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State National Insurance Co. v. Khatri

United States District Court, Ninth Circuit

August 8, 2013

STATE NATIONAL INSURANCE COMPANY, Plaintiff,
v.
PRADEEP KANTILAL KHATRI, et al., Defendants.

ORDER DENYING PLAINTIFF'S MOTION FOR LEAVE TO FILE A MOTION FOR RECONSIDERATION Re: ECF No. 18

LAUREL BEELER, Magistrate Judge.

INTRODUCTION

Plaintiff State National Insurance Company ("State National") filed this action against Pradeep Kantilal Khatri and VNS Hotels, Inc. ("VNS") (collectively, "Defendants") seeking reimbursement of defense fees and costs incurred and indemnity of payments made in relation to a state court action in which State National defended Defendants and ultimately settled with the state court plaintiffs. See generally Original Complaint, ECF No. 1.[1] The court granted Defendants motion to dismiss State National's original complaint. 5/7/2013 Order, ECF No. 14. In doing so, the court dismissed with prejudice State National's first claim for reimbursement of all of the expenses it incurred in relation to a state court action (the "Mackrani Action") in which State National defended Defendants and ultimately settled with the state court plaintiffs (the "Mackranis") because, State National alleged, none of the claims were potentially covered under the relevant Commercial General Liability Policy (the "Policy"). Id. at 7-11.

State National now moves, pursuant to Civil Local Rule 7-9(a), for leave to file a motion for reconsideration with respect to its first claim. Motion, ECF No. 18. Defendants oppose State National's motion. Opposition, ECF No. 21. Upon review of the papers submitted, the court DENIES State National's motion.

STATEMENT

State National instituted this action on January 30, 2013. See generally Complaint, ECF No. 1. In its original complaint, it brought claims for: (1) reimbursement of expenses incurred in defense of the Mackrani Action because there were no potentially covered claims under the Policy; (2) reimbursement of allocated expenses incurred in defense of the Mackrani Action because not all claims were potentially covered under the Policy; (3) reimbursement of expenses incurred in settlement of the Mackrani Action because State National indemnified Defendants for claims not covered under the Policy, and (4) reimbursement of allocated expenses incurred in settlement of the Mackrani Action because State National indemnified Defendants for claims potentially not covered under the Policy. See id. ΒΆΒΆ 31-52.

In their motion to dismiss the original complaint, with respect to State National's first claim, Defendants argued that at least one of the claims brought by the Mackranis was potentially covered under the Policy. Motion to Dismiss, ECF No. 9-1 at 11-12. Specifically, Defendants argued that the Mackranis' claims for defamation, assault, battery, false imprisonment, and negligent infliction of emotional distress, as they were alleged in the Mackranis' complaint, were potentially covered under the Policy. Id. In response, State National made three arguments: (1) the Mackranis' assault, battery, and negligent infliction of emotional distress claims were not potentially covered because the Mackranis did not allege that they suffered physical harm, and thus "bodily injury, " as defined in the Policy; (2) even if they had alleged "bodily injury, " their assault, battery, and negligent infliction of emotional distress claims were not potentially covered because they were not caused by an "accident"; and (3) the Mackranis' defamation and false imprisonment claims were not potentially covered because the Policy's Employment-Related Practices Exclusion applied to these claims. Opposition, ECF No. 12 at 8-10. In reply, Defendants argued that (1) the Mackranis did, in fact, allege that Veena Mackrani suffered physical harm with respect to their assault, battery, and negligence infliction of emotional distress claims; (2) it was not clear from the Mackranis' allegations whether the physical harm they alleged was caused by "accident" or not and so the claims were potentially covered under the Policy; and (3) it was not certain at the outset of the Mackrani Action whether the Policy's Employment-Related Practices Exclusion applied the Mackranis' defamation and false imprisonment claims and thus they, too, were potentially covered under the Policy. Reply, ECF No. 13 at 6-10. The court agreed with Defendants on all three of their arguments, found that at least one of the Mackranis' claims were potentially covered under the Policy, and dismissed with prejudice State National's first claim. 5/7/2013 Order, ECF No. 14 at 7-11.

State National now moves, pursuant to Civil Local Rule 7-9(a), for leave to file a motion for reconsideration. Motion, ECF No. 18. Defendants oppose State National's motion. Opposition, ECF No. 21.

ANALYSIS

I. LEGAL STANDARD

Under Civil Local Rule 7-9(a), a party must seek permission from the court prior to filing a motion for reconsideration. N.D. Cal. Civ. L.R. 7-9(a).[2] In seeking permission from the court, the moving party must specifically show:

(1) That at the time of 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 ...

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