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Phoenix Insurance Co. v. Cantex, Inc.

United States District Court, D. Colorado

May 19, 2014

THE PHOENIX INSURANCE COMPANY, ET AL., Plaintiffs,
v.
CANTEX, INC., ET AL., Defendants.

ORDER GRANTING PLAINTIFFS MOTION TO RE-OPEN CASE

ROBERT E. BLACKBURN, District Judge.

The matters before me are (1) Plaintiffs [ sic ] Motion To Re-Open Case [#78], [1] filed January 31, 2014; and (2) Landmark's Motion to Join Travelers' Motion To Re-Open Case [#90], filed March 6, 2014. I grant the motions.

I. JURISDICTION

This court has jurisdiction over this matter pursuant to 28 U.S.C. ยง1332 (diversity of citizenship).

II. STANDARD OF REVIEW

A case that is administratively closed under D.C.COLO.LCivR 41.2 may be reopened for good cause shown. Generally, there is good cause to reopen when parties seek to litigate remaining issues that are ripe for review. American Family Mutual Insurance Co. v. Teamcorp, Inc., 835 F.Supp.2d 1083, 1086 (D. Colo. 2011). Nevertheless, courts may exercise discretion by denying a motion to reopen where the relief sought would be futile. Id.

III. ANALYSIS

This is an action for declaratory judgment and other relief arising from a lawsuit brought by defendant, Cantex, Inc. ("Cantex"), against defendant, RBR Construction ("RBR"), seeking the cost to replace allegedly defective concrete installed at Cantex's Kingman, Arizona, manufacturing facility.[2] RBR claimed that it was entitled to a defense as an additional insured under various policies of insurance issued by plaintiffs to defendant, Concrete Management Company ("CMC"). Plaintiffs defended RBR in the underlying action under a reservation of rights. By this action, plaintiffs seek a declaration that they had no duty to defend or indemnify either CMC or RBR in the underlying action.

At the time this suit was filed in February 2013, however, the underlying action was still ongoing. Ultimately, a trial was held in September 2013, resulting in a jury determination that CMC was liable for eighty-five per cent (85%) of any damages assessed against RBR. However, the question whether RBR was liable to Cantex was tried to the court, which did not simultaneously render its determination on that issue. While that determination was pending, plaintiffs moved to extend various pretrial deadlines in this case. ( See Plaintiffs' Motion to Amend the Scheduling Order to Extend Deadlines for Discovery Cutoff and the Filing of Dispositive Motions and for Expedited Briefing on This Motion [# 68], filed November 14, 2013.) Concluding that "plaintiffs acted imprudently in rushing to this court" and that "neither they nor the defendants they brought into the action are in any position to prepare for trial within the normal time allowed by the district judge, " the magistrate judge recommended that the case be administratively closed, "subject to reopening for good cause when, if ever, the parties are in a position to prepare the case for trial." (Recommendation of United States Magistrate Judge and Order at 2-3 [#71], filed November 19, 2013.) I adopted that recommendation and ordered this matter closed administratively. ( See Order Adopting Recommendation of United States Magistrate Judge and Administratively Closing Case [#77], filed December 11, 2013.)

Shortly thereafter, the judge in the underlying action issued his determination that RBR was liable to Cantex for nearly $3.7 million in damages. The transcript of the trial was received by plaintiffs in mid-January 2014. This motion followed. Herein, plaintiffs claim it is appropriate to reopen this matter because the underlying action has been fully resolved, making their claims ripe for determination. Cantex, however, objects that reopening would be futile and therefore urges that the motion be denied.

Cantex's primary argument in support of its position is that, by virtue of various agreements among the defendants following the entry of judgment, it will seek to file third-party claims against additional parties not currently joined herein, [3] which allegedly would destroy diversity jurisdiction.[4] At this juncture, however, the filing of such claims is purely hypothetical. Whether the inclusion of these parties would destroy diversity - and what that might mean for the continuing viability of this case[5] - are issues that must await proper motion after the case is reopened.[6]

Nor is a response brief the appropriate vehicle for determining whether the suit Cantex recently filed in Arizona state court seeking to collect its judgment in the underlying action is the proper or superior forum for determining the rights of all interested parties. Although these arguments may well implicate issues of comity and abstention, Cantex has presented little more than its own ipse dixit to suggest that the state court action should take precedence over this one. Questions regarding whether one of these lawsuits must yield to the other cannot be forestalled prior to reopening of the case.

For these reasons, I find and conclude that good cause exists to reopen this case. Accordingly, plaintiffs' motion will be granted.

THEREFORE IT IS ORDERED as follows:

1. That Landmark's Motion to Join Travelers' Motion To Re-Open Case [#90], filed March 6, 2014, is GRANTED;

2. That Plaintiffs [ sic ] Motion To Re-Open Case [#78], filed January 31, 2014, is GRANTED; and

3. That under D.C.COLO.LCivR 41.2, the clerk is DIRECTED to reopen this civil action.


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