LAWRENCE K. KARLTON, District Judge.
This is a class-action lawsuit against Allstate Indemnity Company ("Allstate") for five causes of action: Breach of Contract, Bad Faith, Breach of Implied Covenant of Good Faith and Fair Dealing, Fraud/Misrepresentation, and Unfair Competition. Plaintiff has not yet moved for class certification. The claims arise from Allstate's alleged practices regarding seatbelt inspection, replacement, and/or repair after cars covered by Allstate's insurance policies are involved in collisions. This court granted summary judgment to defendant on all of plaintiff's claims on May 12, 2011. Pending before the court are the following motions by plaintiff: a Rule 59(a) Motion for a New Trial, a Rule 59(e) Motion to Alter or Amend the Judgment, a Local Rule 230(j) Motion for Reconsideration, a Rule 60(b) Motion for Relief from Judgment; and a Rule 56(e) Motion for Leave to File a Corrected Statement of Disputed Facts. For the reasons stated herein, plaintiff's motions are GRANTED in part and DENIED in part.
Plaintiff Robert Watts purchased a car insurance policy from defendant Allstate Indemnity Company ("Allstate") in 2004. Depo. of Robert Watts ("Watts Depo") 19:7-14, Ex. B of Defs.' Mot. for. Summary J., ECF No. 202-2. The policy provides that "Allstate will pay for direct and accidental loss to [plaintiff's] insured auto or a non-owned auto. . . from a collision with another object or by upset of that auto or trailer." Allstate Auto Insurance Policy ("Policy") 18, Pl.'s Ex. A, ECF No. 211-1.
On March 29, 2006, plaintiff's 2005 Honda Civic was involved in a collision while it was being driven by plaintiff's wife. During the accident, both the driver and the front-seat passenger were restrained by their seat belts. As a result of the accident, the front seat passenger suffered a fractured rib, and the driver suffered from serious neck injuries. At the time of the collision, plaintiff was insured under the car insurance policy issued by Allstate. Following the accident, plaintiff arranged for the vehicle tow to Artistic Collision, a garage of plaintiff's own choosing, and not part of Allstate's direct repair programs. Watts Depo 31:15. On March 30, 2006, Artistic Collision Shop Manager Bryan Welsh prepared a "visible damage quote." Depo. of Bryan Welsh ("Welsh Depo") 14:11-14. Ex. C of Defs.' Mot. for. Summary J., ECF No. 202-4. The visible damage quote did not include any amount for inspection, repair, or replacement of the seatbelts. Mr. Welsh testified that he did not recall inspecting the seatbelts.
Plaintiff then presented a claim to Allstate for repairs to the vehicles. On March 31, 2006, Allstate adjuster Elio Lencioni prepared an estimate for the repair. Mr. Lencioni's estimate did not include any amount for inspection or repair of plaintiff's seatbelts, although Lenocioni testified that it would have been his custom and practice to inspect the seatbelt for "fraying, twisting, any deformation, any stitching that was coming loose," to "pull [the seatbelt] hard to see if it locks," to see if it goes back to where it is supposed to go. And then to insert it in the buckle make sure that it inserts in the buckle and it releases from the buckle, . . . as it's supposed to." Depo. of Elio Lencioni 148, Def.'s Ex. D. Mr. Lencioni stated that several circumstances would prompt him to conduct the type of inspection describe above, including any time there was "significant front-end damage" to the vehicle, and "if it's a significant impact of any kind."
Artistic Collision then repaired the car in accordance with Mr. Lencioni's estimate. Artistic Collision did not replace the vehicle's seatbelts. Allstate then paid Artistic Collision for the repairs. Welsh Depo 24.
At some point between the time of the accident and September 18, 2007, plaintiff reviewed the owner's manual issued by Honda for his vehicle. Watts Depo 75:13. In the owner's manual, plaintiff read that seatbelts should be replaced in all vehicles involved in serious collisions. Watts Depo 83:6. On September 18, 2007, plaintiff sent a letter to Allstate that stated, among other things, "we have several concerns that we believe need further repair. . . this was a major frontal impact. The damage to the car exceeded $6500 and both driver and passenger sustained injuries. The airbags did not deploy and we are requesting that the airbag sensors be inspected to ensure that they are operating correctly. We are also requesting that the seatbelt tensioners be replaced." Watts Depo 66:8-13, Ex. 27 ("September 18 Letter").
