Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-01276/USCOURTS-cand-3_06-cv-01276-7/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1441 Petition for Removal

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United States District Court

For the Northern District of California

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

FRANK GHIGLIONE and RODGERS

TRUCKING, 

Plaintiffs,

 v.

DISCOVER PROPERTY AND CASUALTY

COMPANY, DISCOVER MANAGERS, INC.,

and DOES 1 through 10, inclusive,

Defendants. 

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No. C-06-1276 SC

ORDER DENYING

PLAINTIFFS' MOTION

FOR RECONSIDERATION

I. INTRODUCTION

Plaintiffs Frank Ghiglione and Rodgers Trucking

("Plaintiffs") brought this action against Discover Property and

Casualty Company et al. ("Discover" or "Defendants") alleging

breach of contract and breach of the covenant of good faith and

fair dealing based on Discover's conduct during its defense of

Rodgers Trucking in a prior lawsuit. See Complaint, Ex. A. 

Presently before the Court is Plaintiffs' Rule 60(b) Motion

for Reconsideration of the Court's Order Granting Defendants'

Motion for Summary Judgment. For the reasons stated herein, the

Court hereby DENIES Plaintiffs' Motion for Reconsideration.

II. BACKGROUND

In 2003, Rodgers Trucking was insured by Defendant Discover

Property and Casualty Company under a $1 million automobile

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United States District Court

For the Northern District of California

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liability policy. On May 9, 2003, a Rodgers Trucking vehicle

struck Mr. Eliseo Soria ("Soria") while he was riding a bicycle. 

The police report stated that the truck driver caused the

collision. See Tarkoff Decl., Ex. M. Soria suffered significant

injuries and subsequently sued Rodgers Trucking in state court,

claiming several million dollars in damages.

After the accident, the insurance broker for Rodgers Trucking

reported the accident to Don Bullock at The Murata Group, the

third-party administrator ("TPA") for the claim. The TPA hired

Arenas Claims Consulting to investigate the accident. Arenas

conducted a scene investigation on May 16, 2003 and produced a

written report on May 27, 2003. See Tarkoff Decl., Ex. C, Bullock

Depo., 17-18. The TPA also retained Lenore Defiesta as defense

counsel in anticipation of Soria filing a lawsuit. See id. at 23-

24, 28-29. While investigating the claim, Discover authorized the

hiring of multiple experts to analyze the accident and approved

over $150,000 in defense costs. See id. at 34, 54. 

Defendants made several attempts to settle the case. On July

9, 2004, Defendants sent Soria three structured settlement

proposals prepared by the Bridge Settlement Corporation. See

Korte Decl., Ex. 3. Soria rejected the offers. See Bullock

Decl., ¶ 4. In addition, the parties engaged in multiple

mediation sessions before four different mediators. See Tarkoff

Decl., Ex. A, Korte Depo., 22, 29, 32, 49. During the settlement

negotiations Soria never made a demand at or below the policy

limits. See id. at 58-59. Each of the mediators suggested that

Rodgers Trucking would have to make a monetary contribution to

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facilitate settlement because the insurance policy was not large

enough to constitute a sufficient payment to Soria. See id. at

100-101. 

Subsequently, when it appeared likely that the case would go

to trial, Defendants authorized the hiring of an additional

attorney, Kevin Cholakian, to be the lead trial attorney. See id.

at 111. Mr. Korte, the attorney for Rodgers Trucking, was

satisfied that the new attorney provided adequate representation. 

See id.

Immediately prior to trial, the parties settled the Soria

case for $1.2 million. Defendants agreed to pay $1 million, the

full value of the insurance policy, and Rodgers Trucking agreed to

pay the remaining balance of $200,000.00. See Tarkoff Decl., Ex.

B, Ghiglione Depo., 22; Korte Decl., Ex. 12. At deposition, Frank

Ghiglione agreed that when considering the final settlement

proposal he was not pressured by Discover or its attorneys. See

Ghiglione Depo., 32-33. Ghiglione made the decision to settle

after discussing the matter with Mr. Korte. See id. at 51.

On March 29, 2007, this Court granted Defendants' Motion for

Summary Judgment. Docket No. 46. On May 18, 2007, after

Defendants' submitted their offer of proof regarding attorneys'

fees and costs, this Court entered judgment in Defendants' favor. 

Docket No. 49. On July 31, 2007, Plaintiffs filed their Motion

for Reconsideration, claiming that new evidence exists to support

their claims. Plaintiffs assert that the new evidence is

contained in the transcripts from the second session of Lenore

Defiesta's deposition, dated March 23, 2007. 

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III. LEGAL STANDARD

Under to Rule 60(b) of the Federal Rules of Civil Procedure: 

On motion and upon such terms as are just, the court may

relieve a party or a party's legal representative from a

final judgment, order, or proceeding for the following

reasons: (1) mistake, inadvertence, surprise, or excusable

neglect; (2) newly discovered evidence which by due diligence

could not have been discovered in time to move for a new

trial under Rule 59(b); (3) fraud (whether heretofore

denominated intrinsic or extrinsic), misrepresentation, or

other misconduct of an adverse party; (4) the judgment is

void; (5) the judgment has been satisfied, released, or

discharged, or a prior judgment upon which it is based has

been reversed or otherwise vacated, or it is no longer

equitable that the judgment should have prospective

application; or (6) any other reason justifying relief from

the operation of the judgment.

IV. DISCUSSION

Plaintiffs' Motion for Reconsideration is based on the

argument that new evidence from the second session of the

deposition of Lenore Defiesta supports Plaintiffs' contentions

that (1) Defiesta did not competently represent Plaintiffs in the

Soria case and (2) a conflict of interest existed to support a

Cumis claim under Cal. Civ. Code § 2860. See Dynamic Concepts,

Inc. v. Truck Ins. Exchange, 61 Cal. App. 4th 999 (1998). As

requested by Plaintiffs, the Court reviewed the evidence from the

entire case and paid particular attention to the second session of

the Defiesta Deposition and the corresponding exhibits. 

Having reviewed the evidence, the Court finds that there is

no evidence in Plaintiffs' recent filings sufficient to vacate the

judgment. Plaintiffs simply repeat the same arguments and use the

same types of evidence presented in their opposition to

Defendants' summary judgment motion. Plaintiffs' argument that 

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Defiesta did not competently handle the case fails. Similarly,

Plaintiffs' argument that Defiesta failed to tender or improperly

tendered the coverage request for premises liability to the St.

Paul Insurance Company also fails. The evidence indicates that

Defiesta properly requested coverage. Any evidence that Discover

is related to St. Paul had no impact on Defiesta's or Discover's

handling of the Soria matter. Furthermore, the fact that Defiesta

now works at a different law firm that does work for St. Paul

cannot create a conflict in the Soria matter, which she worked on

at her old firm.

Plaintiffs' motion under Rule 60(b) fails because they have

presented no new evidence or argument indicating that the Court's

Summary Judgment Order was incorrect.

V. CONCLUSION

For the reasons described herein, the Court DENIES

Plaintiffs' Motion for Reconsideration.

IT IS SO ORDERED.

Dated: September 7, 2007

 

UNITED STATES DISTRICT JUDGE

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