Court Opinion

ID: 2731498
Source: CourtListenerOpinion
Date Created: 2014-09-10 05:00:33.620854+00
Date Added: 2024-06-11T10:18:49.050888
License: Public Domain

Case: 14-40153      Document: 00512762421         Page: 1    Date Filed: 09/09/2014

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT

                                    No. 14-40153                         United States Court of Appeals
                                  Summary Calendar                                Fifth Circuit

                                                                                FILED
                                                                        September 9, 2014
SENTRY SELECT INSURANCE COMPANY,                                           Lyle W. Cayce
                                                                                Clerk
                                                 Plaintiff - Appellant
v.

HOME STATE COUNTY MUTUAL INSURANCE COMPANY; MARK LYNN
STEVENS,

                                                 Defendants - Appellees

                   Appeal from the United States District Court
                        for the Eastern District of Texas
                              USDC No. 5:12-CV-10

Before REAVLEY, DENNIS, and SOUTHWICK, Circuit Judges.
PER CURIAM:*
       Plaintiff-appellant Sentry Select Insurance Company (“Sentry”) brought
this declaratory judgment action against defendants-appellees Mark Lynn
Stevens and Home State County Mutual Insurance Company (“Home State”),
seeking a declaration that its garage liability insurance policy with Stevens’s
employer, Classic Motors of Texarkana, Inc., provided no coverage to Stevens

       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
    Case: 14-40153     Document: 00512762421    Page: 2   Date Filed: 09/09/2014

                                 No. 14-40153
in connection with a car accident he had with Donald and Barbara Roche in
Florida. When the accident occurred, Stevens was driving a car owned by
Classic Motors.      Home State insured Stevens under a personal liability
insurance policy, which, Sentry argued, provided all needed coverage for the
accident at issue. The district court granted judgment in favor of Sentry.
Sentry then sought to reopen the case and to amend its complaint to assert
new claims against Home State for money damages. The district court denied
those motions, and Sentry appealed the denial. We now affirm.
      On January 27, 2012, after the Roches commenced lawsuits against
Stevens in Florida state court, Sentry filed this federal action for declaratory
judgment. On August 16, 2013, on cross-motions for summary judgment, the
magistrate judge issued a report and recommendation concluding that Sentry’s
insurance policy did not cover Stevens’s accident and that Sentry’s requested
declaratory judgment should be granted. On September 5, 2013, the district
court, noting that no objections to the magistrate judge’s report and
recommendation had been filed, issued declaratory judgment in Sentry’s favor.
      Later that same day, Sentry moved for leave to amend its complaint to
assert new claims against Home State. In the motion, Sentry explained that,
on July 31, 2013, it reached an agreement with the Roches to settle their
lawsuits against Stevens and, on August 21, 2013, it paid the agreed upon
settlement amount to them. Now, Sentry argued, it had new claims against
Home State for reimbursement for the settlement and for other related relief
given that the court had determined that it was Home State’s policy, not
Sentry’s, that covered the accident.
       The district court denied Sentry’s motions, reasoning that Sentry could
have asserted the new claims against Home State before the district court
entered its final judgment. Sentry now appeals this determination.

