Free Motion for Miscellaneous Relief - District Court of Arizona - Arizona

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Wayne Gill, Esq. (Fla Bar. No. 114953) WALTON LANTAFF SCHROEDER & CARSON LLP 1700 Palm Beach Lakes Boulevard, 7th Floor West Palm Beach, Florida 33401 Telephone: (561) 689-6700 Facsimile: (561) 689-2647 Steven Plitt, Esq. (State Bar No. 007481) Daniel Maldonado, Esq. (State Bar No. 018483) BESS KUNZ, A Professional Corporation 3838 North Central Avenue, Suite 1500 Phoenix, Arizona 85012-1092 Telephone: (602) 331-4600 Facsimile: (602) 331-8600 Attorneys for Defendant/Counter-Plaintiff IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA U-Haul International, Inc., et al Plaintiffs/Counter-Defendants, vs. Lumbermens Mutual Casualty Company, Defendant, Counter-Plaintiff. No. CIV 04-0662 PHX DGC LMC'S MEMORANDUM IN SUPPORT OF ITS MOTION FOR AMENDED AND ADDITIONAL FINDINGS, MOTION FOR AMENDMENT OF JUDGMENT, AND MOTION FOR NEW TRIAL (Assigned to the Honorable David G. Campbell) Lumbermens Mutual Casualty Company ("LMC"), by its undersigned counsel and for its memorandum of law in support of its motion for amendment of the Court's

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Order (Doc. #162) pursuant to Fed.R.Civ.P.52(b), for amendment of the judgment (Doc. #166) pursuant to Fed.R.Civ.P. 52(b) and Fed.R.Civ.P. 59(e), and for a new trial under Fed.R.Civ.P. 59(a), states as follows:
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MOTION FOR AMENDED AND ADDITIONAL FINDINGS PURSUANT TO FED.R.CIV.P. 52(b), AND LEGAL MEMORANDUM Rule 52(b) provides that "The Court may amend its findings--or make additional findings--and may amend the judgment accordingly. Grounds for a Rule 52(b) motion include manifest errors of fact and/or law, and to permit meaningful appellate review. Duffie v. Deere & Co., 111 F.3d 70 (8th Cir. 1997). REQUESTED ADDITIONAL FINDINGS OF FACT REGARDING LMC'S EQUITABLE ESTOPPEL DEFENSE LMC, in order to permit meaningful appellate review, requests the following additional findings of fact regarding its estoppel defense: a) That AON, at all times material, acted exclusively as the agent of plaintiffs and did not act as an agent or co-agent for LMC; b) That the unrebutted evidence is that plaintiffs represented to LMC through plaintiffs' agent AON that: (1) LMC would have no obligation to contribute to any judgment or settlement before Republic Western has paid $7,000,000 in indemnity; and (2) that Republic Western's payment of defense costs would not reduce any of Republic Western's combined $7,000,000 underlying coverage limits; c) That LMC's reliance on said representations was detrimental to LMC. REQUESTED AMENDMENTS OF THE FOLLOWING FINDINGS OF FACT UPON WHICH THE COURT BASES ITS FINDING OF NO JUSTIFIABLE RELIANCE To correct what LMC contends are manifest errors of fact and to permit meaningful appellate review, LMC requests the Court amend the following findings: a. First, this Court found that U-Haul's handwritten 1998 application (Ex. 2)

stating that the policies beneath LMC's policy would be defense "within aggregate

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limits" was a "representation" to Lumbermens regarding the underlying coverages. (Order, p. 5, ll. 2-6) The Court's citation of this application as a "representation" suggests that LMC received this application, yet there is no evidence that LMC did so.

