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Fay Avenue Properties, LLC v. Travelers Property Casualty Co.

United States District Court, S.D. California

December 9, 2014



GONZALO P. CURIEL, District Judge.

Before the Court is Defendant's motion for reconsideration of the Court's order denying Defendant's motion for summary judgment filed on September 23, 2014. (Dkt. No. 143.) Plaintiff filed an opposition and Defendant filed a reply. (Dkt. Nos. 152, 154.) After a review of the briefs, supporting documentation, and the applicable law, the Court DENIES Defendant's motion for reconsideration.


Plaintiffs Fay Avenue Properties, LLC ("Fay") and La Jolla Spa MD, Inc. ("LJS") filed a complaint against Defendant Travelers Property Casualty Company of America ("Travelers") on August 26, 2011. (Dkt. No. 1.) The Complaint alleges causes of action for breach of contract; breach of the implied covenant of good faith and fair dealing; fraudulent concealment; and negligence for Defendant's failure to pay under the insurance policy. (Id.) Plaintiff also seeks to recover punitive damages. (Id.)

On February 28, 2012, District Judge Sabraw granted Defendant's motion to dismiss the fraudulent concealment and negligence causes of action. (Dkt. No. 31.) The case was transferred to the undersigned judge on October 12, 2012. (Dkt. No. 48.)

On September 23, 2014, the Court denied Defendant's motion for summary judgment on the two remaining causes of action for breach of contract and breach of the implied covenant of good faith and fair dealing. (Dkt. No. 139.) The Court concluded that there are genuine issues of material fact whether the insurance policy was voided based on Plaintiff's failure to comply with the Examination Under Oath ("EUO") condition and a violation of the concealment, misrepresentation and fraud provision in the insurance policy. (Id.) On October 20, 2014, the Court granted Plaintiff Fay and Defendant Travelers' joint motion to dismiss with prejudice. (Dkt. No. 145.)


Defendant LJS moves for reconsideration pursuant to Federal Rule of Civil Procedure ("Rule") 54(b) arguing that the Court committed clear error. Plaintiff opposes.

A motion for reconsideration may be brought under Rule 54(b) which provides that any order which does not terminate the case is subject to revision at any time before the entry of judgment. See Fed.R.Civ.P. 54(b). "Reconsideration is appropriate if the district court (1) is presented with newly discovered evidence; (2) clear error or the initial decision was manifestly unjust, or (3) if there is an intervening change in controlling law." Sch. Dist. No. 1J, Multnomah County, Or. v. AcandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993); see also Ybarra v. McDaniel, 656 F.3d 984, 998 (9th Cir. 2011).

In addition, Local Civil Rule 7.1(i)(1) provides that a motion for reconsideration must include an affidavit or certified statement of a party or attorney "setting forth the material facts and circumstances surrounding each prior application, including inter alia: (1) when and to what judge the application was made, (2) what ruling or decision or order was made thereon, and (3) what new and different facts and circumstances are claimed to exist which did not exist, or were not shown upon such prior application." Local Civ. R. 7.1(i)(1).

Clear error occurs when "the reviewing court on the entire record is left with the definite and firm conviction that a mistake has been committed." Smith v. Clark County School Dist., 727 F.3d 950, 955 (9th Cir. 2013) (quoting United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948)).

The Court has discretion in granting or denying a motion for reconsideration. Navajo Nation v. Confederated Tribes and Bands of the Yakama Indian Nation, 331 F.3d 1041, 1046 (9th Cir. 2003). A motion for reconsideration should not be granted absent highly unusual circumstances. 389 Orange St. Partners v. Arnold, 179 F.3d 656, 665 (9th Cir. 1999). 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." Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873, 880 (9th Cir. 2009) (quoting Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000)). Moreover, a motion for reconsideration "cannot be used to ask the Court to rethink what the Court has already thought through merely because a party disagrees with the Court's decision. Collins v. D.R. Horton, Inc., 252 F.Supp.2d 936, 938 (D. Az. 2003) (citing United States v. Rezzonico, 32 F.Supp.2d 1112, 1116 (D. Az.1998)).

A. Misrepresentations by Diane York

Defendant argues that York, on behalf of LJS, stated on at least three occasions, in an email dated May 4, 2011, in a letter dated June 14, 2011, and at the fourth EUO session on July 12, 2011, that the second set of inventory provided around June 2, 2011, constituted inventory stolen by Dr. Goldman which contradicts her belief in April 2011 that the second set of inventories would provide an inventory of the entire building. Defendant already raised these arguments and facts in its motion for summary judgment. The Court looked at those representations and concluded that while York admitted that conflicting statements were made, at the time, she was "mistaken or confused" due to her inexperience with the claims process. (Dkt. No. 139 at 19.) The Court expressed concern as to the numerous false statements made by York to Travelers but on summary judgment, the Court is to view the facts in light most favorable to the non-moving party. (Id. at ...

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