Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_04-cv-02314/USCOURTS-caed-2_04-cv-02314-4/pdf.json

Nature of Suit Code: 360
Nature of Suit: Other Personal Injury
Cause of Action: 28:1332 Diversity-Breach of Contract

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1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

CLYDE TERRY, an individual,

and ANNE TERRY, an individual,

NO. CIV. S 04-2314 MCE CGH

Plaintiffs,

v. MEMORANDUM AND ORDER

THE TRAVELERS INDEMNITY

COMPANY OF CONNECTICUT, a

Corporation; and KENNEL PAK, a

Corporation; and GENTZLER &

SMITH ASSOCIATES, a

Corporation,

Defendants.

----oo0oo----

Plaintiffs Clyde and Anne Terry have petitioned this Court

to reconsider its April 27, 2005, Memorandum and Order wherein

the Court struck their claim for attorney’s fees accrued in an

underlying state court action (the “Order”). Concurrently with

that motion, Plaintiffs filed a petition to certify two questions

of law for immediate appellate review. The Court will dispose of

both Plaintiffs’ motions herein (“Motions”).

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Because oral argument will not be of material assistance, 1

the Court orders this matter submitted on the briefs. E.D. Cal.

Local Rule 78-230(h). 

2

In their motion for reconsideration, Plaintiffs allege that

a California Supreme Court decision distinguished and limited the

authority relied upon by this Court in issuing its earlier Order. 

That supreme court decision, Plaintiffs contend, was not properly

considered by this Court thereby requiring the that the earlier

Order be revisited.

In their motion for certification of questions of law,

Plaintiffs contend that sufficient grounds exist to certify the

following two questions: 1) Whether emotional distress damages

are available in negligence and negligent representation actions;

and 2) Whether a showing of exceptional circumstances is required

when seeking an award of attorney’s fees under the “tort of

another” doctrine. As explained fully below, Plaintiffs’ motion

for reconsideration is denied. Likewise, Plaintiffs’ petition

for certification of the foregoing questions of law is denied.1

BACKGROUND

The Court has already set forth a detailed factual

background for this action in its Order of April 27, 2005, which

is incorporated by reference and need not be reproduced herein.

(Mem. & Order 2-5). Subsequent to that Order, Plaintiffs filed a

First Amended Complaint reasserting their four original claims

against Defendants as well as emotional distress damages and

attorney’s fees in all claims. Defendants moved for a second

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Plaintiffs did not clarify under which rule they were 2

seeking reconsideration. However, in seeking reconsideration,

(continued...)

3

time to strike all references to 1) emotional distress damages in

the negligence and negligent misrepresentation claims and 2)

attorney’s fees in all claims. The Court again agreed with

Defendants and, in a Memorandum and Order dated August 15, 2005,

granted the motion to strike, this time, without leave to amend. 

Plaintiffs have filed the present Motions in response.

STANDARDS

Motion to Reconsider

 A court should be loathe to revisit its own decisions

unless extraordinary circumstances show that its prior decision

was wrong. Christianson v. Colt Indus. Operating Corp., 486 U.S.

800, 816, 108 S. Ct. 2166, 100 L. Ed. 2d 811 (1988). This

principle is generally embodied in the law of the case doctrine. 

That doctrine counsels against reopening questions once resolved

in ongoing litigation. Pyramid Lake Paiute Tribe of Indians v.

Hodel, 882 F.2d 364, 369 (9th Cir. 1989)(citing 18 C. Wright, A.

Miller & E. Cooper, Federal Practice and Procedure § 4478 at

788-89). Nonetheless, a court order resolving fewer than all of

the claims among all of the parties is "subject to revision at

any time before the entry of judgment adjudicating all the claims

and the rights and liabilities of all the parties." Fed. R. Civ.

P. 54(b). Where reconsideration of a non-final order is sought, 2

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(...continued) 2

Plaintiffs cannot rely on Fed. R. Civ. P. 59(e) or 60(b) because

they only apply to reconsideration of "final judgments and

appealable interlocutory orders." Balla v. Idaho State Bd. of

Corrections, 869 F.2d 461, 466-67 (9th Cir. 1989). Accordingly,

the Court will consider this a Rule 54(b) motion. 

4

the court has "inherent jurisdiction to modify, alter or revoke

it." United States v. Martin, 226 F.3d 1042, 1048-1049 (9th Cir.

2000). The major grounds that justify reconsideration involve an

intervening change of controlling law, the availability of new

evidence, or the need to correct a clear error or prevent

manifest injustice. Pyramid, 882 F.2d at 369.

In addition, pursuant to E.D. Local Rule 78-230(k), an

application for reconsideration must set forth, by affidavit or

brief, any new material facts and circumstances that support a

claim that the Court's previous ruling be revisited. 

