Gulf Insurance Company v. First Bank, No. 2:2008cv00209 - Document 104 (E.D. Cal. 2009)
Court Description: ORDER denying 97 Motion for Reconsideration signed by Senior Judge Lawrence K. Karlton on 7/7/09. (Kaminski, H)
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Gulf Insurance Company v. First Bank Doc. 104 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 FOR THE EASTERN DISTRICT OF CALIFORNIA 9 GULF INSURANCE COMPANY, 10 NO. CIV. S-08-209 LKK/JFM 11 12 Plaintiff, v. O R D E R 13 FIRST BANK and DOES 1 through 50, inclusive, 14 Defendants. 15 / 16 This case centers on a surety agreement made by plaintiff for 17 the benefit of a third party, for whom defendant was a lender. The 18 court resolved all claims in the case by an order issued on April 19 10, 2009, granting in part and denying in part each party’s cross 20 motion 21 defendant’s motion for reconsideration of the court’s grant of 22 summary judgment in plaintiff’s favor on its causes of action for 23 breach of contract and conversion. The court resolves the motion 24 on the papers. 25 26 for summary judgment. Pending before the court is I. BACKGROUND As the court expressed at the hearing on the summary judgment 1 Dockets.Justia.com 1 motions, this 2 questions. The crux of the dispute between the parties with regard 3 to the plaintiff’s claims for breach of contract and conversion was 4 whether there was sufficient evidence that plaintiff had suffered 5 damages from any improper acts by defendant. Without recounting the 6 facts of the case that were described in detail in the court’s 7 earlier order, plaintiff acted as a surety for third party Baldwin 8 Ranch in its construction project. Defendant was a lender to 9 Baldwin Ranch. case As presents a difficult condition of and issuing complicated the surety legal bonds, 10 plaintiff required Baldwin Ranch to obtain a set-aside letter from 11 defendant, which it did. In the letter, defendant agreed to set 12 aside a certain amount and, critically, that this set-aside was 13 “irrevocable.” Order, Apr. 10, 2009 at 4. 14 Nevertheless, Baldwin Ranch subsequently obtained a loan from 15 another lender and used at least some of these funds to pay off the 16 defendant’s loan. The property securing the loan was released. 17 Defendant failed to notify plaintiff of this or to seek plaintiff’s 18 release of defendant from its obligations under the set-aside 19 letter. Baldwin Ranch later obtained a loan from yet another 20 lender. In total, the amount that Baldwin Ranch received from the 21 two other lenders exceeded the amount that remained to be disbursed 22 by defendant under the set-aside letter. 23 Plaintiff brought suit against defendant for, inter alia, 24 breach of contract and conversion 25 disburse to Baldwin Ranch or to plaintiff the full amount of funds 26 identified in the set-aside letter. The court granted plaintiff’s 2 for improperly failing to 1 motion for summary judgment and denied defendant’s motion for 2 summary judgment on these claims. II. STANDARD 3 4 “Under the ‘law of the case’ doctrine a court is generally 5 precluded from reconsidering an issue that has already been decided 6 by the same court, or a higher court in the identical case.” United 7 States v. Alexander, 106 F.3d 874, 876 (9th Cir. 1997)(citing 8 Thomas v. Bible, 983 F.2d 153, 154 (9th Cir.), cert. denied, 508 9 U.S. 951 (1993)). Although motions to reconsider are directed to 10 the sound discretion of the court, see Kern-Tulare Water Dist. v. 11 City of Bakersfield, 634 F. Supp. 656, 665 (E.D. Cal. 1986), aff’d 12 in part and rev’d in part on other grounds, 824 F.2d 514 (9th Cir. 13 1987), cert. denied, 486 U.S. 1015 (1988), considerations of 14 judicial economy weigh heavily in the process. 15 78-230(k) requires that a party seeking reconsideration of a 16 district court’s order must brief the “new or different facts or 17 circumstances . . . which . . . were not shown upon such prior 18 motion, or what other grounds exist for the motion.” Generally 19 speaking, before reconsideration may be granted there must be a 20 change in the controlling law or facts, the need to correct a clear 21 error, or the need to prevent manifest injustice. See Alexander, 22 106 F.3d at 876. 