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LMC respectfully requests that the Court amend this finding to further state that: "There is no evidence that this signed application was ever sent to or received by LMC." b. Second, the finding that the deletion in LMC's March 30, 1998, April 1,

1998, and April 7, 1998 binders (Exs. 105, 107, 108) of the statement in LMC's
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February 26, 1998 binder (Ex. 103) that underlying coverage would be "Defense in addition to limit. . . suggests that LMC's requirement for the underlying coverage had changed." (Order, p. 5, l. 18 ­ p. 6., l. 9) This finding of fact is inconsistent with the

Court's own finding that LMC's 1998 binders contained "an even more explicit"
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statement that "Our form will not respond until such time as the indemnity portion of a loss exceeds the underlying or Self-Insured limit." LMC respectfully requests that the Court amend the Court's factual finding at page 6, lines 5-9 of the order to state: The statement, "Defense in addition to limit" which is contained in LMC's February 26, 1998 quotation letter (Ex. 103), but not in LMC's subsequent 1998 binder letters does not suggest that LMC's requirement that the underlying coverage be defense in addition to limits had changed. This is because said binder letters contain the statement that "Our form will not respond until such time as the indemnity portion of a loss exceeds the underlying or Self-Insured limit." c. Third, that LMC, pursuant to the following form provisions in its 1998 binders (Exs. 105, 107, 108) and its 1999 policy (Ex. 15), "adopted the exact terms and conditions of the RU policy (Exs. 13, 14), including the provision providing that LAE

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was included within policy limits;" and that "Had LMC reviewed the RU policy, it would have seen, as the Court did, that the policy included LAE in the aggregate insurance limit." (Order, p. 6, ll. 10-18 and p. 7, ll. 8-16) This finding mistakenly

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implies that the only reference to LAE in the RU policies expressly states that LAE is included within aggregate limits. However, the RU policy contains no such provision. The RU's policy's definition of "ultimate net loss" refers only to "expenses incurred by the insured." Moreover, the RU policies state that they shall not apply to LAE "covered

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by underlying insurance" and further state that expenses under Coverage II are "payable by the company [Republic] in addition to the applicable limit of liability of this policy." LMC therefore respectfully requests that this finding be amended as follows:

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However, the RU policy does not contain a provision stating that LAE was included within the policy limits, but rather states that expenses will be paid in addition to limits under Coverage II. LMC's following form provision therefore did not provide additional reason for LMC to review the 1998 RU policy carefully. d. Fourth, the finding that LMC's receipt of the RU policy put LMC on

notice that the RU policies were defense within limits policies because the Court has found that the RU policy's definition of "ultimate net loss" "clearly include defense costs within aggregate limits." (Order, p. 7, ll. 2-4) The RU policy does not expressly state that it includes LAE in the aggregate insurance limits, and does not expressly state that payment of defense costs reduce the policy limit, and as noted above, the RU policies contain language that expressly states that LAE was payable in addition to the

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limits under Coverage II. Although the Court has held that the RU policies may include defense costs paid by Republic Western, the RU policies' definition of "ultimate net loss refers only to "all expenses incurred by the insured [U-Haul]." LMC respectfully

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requests that the finding be amended to state: The RU policies' definition of "ultimate net loss" does not include LAE except "all expenses incurred by the insured." Thus, a reading of the RU policy by LMC would not have contradicted AON's representation to LMC that the RU policy provides for payment of LAE in addition to limits. e. Fifth, this Court has suggested that, during the trial, LMC's counsel

admitted that the RX and RG policies underlying LMC's coverage were defense within limits policies. (Order, p. 8, ll. 6-12) LMC submits that this conclusion is not supported by the record. The Court asked LMC's counsel: "Does LMC agree that the RG and RX policies were defense within limits?" LMC's counsel responded by stating: "In this lawsuit, having looked at the policies in this lawsuit, having seen them now, yes. RG states it's defense within limits. RX says it follows form." (T. p. 168, ll. 14-18) LMC's

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counsel was stating that LMC does not presently contest the claim that the RG and RX policies were defense within limits. That is not at issue. The issue is whether LMC knew or had reason to know that the RG and RX policies were defense within limits while LMC was underwriting its policies. There is no evidence that LMC received the

