Certain Underwriters at Lloyd's London v. Garmin International, Inc. , 781 F.3d 1226 ( 2015 )

FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS March 27, 2015
Elisabeth A. Shumaker
TENTH CIRCUIT Clerk of Court
CERTAIN UNDERWRITERS AT
LLOYD'S LONDON; GLOBAL
AEROSPACE UNDERWRITING
MANAGERS LIMITED; MITSUI
SUMITOMO INSURANCE COMPANY
(EUROPE) LTD; TOKIO MARINE
EUROPE INSURANCE LIMITED;
BERKSHIRE HATHAWAY
INTERNATIONAL INSURANCE
LIMITED; GREAT LAKES
REINSURANCE (UK) PLC;
WURTTEMBERGISCHE
VERSICHERUNG AG; SWISS RE
INTERNATIONAL SE UK BRANCH;
ALLIANZ GLOBAL RISKS US
INSURANCE COMPANY; NATIONAL
FIRE & MARINE INSURANCE
COMPANY,
Plaintiffs – Appellees,
v. No. 13-3310
GARMIN INTERNATIONAL, INC.,
Defendant,
and
HENRY P. BARTLE,
Defendant – Appellant.
Appeal from the United States District Court
For the District of Kansas
(D.C. No. 2:11-CV-02426 EFM)
Gregory L. Anderson of Dwyer, Daly, Brotzen & Bruno, LLP, Los Angeles, California
(Christopher Carpenter and Tracy M. Hayes of Sanders Warren & Russell LLP, Overland
Park, Kansas, with him on the brief), for Defendant–Appellant.
Jill A. O’Donovan of Walker Wilcox Matousek LLP, Chicago, Illinois (John W. Cowden
and Eric A. Cunningham III of Baker Sterchi Cowden & Rice, LLC, Kansas City,
Missouri, with her on the brief), for Plaintiffs–Appellees.
Before BACHARACH, McKAY, and McHUGH, Circuit Judges.
McKAY, Circuit Judge.
This case involves a dispute over insurance coverage following a private airplane
crash. Garmin International, Inc., purchased an insurance policy from Appellees. In
2008, while the insurance policy was in effect, Appellant Henry Bartle, an individual who
had some dealings with Garmin, crashed while piloting his malfunctioning personal
aircraft, injuring himself and his passengers. Mr. Bartle then sought coverage under
Garmin’s insurance policy for indemnification from claims brought against Mr. Bartle by
his injured passengers. Appellees, the insurers, brought suit in the United States District
Court for the District of Kansas seeking a declaration under the Declaratory Judgment
Act, 28 U.S.C. § 2201, that Mr. Bartle does not qualify as an “Insured” under Garmin’s
insurance policy.
Mr. Bartle submitted evidence to the district court to demonstrate he was indeed
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an “Insured”, but the district court refused to consider much of the evidence because the
evidence failed to conform to district court rules regarding proper citation. Without
considering this evidence, the district court granted summary judgment to the insurers,
finding that Mr. Bartle was not an “Insured” under the policy. Mr. Bartle appealed both
the district court’s grant of summary judgment to the insurers and its refusal to consider
the excluded evidence. For the reasons set forth below, we affirm the district court’s
decision.
BACKGROUND
In 2006, Garmin International, Inc. sought to test a new product, the G900X, in
experimental, home-built aircraft.1 The G900X replaces an aircraft cockpit’s traditional
analog navigational display with a computerized display and requires extensive
installation to connect the product to various aircraft systems. Garmin desired data and
diagrams from the installation of the G900X system in experimental aircraft to aid in
creating a G900X installation manual.
Mr. Bartle owned a Lancair IV-P aircraft—the sort of home-built, experimental
aircraft sought by Garmin for collection of this installation data. Chris Shulte, a Garmin
manager and friend of Mr. Bartle, approached Mr. Bartle about installing the new system
in his Lancair IV-P. Mr. Shulte agreed to provide the G900X to Mr. Bartle at a
discounted price. In exchange, Mr. Bartle was to provide Mr. Shulte and other Garmin
employees access to his aircraft in order to obtain installation data.
1
The facts in this appeal are stated in the light most favorable to Mr. Bartle as the
party opposing summary judgment. We note that many of these facts remain disputed.
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Mr. Shulte purchased the G900X using his employee discount and resold it to Mr.
Bartle at the discounted price. The two then worked on installing the G900X in Mr.
Bartle’s aircraft primarily on weekends in Mr. Bartle’s private hangar in Oregon. During
the course of the installation, Mr. Shulte directed one Garmin employee to install part of
the wiring in Mr. Bartle’s aircraft, and another employee went to Mr. Bartle’s hangar to
obtain data from the aircraft in order to create technical drawings and gather other data
for the G900X manual.
Installing the G900X into the Lancair IV-P aircraft requires an aircraft-specific
bracket to hold one component of the G900X system in place. Mr. Bartle, who possessed
a background in composite fabrication, designed his own bracket for that purpose.
Garmin received permission to use diagrams of Mr. Bartle’s bracket in the G900X
installation manual and listed Mr. Bartle’s company, the Ultimate Group as the supplier
for that bracket in the manual. At the time of discovery in this case, the Ultimate Group
had sold approximately ten brackets for use with the G900X as a result of the listing in
Garmin’s installation manual.
Mr. Bartle and Mr. Shulte completed installation of the G900X and in November
2007, Mr. Bartle received a certificate of registration for the aircraft listing Mr. Bartle
and his wife as the registered owners. Throughout the process of installing the G900X in
the Lancair IV-P aircraft, Garmin and Mr. Bartle never entered into a written agreement,
signed any releases, or discussed insurance. Garmin provided no written instructions or
parameters for any work on the aircraft.
In February 2008, Mr. Bartle took his step-daughter, her friend, and her friend’s
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daughter sightseeing in his aircraft. The aircraft engine lost power during the flight and
the plane crash-landed short of the runway. All of the passengers were injured in the
crash. Mr. Bartle’s passengers and their spouses filed suit in California state court,
raising claims of strict product liability, negligence, breach of express and implied
warranties, and loss of consortium. The negligence claim alleged that Mr. Bartle
specifically “breached his duty to Plaintiffs by negligently operating the airplane such
that the airplane crashed to the ground thereby injuring Plaintiffs.” (R. at 106.) The
California complaint also alleged that the defendants—among them Mr. Bartle—were
negligent in the building and fabrication of the aircraft and that Mr. Bartle and Garmin
were acting as “agents, servants, employees and/or joint venturers” of one another and
were at all times “acting within the course, scope, and authority of said agency,
employment and/or venture.” (R. at 103.)
Mr. Bartle, facing potential liability for his part in the plane crash, asserted that the
aircraft was built in a joint venture with Garmin and that Garmin’s insurance policy
includes coverage for all such joint ventures. Garmin denied any business relationship
existed with Mr. Bartle, and further denied that Mr. Bartle qualified as an “Insured”
under Garmin’s insurance policy.
Garmin’s insurance provider subsequently brought an action in the United States
District Court for the District of Kansas2 under the Declaratory Judgment Act, 28 U.S.C.
§ 2201(a), which states that “[i]n a case of actual controversy within its jurisdiction, . . .
2
Garmin’s insurance policy contains a forum selection clause designating the
Insured’s primary place of business (in this case Kansas) as the jurisdiction whose law
governs the policy. (R. at 69.)
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any court of the United States, upon the filing of an appropriate pleading, may declare the
rights and other legal relations of any interested party seeking such declaration.”
Specifically, the insurers sought a declaration that Mr. Bartle falls outside the definition
of “Insured” under Garmin’s insurance policy.
Mr. Bartle submitted over 700 pages of evidence and exhibits to the district court
supporting his contention that he and Garmin were engaged in a joint venture or other
business relationship entitling him to coverage under Garmin’s insurance policy.
However, the district court found that a majority of the exhibits relied on by Mr. Bartle to
demonstrate the existence of such a relationship failed to conform to District of Kansas
Rule 56.1, which requires that each fact in dispute be numbered by paragraph and that a
party must refer with particularity to portions of the record that support its assertions.
The district court disregarded all of Mr. Bartle’s exhibits not cited to in accordance with
this rule.
Without considering Mr. Bartle’s disregarded evidence, the district court then
granted summary judgment to Garmin, finding that Mr. Bartle was not covered under
Garmin’s insurance policy. The district court denied Mr. Bartle’s motion for
reconsideration of its decision, in which Mr. Bartle argued the court incorrectly set aside
his evidence under District of Kansas Rule 56.1. This appeal followed.
DISCUSSION
We review de novo the district court's grant of summary judgment and apply the
same legal standard used by the district court under Rule 56(c) of the Federal Rules of
Civil Procedure. Applied Genetics Int'l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238,
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1241 (10th Cir.1990). Summary judgment is appropriate only when “there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). In applying this standard, we view all facts and any reasonable
inferences that might be drawn from them in the light most favorable to Mr. Bartle. See
Henderson v. Inter-Chem Coal Co., 41 F.3d 567, 569 (10th Cir. 1994). However, in
reviewing a grant of summary judgment, we do not consider materials not before the
district court. See Myers v. Okla. Cnty. Bd. of Cnty. Comm'rs, 151 F.3d 1313, 1319 (10th
Cir. 1998).
In this case, the district court disregarded hundreds of pages of evidence which
were not referred to in accordance with the local rules—evidence we will not now
consider on appeal unless we find the district court abused its discretion in applying those
rules. See Roth v. Green, 466 F.3d 1179, 1190 (10th Cir. 2006) (“We review a district
court’s application of its local rules for abuse of discretion.”); see also Fye v. Okla. Corp.
Comm'n, 516 F.3d 1217 (10th Cir. 2008) (declining to consider evidence not considered
by the district court).
