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Greenbrier Hotel Corp. v. Lexington Insurance Co.

United States District Court, S.D. West Virginia, Beckley Division

June 11, 2018

GREENBRIER HOTEL CORPORATION, et al., Plaintiffs,
v.
LEXINGTON INSURANCE COMPANY, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          IRENE C. BERGER UNITED STATES DISTRICT JUDGE.

         The Court has reviewed the Plaintiffs' Motion for Reconsideration of January 4, 2018 Order and Judgment Order (Document 104) and supporting memorandum (Document 105), the Defendants' Memorandum of Law in Opposition to Plaintiffs' Motion for Reconsideration of January 4, 2018 Order and Judgment Order (Document 107), and the Plaintiffs' Reply in Support of Reconsideration of January 4, 2018 Order and Judgment Order (Document 109).

         This case has had a somewhat convoluted history. The Plaintiff, referred to collectively as “the Greenbrier, ” filed a Complaint (Document 1-1) in the Circuit Court of Greenbrier County, West Virginia, on March 14, 2014. The Greenbrier sought recovery from the Defendants, a group of insurers, for damages arising from a 2012 derecho windstorm. The derecho occurred on June 29, 2012, and the Greenbrier hosted its Greenbrier Classic golf tournament just days later. The tournament went forward as scheduled, and the Insurers promptly paid portions of the Greenbrier's claim. However, the Insurers largely denied a business interruption claim related to a projected increase in profits following the Greenbrier Classic. That denial is the subject of this lawsuit.

         The Insurers requested that the case be dismissed or stayed pending appraisal. On February 18, 2015, the Court granted the motion and entered a stay to permit appraisal in accordance with the insurance policies. (See Memorandum Opinion and Order, Document 75.) On May 1, 2017, after receiving notice that the appraisal process was complete, the Court entered an order lifting the stay and setting a schedule for the filing of any motions to overturn the appraisal award. (See Order, Document 79.) The appraisal panel[1] determined that the Insurers owed an additional $57, 000, but found that the Greenbrier was not entitled to the remainder of its $16, 497, 138.63 claim.

         The Greenbrier filed a motion to vacate the decision of the appraiser/umpire on May 23, 2017. On June 13, 2017, the Insurers filed a cross-motion seeking partial summary judgment on the underlying complaint as a result of the appraisal decision. The Court denied the motion to vacate and granted the cross-motion for partial summary judgment. (See Memorandum Opinion and Order, Document 93.)

         The Greenbrier's amended complaint (Document 1-3) contains the following counts: Count One: Breach of the Insurance Contract; Count Two: Declaratory Relief determining that appraisal was not required; and Count Three: Unfair and Unlawful Claims Practices. The Court found that the first opinion staying the case pending appraisal resolved Count Two, and the second opinion granting partial summary judgment and enforcing the appraisal award resolved Count One. Therefore, the Court requested that the Greenbrier indicate whether it intended to pursue Count Three and what type of discovery it anticipated. The Greenbrier responded that it intended to proceed with Count Three, but might wish to appeal the Court's prior decisions before proceeding.[2]The Insurers filed a response contending that the Greenbrier would have no damages that were not premised on the success of Count One, the improper refusal to pay the Greenbrier's claim.

         Upon careful review of the amended complaint, the Court ordered that Count Three be dismissed, explaining that it appeared to be dependent on the success of Count One. (See Order, Document 101.) The Greenbrier seeks reconsideration.

         STANDARD OF REVIEW

         Rule 59(e) of the Federal Rules of Civil Procedure permits a motion to alter or amend a judgment within 28 days of the entry of judgment. The Fourth Circuit has “recognized that there are three grounds for amending an earlier judgment: (1) to accommodate an intervening change in controlling law; (2) to account for new evidence not available at trial; or (3) to correct a clear error of law or prevent manifest injustice.” Pac. Ins. Co. v. Am. Nat. Fire Ins. Co., 148 F.3d 396, 403 (4th Cir. 1998). “Rule 59(e) motions may not be used, however, to raise arguments which could have been raised prior to the issuance of the judgment, nor may they be used to argue a case under a novel legal theory that the party had the ability to address in the first instance.” Id. The Fourth Circuit has further cautioned that reconsideration after entry of judgment should be used sparingly. Id.

         Rule 60(b), in turn, permits relief from a final judgment for the following reasons:

(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b);
(3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct ...

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