Free Response to Motion - District Court of Colorado - Colorado

Case 1:01-cv-01807-MSK-MJW

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 01-cv-1807-MSK-MJW Bank One, Colorado, N.A., Bank One Trust Company, N.A. as Trustee of the Dora Lucille Jamison Trust and the Jamison Family Trust, Plaintiffs, v. Boulder Cleaners, Inc., C.V.Y. Corporation, d/b/a Your Valet Cleaners, Johnny On the Spot, Inc., Defendants.

Boulder Cleaners, Inc., and John's Cleaners, Inc. Cross-Plaintiffs, v. C.V.Y. Corporation, d/b/a Your Valet Cleaners, Cross-Defendant.

C.V.Y. Corporation, d/b/a Your Valet Cleaners, Counterclaimant, v. Bank One, Colorado, N.A., Bank One Trust Company, N.A. as Trustee of the Dora Lucille Jamison Trust and the Jamison Family Trust, Counterclaim Defendants.

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PLAINTIFFS' COMBINED RESPONSE IN OPPOSITION TO DEFENDANTS' MOTIONS (1) TO AMEND TO ADD A NEW COUNTERCLAIM; AND (2) FOR RECONSIDERATION OF THE COURT'S SUMMARY JUDGMENT ORDER

Plaintiffs Bank One, Colorado, N.A. and Bank One Trust Company, N.A., (collectively, "Plaintiffs") respectfully submit their Combined Response in Opposition to the Motions of Defendants C.V.Y. Corporation, d/b/a Your Valet Cleaners, and Johnny on the Spot, Inc. (collectively, "Defendants"), entitled (1) "Motion For Leave to Assert Counterclaim For CERCLA 42 U.S.C. § 9613 Contribution Against Plaintiffs" and (2) "Motion for Reconsideration of the Court's Order Granting Summary Judgment on Counterclaims Asserted by Defendant C.V.Y. Corporation." For the reasons set forth below, both Motions should be denied in their entirety. Defendants' Motion To Amend. 1. Over five years into this case, Defendants ask the Court to allow them to assert a

new counterclaim for contribution under CERCLA section 113, 42 U.S.C. § 113(f)(1). Defendants argue that Rule 13(e) allows them to assert this counterclaim at this late date. See Mot. to Amend ¶¶ 10, 15. 2. Rule 13(e) does not apply here. That Rule applies only to a counterclaim "which

either matured or was acquired by the pleader after serving a pleading." Id. Any section 113(f)(1) claim by Defendants accrued as soon as they were subject to a suit under CERCLA section 107. See 42 U.S.C. § 9613(f)(1) (Section 113 claims may be asserted "during or following any civil action under section 9606 of this title or under section 9607(a) of this title.").

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Plaintiffs have asserted a CERCLA section 107 claim in this case ever since their original complaint in September 2001. Therefore, Defendants could have asserted a counterclaim under section 113 in any of their several amended answers and counterclaims they have served over the past five years. 3. Defendants argue that the Supreme Court's decision in Cooper Industries, Inc. v.

Aviall Services, Inc., 543 U.S. 157 (2004), brings their proposed counterclaim within the scope of Rule 13(e). Mot. to Amend ¶ 10. That is not so. The Aviall decision had no impact on Defendants' ability to bring a section 113 claim in this case. Aviall only made it more difficult to assert a section 113(f)(1) claim by narrowing the class of plaintiffs who could bring such a claim. Aviall addressed the question of "whether a private party who has not been sued under § 106 or § 107(a) may nonetheless obtain contribution under § 113(f)(1) from other liable parties." Id. at 160-61 (emphasis added). Strictly construing the language in the CERCLA statute, the Supreme Court held that it may not. Id. 4. Because Plaintiffs always have asserted a section 107 claim against Defendants in

this case, Defendants were free in their response to Plaintiffs' original complaint ­ and at all times since, before or after Aviall ­ to assert a counterclaim for contribution under section 113. They simply chose not to do so until now. Whether that was the result of inadvertence or a tactical decision is of no importance. Regardless, Defendants cannot claim application of Rule 13(e). See Carroll v. Acme-Cleveland Corp., 955 F.2d 1107, 1114 (7th Cir. 1992) ("[Defendant] could not file its claim under Rule 13(e) because the claim accrued before [Defendant] was required to file its answer."); Bergquist v. Aetna U.S. Healthcare, 289 F. Supp. 2d 400,

