's diminishes plaintiffs' recovery by operation of law. Second, as NacFrugal's did not own, operate, or exercise any control over the warehouse facility, neither MacFrugal's nor National Union is liable to any party in this suit. Third, the third-party liability policy issued by National Union does not cover the types of claims asserted by Grinnell.
II. Discussion
A. Summary Judgment Standard
Summary judgment is appropriate when there are no genuine issues as to any material facts, and the moving party is entitled to judgment as a matter of law. See FED. R. Civ. P. 56(c). See also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552 (1986). Accordingly, a court must be satisfied that no reasonable trier of fact could find for the nonmoving party. In other words, "if the evidentiary material of record were reduced to admissible evidence in court, it would be insufficient to permit the nonmoving party to carry its burden." Beck v. Texas State Bd. off Dental Exam'rs, 204 F.3d 629, 633 (5th Cir. 2000)
Initially, the moving party bears the burden of establishing that there are no genuine issues of material fact. If the dispositive issue is one for which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by merely pointing out that the evidence in the record contains insufficient proof concerning an essential element of the nonmoving party's claim. See Celotex, 477 U.S. at 325, 106 S.Ct. at 2554; see also Lavespere, 910 F.2d at 178. The burden then shifts to the nonmoving party, who must, by submitting or referring to evidence, set out specific facts showing that a genuine issue exists. See Celotex, 477 U.S. at 324, 106 S.Ct. at 2553. Summary judgment is mandated if the nonmovant fails to make a showing sufficient to establish the existence of an element essential on which it bears the burden of proof at trial. See Id. at 322, 106 S.Ct. at 2552. The nonmovant may not rest upon the pleadings but must identify specific facts that establish a genuine issue exists for trial. See Id. at 325, 106 S.Ct. at 2553-54; Rushing v. Kansas City S. Ry. Co., 185 F.3d 496, 505 (5th Cir. 1999)
B. Fault Assessment
When plaintiffs paid WCL's policy claim, they acquired WCL's rights against Grinnell. See LA. Civ. CODE arts. 1825-1828 (subrogation). See also Bosch v. Cummings, 520 So.2d 721, 722 (La. 1988) ("When the carrier makes payment under its policy to its insured[,] the carrier becomes subrogated, in the measure of what it has paid, to the insured's right of action against the tortfeasor."). Despite Grinnell's assertions to the contrary, plaintiffs also acquired MacFrugal's rights because MacFrugal's had an "insurable interest" in the destroyed merchandise as WCL's sole shareholder and lease guarantor. LA. REv. STAT. § 22:614 (B) (Insurable interest "means any lawful and substantial economic interest in the safety or the preservation of the subject of the insurance free from loss, destruction, or pecuniary loss."). See, e.g., Giddens v. USAA Prop. Cas. Ins. Co., 644 So.2d 827, 829 (La.App. 1st Cir. 1994) (exposure to "direct, immediate or potential financial loss or liability" constitutes insurable interest). But plaintiffs can recover no more than their insured could recover against the alleged tortfeasor. See, e.g., Fontenot v. Mid-American Cas. Co., 562 So.2d 39, 41 (La.App. 3d Cir. 1990) ("[T]he insurer by subrogation may acquire only whatever rights its insured has against the tortfeasor or his insurer."). Under Louisiana Civil Code article 2323, plaintiffs' recovery is diminished by any fault assessed against the insured. See LA. Civ. Code art. 2323.
Accordingly, any fault assessed against either WCL or MacFrugal's automatically reduces the amount plaintiffs may recover from Grinnell. See, e.g., Fontenot, 562. So.2d at 41-42 (reducing insurer's recovery by percentage of fault attributable to its insured). Therefore, as each party's fault will be assessed, and no party will be held liable for more than its share, the Court grants MacFrugal's and National Union's motions for summary judgment. . . . The Court declines to address the merits of their alternative arguments.
III. Conclusion
For the foregoing reasons the Court grants MacFrugal's and National Union's motions for summary judgment to dismiss the third party demands of Grinnell Fire Protection Systems Company.
ORDER AND REASONS
Before the Court are plaintiffs' motion for reconsideration of the Court's August 28, 2000 order granting summary judgment to the City of New Orleans and, in the alternative, request to certify that order as final. For the following reasons the Court denies plaintiffs' motion for reconsideration and request for certification.
I. Background
On August 28, 2000, the Court granted a motion for summary judgment by the City of New Orleans. The Court found that the actions taken by the New Orleans Fire Department ("NOFD") at the MacFrugal warehouse fire were protected by the discretionary function exception pursuant to Louisiana Revised Statutes Section
Plaintiffs (London-based insurance companies and Underwriters at Lloyd's, London) now move the Court to reconsider its opinion. They assert there are three errors of law or fact that warrant vacating the judgment. First, the Court mistakenly looked to the National Fire Protection Association's Handbook instead of the Standards, which have the force of law. Second, whether the New Orleans Building Code mandated how the NOFD should have acted is a disputed issue of material fact that a jury must resolve. Third, the Court determined that the NOFD's actions were grounded in policy despite a scarcity of factual support or legal precedent. In the alternative, plaintiffs ask the Court to enter a final judgment for the City, certifying the judgment for immediate appeal to the Fifth Circuit pursuant to Federal Rule of Civil Procedure 54(b)
II. Discussion
A. Reconsideration
Although the Federal Rules of Civil Procedure do not formally recognize a motion to reconsider in haec verba, the Fifth Circuit has held that a motion to reconsider a dispositive pretrial motion may be classified under either Rule 59 or Rule 60, depending upon the time of filing. See Pryor v. United States Postal Service, 769 F.2d 281, 285 (5th Cir. 1985); Lavespere v. Niagra Mach. Tool Works, Inc., 910 F.2d 167, 173 (5th Cir. 1990), abrogated on other grounds by Little v. Liquid Air Corp., 37 F.3d 1069, 1075 n. 14 (5th Cir. 1994) (en banc). As plaintiff filed his motion for reconsideration more than ten days after judgment, the motion falls under Rule 60(b) as a motion for "relief from judgment." See Lavespere, 910 F.3d at 173. Under Rule 60(b) a court will grant relief from a final judgment or order only upon a showing of one of:
(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b);
(3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party;
(4) the judgment is void;
(5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or
(6) any other reason justifying relief from the operation of the judgment.
