Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_05-cv-02924/USCOURTS-azd-2_05-cv-02924-6/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:2201 Declaratory Judgment (Insurance)

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

The Medical Protective Company, a

foreign corporation 

Plaintiff, 

vs.

Herman Pang, M.D., 

Defendant. 

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No. CV 05-2924-PHX-JAT

ORDER

Pending before the Court are Defendant Dr. Herman Pang's Motion for Attorneys'

Fees (Doc. 264); Plaintiff Medical Protective Company's Motion for Rule 60(b) Relief (Doc.

266); Plaintiff's Motion to Alter or Amend Judgment Under Rule 59(e) (Doc. 268); Plaintiff's

Motion to Strike and Motion for Attorneys' Fees (Doc. 269); Defendant's Rule 54 Motion

Requesting Review and Revision of Clerk's 4/28/10 Order Re: Taxation of Costs (Doc. 273);

Defendant's Motion for Extension of Time to File Supplement (Doc. 285); Defendant's

Second Motion for Extension of Time to File Supplement (Doc. 289); Defendant's Third

Motion for Extension of Time to File Supplement (Doc. 291); Defendant's Fourth Motion for

Extension of Time to File Supplement (Doc. 292). The Court now rules on the motions.

I. Background

In September 2005, Plaintiff Medical Protective Company (“MPC”) filed the current

action seeking declaratory relief and partial recision of a medical malpractice policy issued

Case 2:05-cv-02924-JAT Document 305 Filed 10/19/10 Page 1 of 9
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to Dr. Pang. In particular, MPC sought to reduce the limits of liability for a professional

insurance policy it issued to Dr. Pang that relates to a state court medical malpractice action

brought by K. Williamson against Dr. Pang. Defendant Dr. Pang filed a counter-claim against

MPC for bad faith. In July 2007, a jury returned a verdict in favor of Dr. Pang regarding the

state court medical malpractice action. K. Williamson then appealed the jury verdict to the

Arizona Court of Appeals.

While the state court action was pending before the Arizona Court of Appeals, MPC

and Dr. Pang filed a joint motion for dismissal without prejudice (Doc. 260). On March 26,

2008, this Court issued an Order granting the parties' joint motion for dismissal without

prejudice (Doc. 262), and adopting in large part the parties' proposed form of order (Doc.

261). In the March 2008 Order, the Court ordered the following:

IT IS FURTHER ORDERED that this Order shall not be deemed a final

order, that the Court retains jurisdiction over this action, and that all rights of

action and all rights of appeal are tolled and maintained by the parties as they

currently exist until further order of the Court as set-forth below.

IT IS FURTHER ORDERED that no later than thirty (30) days after a

mandate is filed in the Superior Court of Arizona, case no. CV 2002-014646,

from the Arizona Court of Appeals or the Arizona Supreme Court regarding

the appeal of Kymberli Williamson, one of the parties herein shall file a

motion in this action requesting: (1) that the Court enter a final order

dismissing this action with prejudice; or (2) requesting that this action be reopened for final pre-trial conference and trial; or (3) requesting that the nonfinal order of dismissal without prejudice and the Court’s jurisdiction continue

until after re-trial of the Williamson case and termination of all appeals

therefrom; or (4) such other orders as may be appropriate.

IT IS FURTHER ORDERED that in the event neither party files such

motion, this Order shall automatically become a self-executing final order of

dismissal with prejudice thirty-one (31) days after the filing of such mandate

in the Superior Court of Arizona from the Arizona Court of Appeals or

Arizona Supreme Court and without further action by this Court.

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(Doc. 262 at pp. 1, 2.)

In July 2009, the Arizona Court of Appeals issued a memorandum decision reversing

and remanding the state court judgment entered in favor of Dr. Pang. Dr. Pang petitioned

to the Arizona Supreme Court for review of the Arizona Court of Appeals' decision, but the

Arizona Supreme Court denied the petition. A mandate was then filed on February 25, 2010

in superior court.

Neither party filed a motion as outlined in the Court's March 2008 Order within thirtyone days after the filing of the February 25 mandate. As a result, the Court's March 2008

Order became a self-executing final order of dismissal with prejudice of MPC's declaratory

and recision claims, as well as Dr. Pang's bad faith counter-claim. MPC now requests Rule

60(b)(1) and 59(e) relief from the March 2008 Order.