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RG and RX policies before LMC issued its policies. There is no evidence that LMC had any knowledge as to the contents of the RG and RX policies when LMC issued its policies (other than AON's representations to LMC that the underlying coverage was

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defense in addition to limits). LMC's counsel only stated, in the interests of full candor, that he had learned, long after the fact, that the RG and RX policies, unlike the RU policies, contain terms that make them defense within limits policies. LMC respectfully

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requests that the Court's finding at page 8, lines 6-12 of the order be amended to state: There is no evidence that LMC received the RX and RG policies before LMC issued its policies, or that prior to issuing its policies, LMC was told or knew that the RX and RG policies were defense within limits policies. f. LMC further contends that the Court's findings of fact (Order, p. 8, ll. 13-

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21) that: "LMC either knew or should have known that the RU policies were defense within limits policies"; that "LMC did not justifiably rely on representations by AON to the contrary"; and that "LMC has failed to prove by clear and satisfactory evidence that it justifiably relied on representations by AON that the underlying policies were defense

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outside of limits coverages," constitute manifest errors of fact.

Therefore, LMC

respectfully requests that the aforesaid finding be amended to state that: LMC neither knew nor should have known that the RU policies were defense within limits policies; and LMC justifiably relied on representations by AON that the underlying policies beneath LMC's coverage were not defense within limits policies. LMC has proven by clear and satisfactory evidence that it justifiably relied on representations by AON that the underlying policies were defense outside of limits coverages. REQUESTED AMENDMENT OF THE COURT'S CONCLUSION OF LAW REGARDING LMC'S EQUITABLE ESTOPPEL DEFENSE The Court's conclusion of law "that LMC is not entitled to prevail on the defense of equitable estoppel," (Order, p. 8, ll. 25-27) is based on the Court's findings of fact that "LMC has failed to prove it justifiably relied on representations from AON that the

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underlying insurance was defense outside of limits." (Order, p. 8, ll. 23-27). As previously stated herein, because the factual findings should be amended to state that LMC justifiably relied on AON's representations, LMC requests that the Court's

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conclusion of law regarding LMC's equitable estoppel defense be amended to state: Because LMC has proven that it justifiably relied on representations from AON that the underlying insurance was defense outside of limits, LMC has established its equitable estoppel defense. The Court concludes that LMC is entitled to prevail on the defense of equitable estoppel. REQUESTED AMENDMENTS AND ADDITIONAL FINDINGS AS TO DAMAGES In order to correct what LMC contends are manifest errors of fact and law, LMC respectfully requests that the Court amend the following findings of fact: a. The Court's order finds that: "Because U-Haul is the insured under the

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LMC policies, the Court finds that U-Haul proved it was entitled to recover these damages." (Order, p. 11, ll. 16-17) Plaintiffs admitted during trial that all of the damages sought by plaintiffs U-Haul International, Inc. and Republic Western Insurance Company are sums that were paid by Republic Western, not by U-Haul. (T. p. 103, l. 25 through p. 104, l. 1) The plaintiffs simply put on no damages evidence whatsoever in connection with U-Haul International's claim, and that is because U-Haul had no damages. Therefore, LMC respectfully requests that the above findings be amended to state 1) that the Court finds that U-Haul International did not prove it was entitled to recover any damages, and LMC is entitled to judgment against U-Haul.

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b.

The Court, in explaining its finding that plaintiffs have made a showing that

the LAE payments (which plaintiffs claim reduce Republic Western's policy limits) are reasonable, states that: "Mr. Matush testified that the Republic Western personnel who

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made payments in these matters were obligated to evaluate invoices and determine their reasonableness." (Order, p. 11, l. 27 through p. 12, l. 1) This is not what Mr. Matush said. Instead, Mr. Matush testified that with respect to the adjusters' role in reviewing legal bills, it is the adjuster's role, obligation, or function to know what the services are

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that are reflected in those bills. (T. p. 94, ll. 5-9) Even if Mr. Matush had testified that the adjusters were obligated to evaluate the reasonableness of invoices, which he did not, that would not constitute evidence of habit or routine under Federal Evidence Rule 406. Instead, such testimony would not be evidence that the invoices were reasonable.

