Free Motion for Reconsideration - 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.; U-Haul Company Of Pennsylvania; U-Haul Company Of Florida; and Republic Western Insurance Company, Plaintiffs, vs. Lumbermens Mutual Casualty Company, Defendants. __________________________________ LUMBERMENS MUTUAL CASUALTY COMPANY, Defendant/Counter-Plaintiff, v. CASE NO.: CIV-04-0662-PHX-DGC (Maricopa County Superior Court Cause No. CV 2004-002438) DEFENDANT/COUNTERPLAINTIFF'S MOTION FOR RECONSIDERATION/MOTION FOR CLARIFICATION

(Assigned to the Hon. David G. Campbell)

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REPUBLIC WESTERN INSURANCE CO.; U-HAUL INTERNATIONAL, INC.; U-HAUL COMPANY OF PENNSYLVANIA; U-HAUL COMPANY OF FLORIDA; AMERCO; AMERCO REAL ESTATE CO. D/ B/A NOVI MANUFACTURING CO. AND WARRINGTON MANUFACTURING CO.; AMERCO REAL ESTATE SERVICES, INC.; AMERCO REAL ESTATE COMPANY OF TEXAS, INC. ; U-HAUL BUSINESS CONSULTANTS, INC.; U-HAUL COMPANY OF ARIZONA; U-HAUL COMPANY OF CALIFORNIA D/B/A PARAMOUNT MANUFACTURING CO.; U-HAUL CO. OF INDIANA, INC. D/B/A CHICAGO ASSEMBLY DIVISION; U-HAUL CO. OF MASSACHUSETTS, INC. D/B/A BOSTON TRAILER MANUFACTURING COMPANY, INC.; U-HAUL CO. OF MICHIGAN; AND UHAUL CO. OF TEXAS D/B/A DFW MFG. CO., INC.; Counter-Defendants.

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Defendant/Cross-Plaintiff,

LUMBERMENS

MUTUAL

CASUALTY

COMPANY ("LMC") pursuant to Fed.R.Civ.P. 54(b) and the Court's inherent common law authority, respectfully requests the court to reconsider and/or clarify the court's June 12, 2006 Order in regard to the following matters. Introduction As the parties state in their joint status report, plaintiffs, but not LMC, believe that the court has ruled on all issues, that none of the terms and provisions contained in the Order require stipulation, and that therefore no further ruling is required. LMC thus

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requests clarification: (1) as to whether the court has ruled on the matters listed herein; and (2) as to certain terms and provisions of the court's Order. LMC accordingly further requests that the court schedule a hearing and/or permit limited briefing to resolve all remaining issues, if the court agrees with LMC that not all of the issues have been decided. First Ground for Reconsideration or Clarification 1. The court, at page 10 of the Order, states that: Similarly, from the analysis above, the Court concludes that LAE are covered in the RU policies' definition of an "ultimate net loss." Thus, the RU policies may be exhausted by payments of indemnity and LAE, and the LMC policy attaches after said exhaustion.

2. states:

The last sentence of the RU policies' definition of "Ultimate Net Loss"

This policy shall not apply to defense, investigation, settlement, or legal expenses covered by underlying insurance.

The court, at page 8 of the Order, provides the following interpretation of this provision: A plain reading of the policies suggest that this provision avoids possible redundancy of payments by ensuring that the excess policy does not provide payment for expenses covered by the underlying policies. (Emphasis supplied.)

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3.

The court states at page 9 of the Order that: ". . . the LMC policy Therefore, pursuant to the court's

followed the terms of the underlying policies."

interpretation of the last sentence of the RU policy's definition of "Ultimate Net Loss," LMC's excess policy does not provide payment for any of the LAE that was paid by Republic Western's RG, RX, and RU policies (which comprise the "underlying policies" beneath the LMC policy). 4. The facts that were presented to the court show that it is undisputed that

the amount of the claims asserted by plaintiffs against LMC is equal to the amount of the LAE that Republic Western paid under its RG, RX, and RU policies in regard to Republic Western's defense of the Nelson and Fernandez claims. 5. LMC submits that since the RU policy is one of the "underlying policies"

beneath the LMC policy, and since the court has held that the LMC policy follows the form of the RU policy, there is conflict between the court's finding that the RU policies may be exhausted by the payment of indemnity and LAE, and the court's finding that the RU policy's definition of Ultimate Net Loss does not include LAE paid by "the underlying policies." 6. The Ninth Circuit has held that one of the four situations where a motion

for reconsideration will be granted is where ". . . The movant makes a convincing showing that the Court failed to consider material facts that were presented to the Court before the Court's decision." Motorola, Inc. v. JB Rodgers Mechanical Contractors, Inc., 215 F.R.D. 581, 586 (D. Ariz. 2003). WHEREFORE, LMC respectfully requests that the court clarify and/or reconsider the ruling set forth in the last two sentences of the first paragraph on page 10 to instead state: (1) LAE paid by Republic Western under Republic Western's RG and/or RX policies is not covered in the RU policies' definition of "ultimate net loss"; and (2) thus, Republic Western's payment of LAE cannot exhaust the RU policies.

