Court Opinion

ID: 4421249
Source: CourtListenerOpinion
Date Created: 2019-07-30 18:00:33.436588+00
Date Added: 2024-06-11T14:51:42.070327
License: Public Domain

Case: 18-40850      Document: 00515054951         Page: 1    Date Filed: 07/30/2019

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                      United States Court of Appeals
                                                                               Fifth Circuit

                                      No. 18-40850                           FILED
                                                                         July 30, 2019
                                                                        Lyle W. Cayce
JULIE GLEASON; TOM GLEASON,                                                  Clerk

              Plaintiffs - Appellants Cross-Appellees

v.

MARKEL AMERICAN INSURANCE COMPANY,

              Defendant - Appellee Cross-Appellant

                  Appeals from the United States District Court
                        for the Eastern District of Texas
                             USDC No. 4:17-CV-163

Before HIGGINBOTHAM, SMITH, and SOUTHWICK, Circuit Judges.
PER CURIAM:*
       Tom and Julie Gleason were the president and vice president,
respectively, of Oregon Ice Cream, LLC. Tom Gleason also served as Oregon
Ice Cream’s CEO. Oregon Ice Cream had an insurance policy with Markel
American Insurance Co. (MAIC), which included Directors & Officers liability
coverage.

       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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: 18-40850         Document: 00515054951      Page: 2   Date Filed: 07/30/2019

                                       No. 18-40850
      The Gleasons eventually sold their equity interests in Oregon Ice Cream
to OIC Holdings, LLC. After the sale, alleging that the Gleasons had
misrepresented Oregon Ice Cream’s financial condition and committed other
misconduct, OIC Holdings sued the Gleasons in Texas court. The Gleasons
submitted a claim to MAIC, which concluded that Oregon Ice Cream’s liability
policy did not require it to defend the Gleasons in the OIC Holdings lawsuit.
      The Gleasons sued MAIC in state court for allegedly breaching its duties
to defend and indemnify them in the OIC Holdings lawsuit, and MAIC removed
to the Eastern District of Texas. MAIC moved for summary judgment, arguing
that the Gleasons’ claim was barred by a policy exclusion encompassing “any
Claim made against any Insured . . . . based upon, arising out of or in any
way involving . . . the actual, alleged, or attempted purchase or sale, or offer or
solicitation of an offer to purchase or sell, any debt or equity securities.” In
response, the Gleasons argued that the OIC lawsuit fell under an exception to
the exclusion for “any Claim . . . based upon, arising, out of, or in any way
involving the purchase or sale, or offer or solicitation of an offer to purchase or
sell, any debt or equity securities in a private placement transaction exempt
from registration under the Securities Act of 1933, as amended.” They
primarily argued that the transaction at issue in the OIC lawsuit was exempt
from registration under section 4(a)(2) of the Securities Act of 1933, which
exempts “transactions by an issuer not involving any public offering.” 1 The
Gleasons also briefly argued that if the transaction was not exempt under
section 4(a)(2), it was exempt as a “transaction[ ] by any person other than an
issuer, underwriter, or dealer.” 2 They did not, however, cite any relevant case

      1   See 15 U.S.C. § 77d(a)(2).
      2   See id. § 77d(a)(1).
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                                       No. 18-40850
law or other authority to support their argument that the transaction fell
under section 4(a)(1).
       The district court granted MAIC’s motion for summary judgment,
concluding that the OIC lawsuit fell under the policy exclusion and that the
underlying transaction was not exempt from registration under section 4(a)(2)
because the Gleasons were not “issuers.” The Gleasons moved for
reconsideration, arguing more forcefully that if they were not issuers, then the
transaction was a private placement transaction exempt from registration
under section 4(a)(1). The district court denied the motion, observing that in
the Gleasons’ summary judgment opposition they “never explicitly cited 15
U.S.C. § 77d(a)(1) as the provision [they] relied upon, never referenced this as
Section 4(a)(1), never cited any case law, and did not provide a definition of
‘underwriter’ or ‘dealer’” in their opposition to summary judgment.
       We review a district court’s grant of summary judgment de novo and its
refusal to consider new arguments on a motion for reconsideration for abuse of
discretion. 3 We have carefully reviewed the briefs, relevant portions of the
record, and applicable law, and have heard oral argument. We agree with the
district court that the Gleasons failed to adequately raise their section 4(a)(1)
argument in their initial opposition to MAIC’s summary judgment motion. 4
While the Gleasons now argue that section 4(a)(1)’s applicability is so obvious
that the district court committed a clear error of law or manifest injustice, their

       3  See, e.g., In re La. Crawfish Producers, 852 F.3d 456, 462 (5th Cir. 2017) (observing
that when the district court refuses to consider new materials attached to a motion for
reconsideration, that decision is reviewed for abuse of discretion); LeClerc v. Webb, 419 F.3d
405, 412 n.13 (5th Cir. 2005) (affirming denial of a motion for reconsideration as within the
district court’s discretion when the motion impermissibly asserted new arguments not raised
previously).
        4 See, e.g., Keelan v. Majesco Software, Inc., 407 F.3d 332, 340 (5th Cir. 2005) (noting

that in the related context of preserving an argument for appeal, a party “must press and not
merely intimate [an] argument during the proceedings before the district court”).
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                                       No. 18-40850
able lawyers went in a different direction when opposing summary judgment.
The district court did not abuse its discretion in denying the Gleasons’ motion
for reconsideration. 5
       The district court’s reasoning was sound, and we affirm its judgment. We
need not reach the issue raised by MAIC’s cross-appeal.

       5See Templet v. HydroChem Inc., 367 F.3d 473, 479 (5th Cir. 2004) (explaining that
reconsideration “serves the narrow purpose of allowing a party to correct manifest errors of
law or fact or to present newly discovered evidence,” and is “not the proper vehicle for
rehashing evidence, legal theories, or arguments that could have been offered or raised before
the entry of judgment” (alterations omitted)).
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