United States District Court, D. Utah, Central Division
MEMORANDUM DECISION AND ORDER DENYING MOTION TO ALTER
OR AMEND JUDGMENT
Waddoups United States District Judge.
James, Jenalyn, and Wade Morden (collectively, the Mordens)
have moved the court to alter or amend the judgment in this
case under Federal Rule of Civil Procedure 59(e), (Dkt. No.
96). The Mordens bring this motion following the court's
orders granting summary judgment on the Mordens' bad
faith and breach of fiduciary duty claims, (see Dkt.
No. 80), and granting Defendant XL Specialty Insurance
Co.'s (XL's) motion to voluntarily dismiss its
remaining counterclaim and denying the Mordens' motion to
amend their complaint, (see Dkt. No. 92).
January 11, 2017, the court heard oral argument on the
Mordens' motion. Upon careful consideration of the
parties' filings and arguments, relevant case law, and
the record in this case, the court DENIES the Mordens'
motion to alter or amend the judgment, (Dkt. No. 96).
court has previously detailed the factual background of this
case in its orders on summary judgment and on XL's motion
to voluntarily dismiss/the Mordens' motion to amend.
(Dkt. Nos. 80 & 92.) Thus, the court only recounts the
background relevant to the Mordens' present motion to
alter the judgment.
March 27, 2014, the Mordens commenced this action against XL
asserting two unlabeled claims for relief. (See Dkt.
No. 2, pp. 5-8.) The “First Claim for Relief”
alleged XL owed a number of duties under an insurance policy
issued to the insureds, including “a duty to pay valid
claims against its insureds timely” and “a duty
to refrain from actions that would injure its insureds'
ability to obtain the benefits of the insurance
contract.” (Id. at 5-6.) The claim further
stated “XL negligently and in bad faith breached the
duties it owed” to the insureds by, among other things,
failing to pay the Mordens' claim against the insureds
and failing to pay an arbitration award entered against
the insureds and assigned to the Mordens. (Id. at
6-7.) The claim also alleged damages as a “direct and
proximate result of XL's breaches of the duties it
owed.” (Id. at 7.) The complaint sought $5,
434, 730 in damages--the amount of the arbitration award--as
well as general and consequential damages in an amount to be
determined at trial. (See Id. at 8.) The amount of
damages prayed for would only have been available as a bad
faith claim in tort and not available as a contract claim
because of the $1, 000, 000 policy limit. (See Id.
answering the complaint, XL contended various affirmative
defenses and policy exclusions barred coverage of the
Mordens' claim. (See Dkt. No. 12.) XL also filed
a counterclaim for declaratory judgment that the policy did
not cover the Mordens' claims and that XL did not act in
bad faith in refusing to extend coverage for, or to settle,
the Mordens' claims. (Id. at 20-22.)
Mordens sought partial summary judgment on eight of XL's
affirmative defenses and on XL's declaratory judgment
counterclaim involving the interrelated wrongful acts
exclusion. In turn, XL sought judgment that it had not acted
in bad faith or breached its fiduciary duties in denying the
Mordens' claim. After a substantial summary judgment
process, including lengthy oral argument and supplemental
briefing, (see Dkt. Nos. 25, 30, 46, 50, 53, 67, 70,
71, 72, 76, 77, 78, 79), the court issued a memorandum
decision and order granting the Mordens' motion for
summary judgment on XL's counterclaim based on the
interrelated wrongful acts exclusion. (See Dkt. No.
80.) But the court also found that, irrespective of whether
there was coverage under the policy, XL did not act in bad
faith or breach its fiduciary duties in concluding that the
Mordens' claim was not covered. (See id.)
the Mordens' bad faith claims resolved, XL sought to
dismiss its remaining counterclaim for declaratory judgment.
(Dkt. No. 81.) The Mordens opposed dismissal of the
counterclaim and moved to amend the complaint to add a claim
that XL was contractually obligated to indemnify the insureds
up to the policy limit of $1, 000, 000. (Dkt. Nos. 82 &
85.) Ultimately, the court concluded that XL was entitled to
voluntarily dismiss its counterclaim and that the Mordens had
not demonstrated good cause to amend the complaint in the
circumstances. (See Dkt. No. 92.) The court clerk
entered final judgment in XL's favor as to the
Mordens' bad faith and breach of fiduciary duty claims,
and in the Mordens' favor as to XL's counterclaim
regarding the interrelated wrongful acts provision. (Dkt. No.
93.) The Mordens' motion for Rule 59(e) relief from
judgment followed. (Dkt. No. 96.)
for granting a Rule 59(e) motion include ‘(1) an
intervening change in the controlling law, (2) new evidence
previously unavailable, and (3) the need to correct clear
error or prevent manifest injustice.'”
Somerlott v. Cherokee Nation Distributors, Inc., 686
F.3d 1144, 1153 (10th Cir. 2012) (quoting Servants of
Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir.
2000)). Absent one of these “highly unusual
circumstances, ” the court should not grant a Rule
59(e) motion. See Devon Energy Prod. Co. v. Mosaic Potash
Carlsbad, Inc., 693 F.3d 1195, 1212 (10th Cir. 2012)
(quoting McDowell v. Calderon, 197 F.3d 1253, 1255
(9th Cir. 1999)). Whether to grant or deny Rule 59(e) relief
is committed to the court's sound discretion. See
Barber ex rel. Barber v. Colo. Dep't of Revenue, 562
F.3d 1222, 1228 (10th Cir. 2009) (noting the appellate court
will affirm a trial court's decision on a Rule 59(e)
motion unless the court has “a definite and firm
conviction that the lower court made a clear error of
judgment or exceeded the bounds of permissible choice in the
circumstances” (quoting Phelps v. Hamilton,
122 F.3d 1309, 1324 (10th Cir. 1997))).
59(e) relief is appropriate only where ‘the court has
misapprehended the facts, a party's position, or the
controlling law.'” Barber, 562 F.3d at
1228 (quoting Servants of Paraclete, 204 F.3d at
1012). “A motion to reconsider is not a second chance
for the losing party to make its strongest case or to dress
up arguments that previously failed.” Voelkel v.
Gen. Motors Corp., 846 F.Supp. 1482, 1483 (D. Kan.),
aff'd, 43 F.3d 1484 (10th Cir. 1994).
Furthermore, unless extraordinary circumstances exist, a
party may not seek Rule 59(e) relief on grounds available to
the party on prior motions. See Servants of
Paraclete, 204 F.3d at 1012. “A party may not use
Rule 59(e) to raise legal arguments that it could and should
have raised before the court issued its judgment.”
Servants of Paraclete, Inc. v. Great Am. Ins. Co.,
866 F.Supp. 1560, 1581 (D.N.M. 1994) (citing Steele v.
Young, 11 F.3d 1518, 1520 n. 1 (10th Cir. 1993)
(“Rule 59(e) cannot be used to expand a judgment to
encompass new issues which could have been raised prior to
issuance of the judgment.”)).
Mordens contend the court must alter the judgment to correct
the clear error the court committed in overlooking the
Mordens' breach of contract claim, as well as the
manifest injustice that arises from the court's
determination that all claims in this case have been
resolved, precluding the Mordens from fully litigating their
contract claim. (See Dkt. No. 96, p. 4.) The Mordens
point the court to their original complaint and emphasize
that, when viewed under appropriate notice pleading
principles, the complaint sufficiently stated the elements of
a breach of contract claim and put XL on notice of such a
claim. (See Id. at 4-7.)
review of the record, the court finds no obvious factual or
legal error in its resolution of the issues in this case. Nor
does the court find it overlooked or misapprehended the