23 Thus, Local Rule As with motions to alter or amend a judgment made pursuant to 24 Fed. R. Civ. P. 59(a), motions to reconsider are not vehicles 25 permitting the unsuccessful party to “rehash” arguments previously 26 presented. See Costello v. United States Government, 765 F. Supp. 3 1 1003, 1009 (C.D. Cal. 1991). Nor is a motion to reconsider 2 justified on the basis of new evidence available prior to the 3 court’s ruling. See Fay Corp. v. BAT Holdings One, Inc., 651 F. 4 Supp. 307, 309 (W.D. Wash. 1987), aff’d, 896 F.2d 1227 (9th Cir. 5 1990). Finally, “after thoughts” or “shifting of ground” do not 6 constitute an appropriate basis for reconsideration. See id. These 7 relatively 8 concern for preserving dwindling resources and promoting judicial 9 efficiency.” Costello, 765 F. Supp. at 1009. restrictive standards “reflect[] district courts’ III. ANALYSIS 10 11 Defendant argues that the court clearly erred in its analysis 12 in its summary judgment order by improperly placing the burden of 13 persuasion on defendant when deciding to grant plaintiff’s motion 14 on its breach of contract and conversion claims. The court cannot 15 agree. 16 The dispositive element of the court’s ruling on those causes 17 of action was that, under the unambiguous terms of the contract, 18 the parties had agreed that the set-aside amount was irrevocable 19 and, through its unilateral conduct, defendant deprived plaintiff 20 of this benefit of its bargain. See Order, April 10, 2009 at 9-12. 21 The interpretation of a contract is a matter of law for the court, 22 Airborne Freight Corp. v. McPherson, 427 F.2d 1283, 1285 (9th Cir. 23 1970), and it was undisputed that defendant did not disburse the 24 full 25 released defendant from its obligations. Order, April 10, 2009 at 26 10-12. The loss of the guarantee of irrevocability was the damage set-aside amount to plaintiff 4 and that plaintiff never 1 suffered by plaintiff. Id. 2 Therefore, as to this dispositive issue, defendant’s arguments 3 about the allocation of the burden of persuasion is somewhat 4 misplaced. Defendant is correct that, as the movant for summary 5 judgment on claims for which it would bear the burden of proof at 6 trial, plaintiff must have tendered sufficient evidence that would 7 entitle it, if uncontroverted, to a directed verdict at trial. 8 Houghton v. South, 965 F.2d 1532, 1536 (9th Cir. 1992). Plaintiff, 9 therefore, bore the burden to show an absence of material fact on 10 each element of its claims in order to merit the court’s grant of 11 summary judgment in its favor. Id. at 1536-37. 12 Nonetheless, when the material facts are undisputed and 13 resolution of a motion for summary judgment turns on a question of 14 law, the court may determine as a matter of law which party’s 15 position is correct as a matter of law. In other words, in cases 16 such as these plaintiff’s burden is not an evidentiary one -- 17 because the material facts are not in dispute -- but rather the 18 court is left with the obligation to resolve the legal dispute 19 between the parties as a matter of law. See, e.g., Asuncion v. 20 Dist. Dir. of U.S. Immigration & Naturalization Serv., 427 F.2d 21 523, 524 (9th Cir. 1970) (where only a question of law presented 22 on summary judgment, grant of judgment in one party’s favor is 23 proper); Int’l Ass’n of Machinists & Aerospace Workers, Dist. 776 24 v. Texas Steele Co., 538 F.2d 1116, 1119 (5th Cir. 1970), cert. 25 denied, 429 U.S. 1095 (same); Walsh v. United States, 31 F.3d 696, 26 698-99 (8th Cir. 1994) (same). 5 The court’s determination, 1 therefore, that the interpretation of the contract and the 2 undisputed facts about defendant’s conduct entitled the plaintiff 3 to judgment in its favor on its breach of contract and conversion 4 claims was not in error. 5 In its motion, defendant places much emphasis on the court’s 6 discussion of the apparent flaws in the evidence tendered that 7 purported to establish that the subsequent loans Baldwin Ranch 8 obtained were refinances of the original loan. However, defendant’s 9 emphasis is misplaced, as the court preceded this discussion with 10 the qualification that it was “not dispositive to this holding.” 11 Order, Apr. 10, 2009 at 13. The court made clear that its ruling 12 on the damages issue of the breach of contract and conversion 13 claims was premised on defendant’s “depriv[ing] plaintiff of the 14 irrevocable guarantee of set-aside, for which it had bargained, and 15 thus caused damage to plaintiff.” Id. at 12; see also id. at 17 16 (discussing 17 refinancing was immaterial to the resolution of the claims. See 18 T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass’n, 809 F.2d 19 626, 630 (9th Cir. 1987) (“Disputes over irrelevant or unnecessary 20 facts will not preclude a grant of summary judgment.”). conversion 23 The evidence regarding the IV. CONCLUSION 21 22 claim). For the reasons stated herein, the defendant’s motion for reconsideration (Doc. 97) is DENIED. 24 IT IS SO ORDERED. 25 DATED: July 7, 2009. 26 6
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