II. Analysis

A. Rule 60(b)(1)

"On motion and just terms, the court may relieve a party or its legal representative

from a final judgment, order, or proceeding for the following reasons: (1) mistake,

inadvertence, surprise, or excusable neglect . . . ." FED. R. CIV. P. 60(b)(1). Determining if

the alleged excusable neglect merits relief under 60(b)(1) requires examining “four factors:

(1) the danger of prejudice to the opposing party; (2) the length of delay and its potential

impact on the proceedings; (3) the reason for the delay; and (4) whether the movant acted in

good faith.” Bateman v. U.S. Postal Servs., 231 F.3d 1220, 1223-24 (9th Cir 2000).

MPC agrees that the Court's March 2008 Order has now become a final order of

dismissal with prejudice because neither party filed a motion to re-open this case within

thirty-one days of February 25, 2010–the date the mandate in the state court action was filed

in superior court. Nevertheless, MPC requests that the Court relieve MPC from the effect of

the March 2008 Order for reasons of "mistake, inadvertence, surprise, or excusable neglect."

(Doc. 266 at p. 6.)

The Court finds that the first, second, and fourth Bateman factors weigh in favor of

granting MPC's motion. Defendant has not demonstrated any prejudice that will occur to him

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as a result of granting the Rule 60(b) motion, nor is the Court aware of any such prejudice.

The length of delay from when the mandate was filed until the bringing of the Rule 60(b)

motion was minimal and inconsequential. Further, nothing in the record supports a finding

that MPC failed to act in good faith–nor does Defendant so suggest. Accordingly, the Court

finds that the first, second, and fourth factors weigh in favor of granting the requested Rule

60(b) relief.

The Court further finds, however, that the third Bateman factor weighs heavily against

granting MPC's motion. MPC's proffered rationale for not filing a motion to re-open this

case within thirty-one days of the filing of the mandate does not constitute "mistake,

inadvertence, surprise, or excusable neglect" within the meaning of Rule 60(b)(1). MPC

asserts that it was not aware that the mandate had been filed in the superior court–the

triggering event for the thirty-one day time frame in the Court's March 2008 Order. Even

assuming MPC was not aware of the precise date that the mandate was filed, the record

supports a finding–and MPC freely admits–that it was aware the Arizona Court of Appeals

reversed and remanded the jury verdict, that the Arizona Supreme Court denied the petition

for review, and that the case was being remanded to superior court. These facts alone are

sufficient to deny MPC's Rule 60(b) request. "'Neither ignorance nor carelessness on the part

of the litigant or his attorney provide grounds for relief under Rule 60(b)(1).'" Kagan v.

Caterpillar Tractor Co., 795 F.2d 601, 607 (7th Cir.1986) (quoting Engleson v. Burlington

N. R.R. Co., 972 F.2d 1038, 1043 (9th Cir. 1992)). See also Smith v. Stone, 308 F.2d 15, 18

(9th Cir.1962) (attorney's failure to follow court procedure and rules is not excusable neglect

under Rule 60(b)); Martella v. Marine Cooks & Stewards Union, 448 F.2d 729, 730 (9th

Cir.1971) (failure to appeal dismissal of action was due to lack of diligence and was not

excusable neglect under Rule 60(b)). MPC was aware that the jury verdict had been reversed

and that the Arizona Supreme Court declined to revisit the Court of Appeals' decision.

Armed with such information, MPC should have, at a minimum, been aware that the filing

of the mandate in superior court was imminent. MPC's argument that it was unaware of the

precise date of when the mandate was filed is unavailing.

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1

MPC asserted at oral argument that the second paragraph of the Court’s March 2008

obligated Dr. Pang to file a motion after the entry of the mandate, but that paragraph simply

reads, “one of the parties herein shall file a motion in this action requesting . . ..” The Court

finds that the quoted language did not place the responsibility on Dr. Pang to revive this suit

against him. 

