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Stoneledge at Lake Keowee Owners Association Inc. v. Cincinnati Insurance Co.

United States District Court, D. South Carolina

August 21, 2019

Stoneledge at Lake Keowee Owners Association, Inc., Plaintiff/Counter Defendant,
v.
Cincinnati Insurance Company and Builders Mutual Insurance Company, Defendants/Counter Claimants.

          OPINION AND ORDER

          Bruce Howe Hendricks United States District Judge

         This matter is before the Court on Defendants Cincinnati Insurance Company and Builders Mutual Insurance Company's (“Defendants”) motion to reconsider the Court's September 28, 2018 Order granting Plaintiff Stoneledge at Lake Keowee Owners Association, Inc.'s (“Plaintiff”) motion for summary judgment and denying Defendants' motions for summary judgment. (ECF No. 121.) For the reasons set forth in this Order, the motion to reconsider is denied.

         BACKGROUND

         The factual background and procedural history of this case are thoroughly set forth in the Court's prior Orders of March 13, 2018 and September 28, 2018 (ECF Nos. 119 & 121), and the Court assumes familiarity therewith. On October 10, 2018, the South Carolina Court of Appeals released opinions in two pending appeals from the trial of the underlying case: Stoneledge at Lake Keowee Owners' Ass'n, Inc., et al. v. IMK Dev. Co. LLC, et al., Op. No. 5600 (S.C. Ct. App. Oct. 10, 2018) (ECF No. 126-1 at 2-21) (Marick Home Builders, LLC appeal); Stoneledge at Lake Keowee Owners' Ass'n, Inc., et al. v. IMK Dev. Co., LLC, et al., Op. No. 5601 (S.C. Ct. App. Oct. 10, 2018) (ECF No. 126-1 at 22-28) (Bostic Brothers Construction, Inc. appeal). In their motion to reconsider, Defendants contend that these appellate opinions reversed the trial court's reformation of the underlying $5, 000, 000 verdict, that the Court of Appeals' reinstatement of the initial verdict and related application of set-off constitutes new evidence, and that in light of this new evidence the Court should reconsider its ruling denying Defendants' motions for summary judgment on the breach of fiduciary duty claim. (See ECF No. 123 at 1-5.) Defendants further assert that the Court's ruling constitutes legal error and would work a manifest injustice against them in numerous ways. (See Id. at 5-16.)

         Defendants filed their motion to reconsider on October 12, 2018. (ECF No. 123.) Plaintiff filed its memorandum in opposition on November 1, 2018. (ECF No. 126.) This matter is ripe for consideration and the Court now issues the following ruling.

         LEGAL STANDARDS

         The Fourth Circuit Court of Appeals recognizes three grounds upon which a party may successfully move the Court to alter or amend a judgment pursuant to Federal Rule of Civil Procedure 59(e): “(1) to accommodate an intervening change in controlling law; (2) to account for new evidence not available at trial; or (3) to correct a clear error of law or prevent manifest injustice.” Pac. Ins. Co. v. Am. Nat. Fire Ins. Co., 148 F.3d 396, 403 (4th Cir. 1998) (citation omitted). “[R]econsideration of a judgment after its entry is an extraordinary remedy which should be used sparingly.” § 2810.1 Grounds for Amendment or Alteration of Judgment, 11 Fed. Prac. & Proc. Civ. § 2810.1 (3d ed.). “Rule 59(e) motions may not be used to make arguments that could have been made before the judgment was entered . . . .” Hill v. Braxton, 277 F.3d 701, 708 (4th Cir. 2002) (citation omitted). “‘[M]ere disagreement does not support a Rule 59(e) motion.'” U.S. ex rel. Becker v. Westinghouse Savannah River Co., 305 F.3d 284, 290 (4th Cir. 2002) (quoting Hutchinson v. Staton, 994 F.2d 1076, 1082 (4th Cir. 1993)).

         DISCUSSION

         A. New Evidence

         In Opinion No. 5600, the South Carolina Court of Appeals stated:

It appears the trial court amended the jury's verdict to find that each cause of action independently supported a $5 million verdict. In doing so, the trial court invaded the province of the jury. See Joiner v. Bevier, 155 S.C. 340, __, 152 S.E.2d 652, 657 (1930) (“It is [the judiciary's] duty to enforce a verdict, not to make it.”). Therefore, we find the jury's verdict, and its allocation of damages to the three separate causes of action should be reinstated.
The question then becomes how the court should allocate the setoff Marick and Thoennes are entitled to based upon the settlement the HOA received prior to trial. Thoennes' fiduciary duty to the HOA was the result of his position on the Board of the HOA. Based on the record, it does not appear any Board members settled with the HOA prior to trial. Therefore, none of the settlement proceeds should be set off against Thoennes' liability for breach of fiduciary duty because none of the settlement proceeds would have included any amount for damages resulting from a breach of fiduciary duty. Accordingly, Thoennes is responsible for the $1 million award for breach of fiduciary duty, subject to any claims he may have for contribution from any other defendants.

(ECF No. 126-1 at 20 (emphasis added).) The Court of Appeals went on to reapply the set-off for recovery from other settling defendants to the remaining $4, 000, 000 award for negligence and breach of warranty. (Id. at 20-21.)

         In advancing their “new evidence” theory for reconsideration, Defendants focus on the Court of Appeals' statement that “Thoennes' fiduciary duty to the HOA was the result of his position on the Board of the HOA.” (See ECF No. 123-1 at 3.) Defendants argue, “The Court of Appeals ruling clarifies that the damages awarded for breach of fiduciary duty are based upon different duties than the damages awarded against the contractor defendants, ” and that, “this Court now has the clarity it sought in denying summary judgment on this ground.” (Id. at 4.) Defendants further argue that because there is no ...


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