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Lexus v. Tokio Marine & Nichido Fire Insurance Co.

United States District Court, Ninth Circuit

July 1, 2013

EL CAJON LUXURY CARS DBA BOB BAKER LEXUS, Plaintiff,
v.
TOKIO MARINE & NICHIDO FIRE INSURANCE COMPANY, Defendant.

ORDER (1) GRANTING MOTION FOR RECONSIDERATION; (2) DISMISSING PLAINTIFF'S SECOND AMENDED COMPLAINT WITHOUT PREJUDICE; AND (3) STAYING CASE (ECF No. 36)

JANIS L. SAMMARTINO, District Judge.

Presently before the Court is Tokio Marine & Nichido Fire Insurance Co., Ltd.'s ("Defendant, " or "Tokio Marine") Motion for Reconsideration, Request for Clarification, and Request for Certification for Interlocutory Appeal. (ECF No. 36). Also before the Court is Plaintiff El Cajon Luxury Cars d/b/a Bob Baker Lexus's ("Plaintiff, " or "Bob Baker Lexus") response in opposition, (Resp. in Opp'n, ECF No. 41), and Tokio Marine's reply in support, (Reply in Supp., ECF No. 42).

Tokio Marine moves for this Court to reconsider its September 10, 2012 Order denying Tokio Marine's motion to dismiss Bob Baker Lexus's Second Amended Complaint ("SAC"). Having considered the parties' arguments and the law, the Court GRANTS Tokio Marine's motion for reconsideration, DISMISSES Plaintiff's SAC WITHOUT PREJUDICE, and STAYS this case pending the resolution of the underlying state court suit against Bob Baker Lexus.

BACKGROUND

This Order incorporates by reference the factual and procedural history articulated in the Court's prior orders. ( See Order, Sept. 10, 2012, ECF No. 31; Order, Mar. 6, 2012, ECF No. 22; Order, Nov. 8, 2011, ECF No. 13). Tokio Marine filed an answer to the SAC on September 21, 2012, (ECF No. 32), and then proceeded to file the current motion for reconsideration on October 11, 2012, (ECF No. 36). Plaintiff filed its response in opposition on November 8, 2012, (Resp. in Opp'n, ECF No. 41), and Tokio Marine filed a reply in support on November 15, 2012, (Reply in Supp., ECF No. 42). The motion hearing, originally set for November 29, 2012, was reset for January 3, 2013. (Order, Nov. 15, 2012, ECF No. 43).

On December 17, 2012, the parties filed a joint motion requesting that this action be temporarily stayed until April 1, 2013 to facilitate ongoing settlement discussions. (Jt. Mot. to Stay, ECF No. 46). The Court granted the motion to stay and continued the hearing on the motion for reconsideration. (Order, Dec. 20, 2012, ECF No. 47). As the parties did not file a notice of settlement, the Court held a hearing on the motion for reconsideration on June 6, 2013.

STANDARD OF REVIEW

In the Southern District of California, motions for reconsideration are governed by Local Rule 7.1(i). See Gallagher v. San Diego Unified Port Dist., 2011 U.S. Dist. LEXIS 100861, at *2 (S.D. Cal. Sept. 8, 2011). Local Rule 7.1(i)(1) allows a party to apply for reconsideration "[w]henever any motion or any application or petition for any order or other relief has been made to any judge and has been refused in whole or in part." Civ LR 7.1(i)(1).

Whether to grant or deny a motion for reconsideration is in the sound discretion of the district court. Navajo Nation v. Norris, 331 F.3d 1041, 1046 (9th Cir. 2003) (citing Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 883 (9th Cir. 2000)). Generally, a reconsideration of a prior order is "appropriate if the district court (1) is presented with newly discovered evidence, (2) committed clear error or the initial decision was manifestly unjust, or (3) if there is an intervening change in controlling law." Sch. Dist. No. 1J v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993) (citation omitted). "Newly discovered evidence" is evidence that was in existence at the time of trial but (1) "was discovered after trial"; (2) could not have been discovered at an earlier stage by the "exercise of due diligence"; and (3) "is of such magnitude that production of it earlier would likely have changed the outcome of the case." Far Out Prods., Inc. v. Oskar, 247 F.3d 986, 992-93 (9th Cir. 2001) (quoting Defenders of Wildlife v. Bernal, 204 F.3d 920, 929 (9th Cir. 1999)).

DISCUSSION

In its September 10, 2012 Order, this Court determined that Bob Baker Lexus's cause of action for breach of an insurer's duty to defend should survive because Tokio Marine's insurance policy might cover Bob Baker Lexus's liability in an underlying wrongful death lawsuit arising from a fatal accident involving one of the dealership's loaner vehicles. (Order, Sept. 10, 2012, ECF No. 31). Plaintiff's SAC alleges that extrinsic facts support a negligence claim against Bob Baker Lexus based on a receptionist's failure to document a customer complaint regarding an unintended acceleration event in the vehicle that was involved in the accident. (SAC, ECF No. 23).

The Court agreed with Plaintiff that such a negligence claim, if alleged, would not fall within the policy's "Completed Operations" exclusion. (Order, Sept. 10, 2012, ECF No. 31). The Court concluded that this provision, which excludes coverage for liability arising out of "work or operations" performed by, or on behalf of, the dealership, refers to "the work performed in the service or maintenance of [loaner] vehicles, and not [to] a receptionist's work in tracking customer complaints on loaner vehicles." ( Id. ) The Court's reasoning relied, in part, on Bob Baker Lexus's practice of providing loaner vehicles to its customers free of charge: "Nothing in the SAC suggests that customers are required to pay for Bob Baker Lexus's loaner car services; indeed, a more reasonable inference is that this service is provided as a courtesy' to customers who leave their personal vehicles with Bob Baker Lexus for maintenance services." ( Id. )

Tokio Marine now contends that the Court's prior ruling should be modified because (1) documents not previously presented to the Court indicate that customers receiving a loaner vehicle from Bob Baker Lexus must pay for mileage, fuel, and other incidental expenses associated with use of the vehicle; and, (2) the Court's interpretation of the "Completed Operations" exclusion is flawed ...


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