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Moreover, throughout the briefing on this issue, MPC attempts to place the onus on

Defendant Dr. Pang to alert MPC as to when the mandate was filed. Defendant had no such

burden, as the March 2008 Order makes clear that the burden is on the party that desires to

re-open this case to file an appropriate motion within the given time frame.1

 Even though

Dr. Pang was a party to the state court action and MPC was not a party to the state court

action, this does not relieve MPC of its duty to diligently watch for the filing of the mandate

in superior court should MPC desire to re-open this case. Further, the filing of mandates is

open to the general public, and whether MPC was a party to the state court action is

immaterial concerning MPC's ability to ascertain when the mandate was filed and thereafter

properly move to re-open this case.

MPC further argues that it was not the parties' intent for a final order with prejudice

to be entered after the state court jury verdict was reversed. However, MPC cites the Court

to no more than its "contemplations" concerning under what circumstances the March 2008

Order would become a final order with prejudice. Although both parties cite the Court to

various emails exchanged between the parties, these emails do not demonstrate, as MPC

suggests, an intent between the parties that the March 2008 Order must never become a final

order with prejudice if the state court verdict was reversed. The emails express an intent,

should the state court verdict be reversed, to create a mechanism for placing the parties in the

same position they were in prior to the March 2008 order. The parties, through their

proposed order at Doc. 261, provided a mechanism for ensuring that the parties return to the

same position once the state court verdict was reversed. However, the parties also included

a mechanism to ensure that the March 2008 Order would become a final order with

prejudice–either by filing a motion so requesting, or simply by filing nothing within thirtyCase 2:05-cv-02924-JAT Document 305 Filed 10/19/10 Page 5 of 9
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2

 The Court also notes that Defendant Dr. Pang notified this Court that a settlement

had been reached in the state court action, for a sum less than or equal to $1 million–the sum

MPC is seeking to reduce the limits of liability for the professional insurance policy it issued

to Dr. Pang–and that MPC agreed to pay the settlement. As such, it is likely that MPC's

recision claim is now moot.

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one days after the mandate was filed. There is nothing in the communications between the

parties that suggests that the outcome countenanced in the final paragraph of the March 2008

Order was not an intended outcome. The plain language of the parties' proposed order and

the subsequent March 2008 Order clearly countenance such an outcome. As such, based

upon the current record and based upon the absence of any evidence to the contrary

concerning the parties' intent , the Court is not persuaded that a dismissal with prejudice after

a reversal of the jury verdict was an outcome not intended by the parties.2

 Therefore, the

Court finds that the third factor weighs heavily against granting Rule 60(b) relief.

After properly weighing the four Bateman factors, the Court finds that there was no

justifiable "mistake, inadvertence, surprise, or excusable neglect" within the meaning of Rule

60(b)(1). Accordingly, the Court denies MPC's requested Rule 60(b) relief.

B. Rule 59(e)

"There are four grounds upon which a Rule 59(e) motion may be granted: 1) the

motion is 'necessary to correct manifest errors of law or fact upon which the judgment is

based;' 2) the moving party presents 'newly discovered or previously unavailable evidence;'

3) the motion is necessary to 'prevent manifest injustice;' or 4) there is an 'intervening change

in controlling law.'" Turner v. Burlington N. Santa Fe R.R. Co., 338 F.3d 1058, 1063 (9th

Cir. 2003) (quoting McDowell v. Calderon, 197 F.3d 1253, 1254 n.1 (9th Cir.1999)) (italics

omitted).

MPC argues that Rule 59(e) relief is necessary to prevent manifest injustice, as well

as to correct a manifest error of fact. However, MPC merely rehashes its arguments

discussed above under Rule 60(b); namely, that MPC had no knowledge of the filing of the

actual mandate, the onus was on Defendant Dr. Pang to alert the Court or MPC that the

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3

 The Court rejects any assertion that the March 2008 Order is, in effect, a consent

decree. This case does not involve the extensive and ongoing judicial involvement that are

the hallmarks of consent decrees. Rather, the March 2008 Order was issued in direct

response to a private settlement agreement between the parties. There was simply no judicial

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mandate was filed, and that it was not the parties intent for a reversal of the state court jury

verdict to produce a final order of prejudice in this case. The Court need not revisit these

arguments, as the same reasons for rejecting these arguments under Rule 60(b) are equally

applicable under Rule 59(e). Accordingly, the Court finds that MPC is not entitled to its

requested relief under Rule 59(e).

