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Bearbones, Inc. v. Peerless Indemnity Insurance Co.

United States District Court, D. Massachusetts

December 11, 2018

BEARBONES, INC., d/b/a MORNINGSIDE BAKERY, and AMARAL ENTERPRISES LLC, Plaintiffs,
v.
PEERLESS INDEMNITY INSURANCE COMPANY, Defendant.

         MEMORANDUM AND ORDER REGARDING PLAINTIFFS' FED. R. CIV. P. 60(B)(2) OR 60(B)(3) MOTION TO VACATE SUMMARY JUDGMENT IN FAVOR OF DEFENDANT; PLAINTIFFS' AMENDED FED. R. CIV. P. 60(B)(2) OR 60(B)(3) MOTION TO VACATE SUMMARY JUDGMENT IN FAVOR OF DEFENDANT; PLAINTIFFS' SUPPLEMENTARY AMENDED FED. R. CIV. P. 60(B)(2) OR 60(B)(3) MOTION TO VACATE SUMMARY JUDGMENT IN FAVOR OF DEFENDANT; AND DEFENDANT'S MOTION FOR SANCTIONS PURSUANT TO FED. R. CIV. P. 11 (DKT. NOS. 138, 141, 153, 157)

          KATHERINE A. ROBERTSON UNITED STATES MAGISTRATE JUDGE.

         I. Introduction

         On October 17, 2017, the court granted the defendant Peerless Indemnity Insurance Company's (“Defendant”) motion for summary judgment against the plaintiffs Bearbones, Inc., d/b/a Morningside Bakery (“Bearbones”) and Amaral Enterprises, LLC (“Amaral”) (collectively, “Plaintiffs”) (Dkt. No. 124) on Counts II and III of Plaintiffs' verified complaint asserting claims for breach of contract and unfair and deceptive acts or practices under Mass. Gen. Laws chs. 93A and 176D and denied Plaintiffs' cross motion for summary judgment on Count III of the complaint.[1] Judgment entered in Defendant's favor the following day (Dkt. No. 126). On November 13, 2017, Plaintiffs moved to alter or amend the judgment pursuant to Fed.R.Civ.P. 59(e) (Dkt. No. 127). On January 25, 2018, the court denied this motion (Dkt. No. 133). Plaintiffs filed a notice of appeal (Dkt. No. 134), which was entered on the docket of the United States Court of Appeals for the First Circuit on February 16, 2018 (Dkt. No. 136). Thereafter, with their appeal pending, Plaintiffs filed their first motion to vacate the judgment entered in favor of Defendant (Dkt. No. 138). Defendant filed its opposition and a separate motion for sanctions pursuant to Fed.R.Civ.P. 11, which Plaintiffs opposed (Dkt. Nos. 140, 141, 150). On July 5, 2018, without seeking leave to do so, Plaintiffs filed a supplemental memorandum in support of their motion to vacate the judgment (Dkt. No. 151), followed, on July 23, 2018, by an amended motion to vacate the judgment (Dkt. No. 153). On July 26, 2018, following a docket entry directing the parties to comply with the provisions of Fed. R. App. P. 12.1, the First Circuit remanded the case to this court for purposes of ruling on the pending motions (Dkt. Nos. 152, 155). On September 8, 2018, Plaintiffs filed a supplementary motion to vacate the judgment entered in favor of Defendant (Dkt. No. 157), to which Defendant filed its opposition (Dkt. No. 160). The court assumes familiarity with its previous decisions. Further, the court denies the parties' requests for oral argument on these motions. See L.R., D. Mass. 7.1(e), (f). After a review of the record, the parties' motions are DENIED.

         II. Relevant Background

         In summary, Plaintiffs premise their motions to vacate the judgment entered in Defendant's favor on Defendant's failure to produce in discovery a copy of a $28, 977.77 check made payable to attorney David M. Crowley (Crowley) and on Defendant's alleged representation during oral argument that Defendant could have been sued by Lee Bank if it failed to include Lee Bank as a payee on all payments from Plaintiffs' insurance coverage award, a position which Plaintiffs assert the court erroneously accepted.

