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The Regents of the University of California v. Bernzomatic

February 10, 2011

THE REGENTS OF THE UNIVERSITY OF CALIFORNIA,
PLAINTIFF,
v.
BERNZOMATIC, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Frank C. Damrell, Jr. United States District Judge

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MEMORANDUM AND ORDER

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This matter is before the court on defendants Bernzomatic, Irwin Industrial Tool Company, and W. W. Grainger, Inc.'s (collectively, "defendants") motion for reconsideration of the court's December 7, 2010, memorandum and order ("order") denying defendants' motion for summary judgment. Specifically, defendants argue undisclosed additional facts support the court's reconsideration of its denial of defendants' motion because plaintiff the Regents of the University of California ("plaintiff") is precluded from bringing suit. Plaintiff opposes this motion. For the reasons set forth below,*fn1 defendants' motion is DENIED.

BACKGROUND

This case arises out of injuries suffered by Scott Callaway and James Bartlett (collectively, "the employees") on September 2, 2008, during the course and scope of their employment with plaintiff. (Mem. and Order ["Order"], [Docket # 43], at 2.) While using a Berzomatic MAPP gas canister and Lenox torch tip assembly, the employees suffered burn injuries. (Id.) Plaintiff has paid workers' compensation benefits to and on behalf of the employees. (Id.)

On August 5, 2009, the employees filed a personal injury lawsuit against defendants in state court. (Id. at 3.) Subsequently, the attorneys for the employees and defendants signed a stipulated dismissal with prejudice of the lawsuit. (Id.)

On April 5, 2010, plaintiff filed a complaint against defendants in the Superior Court of California, County of Yolo. (Id.) On May 19, 2010, defendants removed the case to this court on the basis of federal diversity jurisdiction. (Id.)

On August 13, 2010, defendants filed a motion for summary judgment arguing, inter alia, that plaintiff was precluded from bringing suit under equitable subrogation principles because the employees dismissed their claims with prejudice. (Docket #15.) The court held that the employees' voluntary dismissal with prejudice of their claims against defendants did not bar plaintiff's lawsuit against defendants because the dismissal served as a release of claims. (Order at 9.) The court noted that although the Labor Code models common law subrogation principles, these principles "must be applied to further the legislative purposes" of ensuring "that the third party is liable for all the wrong his tortfeasance brought about," including "both the damage to the employee and payments made or required to be made by the employer." (Order at 6-7) (internal quotations and citations omitted). The court further noted that there is "a clear legislative policy militating in favor of reimbursement whenever possible." (Id.) (quoting Abdala v. Aziz, 3 Cal. App. 4th 369, 377 (2d Dist. 1992)). Accordingly, the court concluded that the California Labor Code required that plaintiff be given notice and an opportunity to recover the amount of compensation paid to the employees. (Id. at 9.) Because there was no evidence that either the employees or defendants provided plaintiff notice and because defendants were aware that plaintiff had an interest in the claim, the court held that plaintiff has an independent action against defendant, notwithstanding the employees' release. (Id. at 9-10.) Therefore, court denied defendants' motion to dismiss. (Id. at 12.)

On August 30, 2010, the employees filed a complaint for damages against Worthington Industries, Inc. ("Worthington") in state court. (Exh. A. to Decl. of Michael C. Osborne ("Osborne Decl."), [Docket # 46], filed Dec. 16, 2010.) Defendants in this case were not named in the state suit. (Id.) Subsequently, on October 28 2010, plaintiff in this case intervened in the employees' state suit. (Id., Exh. B.) Defendants received notice of plaintiff's intervention in the state suit on October 27, 2010. (Id.)

Defendants contend that plaintiff's intervention in the employees' state suit is newly discovered evidence and request the court to reconsider its order denying defendants' motion for summary judgment. (Defs.' Mot. for Recons. ["Defs.' Mot."], [Docket #45], filed Dec. 16, 2010, at 2.)

STANDARD

An order that resolves fewer than all of the claims among all of the parties "is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties." Fed. R. Civ. P. 54(b); 18B Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 4478 (2d Ed. 2005)(while authorized, reconsideration of interlocutory orders disfavored). Where reconsideration of a non-final order is sought, the court has "inherent jurisdiction to modify, alter or revoke it." United States v. Martin, 226 F.3d 1042, 1048-49. (9th Cir. 2000)

Absent "highly unusual circumstances," reconsideration of a final judgment is appropriate only where (1) the court is presented with newly-discovered evidence, (2) the court committed "clear error or the initial decision was manifestly unjust," or (3) there is an intervening change in the controlling law.*fn2 Sch. Dist. No. 1J, Multnomah County, Or. v. ACandS Inc., 5 F.3d 1255, 1263 (9th Cir. 1993); Carroll v. Nakatani, 342 F.3d 934, 945 (9th Cir. 2004). A motion for reconsideration "may not be used to raise arguments or present evidence for the first time when they could reasonably have been raised earlier in the litigation." Kona Enter., Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. ...

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