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LMC respectfully requests that this finding be amended to state that plaintiffs have not proven that Republic Western's LAE payments regarding the Martinez, Fernandez, and Nelson matters were reasonable. c. Additionally, the weight of the evidence is insufficient to prove the

damages sought by Republic Western. Mr. Matush's testimony contradicts the Court's implied finding that the reports were trustworthy and reliable to prove damages. Mr. Matush admitted at trial that from the face of the exhibits it was not possible to determine whether overpayments had been made (T. p. 78, ll. 12-21), whether payments had been posted by mistake (T. p. 78, l. 22 through p. 79, l.6), whether reimbursements had been received (T. p. 79, ll. 14-21), whether the amount invoiced was the amount

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actually paid (T. p. 83, ll. 10-16), whether expenses paid by Republic Western to Republic Western were LAE (T. p. 83, l. 17 through p. 84, l. 4), and whether the LAE allocations/payments were posted to the correct policy or wrongly posted resulting in

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payments in excess of any of the policy limits, as Mr. Matush admitted sometimes happens. (T. p. 70, ll. 11-17). Even if the data compilations were admissible as a business record (which LMC denies), Mr. Matush's own testimony calls into question the reliability of the exhibits to prove the actual amount of damages. It would be

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manifestly unjust and fundamentally unfair to require LMC to pay damages based on unreliable reports. The documents underlying these reports were requested during

discovery and never produced. LMC never had the opportunity to verify the reports for their accuracy. No bills or invoices were ever produced by Republic for legal or other

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expenses claimed, which at a minimum are required as evidence of reasonableness. See, e.g., Atlantic Permanent Fed. Sav. and Loan Assoc. v. American Cas. Co. of Reading, PA, 839 F.2d 212 (4th Cir. 1988)(plaintiffs introduced fully itemized bills for all legal expenses claimed and presented evidence that it paid those bills). A party seeking fees bears the burden of documenting the hours expended in the litigation and must submit evidence supporting those hours and the rates claimed. See Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). The District Court may exclude from the fee request any hours that are "excessive, redundant, or otherwise unnecessary." Id. at 434. It would be manifestly unjust to require LMC to pay damages not proven to be reasonable, which damages could include excessive, duplicate, or outrageous charges. See, Liberty Mut.

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Ins. Co. v. Continental Cas. Co., 771 F.2d 579 (1st Cir. 1985). Therefore, LMC respectfully requests that the Court amend its finding to hold that Republic Western failed to prove entitlement to the amount of damages sought.

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d.

This Court stated "LMC presented no evidence to suggest that the

payments set forth in Exhibits 28, 29 and 30 were unreasonable." (Order, p. 12, ll. 1-2) LMC respectfully submits that this statement be deleted, for three reasons. First,

Matush testified that he created those exhibits for this litigation, and are thus not
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admissible. (T. p. 68, ll. 74-75). Second, plaintiffs failed to carry their burden of proving that the LAE was reasonable, related and necessary for the defense of the underlying tort cases, particularly in light of the fact that it did not produce any of these documents in discovery or at trial. See Hensley, supra. Third, LMC did introduce

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evidence, during cross examination, that the claimed damages were not reasonable or necessary, including that the plaintiffs' own summaries included payments to U-Haul itself, that the summaries included Republic's own expenses, and that the summaries contained payments for their coverage counsel in this case. (Exs. 28-30). In addition, regarding the Fernandez settlement, this Court has found that "UHaul" is entitled to $1,241,925.54 in damages. (Order, p. 11, ll. 1-2) LMC,

respectfully requests that this finding, and the finding as to interest owed by LMC, be amended and reduced to zero because plaintiffs have not proven exhaustion of the underlying policies. Plaintiffs' calculations were based in part on plaintiffs' claim that payments regarding the Martinez matter exhausted the RGMM policy's $250,000 limit

