Edward Gray Corp. v. National Union Fire Ins. Co. of Pittsburgh, Pa., 95-3518
| Citation | 94 F.3d 363 |
| Decision Date | 29 August 1996 |
| Docket Number | No. 95-3518,95-3518 |
| Parties | EDWARD GRAY CORPORATION, an Illinois Corporation, Plaintiff-Appellant, v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, a Pennsylvania Corporation, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Roger B. Harris (argued), Rita M. Alliss, Altheimer & Gray, Chicago, IL, for Plaintiff-Appellant.
John T. Wardrope, Sandra Young (argued), Howard J. Fishman, Purcell & Wardrope, Chicago, IL, for Defendant-Appellee.
Before ESCHBACH, ROVNER, and EVANS, Circuit Judges.
Plaintiff-Appellant Edward Gray Corporation ("Edward Gray") brought an action against its insurer, Defendant-Appellee National Union Fire Insurance Company of Pittsburgh ("National Union"), seeking damages for an alleged breach of contract. Edward Gray alleged that National Union, as its insurer, was required to provide and pay for Edward Gray's defense in another lawsuit and had refused to do so. The district court granted summary judgment for National Union, finding that Edward Gray had not established a genuine issue of material fact whether Edward Gray had suffered damages. Because we find that the district court erred in granting summary judgment and in denying Edward Gray's subsequent motion for reconsideration, we reverse and remand.
Edward Gray was sued in 1993 for approximately $47 million in damages resulting from the collapse of water-pipes at a Northern Indiana Public Service Company power station (the "NIPSCO litigation"). Edward Gray was named as an additional insured in two policies issued by National Union to one of Edward Gray's subcontractors. Edward Gray sought to tender its defense to its insurer, National Union. Edward Gray asked National Union to provide and pay for Edward Gray's defense in the underlying action and National Union allegedly refused. Edward Gray defended the action through its own counsel and eventually won the underlying case on summary judgment. Edward Gray then brought suit against National Union, seeking to recover $250,000 in attorneys' fees and costs that it alleged it had "incurred and personally paid" in defending the NIPSCO litigation.
Following discovery, Edward Gray brought a motion for summary judgment on the issue of liability. Rather than responding to Edward Gray's motion for summary judgment, National Union filed a motion that it labelled a "motion to dismiss." That motion included several exhibits obtained in discovery that were not included in or attached to the complaint. The exhibits indicate that Edward Gray did not personally pay its defense costs and expenses-the costs were actually paid by another one of Edward Gray's insurers, American Contractors Insurance Company ("American Contractors"). National Union argued therefore that Edward Gray's complaint was premature and not ripe for adjudication because Edward Gray could not prove any damages as a result of National Union's alleged breach of contract and because Edward Gray did not seek declaratory relief. In the absence of damages, National Union asserted that Edward Gray had no cause of action.
Edward Gray opposed the motion to dismiss, arguing that the motion lacked a proper procedural basis and that the motion was inappropriate because it contained numerous exhibits that are extrinsic to the complaint. The district court, however, treated the motion to dismiss as a motion for summary judgment and ordered entry of judgment in favor of National Union.
Edward Gray then filed a Rule 59(e) motion for reconsideration and attached to that motion various exhibits, supported by an affidavit, showing that Edward Gray's retrospective premiums under the American Contractors insurance policy have in fact increased and that Edward Gray paid the premiums, thereby establishing the damage element that the district court previously had found to be lacking. The court denied the motion for reconsideration for two reasons. First, it found that the exhibits were improper because they could have been submitted at the time of the motion for summary judgment. Second, the court found that even if it accepted the documents, they failed to satisfy the damages element of the claim because any increases to Edward Gray's premiums were interim adjustments. Edward Gray appeals.
Before we may address the merits of this appeal, we must resolve a dispute over jurisdiction. National Union argues that Edward Gray's Notice of Appeal was untimely, thereby depriving this court of jurisdiction to decide the appeal. A timeline of the filings is necessary to flesh out the jurisdictional issue. The following events occurred in 1995:
July 20 The district court entered judgment for National Union.