In response, Allstate adjuster Tina Parker directed plaintiff to contact Artistic Collision or the Bureau of Automotive Repairs.
Plaintiff filed his complaint in this action on February 29, 2008. On April 30, 2008 Allstate demanded an appraisal of the loss pursuant to the Appraisal Clause in the Policy. Martin Decl. Ex. A 2, Ex. 1.
In May, 2008, plaintiff took his vehicle to the Elk Grove Honda dealership to have the seatbelts replaced based on the recommendation in the Honda Owner's Manual. Watts Depo. 84:1-7. Mr. Watts did not ask the dealership to inspect the seatbelts before replacing them.
In addition to the specific facts surrounding plaintiff's collision and his claim to Allstate, plaintiff alleges that Allstate had a general scheme or policy to "increase profitability by refusing to replace, repair, or inspect seatbelts in it's policyholders' vehicles that were damaged and made unsafe in automobile collisions." Second Amended Complaint 5:1-2.
Plaintiff's Second Amended Complaint, filed on April 20, 2009, asserts six causes of action against defendant Allstate on behalf of similarly situated plaintiffs: (1) Breach of Contract, (2) Bad Faith, (3) Breach of the Implied Covenant of Good Faith and Fair Dealing, (4) Fraud/Misrepresentation, (5) Unfair Competition, and (6) RICO violations. This court previously dismissed plaintiff's RICO claim. See July 1, 2009 Order, ECF No. 79.
On May 12, 2011, this court granted defendant's motion for summary judgment on all claims, and entered judgment in favor of defendant. May 12, 2011 Order, ECF No. 255 ("May Order"). The May order concluded that plaintiff had not demonstrated a genuine issue of material fact concerning whether his seatbelts were actually damaged in the accident or whether Allstate was contractually obligated to replace seatbelts that were in use during a serious collision, whenever the vehicle's owner's manual recommends replacement.
In the order granting summary judgment to defendant, this court held that plaintiff had not presented evidence sufficient to rebut defendant's evidence that "the seatbelt assemblies were in superb condition." May Order 12 (quoting Decl. Davee). The court held that plaintiff's evidence, consisting of plaintiff's wife's declaration that the seatbelt occasionally got stuck or was loose and an expert declaration that simply cited plaintiff's wife's declaration, did not effectively rebut defendant's technical expert's conclusion that the seatbelts were undamaged. See May Order 13:15-18.
The order additionally analyzed whether there was a triable issue as to whether the defendant breached its obligation by failing to have the undamaged seatbelts replaced. The court held that "such an obligation may be present if the Policy is ambiguous, and if. . . at the time the Policy was purchased, Allstate believed that the policyholder's understanding was that Allstate would adhere to the owner's manual recommendation when paying to restore a vehicle to it's pre-accident condition." May Order 14:13-18. The court then evaluated the evidence that might have supported an inference that Allstate intended to bind itself to replace seatbelts in accordance with owner's manual recommendations. The court found that plaintiff's proffered evidence, including deposition testimony of Allstate's senior training specialist Thomas Parrett and portions of the training materials that reference the owner's manual, was not sufficient to show that Allstate intended to bind itself to adhere to the owner's manuals. The court noted that the training material's recommendation that adjusters consult owner's manuals for additional information "is hardly the equivalent of being bound by that manual." May Order 16, n. 4.
The court granted summary judgment to defendant on all of plaintiff's claims.
On June 9, 2011, plaintiff filed two documents with the court. In one document, ECF No. 260, plaintiff moves for a new trial (Fed. R. Civ. P. 59(a)),
Federal Rule of Civil Procedure 60(b) provides: "On motion and just terms, the court may relieve a party . . . from a final judgment" in the case of mistake or excusable neglect, newly discovered evidence, fraud, a judgment that is void, satisfaction of the judgment, or for any other reason that justifies relief. Fed. R. Civ. P. 60(b). Rule 60(b) "attempts to strike a proper balance between the conflicting principles that litigation must be brought to an end and that justice should be done."
A party moving under Rule 59(e) or Rule 60(b) on the basis of newly discovered evidence must show that the evidence (1) existed at the time of the trial, (2) could not have been discovered through due diligence, and (3) was of such magnitude that production of it earlier would have been likely to change the disposition of the case.