1. NFPA Standards
Plaintiffs first argue that the Court apparently confused the National Fire Protection Association's Handbook, which merely provides recommendations, with the Standards, which were adopted as governing law by the Louisiana State Fire Marshall's Office. Among those governing standards is a provision that "[t]o be ready for prompt valve reopening if fire rekindles, a person stationed at the valve, a fire watch, and a dependable communications between them are needed until automatic sprinkler protection is restored." (Pls.' Supp. Mem., Ex. A. at 1 (NFPA 231C, A-11-6).) Plaintiffs assert that this standard eliminates any NOFD discretion and precludes application of the discretionary immunity statute. The Court disagrees.
The Court's original reasoning did not rely upon a distinction between the Handbook and the Standards. Rather, the Court emphasized that the NFPA language merely recommends courses of action in dealing with fires. Standard A-11-6 is no exception. By its terms, the standard identities a need; it does not mandate specific action. This distinction is dispositive because it allows for the very exercise of discretion that permeates the language of the Standards and triggers the protection afforded by the discretionary function exception embodied in Louisiana Revised Statutes Section 9:2798.1.
2. New Orleans Building Code
Plaintiffs further argue that there is a disputed issue of material fact whether the article 5026 of the New Orleans Building Code mandated certain NOFD actions. In support of this argument, plaintiffs cite the deposition testimony of Chief Electrical Inspector Larry Chan and Fire Captain Wayne Verges. Having reviewed that deposition testimony, the Court finds that neither gentleman addressed an obligation to inspect the electrical power in the midst of an emergency firefighting situation, which includes remedial firefighting actions. See La. R.S. § 9:2793.1(2) ("[T]he term `public emergency' includes any emergency in which there is a potential threat to life or property requiring immediate or remedial action. . . ." Furthermore, as the Court already explained, "it would be nonsensical for NOFD, while engaged in firefighting efforts, to wait 48 hours to secure a permit to restore electrical power." McAuslin v. Grinnell Corp., 2000 WL 1219183, at *3 (E.D. La. Aug. 28, 2000). Accordingly, the Court rejects plaintiffs contention that there is a disputed issue of material fact whether the article 5026 of the New Orleans Building Code mandated certain NOFD actions.
3. Policy Determination
Plaintiffs also argue that there is a scarcity of factual support or legal precedent to support Court's determination that the NOFD's actions were grounded in policy. This contention, however, fails to account for the Court's articulated reasoning. Moreover, the Court is not convinced that any perceived scarcity merits reconsideration.
B. Rule 54(b)
In the alternative, plaintiffs ask the Court to enter a partial final judgment. When deciding whether to certify a judgment under Rule 54(b), a district court must make two determinations. See Curtiss-Wright Corp. v. General Elec. Co., 446 U.S. 1, 7-8, 100 S.Ct. 1460, 1464-65 (1980). "First, the district court must determine that `it is dealing with a final judgment.'" Briargrove Shopping Ctr. Joint Venture v. Pilgrim Enterprises, 170 F.3d 536, 539 (5th Cir. 1999) (quoting Curtiss-Wright, 446 U.S. at 7, 100 S.Ct. at 1464). A judgment is final if "it is `an ultimate disposition of an individual claim entered in the course of a multiple claims action.'" Id. (quoting Curtiss-Wright, 446 U.S. at 7, 100 S.Ct. at 1464). Second, the district court must determine "whether any just reason for delay exists." Id. (quoting Curtiss-Wright, 446 U.S. at 8, 100 S.Ct. at 1465). In making this determination, the district court must weigh "the inconvenience and costs of piecemeal review on the one hand and the danger of denying justice by delay on the other." Road Sprinkler Fitters Local Union v. Continental Sprinkler Co., 967 F.2d 145, 148 (quoting Dickinson v. Petroleum Conversion Corp., 338 U.S. 507, 511, 70 S.Ct. 322, 324 (1950)). A major factor the court should consider is whether the appellate court "would have to decide the same issues more than once even if there were subsequent appeals." H W Indus., Inc. v. Formosa Plastics Corp., USA, 860 F.2d 172, 175 (5th Cir. 1988) (quoting Curtiss-Wright, 446 U.S. at 8, 100 S.Ct. at 1465).
After weighing the appropriate factors, the Court finds that certification is inappropriate. Plaintiffs fail to convince the Court that "there exists some danger of hardship or injustice through delay which would be alleviated by immediate appeal." PYCA Indus., Inc. v. Harrison County Waste Water Mgmt. Dist., 81 F.3d 1412, 1421 (5th Cir. 1996). Consequently, the possibility that an entry of judgment will produce piecemeal review in this case outweighs the danger of denying justice by delay.
III. Conclusion
For the foregoing reasons the Court denies plaintiffs' motion for reconsideration and request to certify its August 28, 2000 order as final.