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Porch v. Ochoa's Construction, Inc.

United States District Court, D. Montana, Billings Division

June 15, 2018

KELLY D. PORCH and MICHELLE R. PORCH, Plaintiff,
v.
OCHOA'S CONSTRUCTION, INC.; PREFERRED CONTRACTORS INSURANCE COMPANY RISK RETENTION GROUP; GOLDEN STATE CLAIMS ADJUSTERS; and JOHN DOES I-V, Defendants.

          FINDINGS AND RECOMMENDATIONS OF U.S. MAGISTRATE JUDGE

          TIMOTHY J. CAVAN UNITED STATES MAGISTRATE JUDGE.

         Before the Court is defendants Preferred Contractors Insurance Company Risk Retention Group (“PCIC”) and Golden State Claims Adjusters' (“Golden State”) (collectively, “Defendants”) Motion for Reconsideration (the “Motion”). (Doc. 60.) For the reasons that follow, the Court recommends that Defendants' Motion be granted.

         I. Pertinent Facts

         The following facts are derived from plaintiffs Kelly D. Porch (“Kelly”) and Michelle R. Porch's (“Michelle”) (collectively, “Plaintiffs”) Second Amended Complaint and Demand for Jury Trial (“SAC”) (Doc. 28.), the parties' briefs, and the events occurring in the course of this litigation as reflected by the Court's docket. They are assumed to be true for the purposes of these Findings and Recommendations.

         Plaintiffs filed their original Complaint and Demand for Jury Trial (“Complaint”) on November 24, 2014, in the Montana Thirteenth Judicial District Court, Yellowstone County against Ochoa's Construction, Inc. (Ochoa), and others. (Doc. 6.) The initial Complaint alleged damages arising from a workplace accident Kelly claims to have sustained in July 2014. (Id.) Neither PCIC nor Golden State were named as defendants.

         At the time of Kelly's alleged accident, PCIC insured Ochoa under a commercial general liability policy. (Doc. 28 at ¶ 13.) PCIC informed Ochoa by letter dated May 21, 2015, that no coverage existed for the allegations in Plaintiffs' Complaint, and that PCIC would be denying coverage for defense and indemnity. (Id. at ¶¶ 14, 16.)

         On February 24, 2016, Ochoa entered into a stipulated consent judgment and covenant not to execute, and assigned to Plaintiffs all of its rights against Defendants. (Id. at ¶ 19.) Plaintiffs thereafter dismissed all defendants except Ochoa. (Docs. 18, 23.)

         On March 28, 2017, Judge Ingrid Gustafson of the Montana Thirteenth Judicial District Court held a reasonableness hearing with respect to Plaintiffs and Ochoa's stipulated consent judgment. (Doc. 26.) Plaintiffs were present at the hearing and presented evidence in support of the reasonableness of the judgment; Ochoa did not appear. (Id.) On March 30, 2017, Judge Gustafson entered judgment in the amount of $4, 700, 000.00 in favor of Plaintiffs and against Ochoa. (Id.)

         On May 19, 2017, Plaintiffs filed an Unopposed Motion for Leave to File Second Amended Complaint. (Doc. 5-1 at 515-516) (emphasis in original). That motion apparently was not accompanied by any briefing or argument as to the appropriateness of amending a complaint after judgment had been entered against the last remaining defendant. (Id.) Judge Gustafson's order granting Plaintiffs leave to file the SAC notes “that the parties have conferred and the sole remaining current Defendant in this case, [Ochoa], has consented in writing to the filing of the Second Amended Complaint.” (Doc. 27.) The order, also dated May 19, 2017[1], does not address any concerns as to the timing of the amendment.

         Plaintiffs filed the SAC on May 23, 2017, adding PCIC and Golden State as defendants, and asserting various claims against them based on their coverage decisions with respect to Ochoa. (See generally Doc. 28.) The SAC also restates Plaintiffs' original claims against Ochoa. (Id.)

         Defendants entered a Notice of Appearance in Montana state court on June 28, 2017, and then promptly removed the case to this Court. (Docs. 1, 5-1 at 521-523.) On July 5, 2017, they filed a motion seeking the dismissal of Plaintiffs' claims against them pursuant to Rule 12(b)(6), Fed. R. Civ. P., presenting largely the same argument they make in the instant Motion - that Judge Gustafson erred in permitting Plaintiffs to amend their complaint after judgment had been entered in the state court. (Docs. 3, 4.)

         In its Findings and Recommendations of U.S. Magistrate Judge (“F&R”), this Court found that regardless of the merits of Defendants' position with respect to the correctness of Judge Gustafson's order, a Rule 12(b)(6) motion was not the proper vehicle for that argument, and recommended that Judge Watters deny the motion. (Doc. 38.) Judge Watters adopted the F&R in full, but indicated in a footnote that a motion for reconsideration may be the appropriate method to advance Defendants' argument. (Doc. 43 at 5, n. 1.) The Court subsequently granted leave for Defendants to seek reconsideration (Doc. 59), and the instant Motion followed.

         II. Legal Standard

         District of Montana Local Rules permit reconsideration of “any interlocutory order” on grounds set forth in L.R. 7.3(b)(1) or (2). L.R. 7.3(a). The pertinent provisions state that “[a] motion ...


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