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and the RU policy's $1,750,000 limit, so as to as to leave Republic Western with no coverage for the Fernandez settlement except for the RUMM policy's $5,000,000 occurrence limit. The Court notes that the details of the settlement of the Martinez

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claim have not been provided to the Court. (Order, p. 3, ll. 1-2). The only evidence received regarding Republic Western's alleged payments on the Martinez claim is plaintiffs' Exhibit #301. Mr. Matush testified that Exhibit #30 is not proof of what indemnity or LAE payments were paid under which Republic Western policy. (T. p. 71,

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ll. 2-8) Plaintiffs' counsel stipulated on the record at trial that plaintiffs are "only using these documents (i.e., plaintiffs' exhibits 28, 29, and 30) for the purposes of the total number of loss adjustment expenses, not the manner in which they were allocated to any particular Republic Western policy (T. p. 54, l. 22 through p. 55, l. 2), and that

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plaintiffs will not argue anything as to which expenses were allocated to which policies. (T. p. 56, ll. 2-5) Republic Western has thus presented no evidence as to how much of the alleged Martinez indemnity and LAE payments were paid under the RGMM and RXMM policies instead of under RUMM. Plaintiffs have also failed to provide any evidence as to the dates of the various Martinez and Fernandez indemnity and LAE payments. Plaintiffs' failure to prove how much, if at all, the Martinez settlement exhausted RGMM's and RXMM's aggregate limits prior to the Fernandez settlement is further shown by the fact that plaintiffs'

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Exhibit #282 regarding the Fernandez matter states that 1) RGMM paid $380,129.03 for LAE, 2) that RXMM paid $274,975.68 for indemnity, and 3) that RXMM paid $1,048,823.86 for LAE. To the extent Republic Western paid Fernandez LAE under

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RGMM and RXMM prior to the Martinez settlement, then RGMM's and RXMM's combined $2,000,000 occurrence limits may not have been exhausted by the Martinez settlement or may have only been partially reduced to some unknown amount. LMC respectfully contends that plaintiffs' failure to prove how much of RGMM's and

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RXMM's combined $2,000,000 aggregate limit was exhausted prior to the Fernandez settlement requires the Court to calculate plaintiffs' damages claim regarding Fernandez by applying the combined $2,000,000 aggregate limit in addition to RUMM's $5,000,000 occurrence limit, for a total of at least $7,000,000 in available coverage for

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the Fernandez settlement. Thus, Republic Western underpaid its share of the Fernandez settlement by $958,033.27, and Republic Western owes reimbursement to LMC, plus interest, regardless of whether LMC prevails on its equitable estoppel defense.3 Alternatively, plaintiffs' Exhibit #28 shows that the sum of $1,241,925.54 includes the $24,982.91 allegedly paid by U-Haul under its self-insured retention (SIR) for the Fernandez matter. Therefore, LMC alternatively requests that the Court's

finding that "U-Haul" is entitled to $1,241,925.54 in damages for the Fernandez matter

LMC does not waive its objection to Exhibit #28. (See attachment "B" to LMC's calculation of damages for the Fernandez matter filed with the court on March 9, 2007 pursuant to the court's instructions.). (Doc. #155)
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be reduced to $1,216,942.63, and subtracted from the total damages found by the Court to be owed by LMC. Moreover, the Court has found that "U-Haul" is entitled to interest of

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$123,773.55 in regard to the Nelson settlement, and interest of $372,576 regarding the Fernandez settlement. Under Arizona law, "a claim is not liquidated unless it is subject to mathematical computation without reliance upon opinion or discretion." Vigilant Ins. v. Sunbeam Corp., 231 F.R.D. 582 (D.Ariz. 2005), quoting Aries v. Palmer Johnson,