Motion to Certify Questions of Law

The decision to certify an order for interlocutory appeal is

committed to the sound discretion of the district court. Swint

v. Chambers County Comm'n, 514 U.S. 35, 47, 131 L. Ed. 2d 60, 115

S. Ct. 1203 (1995). In order to qualify for certification under

28 U.S.C. § 1292(b), a district court judge must be convinced

that the order involves a controlling question of law as to which

there is a substantial ground for difference of opinion, and that

an immediate appeal from the order may materially advance the

ultimate termination of the litigation. The party requesting

certification has the burden of showing that "exceptional

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circumstances" justify a departure from the basic policy of

postponing appellate review until after the entry of a final

judgment. In re Cement Antitrust Litig., 673 F.2d 1020, 1026

(9th Cir. 1982)(internal citations and quotations omitted).

ANALYSIS

1. Motion for Reconsideration

Plaintiffs are seeking reconsideration of this Court’s

Order, dated April 27, 2005, striking their claim for attorney’s

fees accrued in the underlying Terry v. Levens suit. As

explained above, in order for Plaintiffs to be successful on

their motion, they must establish that the Order involves an

intervening change of controlling law, the availability of new

evidence, or the need to correct a clear error or prevent

manifest injustice. 28 U.S.C. § 1292(b). 

Plaintiffs do not allege the existence of new evidence nor

do they allege manifest injustice or that this Court committed a

clear error. Rather, they contend that intervening legal

authority compels a different result than that previously reached

by this Court. Specifically, Plaintiffs contend that Gray v. Don

Miller & Associates, Inc., 35 Cal. 3d 498 (Cal. Sup. Ct. 1984),

erodes the ground upon which this Court rendered its earlier

decision. As explained in detail below, Plaintiffs contention

that the Gray case is intervening legal authority compelling a

different result is entirely without merit.

As an initial matter, it is disingenuous at best to argue

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The Prentice court proclaimed that “In the absence of some 3

special agreement, statutory provision, or exceptional

circumstances, attorney’s fees are to be paid by the party

employing the attorney.” Prentice, 59 Cal. 2d at 620(emphasis

added). 

6

that the Gray case, decided fully 20 years prior to the present

action, is new legal authority. Nor can the Gray case be

considered an intervening change of controlling law as it is

neither a change in the controlling law nor intervening. Even to

the extent the Court yields to Plaintiffs’ argument, the Gray

case does not compel a different result.

Plaintiffs’ central argument is that the standard for “tort

of another” damages first articulated in Prentice v. N. Am. Title

Guar. Corp., 59 Cal. 2d 618, 620 (1963), and used by this Court

in issuing its Order, was substantially altered by the Gray case

rendering the original Order baseless. Specifically, Plaintiffs

contend that this Court struck their claim for attorney’s fees

based on Plaintiffs failure to show “exceptional circumstances”3

as required under the “tort of another” doctrine of Prentice. 

However, Plaintiffs urge, that holding is now baseless because,

under Gray, the “exceptional circumstances” requirement was

expressly eradicated.

While Plaintiffs are correct that Gray arguably narrowed the

“exceptional circumstances” requirement of Prentice, Plaintiffs

are mistaken in assuming this Court based its holding solely on

the lack of exceptional circumstances. A plain reading of the

Order quickly reveals that the Court pointed to the lack of

causation between Defendants’ conduct and the underlying third

party suit as grounds for striking Plaintiffs claim for fees.

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7

Under both Prentice and Gray, it is unquestionable that, absent

causation, a party may not recover attorney’s fees for the tort

of another irrespective of exceptional circumstances. In fact,

the Gray court specifically held that “...the rule of

Prentice..., has been applied when it has been found that the

party seeking attorney fees was required by the wrong of the

defendant to protect his interests by bringing or defending an

action against a third person.” Gray, 35 Cal. 3d at 508. 

In two prior orders, this Court expressly found that

Plaintiffs did not establish the requisite “natural or proximate”

connection between Defendants’ conduct and the underlying third

party action. (Mem. & Order at 10, April 27, 2005; Mem. & Order

at 6, August 15, 2005). Consequently, any narrowing of the

exceptional circumstances doctrine arguably dictated by Gray does

nothing to remedy Plaintiffs’ failure to establish causation and,

therefore, does nothing to compel a different result here.

Because Plaintiffs have utterly failed to establish an

intervening change of controlling law, the availability of new

evidence, or the need to correct a clear error or prevent

manifest injustice, the Court denies their motion for

reconsideration.

//

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8

2. Motion to Certify Questions of Law

a. Emotional Distress Damages

A discretionary interlocutory appeal must establish the

existence of a controlling question of law as to which there is a

substantial ground for difference of opinion, and that an

immediate appeal may materially advance the ultimate termination

of the litigation.