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415 (S.D.N.Y. 2003) (holding that leave to amend not proper under Rule 13(e) where events "that gave rise to the claim accrued more than two months prior to the filing of the answer"). 5. Defendants hardly can claim to be surprised that Plaintiffs' section 107 claim

could result in their being held jointly and severally liable for the costs of the cleanup in this case. For over 15 years, the Tenth Circuit has consistently recognized that section 107 imposes joint and several liability on defendants. See, e.g., Morrison Enters. v. McShares, Inc., 302 F.3d 1127, 1133 (10th Cir. 2002) ("Because liability is strict, joint, and several, CERCLA plaintiffs under § 9607 need not show that the defendant caused the release of hazardous wastes that required response actions."); Sun Co., Inc. (R&M) v. Browning-Ferris, Inc., 124 F.3d 1187, 1190 (10th Cir. 1997) ("PRPs' liability in cost recovery actions under § 107 is strict, joint and several."); United States v. Colo. & E. R.R., 50 F.3d 1530, 1535 (10th Cir. 1995) ("It is also well settled that § 107 imposes joint and several liability on PRPs regardless of fault."); State of Colo. v. Idarado Min. Co., 916 F.2d 1486, 1489 (10th Cir. 1990) ("Liability [under section 107] among responsible parties is joint and several."). 6. Moreover, in their motion for summary judgment on Plaintiffs' section 107 claim

(which the Court denied), Defendants noted that "[l]iability under Section 107 is strict, joint and several." Mot. for Summ. J. ¶ 2 (Doc. # 113); see also Doc. # 114. 7. Essentially, Defendants' argument boils down to their reliance on their

expectation that Plaintiffs would not voluntarily dismiss or withdraw their CERCLA section 113 claim, and the Court's occasional comments and observations as to how this case was likely to be tried. That reliance was not justified. It is a commonplace that plaintiffs can and do decide to withdraw or abandon claims at any point in a case, and often do so in the Pretrial Order on the 4

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eve of trial. See, e.g., Fed. R. Civ. P. 16(c)(1). Defendants' failure to foresee the consequences of Plaintiffs' decision to proceed under section 107 to seek joint and several liability is no one's fault but their own. 8. The deadline for amendment of pleadings ­ after being extended by the Court ­

was May 31, 2002. Because that deadline is long passed, Defendants' Motion to Amend is governed by the "good cause" standard of Rule 16(b) rather than the more lenient standard in Rule 15. See, e.g., Colo. Visionary Acad. v. Medtronic, Inc., 194 F.R.D. 684, 687-88 (D. Colo. 2000); Rowen v. New Mexico, 210 F.R.D. 250, 252-53 (D.N.M. 2002) (collecting cases). See also Sil-Flo, Inc. v. SFHC, Inc., 917 F.2d 1507, 1518-19 (10th Cir. 1990) (affirming denial of motion to file compulsory counterclaim in absence of showing of "good cause" for failure to meet deadline in scheduling order). 9. Rule 16(b), unlike Rule 15, does not focus on the bad faith of the party moving to

amend his pleading or on prejudice to the opposing party. Colo. Visionary Acad., 194 F.R.D. at 687 (citations omitted); see also Rowen, 210 F.R.D. at 252. Instead, the standard is the diligence demonstrated by the moving party in attempting to meet the Court's deadlines. Id. "Properly construed, `good cause' means that scheduling deadlines cannot be met despite a party's diligent efforts." Id. Furthermore, "[c]arelessness is not compatible with a finding of diligence and offers no reason for a grant of relief," and a party seeking leave to amend out-of-time must offer "persuasive reason[s] as to why the amendment could not have been effected within the time frame established by the court." Id. 10. Defendants cannot possibly meet this standard. There is no reason why

Defendants could not have pleaded a section 113 counterclaim before the Court's May 31, 2002 5

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deadline.1 Plaintiffs could have chosen ­ at any point in the case, with or without the Aviall decision, ­ to withdraw their section 113 and/or other claims, and Defendants would be in the same position they are in now: facing the possibility of joint and several liability under Plaintiffs' section 107 claim. Defendants' failure to account for this entirely foreseeable scenario does not amount to "good cause" under Rule 16, and therefore, their motion to amend should be denied. Defendants' Motion for Reconsideration. 11. Based on "the same reasons and law" cited in their Motion to Amend, Defendants

also move for reconsideration of the Court's March 31, 2004 order granting summary judgment to Plaintiffs on Defendants' counterclaim for contractual indemnification. Mot. for Recons. ¶ 2. 12. Motions to reconsider are not expressly recognized by the Federal Rules of Civil