July 31 Edward Gray filed a Rule 59(e) motion for reconsideration and alteration of judgment, tolling the time for filing its notice of appeal, pursuant to Fed.R.App.P. 4(a)(4)(C).
August 4 Edward Gray filed a motion for leave to amend its original 59(e) motion together with the amended motion Edward Gray proposed to file.
August 22 The district court issued a minute order, providing:
September 20 The district court denied Edward Gray's amended Rule 59(e) motion.
October 20 Edward Gray filed its Notice of Appeal.
The jurisdictional arguments in this case are relatively straightforward. National Union argues that the district court's August 22 order stating that "Plaintiff's first motion is moot," constituted a denial of the motion for reconsideration and triggered the 30 days for Edward Gray to file a Notice of Appeal pursuant to Federal Rule of Appellate Procedure 4. Thus, Edward Gray's October 22 Notice of Appeal would be untimely and this court would have to dismiss the appeal for lack of jurisdiction.
Edward Gray argues that the district court's August 22 order granting the motion for leave to amend meant that the time to appeal did not begin to run until the court ruled on Edward Gray's amended motion for reconsideration. The district court's statement that "plaintiff's first motion is moot" was not a denial of the motion, but an observation that the court need not grant or deny the unamended motion. Edward Gray argues that its Notice of Appeal was filed within 30 days of the district court's ruling and jurisdiction is proper.
We agree with Edward Gray that jurisdiction is appropriate in this case. The district court's August 22 order did not deny plaintiff's motion as National Union contends. The order simply stated that the first motion was moot. This is hardly surprising given that the court granted the motion to amend. The district court (and both parties) assumed that the motion for reconsideration was still outstanding as indicated by the court's statement that "[t]he Court will rule on plaintiff's amended motion for reconsideration by mail." Clearly, the court had not disposed of the motion for reconsideration. Therefore, the Federal Rules of Civil Procedure indicate that the time for filing the Notice of Appeal had not begun to run. "If any party makes a timely motion of a type specified immediately below, the time for appeal for all parties runs from the entry of the order disposing of the last such motion outstanding." Fed.R.App.P. 4(a)(4) (emphasis added).
We acknowledge National Union's concern that allowing permissive amendment of the Rule 59(e) motion would defeat the purpose of the time limitation by allowing a party to file a skeleton motion and then add flesh to the skeleton's bones by "amending" the motion at a later date. The Federal Rules of Civil Procedure mandate that "[a]ny motion to alter or amend a judgment shall be filed no later than 10 days after entry of the judgment." Fed.R.Civ.P. 59(e). In the instant case, however, the amendment simply altered two sentences of the original motion for reconsideration. The district court judge granted Edward Gray's motion to amend the motion for reconsideration, as the court is free to do when the amendment consists of an elaboration of a ground already set out in the original motion. Martinez v. Trainor, 556 F.2d 818, 820 (7th Cir.1977). National Union filed an opposition to Edward Gray's motion for reconsideration, but National Union did not object to the motion for reconsideration on grounds that an "amendment" was improper. Had the National Union objected to the amendment on the ground that it went beyond an "elaboration of a ground already set out in the original motion," the district court may have refused to permit an amendment. Such action, however, would not constitute a disposition of the initial motion for reconsideration. Edward Gray had not abandoned its motion, it only sought to amend the motion. The original motion still would have been "outstanding." This court's jurisdiction over the matter therefore remains unaffected.
We turn next to the merits of the case. The district court converted National Union's "motion to dismiss" into a motion for summary judgment without giving Edward Gray notice of its intent to do so and without giving Edward Gray an opportunity to respond. This was improper. Rule 12(b) of the Federal Rules of Civil Procedure states:
If, on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.
Fed.R.Civ.Proc. 12(b) (emphasis added). Edward Gray correctly points out that the court did not go through the formal ...
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