Local Rule 230(j) applies to motions for reconsideration filed in the Eastern District. That rule requires the movant to brief the court on, inter alia, "what new or different facts or circumstances were not shown upon such prior motion, or what other grounds exist for the motion; and why the facts or circumstances were not shown at the time of the prior motion."
Plaintiff asserts that relief from judgment is warranted in this case based on plaintiff's counsel's excusable neglect (Fed. R. Civ. P. 60(b)(1)) and that altering or amending the judgment is warranted based on newly discovered evidence (Fed. R. Civ. P. 59(e), 60(b)(2)).
Plaintiff argues that plaintiff's counsel's failure to properly cite evidence in the opposition to defendant's summary judgment motion, and the Statement of Disputed Facts in support thereof, and plaintiff's counsel failure to properly authenticate some evidence relied on in the opposition was excusable neglect warranting relief from judgment under Rule 60(b). As an explanation for these omissions, plaintiff states that defendant successfully overwhelmed plaintiff's counsel by scheduling five expert depositions during the time that plaintiff's counsel was preparing the opposition to the summary judgment motion. Pl.'s Mot. for Relief from Judgment 4:10-14. Plaintiff states that, due to excusable neglect, plaintiff's counsel omitted citations to the Declaration of Sandy Browne, "an expert with over 44 years of experience in vehicle occupant safety and restraint systems." Pl.'s Memo 9:1-2. In that declaration Ms. Browne states that the seatbelts worn in the collision "are deemed damaged." Brown Decl., Ex. D to Pl.'s Opp'n to Summary Judgment, ECF No. 232. Plaintiff argues that this evidence supports plaintiff's position that Allstate breached its obligation when it did not replace plaintiff's seatbelts. Ms. Browne's declaration was submitted as an exhibit to plaintiff's opposition to summary judgment, but was not cited in plaintiff's brief, nor in plaintiff's response to defendant's separate statement of undisputed facts.
"The determination [of what constitutes excusable neglect within the meaning of Bankruptcy Rule 9006(b)] is at bottom an equitable one, taking account of all relevant circumstances surrounding the party's omission. These include. . . the danger of prejudice to the debtor, the length of the delay and its potential impact on judicial proceedings, the reason for the delay, including whether it was within the reasonable control of the movant, and whether the movant acted in good faith."
Defendant states, without offering anything in the way of analysis or explanation that "granting plaintiff a second chance to relitigate defendants' summary judgment motion would prejudice defendants." Def's Opp'n to Mot. for Relief from Judgment 8:16-17. "Prejudice requires greater harm than simply that relief would delay resolution of the case."
Plaintiff filed his Rule 60(b) motion with four weeks of the court's order granting summary judgment. Rule 60(c) requires that a motion for relief from judgment be brought "within a reasonable time." Delays of similar length have been found to be reasonable.
Although typically courts should "give little weight to the fact that counsel was experiencing upheaval in this law practice," Pioneer, 507 U.S. at 380, "a party should not be deprived of the opportunity to present the merits of the claim because of a technical error or slight mistake by the party's attorney." Wright & Miller Federal Practice & Procedure § 2858 (2d ed. 1995).
Here, plaintiff asserts that the delay was caused by "defendant's strategic timing. . . aimed at overwhelming plaintiff's counsel in an attempt to impair plaintiff's ability to file his opposition to defendant's Motion for Summary Judgment." Pl.'s Memo 7:17-19. Plaintiff states that defendant moved for, and received an order from Magistrate Judge Newman on April 7, 2011, requiring expert depositions to be completed before April 30, 2011. See April 8, 2011 Order, ECF No. 200. The following day, defendants moved for summary judgment, setting the motion for hearing on May 8, 2011. Plaintiff's opposition to the motion was due on April 25, 2011. Thus, between April 8, 2011 and April 25, 2011, plaintiff's counsel was obligated to participate in five depositions and prepare an opposition to the motion for summary judgment. Plaintiff claims that the omission of key evidence and failure to properly authenticate other evidence was the result of plaintiff's counsel being overwhelmed by the compressed time table caused by defense counsel's "gamesmanship." Pl.'s Memo 7. At no time did plaintiff request that the court continue the summary judgment hearing, although defendant's opposition to this motion indicates that plaintiff did attempt to get a stipulation to continue the hearing.