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Inc., 735 P.2d 1373 (Ariz. 1987), 1 Dan B. Dobbs, Law of Remedies § 3.6(1), at 337 (2d ed.1993) (prejudgment interest permitted if damages "can be ascertained by application of arithmetic or by the application of 'accepted standards of valuation,' without reliance on opinion or discretion."). Interest on unliquidated claims does not

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begin to run until rendition of judgment. Canal Ins. Co. v. Pizer, 901 P.2d 1192 (Ariz. App. 1995). Therefore, plaintiffs are not entitled to an award of prejudgment interest because the amount of Republic Western's damages remained unliquidated until trial. LMC, in order to correct what it contends is a manifest error of fact, respectfully requests that the Court's findings regarding interest be amended to state that plaintiffs are not entitled to an award of prejudgment interest for either the Nelson or Fernandez settlements. Alternatively, the Court has found that LMC owes $123,773.55 prejudgment interest for the Nelson settlement. The correct calculation, based on application of the Arizona 10 percent statutory rate of interest, is actually $64,811. LMC requests that the

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Court amend its calculation of prejudgment interest and subtract the amount of $64,449, from the damages found by the Court to be owed by LMC for the Nelson settlement. The grounds cited above also establish that the evidence is insufficient to support

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plaintiffs' damages claims. This insufficiency of evidence is an independent reason why LMC is entitled to its requested amended findings and conclusions of law stating that plaintiffs are not entitled to recover damages from LMC. REQUESTED FINDINGS AS TO LMC'S ENTITLEMENT TO RECOVER DAMAGES AND INTEREST ON ITS COUNTERCLAIM If the Court grants LMC's request to amend the Court's findings and conclusions of law to find in favor of LMC on LMC's defense of equitable estoppel, then LMC requests: (1) a finding in favor of LMC in the amount of $126,221 on LMC's counterclaim for damages against counter-defendants regarding the Nelson settlement, and a finding that LMC is entitled to $36,933 prejudgment interest on said amount; (2) a finding in favor of LMC in the amount of $2,644,793.21 for LMC's overpayment in

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connection with the Fernandez litigation and $797,060.97 as prejudgment interest. Alternatively, if the Court grants LMC's request to amend the Court's findings and conclusions of law to find that LMC owes nothing to plaintiffs for the Fernandez settlement due to plaintiffs having failed to prove the extent to which, if at all, RGMM's

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and RXMM's aggregate limits were exhausted prior to the Fernandez settlement, then LMC requests a finding from the Court in favor of LMC in the amount of $958,033.27, together with $288,722.36 as prejudgment interest.

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REQUEST FOR CONCLUSION OF LAW AS TO THE AMOUNT WHICH COUNTER-PLAINTIFFS ARE ENTITLED TO JUDGMENT AGAINST COUNTER-DEFENDANTS If the Court grants LMC's request for a finding that LMC is entitled to recover

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damages on LMC's counterclaim for $2,771,014.21 (126,221 + 2,644,793.21) plus interest, it necessarily follows that this Court amend its conclusions of law to state that LMC is entitled to judgment against all counter-defendants in the total amount of $3,605,008.18. Alternatively, if the Court finds that LMC is entitled to recover

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damages in the amount of $958,033.27, plus interest, this Court should amend its conclusions to enter judgment in the total amount of $1,084,254.27 (958,033.27 + 126,221) MOTION FOR AMENDMENT OF JUDGMENT PURSUANT TO FED.R.CIV.P. 52(b) AND 59(e) LMC, pursuant to Fed.R.Civ.P. 52(b) and Fed.R.Civ.P. 59(e), respectfully requests that the Court amend the judgment dated March 14, 2007 (Doc. #166) by

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substituting the proposed judgment attached as Exhibit "A" in favor of LMC, and the proposed judgment attached as Exhibit "B" in favor of LMC on its counterclaim in the event the Court finds that LMC is entitled to recover damages in the amount of $2,771,014.21 plus interest; or alternatively, that the proposed judgment attached as

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Exhibit "C" be entered in favor of LMC in place of the proposed judgment attached as Exhibit "B" if the Court finds that LMC is entitled to recover damages on LMC's counterclaim in the amount of $958,033.27 plus interest. In support thereof, LMC

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adopts and restates all of the grounds set forth above, and states that this requested amendment and substitution of proposed judgments is necessary to correct what LMC contends is clear legal error, and to prevent manifest injustice.

