Opinion
Civil Action 17-cv-00346-PAB-MEH
07-27-2021
OWNERS INS. CO., Plaintiff, v. 11380 EAST SMITH ROAD, LLC, 3555 MOLINE, LLC, Defendants.
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
Michael E. Hegarty, United States Magistrate Judge.
Before the Court is Plaintiff's Motion to Amend Pretrial Order to Grant Leave for Plaintiff to File Dispositive Motion. ECF 100. Plaintiff seeks leave of court to file a summary judgment motion, a copy of which it provides at ECF 98. The matter is fully briefed, and oral argument would not materially assist in its adjudication. For the reasons that follow, the Court respectfully recommends that the Motion be denied.
BACKGROUND
I. Claims for Relief
The Final Pretrial Order (“FPTO”) was entered on December 18, 2019. ECF 72. As Plaintiff stresses in its proposed summary judgment motion (ECF 98-2 at 15, n.1), the significance of a FPTO, the Tenth Circuit explained in Monfroe v. Phillips, 778 F.3d 849 (10th Cir. 2015), was to succinctly disclose a party's trial intentions. Id. at 851. Accordingly, a party waives any claims, issues, defenses, or theories of damages not included in the FPTO. Murphy-Sims v. Owners Ins. Co., 947 F.3d 628, 631 (10th Cir. 2020); Wilson v. Muckala, 303 F.3d 1207, 1215 (10th Cir. 2002).
As the FPTO describes it, the lawsuit concerns a commercial property insurance policy that Plaintiff issued to Defendants to insure two buildings. The insured Defendants asked their insurer Plaintiff to pay for hail storm-related damage to the buildings' roofs under the policy's terms. Later, the first Defendant, 11380 East Smith Road LLC, went through a bankruptcy reorganization and foreclosure (which began in February 2018 and concluded a year later in February 2019). The second Defendant, 3555 Moline, LLC, sold its building to a third party in December 2016.
Plaintiff admits general insurance coverage and some loss. Otherwise, the parties dispute what the proper amount of loss is, whether as a matter of contract interpretation (what kind of coverage do the various policy provisions permit), damage valuation (based on facts over the roofs' pre-existing condition, the damage that the hail storm caused directly, and repair costs), or waiver (with respect to Defendants' later request to add lost operating cash as damages). In other words, as the Court summarized in its Order at ECF 97, the parties dispute the scope of the alleged damage, the scope of the associated repairs, and the scope of coverage under the policy. The parties litigate those disputes through their respective claims for relief. Plaintiff seeks to resolve the disputes in its favor through a declaratory judgment. Defendants bring counterclaims for breach of contract and bad faith. Plaintiff contests Defendants' standing to assert those claims.
The Court dismissed Defendants' claim for mandatory appraisal, thereby resolving the dispute over the enforceability of the policy's appraisal provision in Plaintiff's favor. ECF 20; ECF 94; ECF 95 at 4, n.2. Defendants seek reconsideration of that dismissal and argue that appraisal would render moot the parties' dispute over the amount of loss. ECF 96 at 4.
II. Procedural History
From the time of its entry on December 18, 2019, the FPTO controlled “the subsequent course of this action and the trial.” It “may not be amended except by consent of the parties and approval by the court or by order of the court to prevent manifest injustice .” ECF 72 at 44 (emphasis in the original).
Previously, on September 27, 2018, the deadline for discovery was set as November 16, 2018 and the deadline for dispositive motions was set as December 16, 2018. ECF 36. No dispositive motions were filed within that time frame.
The Court held a Pretrial Conference on March 26, 2019 at which the issue of Defendant 11380 East Smith Road LLC's bankruptcy arose. The lawsuit was stayed until the question of how the bankruptcy proceeding affected Defendant's ownership of the insurance claim was answered. The Court gave Plaintiff leave to move to reopen discovery, if needed, afterwards. ECF 43. Beginning in April 2019, the parties filed monthly status reports to keep the Court up-to-date. I held a Status Conference on November 6, 2019 at which the Final Pretrial Conference was set for December 12, 2019 (ECF 68) which was later reset to December 17, 2019 (ECF 70).
Upon entry of the FPTO, a Trial Preparation Conference was scheduled for July 17, 2020 and a jury trial to begin on August 3, 2020. ECF 73. The parties were instructed to file motions to exclude expert testimony sixty days before the Trial Preparation Conference.
On February 28, 2020, Defendant 11380 East Smith Road LLC filed a Notice to inform the Court that it had settled its bankruptcy case. ECF 75.
On March 11, 2020, the Court reset the Trial Preparation Conference to October 2, 2020 and the jury trial to October 26, 2020. ECF 77. The deadline for filing motions to exclude expert testimony remained the same (sixty days before the Trial Preparation Conference). Within that time frame, on August 3, 2020, Plaintiff moved to exclude the testimony of Defendants' expert witness, Edward Fronapfel. ECF 78.
A Status Conference was held on September 24, 2020, at which the Trial Preparation Conference was reset to October 1, 2021 and the trial to October 18, 2021. ECF 93. The trial was continued for COVID-related reasons. ECF 96 at 4.
The Court also asked the parties to state their preference for how to try the remaining declaratory judgment claims. ECF 94. Plaintiff answered that several of its declaratory judgment claims could be ruled upon as a matter of law by way of a dispositive motion rather than by trial (whether to the court or to the jury). ECF 95. Plaintiff conceded the need for the Court to grant leave to file dispositive motions for that approach. ECF 95 at 2, n.1. Alternatively, Plaintiff suggested that its declaratory judgment claims be tried first, to the court, and try all remaining claims thereafter to the jury. Defendants agreed that the declaratory relief claims raise questions of law that the Court may resolve without a jury. ECF 96. Defendants added that “the dispositive motion deadline has long since passed.” Id. at 1, n.1. The parties filed their notices on October 22, 2020.
On March 17, 2021, the Court granted Plaintiff's motion to exclude the opinion testimony of Edward Fronapfel, Defendants' expert witness. The subject of Mr. Fronapfel's opinion was the reasonableness of the repair estimate for Defendants' roofs which in turn was based on his opinions about the extent of roof damage, its cause, and the necessity for repair. The Court excluded his opinion that the $340,000 cost credit is reasonable. ECF 97.
Nearly four months later, on July 12, 2021, Plaintiff filed the instant Motion seeking permission to move for summary judgment, the basis of which was the exclusion of Mr. Fronapfel's opinion. As Plaintiff summarizes its argument, Defendants have no other expert witness “to opine on the cost of these complex roof repairs” and without such expert opinion evidence, “Defendants cannot prove their essential element of damages for their breach of contract claim.” ECF 98-2 at 1.
LEGAL STANDARD
As Plaintiff concedes, the deadline for filing a dispositive motion has passed, and therefore, it requires leave of court to file its proposed summary judgment motion. ECF 100 at 1-2. The FPTO sets the standard for when a court may grant such leave: to prevent manifest injustice .” ECF 72 at 44 (emphasis in the original). See Fed.R.Civ.P. 16(e) (“The Court may modify the order issued after a final pretrial conference only to prevent manifest injustice.”). Plaintiff does not move to extend the dispositive motions deadline under Fed.R.Civ.P. 16(b) and its good cause standard. Given that this lawsuit stands much closer in time to the trial (set to begin on October 18, 2021 with a Trial Preparation Conference on October 1, 2021) than the dispositive motions deadline (December 16, 2018), the Court adheres to Plaintiff's application of the Rule 16(e) standard for relief. As the party seeking a Rule 16(e) modification, Plaintiff bears the burden of persuasion and to formally move for such relief. Koch v. Koch Indus., Inc., 203 F.3d 1202, 1223 (10th Cir. 2000).
ANALYSIS
I. Timeliness
One factor for the Court to consider is whether Plaintiff seeks the amendment in a timely fashion. Id. (“This Court should also consider whether the party . . . timely moved for such modification in the trial court.”) The change in circumstances that prompted Plaintiff to move for summary judgment was the Court's exclusion of Mr. Fronapfel's expert opinion. The Order was issued after the dispositive motions deadline and the issuance of the FPTO. However, four months passed after the Court granted its motion to exclude the opinion evidence before Plaintiff sought leave to file its summary judgment motion. Plaintiff acknowledges that passage of time and explains the various other litigation responsibilities and personal matters that contributed to it. ECF 100 at 8-9. Even if the intervening circumstances are understandable and excusable, that does not necessarily mean that Plaintiff acted expeditiously. Plaintiff could have filed the same motion soon after the expert witness opinion ruling and asked for additional time to prepare the summary judgment motion. That would have given both the Court and Defendants more time to factor it into the trial preparation schedule. Even if the press of other business and personal demands hindered Plaintiff's ability to prepare its summary judgment motion sooner, seeking to file it at this point effectively places Defendants in the position of defending against summary judgment despite the other demands on their time. The Court finds no bad faith on Plaintiff's part, but even if the Court were to find the instant Motion timely, Plaintiff still would not meet the FPTO amendment standard on the merits.
II. Koch Factors
The factors relevant to a request to amend a FPTO are: (1) prejudice or surprise to the opposing party, (2) the ability to cure any prejudice, (3) disruption to an orderly and efficient trial, and (4) bad faith by the party seeking the modification. Koch, 203 F.3d at 1222. Although the modification at issue in Koch was the addition of a new issue (and not what is in effect a request to extend the dispositive motions deadline), the parties frame their arguments in reference to the Koch factors. This Court follows suit and applies the Koch factors as well, adjusted to reflect the nature of Plaintiff's request.
A. Prejudice
The Court accepts Plaintiff's explanation for the four-month delay before it sought leave to file its summary judgment motion. Likewise, the Court does not doubt Defendants' assertion that granting the instant Motion would cause it “substantial unfair prejudice.” ECF 106 at 2. Defendants' counsel explains that he “has numerous pending matters with existing deadlines and long-standing schedules that would all have to shift, leading to delays in numerous other cases, in order to allow simultaneous work in this case to respond to the proposed motion while continuing to prepare for the trial.” Id. at 3. Plaintiff replies that its summary judgment motion could be briefed (and ruled upon) in time before the trial's start, but the timing still would be very close. On balance, the prejudice factor weighs against Plaintiff's request.
B. Cure
Defendant states that the only way to ameliorate the prejudice would be to reschedule the Trial Preparation Conference and trial date. ECF 106 at 3. That is the only option if the remaining two months' time is insufficient to permit full briefing and a ruling (as well as to permit the parties time to factor the ruling into their trial preparations). However, I lack the authority to change the trial schedule that Chief Judge Brimmer has created.
C. Disruptive Effect
Plaintiff stresses the benefit of a summary judgment ruling on the orderly and efficient trial of this lawsuit. The question of whether Defendants can prove damages must be answered at some point anyway. Were the Court to grant its proposed summary judgment motion, it would obviate “the need for trial in toto.” ECF 100 at 6. Denial of the motion still would assist the parties in preparing for trial. Defendants obviously disagree that the summary judgment option improves trial preparation efficiency.
Plaintiff cites Am. Auto. Ins. Co. v. First Mercury Ins. Co., No. 13:CV-439 MCA/LF, 2017 WL 3084436 (D.N.M. July 17, 2017) and Eischeid v. Dover Constr., Inc., 217 F.R.D. 448 (N.D. Iowa 2003) for how a dispositive motion, even if filed late, still may present the overall most efficient means for resolving a legal issue. First Mercury and Eischeid both addressed that point in the Rule 16(b) context rather than the Rule 16(e) standard at issue here. Nevertheless, even if Plaintiff's proposed summary judgment motion would simplify what issues needed to be tried, that does not necessary mean that leave must be granted to allow it. Even if a summary judgment ruling had a beneficial effect, the damages issue still can be addressed in other ways. Giving Plaintiff leave to file its proposed summary judgment motion is not required to prevent manifest injustice.
D. Bad Faith
The Court sees no bad faith behind Plaintiff's instant request. Plaintiff filed its underlying motion to exclude or limit Defendants' expert Edward Fronapfel's opinion testimony within the given deadline. Once it obtained a favorable ruling on that motion, Plaintiff probably should have acted sooner to obtain leave to file the summary judgment motion, but it also explains the reason for that delay. Even if no bad faith is evident, the other reasons the Court discusses above militate against granting the Motion.
CONCLUSION
The new development that precipitated Plaintiff's request to file its summary judgment motion was the favorable ruling regarding Defendants' expert witness. Rulings on such trial-related motions such as the motion to exclude trial testimony at issue here or motions in limine generally have the effect of changing the relative strength or weakness of a party's case. That does not necessarily warrant the filing of dispositive motion in response. Even if, as Plaintiff contends here, the ruling had a dramatic effect on a core claim for relief, there is no need to interfere with the trial preparation process.
Accordingly, the Court respectfully RECOMMENDS that the Motion [filed July 12, 2021; ECF 100] be denied.
Be advised that all parties shall have fourteen (14) days after service hereof to serve and file any written objections in order to obtain reconsideration by the District Judge to whom this case is assigned. Fed.R.Civ.P. 72. The party filing objections must specifically identify those findings or recommendations to which the objections are being made. The District Court need not consider frivolous, conclusive or general objections. A party's failure to file such written objections to proposed findings and recommendations contained in this report may bar the party from a de novo determination by the District Judge of the proposed findings and recommendations. United States v. Raddatz, 447 U.S. 667, 676-83 (1980); 28 U.S.C. § 636(b)(1). Additionally, the failure to file written objections to the proposed findings and recommendations within fourteen (14) days after being served with a copy may bar the aggrieved party from appealing the factual findings of the Magistrate Judge that are accepted or adopted by the District Court. Thomas v. Arn, 474 U.S. 140, 155 (1985); In re Garcia, 347 Fed.Appx. 381, 382-83 (10th Cir. 2009).