Defendant states that it had attempted to schedule the expert depositions prior to seeking an order from Magistrate Judge Newman, but that plaintiff's counsel did not cooperate. Def.'s Opp'n 3. Further, defendant argues that plaintiff filed additional evidence in opposition to the summary judgment motion on May 5, 2011, after defendant filed its reply. Defendant argues that, given this extensive surreply submitted by plaintiff, plaintiff's counsel had plenty of time to correct the omissions before the hearing on the summary judgment motion.
The court finds, in its equitable discretion, that the compressed time table under which plaintiff's counsel was working while preparing the opposition to the summary judgement motion is an excusable reason for a delay in presenting the court with citations to evidence supporting plaintiff's position. This factor, therefore, weighs in favor of granting plaintiff's motion.
The court sees no evidence that plaintiff or his counsel has failed to act in good faith. It appears to the court that the omission of citations to Ms. Browne's declaration and plaintiff's failure to authenticate certain pieces of evidence were caused by, at worst, sloppiness on the part of plaintiff's counsel in preparing the opposition to summary judgment. Indeed, plaintiff's opposition appeared to the court to be less-than-complete at the time it was filed.
Taking into account relevant circumstances surrounding the plaintiff's omission, as set forth in Pioneer, supra, the court finds that plaintiff's omissions were the result of excusable neglect on the part of plaintiff's counsel.
Having found that excusable neglect led to the omission of the citations to the Sandy Browne declaration, the court now turns to whether that evidence changes the court's analysis of defendant's summary judgment motion.
Plaintiff asserts that, due to excusable neglect, plaintiff's counsel omitted citations to the Declaration of Sandy Browne, "an expert with over 44 years of experience in vehicle occupant safety and restraint systems." Pl.'s Memo 9:1-2. In that declaration Ms. Browne states that the seatbelts worn in the collision "are deemed damaged." Browne Decl., Ex. D to Pl.'s Opp'n to Summary Judgment, ECF No. 232. According to Browne, when a seatbelt is in a collision, the seat belt webbing becomes stretched and elongated, and does not return to its previous elasticity.
Plaintiff offers Browne's testimony in order to prove that Allstate was contractually obligated to pay for the replacement of the seat belts following the collision because the seat belts were "deemed damaged" and could not have returned to its original condition. The court now analyzes whether Browne's expert testimony on this point is reliable and relevant under the framework set forth in
Ms. Browne is a former accident investigator with the National Transportation Safety Board and the National Highway Traffic Safety Administration. Browne Curriculum Vitae ("CV"), ECF No 233 at 13. She has completed approximately 2000 hours of training in accident investigation through the University of Southern California, Stanford University, the Department of Transportation, and the National Transportation Safety Board. That training included course on "seat belt systems, and their construction, their performance, their testing requirements, their failures, their inefficiencies, and the biomechanical result of lap belts." Browne Depo. 36-37. She has published dozens of articles on automobile accidents, including on the performance of lap and shoulder belts in car accidents, and has provided numerous trainings on car accidents to the California Highway Patrol, including on restraint systems. In the course of her experience as an investigator and as a consultant in seat belt safety, Browne has personally inspected dozens of seat belts that have been involved in car accidents.
Based on this experience and training, Browne testified that in her opinion "once you load
In her declaration, Browne asserted that her conclusion that the seatbelts were damaged
Brown Decl. ¶ 28-30.
The court finds the Browne testimony to be reliable and relevant. Ms. Browne's experience and training in biomechanics and engineering is vast, and her conclusions are relevant to a core issue in this case. Further, the court finds that the evidence raises a triable issue on the factual question of whether the Watts' seatbelts were damaged following the collision. Accordingly, summary judgment for defendants is not appropriate on this issue, plaintiff's motion for relief from judgment is GRANTED.
In addition to excusable neglect, plaintiff asserts that relief from judgment is warranted because of newly discovered evidence.
A party moving under Rule 59(e) or Rule 60(b) on the basis of newly discovered evidence must show that the evidence (1) existed at the time of the trial, (2) could not have been discovered through due diligence, and (3) was of such magnitude that production of it earlier would have been likely to change the disposition of the case.