Plaintiffs first seek certification on the issue of whether

emotional distress damages are available in negligence and

negligent representation actions. It is very well settled in

California that recovery for the inevitable distress resulting

from finding oneself the victim of a negligent tortfeasor is not

recognized unless malice, breach of certain limited fiduciary

duties, physical injury or impact, or some other unusually

extreme or outrageous circumstance can be shown. Friedman, 107

Cal. App. 4th at 484 (citing Branch v. Homefed Bank, 6

Cal.App.4th 793, 801). In fact, absent impact or physical

injury, emotional distress damages have only been allowed where

the negligence is of a type which will cause highly unusual as

well as predictable emotional distress. Friedman, 107 Cal. App.

4th at 464.

Plaintiffs essentially reargue that Defendants owed

Plaintiffs a fiduciary duty as insurers and that Defendants’

revocation of the insurance contract was a breach of that special

duty. Plaintiffs then reason that the breach of an insurers’

fiduciary duty is excepted from the bar against emotional

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The Court stresses that no California case has permitted 4

the recovery of emotional distress damages for negligent

revocation of an insurance contract. Rather, the clear line of

authority permits such damages only in breach of the covenant of

good faith and fair dealing inherent in an insurance contract.

9

distress damages in negligence and negligent misrepresentation

cases. Plaintiffs’ argument in this regard is based on some

limited authority permitting such damages for breach of the

covenant of good faith and fair dealing in insurance contract

breach actions. In addition, Plaintiffs urge that the 4

underlying insurance contract has, as its object, the Plaintiffs’

emotional condition further entitling them to emotional distress

damages. See generally id.

Even assuming that Plaintiffs could show that Defendants

were in a special relationship with Defendants vis-a-vis the

existence of the insurance contract and that Defendants breached

a fiduciary duty to Plaintiffs as insurers, Plaintiffs’ claim

must nonetheless fail because they cannot show that that the

alleged negligence is of a type which would cause “highly unusual

as well as predictable emotional distress.” Id. at 464. To be

sure, this case is nothing akin to a mortuary mishandling human

remains or a doctor telling a patient to advise her husband that

she has syphilis. See id. at 485. Just as in Friedman, nothing

in this case suggests defendants should have foreseen Plaintiffs’

sensitive emotional response. In addition, this Court has

clearly held that the Plaintiffs’ emotional condition is not the

object of the insurance contract underlying this action further

eroding Plaintiffs’ untenable argument. (Mem. & Order 4-5,

August 15, 2005).

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10

Because Plaintiffs have failed to raise a question of law,

let alone a controlling question of law, their request for

certification of the foregoing question must be denied.

b. Attorney’s Fees

Plaintiffs also request that the Court certify whether a

showing of exceptional circumstances is required when seeking an

award of attorney’s fees under the tort of another doctrine. 

Plaintiffs’ argument in this respect is identical to its argument

set forth in Section 1 seeking reconsideration. Specifically,

Plaintiffs aver that exceptional circumstances need not be shown

when seeking attorney’s fees under the tort of another doctrine. 

Although the Gray decision arguably narrows the exceptional

circumstances requirement, Plaintiffs’ motion for certification

must nonetheless be denied.

Plaintiffs cannot prevail on this motion because they cannot

show that seeking appellate review of this question will advance

the ultimate termination of this litigation. In fact, resolving

the foregoing question is quite irrelevant to this litigation

because the Court has not based its denial of Plaintiffs’ request

for attorney’s fees on whether Plaintiffs satisfactorily showed

any exceptional circumstances. Rather, the Court’s holding is

based on the fact that Plaintiffs cannot show that there is a

causal nexus between Defendants’ conduct and the underlying state

court action. Consequently, Plaintiffs’ motion is denied.

//

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CONCLUSION

This Court declines to revisit its earlier decision to

strike Plaintiffs’ request for attorney’s fees because Plaintiffs

have failed to show an intervening change of controlling law, the

availability of new evidence, or the need to correct a clear

error or prevent manifest injustice. In fact, Plaintiffs’ motion

to reconsider merely reiterates the precise arguments that have

been twice rejected by this Court. The Court has unambiguously

articulated its position and grows weary of restating what it has

already said. Plaintiffs’ counsel has presented no facts or

circumstances that would give rise to a proper motion for

reconsideration. Accordingly, that motion is DENIED.

Similarly, with respect to Plaintiffs’ motion to certify

questions of law, Plaintiffs have failed to show any exceptional

circumstances that would justify a departure from the basic

policy of postponing appellate review until after the entry of a

final judgment. Further, Plaintiffs have presented no questions

of controlling law that would advance the termination of this

litigation, but instead, simply ask this Court to reexamine facts

it has previously decided. Consequently, Plaintiffs’ motion to

certify questions of law is DENIED.

//

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Plaintiff’s counsel is cautioned that continuing to file

motions on issues which have previously been disposed of by this

Court may result in further action being taken by the Court,

which may include sanctions.

IT IS SO ORDERED. 

DATED: November 4, 2005

_____________________________

MORRISON C. ENGLAND, JR

UNITED STATES DISTRICT JUDGE

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