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Liberty Mutual Fire Insurance Co. v. Fowlkes Plumbing, LLC

United States District Court, N.D. Mississippi, Aberdeen Division

April 4, 2018

LIBERTY MUTUAL FIRE INSURANCE COMPANY PLAINTIFF
v.
FOWLKES PLUMBING, LLC, QUALITY HEAT & AIR, INC., and SULLIVAN ENTERPRISES, INC. DEFENDANTS

          MEMORANDUM OPINION DENYING DEFENDANTS' MOTION FOR RECONSIDERATION

         Now before this Court is the Defendants' motion for reconsideration [116]. In their motion, Defendants ask this Court to reconsider its previous denial of Defendants' motion for summary judgment [114]. Having considered the matter, the Court finds the motion should be denied.

         Factual and Procedural Background

         In May 2015, nonparty Chickasaw County School District entered into a contractual agreement ("Agreement" or "the Agreement") with Defendant Sullivan Enterprises to perform window restoration work on the Houlka Attendance Center. See Affidavit of Dr. Betsy Collums [Doc. No. 107-1] at ¶ 7 & Document Al01-2007, Agreement between Chickasaw County School District and Sullivan Enterprises, Inc. [Doc. No. 107-2, Exhibit A]. On July 30, 2015, while construction work was ongoing a fire began that consumed the entire Houlka Attendance Center Building. Doc. No. 107-1 at ¶ 11.

         As a result of this fire, Plaintiff Liberty Mutual, the school district's property insurer, paid the school district $4.3 million for the damages caused to the building. Affidavit of Jay Goldstein [Doc. No. 107-4] at ¶ 13. Liberty Mutual then brought this subrogation action against the Defendants, alleging that their negligence started the fire and seeking to recover insurance proceeds it paid out to the School District.

         In their original motion, Defendants argued that the Agreement between Sullivan Enterprises, the contractor, and the School District provided a waiver of subrogation for the claims at hand. This Court found that the waiver of subrogation provision only extended to damages of property considered to be "Work" property as defined by the Agreement. As a result, the Agreement did not prevent Liberty Mutual from seeking recovery for damages to non-Work property, and so this Court denied Defendants' motion with respect to Liberty Mutual's claims for those damages.

         To reach that decision, this Court had to decide whether the scope of the provision was determined by the nature of property damaged-an approach often described as the "minority" approach and described by this Court as the "damage type" approach-or by which insurance policy paid for the damages, described as the "majority" or "insurance source" approach. See Trinity Universal Ins. Co. v. Bill Cox Const, 75 S.W.3d 6, 11-12 (Tex. Civ. App. 2001). The Court found the "damage type" approach applicable and therefore found that the waiver of subrogation provision did not prevent Liberty Mutual from seeking to recover damages it paid for non-Work property. As a result, the Court granted Defendants' motion with respect to damages for Work property and denied the motion with respect to damages for non-Work property.

         Defendants now ask this Court to reconsider that opinion and order and decide that the majority approach should apply and grant summary judgment in their favor in full.

         Analysis

         "While the Federal Rules of Civil Procedure do not provide for a motion for reconsideration, such a motion may be considered either a Rule 59(e) motion to alter or amend judgment or a Rule 60(b) motion for relief from judgment or order." Shepherd v. Int'l Paper Co., 372 F.3d 326, 328 n.l (5th Cir. 2004). Because the motion before this Court was filed within 28 days of the Court's order, the Court will treat the motion as a Rule 59(e) motion to alter or amend judgment. See Fed. R. Civ. P. 59. A Rule 59 motion is the proper vehicle by which a party can "correct manifest errors of law or fact" or "present newly discovered evidence." Templet v. HydroChem Inc., 367 F.3d 473, 479 (5th Cir. 2004) (quoting Waltman v. Int'l Paper Co., 875 F.2d 468, 473 (5th Cir. 1989)). A party should not attempt to use the Rule 59 motion for the purpose of "rehashing evidence, legal theories, or arguments that could have been offered or raised before the entry of judgment." Templet, 367 F.3d at 479, (citing Simon v. U.S., 81 F.2d 1154, 1159 (5th Cir. 1990)).

         Defendants identify four issues they assert are manifest errors of law or fact:

1. The Court's opinion was manifestly in error in law and fact when it mistakenly quoted from an affirmance by the Fifth Circuit in Craig-Wilkinson, 101 F.3d 699, 1996 WL 661216 (5th Cir. 1996) and mistakenly found that the court should follow the "minority rule" on the scope of waiver issue.
2. The Court's opinion misapprehended Defendants' waiver of subrogation argument by not applying section 11.3.5 of the General Conditions of A201-2007.
3. The Court's opinion inaccurately concluded "the relevant sections of Document A107-1987 [contained in Fidelity & Guaranty Ins. Co. v. Craig-Wilkinson, Inc., 948 Supp. 608 (S.D.Miss.) aff d 101 F.3d 699 are identical to the sections [in General Conditions of Form A201-2007] at issue here."
4. The Court's opinion was manifestly in error by finding Liberty Mutual's Policy only waived damages to work "because there is no evidence [Liberty Mutual's Policy] was purchased specifically to cover the work, or that it includes any ...

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