Plaintiff states that Mr. Lange's deposition was taken on May 2, 2011, before the court's May 12, 2011 order granting summary judgment to defendant. Pl.'s Mot. for a New Trial 5:22. Although the transcript of the deposition was not available until after the grant of summary judgment, the testimony itself was. Therefore, the court concludes that the evidence existed at the time of trial.
Plaintiff's opposition to summary judgment was submitted one week prior to the deposition of Mr. Lange on May 2, 2011. Plaintiff contends that defendant's counsel "concealed Mr. Lange's testimony by refusing to make him available for deposition until after plaintiff's opposition to summary judgment was due. Pl.s Mot. for a New Trial 2:16-17. At the time that the parties scheduled Mr. Lange's deposition, defendant had not yet filed its summary judgment motion, and plaintiff did not yet know that the deposition would take place after the opposition's April 25, 2011 due date.
Defendant counters that the deposition testimony was actually in plaintiff's possession before the court's May 12 order granting summary judgment, and that plaintiff filed a surreply on May 5, 2011 after taking Mr. Lange's deposition, but did not include evidence from Mr. Lange's deposition in that filing. Further, defendant asserts that it attempted to schedule all expert depositions earlier, but that plaintiff's counsel refused to cooperate. This refusal by plaintiff's counsel, according to defendant, negates any claim of due diligence by plaintiff.
The court concludes that plaintiff acted with due diligence. At the time the depositions were scheduled, plaintiff did not know that defendant was going to schedule a motion for summary judgment. Even after the summary judgment motion was filed and plaintiff became aware that Mr. Lange's deposition would take place after the opposition was due, plaintiff did not know that Mr. Lange's deposition would produce strong enough evidence to warrant requesting an extension of the deadline for the filing of the opposition.
Plaintiff's offered newly discovered evidence purportedly creates a genuine issue of material fact as to whether Allstate believed that policyholders would expect it to adhere to the owner's manual's recommendations when restoring a vehicle to its pre-accident condition. Plaintiff states that Mr. Lange, an expert on collision repair industry standards, testified at his deposition that when a manufacturer's service manual is silent on whether to replace seatbelts after a collision, members of the repair industry have to look at the owner's manual.
The court concludes that Mr. Lange's deposition testimony is not evidence of a contractual obligation on the part of Allstate to replace seatbelts in every collision according to the owner's manual. In his deposition, Mr. Lange stated, "my view is that the information that is useful and appropriate for consideration with respect to post-collision treatment of safety belts would be embedded in service manuals, not owner's manuals." Lange Depo. 147:16-19. Mr. Lange went on to state "it's my opinion that the primary source [for determination of seat belt replacement or inspection] should be the repair service manual. If there's nothing there, then obviously the repair industry has to go elsewhere. Owners' manuals may be the places that an operator would look."
In this case, the vehicle service manual stated that the seatbelts should be replaced in every collision in which the airbags had been deployed, whereas the vehicle owner's manual stated that seatbelts should be replaced in all vehicles involved in serious collisions. Plaintiff characterizes the vehicle service manual as being silent on what to do in the event of a serious collision in which the airbags do not deploy. Plaintiff argues that, given the vehicle service manual's "silence" on this issue, Allstate was contractually bound to adhere to the owner's manual recommendations.
The court finds this position to be untenable. Mr. Lange's deposition testimony does not show such a contractual obligation. There was no uniform custom within the automobile repair industry to adhere to the owner's manual. In fact, Mr. Lange stated explicitly that there is no uniform process within the automobile repair industry for determining what stems should be taken to determine seatbelt replacement following a collision.
The court's inquiry on this question is for the purpose of determining what Allstate's contractual obligations were with respect to replacing seatbelts following a serious collision, such as the one plaintiff's insured car was involved in. Plaintiff's evidence shows that there is a variety of sources that vehicle repair professionals consult when determining how to restore cars following collisions. Plaintiff has not produced any evidence that Allstate's belief was that its clients would expect that their insure cars to be restored according to owner's manual recommendations.
Accordingly, the court concludes that Mr. Lange's testimony is not of such a magnitude that it would change the disposition of the court's summary judgment order.
For the reasons discussed herein, the court ORDERS as follows:
