Free Order - District Court of Arizona - Arizona

WO

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

) ) ) vs. ) ) The Burlington Northern ) Santa Fe Railway Company, ) ) Defendant. ) ) The Burlington Northern ) Santa Fe Railway Company, ) a corporation, ) ) Third Party Plaintiff ) ) vs. ) ) Chemical Lime Company of ) Arizona, a corporation; ABC ) Corporations I-IV, fictitious ) corporations, ) ) Third Party Defendants.) ______________________________) Plaintiff,

Steve Schrum,

No. CIV 04-619 PHX RCB O R D E R

By order entered May 18, 2006, this court granted summary judgment in favor of defendant/third-party plaintiff, The Burlington Northern Santa Fe Railway Company ("BNSF"), and against plaintiff. Doc. 110. The third-party defendant, Chemical Lime

Company of Arizona ("Chemical Lime"), joined in BNSF's motion (Doc.

Case 2:04-cv-00619-RCB

Document 125

Filed 09/18/2006

Page 1 of 4

72), and the court granted summary judgment in favor of Chemical Lime as well. Id.

In addition to moving for summary judgment as to plaintiff's claims, in its capacity as a third-party plaintiff BNSF filed a separate motion seeking summary judgment "on its indemnification claim against Chemical Lime." Doc. 70 at 5. Chemical Line also

sought summary judgment on the indemnity issue, but contrary to BNSF, Chemical Line argued that there were "no facts triggering any indemnity obligation" on its part. Doc. 68 at 1. This court

denied as "moot" BNSF's and Chemical Line's motions with respect to the issue of indemnification. Doc. 110 at 13.

On June 2, 2006, BNSF timely filed a motion for reconsideration. BNSF concedes that once the court found in BNSF's

favor on the issue of liability, whether Chemical Line had a duty to indemnify it "became a non-issue[.]" Doc. 113 at 2. On this

reconsideration motion, BNSF is taking the position, however, that because the duty to defend is separate and distinct from the duty to indemnify, the court should have addressed the duty to defend, which it did not. BNSF is requesting the court to "reconsider" Id. at 3. More specifically, BNSF is

this "narrow issue."

requesting the court to "hold that Chemical Lime breached its duty to defend . . . when it denied BNSF's repeated tender of defense, and grant BNSF's summary judgment motion against Chemical Lime on th[at] duty[.]" Id.

On June 15, 2006, plaintiff timely appealed this court's May 17, 2006 order. Doc. 114. Doc. The next day BNSF also timely filed a Thus the issue becomes whether the 2 Case 2:04-cv-00619-RCB Document 125 Filed 09/18/2006 Page 2 of 4

Notice of Appeal.

117.

Notices of Appeal divested this court of jurisdiction to consider BNSF's reconsideration motion. This court retains jurisdiction to consider that previously filed motion, despite the fact that the parties have filed Notices of Appeal. This is so because the Ninth Circuit has held that

notwithstanding the filing of notice of appeal, a trial court retains jurisdiction under Fed. R.App. P. 4 to rule on certain timely filed substantive post-judgment tolling motions such as BNSF's motion herein. See Miller v. Marriott Int'l, Inc., 300 F.3d

1061, 1064 & n.1 (9th Cir. 2002); see also United Nat'l Ins. Co. v. R&D Latex Corp., 242 F.3d 1102, 1109 (9th Cir. 2001) (citing Fed. R. App. P. 4(a)(4)(B)(i) for the proposition that a "notice of appeal . . . did not . . . divest the district court of jurisdiction at the time it was filed because there was then a pending motion for reconsideration[]"); Leader Nat'l Ins. Co. v. Industrial Indem. Ins. Co., 19 F.3d 444, 445 (9th Cir. 1994) (under amended Fed. R.App. P. 4, a notice of appeal is no longer a nullity but is "held in abeyance" until an earlier filed motion for reconsideration is decided). Having determined that it has jurisdiction, the next issue is whether to allow Chemical Lime to file a response to the motion. Absent a court order responses and replies to motions for reconsideration are not allowed. See L.R.Civ 7.2(g). Because

"[t]he duty to defend . . . is not the same as the duty to indemnify[,] and because it "generally exists regardless of whether the insured is ultimately found liable[,]" INA Ins. Co. of North America v. Valley Forge Ins. Co., 150 Ariz. 3 Case 2:04-cv-00619-RCB Document 125 Filed 09/18/2006 Page 3 of 4

248, 722 P.2d 975, 982 (Ct. App. 1986) (emphasis added),1 on the face of it BNSF's motion for reconsideration may have merit ­ at least to the extent that the court did not previously address the duty to defend issue. Therefore, IT IS ORDERED that Chemical Lime shall, within ten (10) days of this Order: (1) advise the court in writing that it is adopting its position on the duty to defend as articulated in its previously filed summary judgment response (Doc. 80), or (2) file a response to BNSF's reconsideration motion (Doc. 113). If Chemical

Lime elects to file such a response, then BNSF may file a reply in accordance with L.R.Civ 7.2(d).2 DATED this 18th day of September, 2006.

Copies to counsel of record

1

The court is fully aware that INA Ins. Co. of North America, 722 P.2d 975, involved an insurance policy and obviously the present case does not. Nonetheless, INA remains instructive.
2

The court is invoking this relatively shortened time frame because it is aware that the parties are subject to a briefing schedule in the Ninth Circuit. See Doc. 124. 4 Case 2:04-cv-00619-RCB Document 125 Filed 09/18/2006 Page 4 of 4