C. Attorneys' Fees

Defendant Dr. Pang asserts that he is entitled to his reasonable attorneys' fees under

A.R.S. § 12-341.01. MPC, in response, argues that there is no prevailing party within the

meaning of Section 12-341.01; and, if the Court determines that there is a prevailing party

under this statute, then MPC is the prevailing party.

Section 12-341.01 provides: "In any contested action arising out of a contract, express

or implied, the court may award the successful party reasonable attorney fees." A.R.S. § 12-

341.01(A). The Court finds that there is no "successful party" within the meaning of Section

12-341.01. The Court never resolved the merits of either party's claims. Through the

settlement agreement, MPC agreed to dismiss its declaratory and recision claims, and Dr.

Pang agreed to dismiss his bad faith claims. Unlike an order addressing a motion to dismiss

or a motion for summary judgment, the Court in its March 2008 Order never resolved, much

less entered judgment on the merits of these claims. This case has been dismissed with

prejudice because each party voluntarily agreed to a settlement that provided a mechanism

for dismissing all claims with prejudice. Such a result does not produce a "successful party"

within the meaning of Section 12-341.01. Neither MPC nor Dr. Pang were awarded the

relief they were seeking in bringing their claims and counter-claims. See Buckhannon Bd.

& Care Home, Inc. v. W. Va. Dep't of Health & Human Res., 532 U.S. 598, 603 (2001)

(stating that "a 'prevailing party' is one who has been awarded some relief by the court").3

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approval nor oversight in this case.

4

 Defendant Dr. Pang also asks the Court to revise the order of the Clerk of the Court

at Doc. 271, wherein the Clerk of the Court denied Defendant's bill of costs. The Court notes

that LRCiv. 54.1(d) provides that "[t]he Court will not determine the party entitled to costs

in actions terminated by settlement; parties must reach agreement on taxation of costs, or

bear own costs." In any event, for the reasons discussed above, there is no "prevailing party"

in this case. Accordingly, the Court denies Defendant's request to revise the order of the

Clerk of the Court.

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Moreover, this case does not present a scenario where one party is the "successful party"

because the opposing party voluntary dismissed, Vicari v. Lake Havasu City, 213 P.3d 367

(Ariz. Ct. App. 2009), or because the Court dismissed this action for a lack of prosecution.

Britt v. Steffen, 205 P.3d 357 (Ariz. Ct. App. 2008). Rather, the Court was presented with

a settlement agreement between the parties that became a final order with prejudice.

Accordingly, the Court finds that neither party is entitled to its attorneys' fees under Section

12-341.01.4

III. Conclusion

Thirty-one days after the filing of the mandate in superior court, this Court's March

2008 Order became a final order of dismissal with prejudice. For the reasons discussed

above, MPC is not entitled to either Rule 59(e) or Rule 60(b) relief. Moreover, the Court

concludes that there is no "successful party" within the meaning of Section 12-341.01. As

such, the Court denies both parties' requests for attorneys' fees.

Accordingly,

IT IS ORDERED that Defendant Dr. Herman Pang's Motion for Attorneys' Fees

(Doc. 264) is denied.

IT IS FURTHER ORDERED that Plaintiff Medical Protective Company's Motion

for Rule 60(b) Relief (Doc. 266) is denied.

IT IS FURTHER ORDERED that Plaintiff's Motion to Alter or Amend Judgment

Under Rule 59(e) (Doc. 268) is denied.

IT IS FURTHER ORDERED that Plaintiff's Motion to Strike and Motion for

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Attorneys' Fees (Doc. 269) is denied.

IT IS FURTHER ORDERED that Defendant's Rule 54 Motion Requesting Review

and Revision of Clerk's 4/28/10 Order Re: Taxation of Costs (Doc. 273) is denied.

IT IS FURTHER ORDERED that Defendant's First, Second, Third, and Fourth

Motions for Extension of Time to File Supplement (Doc. 285) are denied as moot.

DATED this 19th day of October, 2010.

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