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Kaufman & Broad Monterey Bay; Kb Home South Bay, Inc v. Travelers Property Casualty Company of America

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION


January 11, 2013

KAUFMAN & BROAD MONTEREY BAY; KB HOME SOUTH BAY, INC., PLAINTIFFS,
v.
TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA,
DEFENDANT.

District Court For the Northern District of California

ORDER DENYING KB HOME'S MOTION FOR LEAVE TO FILE MOTION FOR RECONSIDERATION OF RULING ON ORDER GRANTING IN PART DEFENDANT'S MOTION FOR SUMMARY JUDGMENT, ORI N THE ALTERNATIVE, PARTIAL SUMMARY JUDGMENT [Re: Docket No. 233]

Presently before the court is Plaintiffs Kaufman & Broad Monterey Bay and KB Home South Bay Inc.'s ("KB Home") Motion for Leave to File Motion for Reconsideration of Ruling on 21 Order Granting in Part Defendant's Motion for Summary Judgment. In that Order, the court 22 found, inter alia, that KB Home had not proven damages from Defendant Travelers Property 23 Casualty Company of America's ("Travelers") breach of insurance contract, and accordingly 24 granted summary judgment to Travelers as to KB Home's breach of contract claim. Dkt. No. 220. 25 KB Home contends that since the time of that order, Travelers again has wrongfully withdrawn 26 27 from KB Home's defense, causing KB Home to incur damages of unpaid defense fees, costs and 2 interest charges. 3

Based on this new occurrence, KB Home asks the court to reconsider its ruling granting 4 summary judgment to Travelers on KB Home's breach of contract claim. KB Home brings this 5 motion pursuant to Federal Rule of Civil Procedure Rule 60(b) and Civil Local Rule 7-9. Rule 6 60(b) provides the general authority for a federal district court to relieve a party from the court's 7 order or judgment. Under Rule 60(b), such reconsideration is permitted upon a showing of: "(1) 8 mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence that, with 9 reasonable diligence, could not have been discovered in time to move for a new trial under Rule 10 59(b); (3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party; (4) the judgment is void; (5) the judgment has been satisfied, released, or 12 discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it 13 prospectively is no longer equitable; or (6) any other reason that justifies relief." Fed. R. Civ. P. 60(b). 15

Civil Local Rule 7-9 provides the mechanism by which a party can seek the relief specified 16 in Rule 60(b). That rule states: 17

Before the entry of a judgment adjudicating all of the claims and the rights and liabilities of all the parties in the case, any party may make a motion before a Judge requesting that the Judge grant the party leave to file a motion for reconsideration of any interlocutory order made by that Judge on any ground set forth in Civil L.R. 7-9(b). No party may notice a motion for reconsideration without first obtaining leave of Court to file the motion.

In requesting leave of court, the moving party must at the very least do two things. First, the party 23 must make a specific showing supporting one of the following bases: 24

(1) At the time of the filing the motion for leave, a material difference in fact or law exists from that which was presented to the Court before entry of the interlocutory order for which reconsideration is sought. The party also must show that in the exercise of reasonable diligence the party applying for reconsideration did not know such fact or law at the time of the interlocutory order; or

(2) The emergence of new material facts or a change of law occurring after the time of such order; or

(3) A manifest failure by the Court to consider material facts or dispositive legal arguments which were presented to the Court before such interlocutory order. Civ. L.R. 7-9(b).

Second, the party must accomplish the appropriate showing without repeating any oral or written 9 argument previously made with respect to the interlocutory order that the party now seeks to have reconsidered. Civ. L.R. 7-9(c). Doing so subjects that party to the possibility of sanctions. Id. Motions to reconsider are committed to the discretion of the trial court. Rodgers v. Watt, 722 F.2d 12 456, 460 (9th Cir. 1983) (en banc). 13

KB Home contends that the court should reconsider its prior summary judgment order because Travelers again withdrew its representation on February 8, 2012-several months after the 15 parties' motions for summary judgment had been submitted-and caused KB Home to incur 16 damages. While the court agrees with KB Home that it could not have included these facts in its 17 prior summary judgment briefing, the court does not agree that reconsideration is appropriate here. 18

KB Home discovered Travelers' most recent alleged breach on February 8, 2012. On April 26, 2012, KB Home determined that Travelers' withdrawal was improper. Since that time, KB 20 Home has been incurring defense fees and costs. 21

The court did not issue its Order until July 18, 2012-more than five months after KB Home discovered the new alleged breach, and nearly three months after KB Home "confirmed" 23 that the withdrawal was improper. This delay suggests that KB Home did not exercise reasonable 24 diligence in bringing this new information to the court's attention. Having discovered a new 25 alleged breach, and having started to incur damages as a result, it was incumbent on KB Home to 26 alert the court to the change in circumstances while its motion for summary judgment was still 27

20130111

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