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Illinois National Insurance v. Nordic Pcl Construction

June 13, 2012

ILLINOIS NATIONAL INSURANCE
COMPANY, AN ILLINOIS CORPORATION; AND NATIONAL UNION FIRE INSURANCE COMPANY
OF PITTSBURGH, PA., A
PENNSYLVANIA CORPORATION,
PLAINTIFFS,
v.
NORDIC PCL CONSTRUCTION, INC., F/K/A NORDIC CONSTRUCTION, LTD., A HAWAII CORPORATION, DEFENDANT.
NORDIC PCL CONSTRUCTION, INC., F/K/A NORDIC CONSTRUCTION LTD., A HAWAII CORPORATION, DEFENDANT AND THIRD-PARTY PLAINTIFF,
v.
MARSH USA, INC., THIRD-PARTY DEFENDANT.



The opinion of the court was delivered by: Susan Oki Mollway Chief United States District Judge

ORDER DENYING THIRD-PARTY DEFENDANT MARSH USA INC.'S MOTION FOR RECONSIDERATION OF INTERLOCUTORY ORDER AND DENYING DEFENDANT NORDIC PCL CONSTRUCTION, INC.'S MOTION FOR PARTIAL RECONSIDERATION OF INTERLOCUTORY ORDER

The court has before it two motions seeking reconsideration of its order of April 26, 2012 ("Partial Dismissal Order"). One motion is filed by Third-Party Defendant Marsh USA Inc., the other by Defendant Nordic PCL Construction, Inc. Nordic has also joined in Marsh's reconsideration motion. This court denies both reconsideration motions.

The parties are familiar with the facts of this case, which are detailed in the Partial Dismissal Order and not repeated here. The parties are also familiar with Local Rule

60.1, governing motions for reconsideration of interlocutory orders. The present order therefore focuses on the arguments raised in favor of reconsideration.

The opposition memoranda filed by Plaintiffs thoroughly address the movants' arguments and need little supplementation. Moreover, having addressed in the Partial Dismissal Order most of the arguments contained in the reconsideration motions, the court keeps the present order brief, instead of repeating the opposition arguments or this court's own earlier ruling.

I. MARSH'S RECONSIDERATION MOTION

Even if, as Marsh argues, it may seek reconsideration of the court's ruling on claims brought neither by nor against Marsh, Marsh's motion fails.

A. Marsh's Disagreement with this Court Does Not Warrant Reconsideration.

It appears to this court that much of Marsh's reconsideration motion merely reargues matters already addressed by this court. Nothing in Marsh's reconsideration motion persuades this court that it has misapplied the "law of the circuit" rule, or that Burlington ceases to be good law binding on this court. This court has already addressed why Tri-S Corp. V. Western World Ins. Co., 110 Haw. 473, 135 P.3d 82 (2006), does not nullify Burlington. This court has also already noted that, in Burlington, the Ninth Circuit had before it pre-existing Hawaii Supreme Court decisions and cannot be said by any district court in this circuit to have misconstrued those decisions in the absence of clearly contrary Hawaii Supreme Court decisions. While Marsh contends that Tri-S makes it clear that Burlington is incorrect, the Hawaii Intermediate Court of Appeals, four years after Tri-S was decided, expressly validated and followed Burlington in Group Builders, Inc. v. Admiral Insurance Co., 123 Haw. 142, 231 P.2d 67 (Haw. Ct. App. 2010). The ICA was certainly bound by the Hawaii Supreme Court, and must have thought that its decision was consistent with prior Hawaii Supreme Court decisions, including Tri-S. That is, while Marsh treats Group Builders as a deviation from pre-existing law, nothing in the ICA's decision suggests that it intended to thwart the Hawaii Supreme Court.

This court continues to read Burlington as controlling.

B. This Court Has Not Nullified Act 83.

Marsh complains that this court's Partial Dismissal Order has made a nullity of Act 83. Marsh is mistaken. Marsh simply does not agree with this court's reading of Act 83. Marsh argues that Act 83 was "intended to restore coverage" recognized by the Hawaii Supreme Court. Marsh Mem. In Support of Motion at 25, ECF No. 70-1. To the extent this court reads the insurance policies in accordance with this court's reading of Hawaii Supreme Court decisions, this court cannot be said to be ignoring Act 83. To the extent pre-existing law was consistent with Group Builders, the Hawaii legislature does not say that pre-existing law must be ignored. That is, Act 83 provides a remedy that is limited to restoring coverage that was lost as a result of the Group Builders decision. Act 83 never purports to create new coverage rights. If Group Builders denies an insured coverage that the insured would have had absent Group Builders, then, Act 83 says, the insured is entitled to coverage. It does not follow that all insureds that are denied coverage would have had such coverage in the absence of Group Builders. While Marsh and this court are not reading Hawaii Supreme Court law in the same way, that is not equivalent to this court's flouting or invalidating of Act 83.

Application of Act 83 requires an analysis of Hawaii Supreme Court decisions preceding Group Builders. As noted above, far from purporting to deviate from pre-existing Hawaii Supreme Court decisions, which the ICA clearly could not do, Group Builders was a decision that the ICA thought was consistent with those pre-existing Hawaii Supreme Court cases. Act 83 cannot be read outside of that context. Act 83 is not a proclamation of law in a vacuum; its stated purpose is to give effect to pre-existing judicial decisions. In that respect, Act 83 is distinguishable from legislation that enacts or amends a statute in response to a judicial decision that construes a statute in a manner unacceptable to the legislative body. In that circumstance, construction of the decisions preceding the new enactment or amendment does not determine the applicability of that new law. That is not the circumstance presented by Act 83.

A clear example of that different circumstance may be found in the federal arena in the Lily Ledbetter Fair Pay Act of 2009. That Act was a response to the United States Supreme Court's decision in Ledbetter v. Goodyear Tire and Rubber Co., 550 U.S. 618 (2007). The plaintiff in that case was a woman who sued her employer after discovering that women were paid less than men for the same work. The Supreme Court held that her suit was time-barred. The Court reasoned that the limitations period on the claim began to run from the date of the employer's initial decision to discriminate, even if that decision was not known to the employee at the time, and that the limitations period could not be run from the most recent paycheck. The 2009 legislation superseded the Court's decision ...


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