         Some background is necessary as context for the pending motions. Pursuant to Mass. Gen. Laws ch. 175, § 100, Crowley was selected and served as the third referee in the statutorily-mandated reference proceeding between Defendant and Plaintiffs. Crowley sent the unanimous reference award to counsel for Defendant and counsel for Plaintiffs on July 7, 2015. With the reference award, Crowley include his bill for services as the third referee in the matter (Dkt. No. 156-1). Pursuant to Mass. Gen. Laws ch. 175, § 101B, if the reference panel renders an award to the insured, as occurred in this case, the insurance company and the insured are each liable for half of the third referee's compensation. Crowley noted in the cover letter that, pursuant to Mass. Gen. Laws ch. 175, §§ 101B and 101C, the insurer was required as an initial matter to pay the entire amount of the third referee's bill (Dkt. No. 156-1). On August 4, 2015, Defendant's counsel sent a letter to Plaintiffs' counsel, enclosing a check to the insured for the amount due based on the reference award. A letter sent the same day noted that, pursuant to statute, an amount equal to half of Crowley's bill for services had been deducted from the check to the insured. See Mass. Gen. Laws ch. 175, § 101B. The letter informed Plaintiffs' counsel that Defendant had paid Crowley's bill for services in full as contemplated by the statute and noted that “[t]he check in payment of Attorney Crowley's bill was remitted directly by Peerless to Attorney Crowley and was not sent to this office for disbursement.” Plaintiffs' counsel was asked to confer directly with Crowley about any questions about the payment for Crowley's services (Dkt. No. 156-3). Crowley's law firm was the sole payee on the check Defendant issued in payment for Crowley's services as the third referee (Dkt. No. 156-2 at 3).

         Plaintiffs' document production requests to Defendant included a request for “[t]he entire claim file of Bearbones, Inc. with al [sic] photographs, estimates, notes, payments, vendor requests, vendor payments, referee payments, travel payments, lodging payments, limousine payments, airline payments” (Dkt. No. 139-3 at 5). Defendant did not produce a copy of the check to Crowley in discovery. Plaintiffs did not file a motion to compel production of a copy of the check while the matter was pending in this court. So far as appears from the parties' submissions, beyond Plaintiffs' document production requests, they made no effort to obtain a copy of the check until sometime around April 2018 (Dkt. Nos. 139-1, 156-2 at 4).

         III. Analysis

         A. Plaintiffs' Rule 60(b) Motions

         1. Legal Standard for Rule 60(b) Relief

         “‘[R]elief under Rule 60(b) is extraordinary in nature and . . . motions invoking that rule should be granted sparingly.'” Giroux v. Fed. Nat. Mortg. Ass'n, 810 F.3d 103, 106 (1st Cir. 2016) (quoting Karak v. Bursaw Oil Corp., 288 F.3d 15, 19 (1st Cir. 2002)).

Federal Rule of Civil Procedure 60(b) invests a court, “in certain carefully delimited situations, with the power to ‘vacate judgments whenever such action is appropriate to accomplish justice.'” Teamsters, Chauffeurs, Warehousemen & Helpers Union, Local No. 59 v. Superline Transp. Co., 953 F.2d 17, 19 (1st Cir. 1992), quoting Klapprott v. United States, 335 U.S. 601, 614-615 (1949). Motions brought under Rule 60(b) are committed to the sound discretion of the district court, Rodriguez-Antuna v. Chase Manhattan Bank Corp., 871 F.2d 1, 3 (1st Cir. 1989), and may be granted only under exceptional circumstances. Lepore v. Vidockler, 792 F.2d 272, 274 (1st Cir. 1986). A court should not vacate a judgment under Rule 60(b) if doing so will [be] “an empty exercise.” Teamsters, 953 F.2d 17, 20 (1st Cir. 1992).

In re Atl. Power Corp. Sec. Litig., Civil Action No. 1:13-cv-10537-IT, 2015 WL 13679766, at *3 (D. Mass. Oct. ...


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