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                                   No. 14-40153
      Sentry argues that, under Texas law, it could assert its new claims
against Home State only after it settled the lawsuits with the Roches on behalf
of Stevens, and, thus, the district court erred in not providing a post-judgment
opportunity to assert the claims. See generally Am. Centennial Ins. Co. v.
Canal Ins. Co., 843 S.W.2d 480, 482-83 (Tex. 1992) (permitting actions between
insurance carriers under the doctrine of equitable subrogation). Sentry further
argues that, contrary to the representations in its motion before the district
court, it actually did not reach complete settlement with the Roches until
September 11, 2013, after the entry of final judgment. Therefore, the argument
goes, because Sentry could not, under the facts and the law, assert its new
claims against Home State until after final judgment, the district court erred
in declining to reopen the case.
      As an initial matter, when the district court granted Sentry’s motion for
summary judgment and entered declaratory judgment for Sentry, such
judgment was a final judgment that concluded the case. 28 U.S.C. § 2201 (“[A
declaratory judgment] shall have the force and effect of a final judgment . . . .”).
Because the district court entered a final judgment, Sentry could amend its
complaint to assert new claims “only by either appealing the judgment, or
seeking to alter or reopen the judgment under Rule 59 or 60 [of the Federal
Rules of Civil Procedure].” Rosenzweig v. Azurix Corp., 332 F.3d 854, 864 (5th
Cir. 2003); see also Dussouy v. Gulf Coast Inv. Corp., 660 F.2d 594, 597 n.1 (5th
Cir. 1981) (“In this case, a judgment of dismissal had been entered at the time
of the offered amendment. Granting the plaintiff’s motion, therefore, would
require the trial court to vacate the judgment.”).
      Rule 59(e) allows a party to move to “alter or amend a judgment,” which
includes vacating the judgment. See Edward H. Bohlin Co. v. Banning Co., 6
F.3d 350, 355 (5th Cir. 1993). Similarly, Rule 60(b) allows a court to “relieve a
party . . . from final judgment,” but, while the text of Rule 59 is silent as to the
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grounds that justify altering or amending a judgment, Rule 60 enumerates six
grounds for relief. Compare Fed. R. Civ. P. 59(e), with Fed. R. Civ. P. 60(b).
The question of whether Rule 59 or Rule 60 applies to a motion to reopen “turns
on the time at which the motion is served.” Lavespere v. Niagara Mach. & Tool
Works, Inc., 910 F.2d 167, 173 (5th Cir. 1990). “If the motion is served within
[the window provided by Rule 59(e)], the motion falls under Rule 59(e); if it is
served after that time, it falls under Rule 60(b).” Id. Rule 59(e) motions may
be filed “no later than 28 days after the entry of the judgment.” Fed. R. Civ. P.
59(e).       Because Sentry served its motion within one day of entry of the
judgment, the district court correctly considered it under Rule 59(e).                   We
review the district court’s denial of Rule 59(e) relief for an abuse of discretion.
Rosenzweig, 332 F.3d at 863.
         Generally, a Rule 59(e) motion “calls into question the correctness of a
judgment.” In re Transtexas Gas Corp., 303 F.3d 571, 581 (5th Cir. 2002). The
usual grounds for Rule 59(e) relief are correction of manifest errors of law or
consideration of newly discovered evidence. Templet v. HydroChem Inc., 367
F.3d 473, 478-79 (5th Cir. 2004). 1 Rule 59(e) “is not the proper vehicle for
rehashing evidence, legal theories, or arguments that could have been offered
or raised before the entry of judgment.” Id.
         Under these general principles of Rule 59(e), Sentry’s arguments about
whether it could have asserted its new claims against Home State before the
entry of judgment (as the district court believed) or only after judgment (as
Sentry contends) are irrelevant. On the one hand, if Sentry’s new claims could

         Sentry argues that its settlement with the Roches is “new evidence” warranting Rule
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59(e) relief. This argument misconstrues what the courts mean by “newly discovered
evidence.” See generally Templet, 367 F.3d at 479 (stating that Rule 59(e) allows parties to
“present newly discovered evidence”). Rule 59(e) relief premised on new evidence means new
evidence relating to the claims resolved by the final judgment. It does not mean new evidence
relating to new claims that were neither resolved nor addressed by the final judgment.
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                                      No. 14-40153
have been asserted before the district court’s entry of final judgment but were
not, then vacating the judgment under Rule 59(e) to allow assertion of the
claims would clearly be improper and inconsistent with “the policy against
allowing litigants to assert their claims in series.” See S. Constructors Grp.,
Inc. v. Dynalectric Co., 2 F.3d 606, 612 (5th Cir. 1993). On the other hand, if
Sentry’s new claims could not have been asserted until after the district court’s
entry of final judgment, the usual procedure would have been to file a new
lawsuit to assert the new claims. New claims generally mean a new lawsuit,
even if those claims are between the same parties to a prior lawsuit. 2 We are
unaware of any precedent for vacating the final judgment of a closed case in
order to use that case as the forum for litigation of new claims that could not
have been asserted previously, and Sentry has shown us no support for such.
       AFFIRMED.

       2 Sentry contends that, if it brought a new lawsuit to assert its new claims, Home
State could assert the affirmative defense of res judicata. “Under res judicata, a final
judgment on the merits of an action precludes the parties or their privies from relitigating
issues that were or could have been raised in that action.” Allen v. McCurry, 449 U.S. 90, 94
(1980) (emphasis added). If Sentry is correct that its new claims could not have been asserted
in this action, we do not see how res judicata would bar them from litigation in the first
instance in a subsequent action.
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