Procedure. See, e.g., Price v. Philpot, 420 F.3d 1158, 1167 n.9 (10th Cir. 2005); Van Skiver v. United States, 952 F.2d 1241, 1243 (10th Cir. 1991). The judgment Defendants ask the Court to reconsider is interlocutory because it adjudicated fewer than all claims with respect to all parties. See Raytheon Constrs., Inc. v. Asarco Inc., 368 F.3d 1214, 1217 (10th Cir. 2003). Therefore, it "`is subject to reopening at the discretion of the district judge.'" Philpot, 420 F.3d at 1167 n.5 (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 12, (1983)); see also Wagoner v. Wagoner, 938 F.2d 1120, 1122 n. 1 (10th Cir. 1991). See generally Fed. R. Civ. P. 54(b).

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Defendants devote a substantial portion of their Motion to arguing the merits of their proposed section 113 counterclaim. See id. ¶¶ 12-14. Although Plaintiffs disagree with much, if not all, of this analysis, it is not relevant to whether Defendants can satisfy the Rule 16 "good cause" standard and therefore is not addressed in this Response. 6

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13.

A motion for reconsideration is appropriate only when the court has

misapprehended the facts, a party's position, or controlling law. See Servants of Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000). It is inappropriate to file a motion for reconsideration merely "to revisit issues already addressed or advance arguments that could have been raised in prior briefing." Id.; see also Van Skiver, 952 F.2d at 1243; Bartholic v. ScriptoTokai Corp., 140 F. Supp. 2d 1098, 1124 (D. Colo. 2000) ("A motion to reconsider is not a second opportunity for the losing party to make its strongest case, to rehash arguments, or to dress up arguments that previously failed."). 14. It is unclear how, if at all, Defendants even attempt to satisfy this standard.

Obviously, the Supreme Court's decision in Aviall ­ although perhaps a change in controlling law ­ had nothing to do with the Court's ruling on Defendants' counterclaim for contractual indemnification. 15. The Court's summary judgment holding was based on two findings: (1) with

respect to Bank One Trust Company, Defendants' "fail[ure] to produce any evidence from which it could be inferred that Bank One Trust Company was a party to an agreement to indemnify CVY"; and (2) with respect to Bank One, N.A., "regardless of which meaning is given to the [purported contractual indemnity] provision, it is nonetheless clear that the provision does not entitle CVY to indemnification." Doc. # 381 at 5, 6. 16. Defendants offer nothing whatsoever to warrant reconsideration of those two

findings of the Court. Instead, Defendants focus on a single paragraph of dicta in the Court's

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order concerning the significance of its ruling.2 Clearly, the eventual accuracy or inaccuracy of the Court's observations in this paragraph cannot justify reconsideration of the Court's holding, which was based on different facts and different reasoning. Conclusion. 17. For the foregoing reasons and upon the foregoing authorities, the Court should

deny Defendants' Motions and grant such other and further relief in favor of Plaintiffs and against Defendants as the Court deems just and proper. September 29, 2006. Respectfully submitted, DAVIS GRAHAM & STUBBS LLP

/s/ Jonathan W. Rauchway Laura J. Riese Jonathan W. Rauchway 1550 Seventeenth Street, Suite 500 Denver, Colorado 80202 Telephone: (303) 892-9400 Facsimile: (303) 893-1379 E-mail: [email protected] Attorneys for Plaintiffs

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"Dicta are statements and comments in an opinion concerning some rule of law or legal proposition not necessarily involved nor essential to determination of the case in hand." Rohrbaugh v. Celotex Corp., 53 F.3d 1181, 1184 (10th Cir. 1995) (citation omitted). 8

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CERTIFICATE OF SERVICE I hereby certify that on September 29, 2006, I electronically filed the foregoing PLAINTIFFS' COMBINED RESPONSE IN OPPOSITION TO DEFENDANTS' MOTIONS (1) TO AMEND TO ADD A NEW COUNTERCLAIM; AND (2) FOR RECONSIDERATION OF THE COURT'S SUMMARY JUDGMENT ORDER with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following: C. Michael Montgomery, Esq. Max K. Jones, Jr. Esq. Montgomery, Kolodny, Amatuzio & Dusbabek LLP 475 Seventeenth Street, 16th Floor Denver, Colorado 80202 Scott Jurdem, Esq. Buchanan, Jurdem & Cederberg, P.C. 1621 18th Street, Suite 260 Denver, Colorado 80202

/s/ Fran Barnes

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