United States District Court, S.D. Indiana, Indianapolis Division
H.E. McGONIGAL, INC., Plaintiff,
HARLEYSVILLE LAKE STATES INSURANCE COMPANY, and COREPOINTE INSURANCE COMPANY, Defendants.
ENTRY DENYING PLAINTIFF'S MOTION TO
WALTON PRATT, UNITED STATES DISTRICT JUDGE.
matter is before the Court on Plaintiff H.E. McGonigal,
Inc.'s (“McGonigal”) Motion to Reconsider
filed pursuant to Federal Rule of Civil Procedure 54(b)
(Filing No. 69). Following motions to dismiss filed
by Defendants Harleysville Lake States Insurance Company
(“Harleysville”) and CorePointe Insurance Company
(“CorePointe”), the Court dismissed
McGonigal's claims for insurance bad faith against
Harleysville and CorePointe (Filing No. 41;
Filing No. 68). The Court also denied
McGonigal's request for leave to amend its Complaint
because of McGonigal's lack of diligence in pursuing and
pleading its bad faith claims and the unfair prejudice that
would result against Harleysville and CorePointe (Filing
No. 66). McGonigal asks the Court to reconsider the
dismissal Orders and the Order denying leave to amend the
Complaint. For the following reasons, the Court DENIES
McGonigal's Motion to Reconsider.
Motion is properly classified as a motion to reconsider under
Federal Rule of Civil Procedure 54(b) because no final
judgment has been entered in this case. See Fed. R.
Civ. P. 54(b) (“any order or other decision, however
designated, that adjudicates fewer than all the claims or the
rights and liabilities of fewer than all the parties does not
end the action as to any of the claims or parties and may be
revised at any time before the entry of a judgment
adjudicating all the claims and all the parties' rights
Court applies a similar standard as applied to motions to
alter or amend a judgment under Rule 59(e). Motions to
reconsider filed pursuant to Rule 54(b) or Rule 59(e) are for
the purpose of correcting manifest errors of law or fact or
to present newly discovered evidence not available at the
time of briefing, and a motion to reconsider an order under
Rule 54(b) is judged by largely the same standard as a motion
to alter or amend a judgment under Rule 59(e). Katz-Crank
v. Haskett, 2014 U.S. Dist. LEXIS 95144, at *6 (S.D.
Ind. July 14, 2014); Woods v. Resnick, 725 F.Supp.2d
809, 827-28 (W.D. Wis. 2010).
to reconsider “serve a limited function: to correct
manifest errors of law or fact or to present newly discovered
evidence.” State Farm Fire & Cas. Co. v.
Nokes, 263 F.R.D. 518, 526 (N.D. Ind. 2009). The motion
is to be used “where the Court has patently
misunderstood a party, or has made a decision outside the
adversarial issues presented to the Court by the parties, or
has made an error not of reasoning but of
apprehension.” Bank of Waunakee v. Rochester Cheese
Sales, Inc., 906 F.2d 1185, 1191 (7th Cir. 1990)
purpose of a motion for reconsideration is to ask the Court
to reconsider matters “properly encompassed in a
decision on the merits.” Osterneck v. Ernst &
Whinney, 489 U.S. 169, 174 (1989). The motion
“will be successful only where the movant clearly
establishes: (1) that the court committed a manifest error of
law or fact, or (2) that newly discovered evidence precluded
entry of judgment.” Cincinnati Life Ins. Co. v.
Beyrer, 722 F.3d 939, 954 (7th Cir. 2013) (citation and
quotation marks omitted). A manifest error “is not
demonstrated by the disappointment of the losing party. It is
the wholesale disregard, misapplication, or failure to
recognize controlling precedent.” Oto v.
Metropolitan Life Ins. Co., 224 F.3d 601, 606 (7th Cir.
2000) (citation and quotation marks omitted).
is not an appropriate forum for rehashing previously rejected
arguments or arguing matters that could have been heard
during the pendency of the previous motion.” Ahmed
v. Ashcroft, 388 F.3d 247, 249 (7th Cir. 2004) (citation
and quotation marks omitted). Relief pursuant to a motion to
reconsider is an “extraordinary remed[y] reserved for
the exceptional case.” Foster v. DeLuca, 545
F.3d 582, 584 (7th Cir. 2008).
Court provides a brief background of this case to begin its
discussion. In January 2015, McGonigal brought this action
against Harleysville and CorePointe, asserting claims for
breach of contract and breach of the duty of good faith and
fair dealing in connection with insurance policies sold by
Harleysville and CorePointe to McGonigal. McGonigal is an
Indiana car dealership company located in Kokomo, Indiana.
CorePointe is an insurance company based out of Birmingham,
Michigan, and Harleysville is an insurance company based out
of Harleysville, Pennsylvania. McGonigal purchased insurance
policies from both Harleysville and CorePointe to cover
losses incurred in its car dealership business.
January 18, 2013, McGonigal learned that approximately
sixteen vehicles were fraudulently purchased with funds drawn
on a McGonigal account, and McGonigal received no
compensation for the vehicles. After discovering the loss,
McGonigal submitted insurance claims to both Harleysville and
CorePointe in accordance with the policies' terms. Even
though McGonigal allegedly complied with the terms of the
policies, and despite the loss allegedly being a loss covered
by the policies, Harleysville and CorePointe denied
of the denial of the claims, McGonigal filed a Complaint in
this Court, seeking coverage for the loss and damages for the
insurers' breach of contract and failure to act in good
faith. On April 13, 2015, Harleysville filed a motion to
dismiss, asserting that the Complaint failed to provide any
factual basis to support a claim of insurance bad faith
(Filing No. 5). On October 26, 2015, the Court
granted Harleysville's motion to dismiss the bad faith
claim against Harleysville (Filing No. 41). On
January 4, 2016, CorePointe filed its motion to dismiss the
bad faith claim asserted against CorePointe, asserting the
same argument advanced by Harleysville- that the Complaint
failed to provide any factual basis to support a claim of
insurance bad faith (Filing No. 45).
than a month after CorePointe's motion to dismiss was
filed and almost four months after the Court's Order
dismissing the bad faith claim against Harleysville, on
February 23, 2016, McGonigal filed a motion requesting leave
to amend its Complaint regarding its bad faith claims
(Filing No. 49). This motion was filed after the
deadline to amend the pleadings had expired. On July 18,
2016, the Court denied McGonigal's motion to amend the
Complaint because of McGonigal's lack of diligence in
pursuing and pleading its bad faith claims and the unfair
prejudice that would result against Harleysville and
CorePointe (Filing No. 66). Then on August 31, 2016,
the Court granted CorePointe's motion to dismiss the bad
faith claim asserted against CorePointe (Filing No.
68). McGonigal filed its Motion to Reconsider, asking
the Court to vacate or amend the two dismissal Orders and the
Order denying leave to amend the Complaint.
Motion to Reconsider, McGonigal argues that the Court
improperly required a heightened pleading standard for its
insurance bad faith claim when the Court granted the
Defendants' motions to dismiss. McGonigal further argues
that the Court erred when it disallowed amendment of the
Complaint because it should ...