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MOTION FOR NEW TRIAL PURSUANT TO FED.R.CIV.P. 59(a) LMC, pursuant to Fed.R.Civ.P. 59(a), respectfully requests that the Court grant a new trial on all or part of the issues tried by bench trial on March 8, 2007. In support thereof, LMC adopts and restates all of the grounds previously set forth above. LMC

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further states that the verdict against LMC is against the clear or great weight of the evidence, and that a new trial is necessary in order to prevent a miscarriage of justice for two reasons. First, based on the evidence, the Court should find that LMC has proven its defense of equitable estoppel. Second, plaintiffs have failed to prove their damages

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claim because:

(1) they have not proven that LMC's coverage was triggered by

exhaustion of all applicable underlying limits including the RA policies that Mr. Matush admitted at trial were primary to all RG, RX and RU policies (T. pp. 89-91);4 (2) they have not proven that any of Republic Western's alleged LAE payments were reasonable; LMC maintains that the issue of exhaustion of all underlying limits (including the RA policies) is raised in plaintiffs' complaint as to the attachment point of the RU policies, and by LMC's second amended answer which pleads a dispute as to LMC's attachment point. The court's March 14, 2007 Order acknowledges the necessity of all underlying coverage being exhausted before LMC's coverage can be triggered, which should include the RA policies. Even if the issue of exhaustion of underlying coverages can be properly considered a new legal argument (which LMC denies), such argument should be permitted in order to prevent manifest injustice because the evidence, which was admitted, was admissible to impeach the plaintiffs, such rule would inhibit defendant's cross examination of plaintiffs' witness, and the court's January 25, 2007 order setting trial was issued after LMC filed the pretrial order.
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(3) plaintiffs' Exs. 28-30 were inadmissible because Matush admitted that he generated them solely in connection with and for use in litigation, and (4) because they have not proven that RGMM's and RXMM's policy limits were exhausted or reduced by payment

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of LAE before the Fernandez settlement. LMC therefore respectfully requests that the Court grant LMC's motion for a new trial and (1) address plaintiffs' failure to prove exhaustion of underlying limits; (2) grant all of LMC's requests for amended and additional findings of fact and law; and (3) direct the entry of a new judgment in favor

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of LMC on plaintiffs' claim against LMC and on LMC's counterclaim against plaintiffs, as previously requested herein. DATED this 28th day of March, 2007. WALTON LANTAFF SCHROEDER & CARSON LLP Wayne T. Gill, Esq. Southtrust Center 1700 Palm Beach Lakes Blvd., #700 West Palm Beach, FL 33401
KUNZ PLITT HYLAND DEMLONG KLEIFIELD

By: s/Daniel Maldonado Steven Plitt, Esq. Daniel Maldonado, Esq. 3838 N. Central Ave., Suite 1500 Phoenix, AZ 85012-1902 Attorneys for Defendant/Counter-Plaintiff

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CERTIFICATE OF SERVICE Filed electronically this 28th day of March, 2007 and copies electronically served/mailed to: Gerald Gaffaney, Esq. David J. Ouimette, Esq. Attorneys for Plaintiffs/Counter-Defendants Mariscal, Weeks, McIntyre & Friedlander, P.A. 2901 North Central, Suite 200 Phoenix, AZ 85012 Bruce Friedman, Esq. Mark S. Fragner, Esq. Attorneys for Plaintiffs/Counter-Defendants Rubin, Fiorella & Friedman, LLP 292 Madison Avenue New York, NY 10017

s/Tracey Barnes
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