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Second Ground for Clarificati on 7. LMC further moves the court for an order clarifying the court's June 12,

2006 Order as to whether the court has ruled on the following issues which were raised in LMC's summary judgment motion, but which were not cited or discussed in the court's Order. (a) Whether, based on the court's Order, LAE paid by Republic Western reduces the annual products-completed operations aggregate limits contained in Republic Western's RG and RX policies; and, if so, whether any such reduction or exhaustion requires the Republic Western RU policy to drop down to attach immediately in excess of such reduced limits. (The only Republic Western limit referred to in the Order is the $7,000,000 total of the three Republic Western policies' combined occurrence limits. The issue of whether the RU policy's occurrence limit is reduced by the amount of Republic Western's LAE payments is completely separate from the issue of whether Republic Western's LAE payments reduce the RG and RX policies' annual products-completed operations limits. This is because the RG and RX policies' products-completed operations aggregate limits are defined and controlled by the provisions of the RG and RX policies, whereas the RU policy's occurrence limit is defined and controlled by the provisions of the RU policy. In its summary judgment papers, LMC did not dispute that the RG and RX policies' occurrence limits are reduced by LAE payments. However, this fact is not relevant to the disputed issue of whether the RG and RX policies' products-completed operations aggregate limits are reduced by payment of LAE. This is because the products-completed operation aggregate limits contained in those policies are defined and controlled by provisions different from those that define and control those policies' occurrence limits. Therefore, the court's ruling on the issue of whether Republic Western's LAE

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payments reduce the RU policy's occurrence limits does not constitute a ruling as to whether Republic Western's LAE payments reduce the RG and RX policies' products-completed operations aggregate limits and, for the same reason, does not constitute a ruling as to whether any reduction or exhaustion of the RG and RX policies' aggregate limits requires the Republic Western RU policy to drop down to attach immediately in excess of such reduced limits. Likewise, the court's finding "with respect to the parties' contractual obligations" does not extend to the issues raised in LMC's motion regarding the RG and RX policies' products-completed operations aggregate limits.) (b) Whether, regardless of the applicability of the reasonable expectations doctrine, the undisputed statements made by U-Haul's insurance agent to LMC, and the statements made by or on behalf of U-Haul in the policy applications that LMC's policy would not attach until after $7,000,000 had been paid for indemnity only, requires a finding, as a matter of law, that this was the intent of the policy language which is at issue on the parties' cross-motions for summary judgment. (The court's Order makes no statement or ruling as to this issue.) (c) LMC's affirmative defense of equitable estoppel. (Although the court ruled that the Arizona reasonable expectations doctrine does not protect an insurer, the court did not rule on LMC's affirmative defense of equitable estoppel which is a separate legal issue, and which was not addressed in plaintiffs' summary judgment motion.) WHEREFORE, Lumbermens Mutual Casualty Company respectfully requests clarification as to whether the court has ruled on the matters listed above in paragraphs (a) through (c), and, if so, the court's ruling on each such matter. In the event that the court has not ruled on the above issues (as LMC believes), LMC requests that the court allow additional briefing on these points, so that rulings can be issued.

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Third Ground for Clarification 8. LMC further moves the court for an order clarifying the following terms

and provisions contained in the court's June 12, 2006 Order. (a) The extent of the "contractual obligations" referred to in the court's Order. (LMC submits that the only "contractual obligations" ruled on by the court are those contractual issues that were cited and discussed in the court's Order.) (b) Identification of "the remaining claims" referred to in the court's Order. (The court's reference to "the remaining claims" is consistent with the fact that the Order expressly does not completely grant plaintiffs' motion and expressly does not completely deny defendant's motion.) (c) The extent to which plaintiffs' summary judgment motion has been denied. (The court's Order states that plaintiffs' summary judgment

motion is granted in part and denied in part.) (d) The extent to which LMC's summary judgment motion has not been denied. (The court's Order states that defendant's summary judgment motion is denied in part.) (e) Whether the court's Order constitutes a ruling on LMC's affirmative defense of estoppel and, if so, on what grounds. WHEREFORE, Lumbermens Mutual Casualty Company respectfully requests that the court clarify its June 12, 2006 Order as to each of the matters set forth in paragraphs (a) through (e) above, and allow additional briefing on all issues not yet adjudicated. ... ... ...

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DATED this 28th day of July, 2006. WALTON LANTAFF SCHROEDER & CARSON LLP Wayne Gill, Esq. 1700 Palm Beach Lakes Boulevard, 7th Floor West Palm Beach, Florida 33401

KUNZ PLITT HYLAND DEMLONG & KLEIFIELD, P.C.

By:

s/Steven Plitt Steven Plitt Daniel Maldonado 3838 N. Central Avenue, Suite 1500 Phoenix, AZ 85012-1902 Attorneys for Defendants

ORIGINAL electronically filed with the USDC this 28th day July, 2006, and a Copy delivered to Judge Campbell; ... and a COPY of the foregoing electronically served/mailed this 28th day of July, 2006 to: Gerald Gaffaney, Esq. David J. Ouimette, Esq. MARISCAL, WEEKS, MCINTYRE & FRIEDLANDER, P.A. 2901 North Central, Suite 200 Phoenix, AZ 85012 Attorneys for Plaintiff

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Bruce Friedman, Esq. Mark S. Fragner, Esq. RUBIN, FIORELLA & FRIEDMAN, LLP 292 Madison Avenue, 11th Floor New York, NY 10017 Attorneys for Plaintiff

s/Adriana Garcia

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