United States District Court, D. South Carolina, Florence Division
Bryan Harwell United States District Judge.
an action for breach of contract and bad faith refusal to pay
underinsured motorist (“UIM”) benefits. On March
27, 2018, the Court entered an order denying Defendant's
motion for summary judgment on both the breach of contract
and bad faith claims and denying Plaintiff's cross-motion
for partial summary judgment on the breach of contract claim.
See ECF No. 51. The parties have now filed motions
to reconsider the March 27 order pursuant to Rule 54(b) of
the Federal Rules of Civil Procedure, see ECF Nos.
53 & 54, and they have each responded to the motions.
See ECF Nos. 55, 56, & 57. The Court denies both
motions for the reasons herein.
Rule of Civil Procedure 54(b) governs the Court's
reconsideration of interlocutory orders such as one denying
summary judgment. See generally Carlson v. Boston Sci.
Corp., 856 F.3d 320, 325 (4th Cir. 2017); Am. Canoe
Ass'n v. Murphy Farms, Inc., 326 F.3d 505, 515 (4th
Cir. 2003). Rule 54(b) permits a district court to revise
“any order or other decision . . . that adjudicates
fewer than all the claims or the rights and liabilities of
fewer than all the parties . . . at any time before the entry
of a judgment adjudicating all the claims and all the
parties' rights and liabilities.” Fed.R.Civ.P.
Fourth Circuit recently articulated the standard for
evaluating Rule 54(b) motions:
Compared to motions to reconsider final judgments
pursuant to Rule 59(e) of the Federal Rules of Civil
Procedure, Rule 54(b)'s approach involves broader
flexibility to revise interlocutory orders before
final judgment as the litigation develops and new facts or
arguments come to light. . . .
[However], the discretion Rule 54(b) provides is not
limitless. For instance, courts have cabined revision
pursuant to Rule 54(b) by treating interlocutory rulings as
law of the case. The law-of-the-case doctrine provides that
in the interest of finality, when a court decides upon a rule
of law, that decision should continue to govern the same
issues in subsequent stages in the same case. Thus, a court
may revise an interlocutory order under the same
circumstances in which it may depart from the law of the
case: (1) a subsequent trial produc[ing] substantially
different evidence; (2) a change in applicable law; or (3)
clear error causing manifest injustice. This standard closely
resembles the standard applicable to motions to reconsider
final orders pursuant to Rule 59(e), but it departs from such
standard by accounting for potentially different evidence
discovered during litigation as opposed to the discovery of
new evidence not available at trial.
Carlson, 856 F.3d at 325 (second alteration in
original) (internal citations and quotation marks omitted);
see also Acosta v. Hilton Grand Vacations Co., No.
4:15-cv-00495-RBH, 2017 WL 2957795 (D.S.C. July 11, 2017)
(applying the Carlson standard).
Defendant's Motion to Reconsider - Bad Faith
seeks reconsideration of the Court's decision to deny
summary judgment on Plaintiff's bad faith
claim. See ECF No. 53. Defendant argues:
“In denying the plaintiff['s] motion for summary
judgment as to [her] breach of contract claim, the Court
determined that a jury could make a ‘reasonable
inference' that there was no fourth policy. If a jury
could reasonably conclude there was no fourth policy, it
cannot be bad faith for [Defendant] to come to the same
conclusion.” Id. at p. 53 (quoting ECF No. 51
at p. 10). In other words, Defendant contends it
“should not be liable for bad faith where the Court has
determined that a reasonable jury could find there was no
fourth policy.” Id. at p. 2.
Court rejects Defendant's argument because it conflates
the meaning of the term “reasonable” as used in
two different contexts. Specifically, Defendant confuses the
meaning of “reasonable inference”-as applied in
the legal standard of review for a summary judgment
motion-with the term “unreasonable action, ”
which is an element of an insurance bad faith claim.
Compare SD3 II LLC v. Black & Decker (U.S.)
Inc., 888 F.3d 98 (4th Cir. 2018) (“[O]n a motion
for summary judgment, the court must draw all
reasonable inferences in favor of
the nonmoving party.” (internal quotation marks omitted
and emphasis added)), with Crossley v. State Farm Mut.
Auto. Ins. Co., 415 S.E.2d 393, 396-97 (S.C. 1992)
(listing the third element of an insurance bad faith claim as
“the insurer's . . . unreasonable
action in breach of an implied covenant of good
faith and fair dealing arising on the contract”
(emphasis added)). In short, “reasonable” has
different meanings here.
prior order, the Court was merely applying the summary
judgment standard when it concluded “at least two
reasonable inferences” could be drawn from the
evidence-either that a fourth contract of insurance existed
or that one did not exist-and therefore summary judgment was
not warranted on the breach of contract claim. See
ECF No. 51 at p. 10. The Court's conclusion in no way
found as a matter of law that Defendant necessarily acted
reasonably in concluding no fourth policy existed and thus
was entitled to summary judgment on the bad faith claim; this
conclusion simply meant there was a question of fact
regarding whether a contract existed. To be clear,
even assuming arguendo that a fourth contract of insurance
existed (by virtue of an oral binder given by Santangelo),
there remain genuine issues of material fact regarding
whether Defendant acted unreasonably by refusing to pay the
UIM benefits allegedly owed thereunder.
both a breach of contract claim and a bad faith claim both
require the existence of a contract,  they are still separate
causes of action. And in this case, the Court has concluded
genuine issues of material fact exist as to both
Plaintiff's breach of contract and bad faith claims, and