District of Kansas Rule 56.1 states in relevant part that:
A memorandum in opposition to a motion for summary
judgment must begin with a section containing a concise
statement of material facts as to which the party contends a
genuine issue exists. Each fact in dispute must be numbered
by paragraph, refer with particularity to those portions of the
record upon which the opposing party relies, and, if
applicable, state the number of movant's fact that is disputed.
If the party opposing summary judgment relies on any facts
not contained in movant’s memorandum, that party must set
forth each additional fact in a separately numbered paragraph
in the [same manner].
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D. Kan. Rule 56.1(b).
The district court, in rejecting Mr. Bartle’s submission of over 700 pages of
exhibits, found that Mr. Bartle failed to cite to specific page numbers or facts within these
exhibits. For instance, to support his contentions regarding the alleged Bartle/Garmin
business relationship, Mr. Bartle appeared to cite generally to over 400 pages of exhibits
without specifically referring to any page number or fact within the massive number of
submitted documents. The court, in its order granting summary judgment to the insurers,
stated:
The Court will not sift through the record in an attempt to
find a genuine issue of material fact or locate arguments for
Bartle. It is his responsibility to tie the facts to his legal
contention. Without a specific reference, the Court will not
search the record in an effort to determine whether there
exists dormant evidence which might require submission of
the case to a jury.
(R. at 1767 (internal quotation marks, footnotes, and brackets omitted).)
Mr. Bartle, in his motion for reconsideration of the district court’s decision, stated
that “[w]hile the exhibits themselves are fairly straightforward, when they were filed
using the Court’s electronic filing system, they clearly lost some of the organization
required to make them user-friendly.” (R. at 1786.) Mr. Bartle explained that the court’s
e-filing system limits the sizes of exhibits and assigns new document and page numbers
to electronically filed exhibits. This made the citations in his brief incorrect, because he
had cited to the exhibits as he arranged them prior to e-filing them, and without taking
into account how the e-filing system would change the exhibit designations. Moreover,
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because page numbers are assigned by the e-filing system, Mr. Bartle was unable “to
direct the court to a particular page/line assigned by the system.” (R. at 1787).
On appeal, Mr. Bartle similarly admits that his submission of evidence through the
district court’s e-filing system made the citations difficult to follow. At oral argument,
Mr. Bartle’s attorney told this court that “[t]he [district] court, in refusing to look at the
evidence, exhibited a great deal of frustration . . . . Certainly the way that it was e-filed
[made it] very difficult for the trial judge to use.” (Oral Argument at 3:40-4:06).
Nevertheless, Mr. Bartle asks us on appeal to find that the district court abused its
discretion in refusing to sift through the voluminous exhibits in order to match the
assertions in Mr. Bartle’s motions to his supporting documentation. We are mindful that
increasingly computerized court submission and filing methods may present challenges
for court staff, judges, and attorneys alike. However, the district court acted well within
its discretion in setting aside the unwieldy mass of data that Mr. Bartle attempted to rely
on without providing correct, specific references in accordance with the local rules.
Mr. Bartle admits his failure to correctly utilize the district court’s e-filing system
made the information very difficult to use and the documentation supporting his
assertions difficult to track down. The district court, in keeping with its longstanding
practice, disregarded Mr. Bartle’s factual support for his summary judgment pleadings to
the extent his filings failed to conform to the procedural rules. Cf. Litton v. Maverick
Paper Co., 388 F. Supp. 2d 1261, 1268 & n.1 (D. Kan. 2005) (noting the court ordinarily
disregards those portions of an affidavit which are not shown to be based upon personal
knowledge or otherwise do not comply with Fed. R. Civ. P. 56(e); further noting that the
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court will only consider those facts of the responding party that comply with D. Kan.
Rule 56.1(b)); Biglow v. Boeing Co., 182 F. Supp. 2d 1037, 1039 n.2 (D. Kan. 2001)
(stating that the court will disregard any factual assertions made in violation of D. Kan.
Rule 56.1(b)). The burden rests with the lawyers desiring to practice before a court to
submit evidence in conformity with the rules of that court, as here with District of Kansas
Rule 56.1. Accordingly, we find no abuse of discretion in the district court’s decision to
consider only that evidence which was properly cited to in accordance with this rule.
We turn then to the merits of the case, which we evaluate based on the evidence
properly cited to by the parties and considered by the district court in its order granting
summary judgment.
Our resolution of this case turns on the definition of “Insured” in the insurance
policy issued to Garmin. Under the policy, the “insured” is defined to be:
GARMIN INTERNATIONAL, INC., GARMIN USA, INC.,
GARMIN LTD, GARMIN CORPORATION, GARMIN
EUROPE LIMITED, PRONAV CORPORATION, PRONAV
INTERNATIONAL, INC., GARMIN AT, INC., GARMIN
B.V., GARMIN N.V., MOTIONBASED and any subsidiary
corporation or subsidiary thereof now existing or hereinafter
created. Subsidiary corporation shall mean any entity that is
under the ownership or management control of Garmin
International, Inc., Garmin Corporation, Garmin Europe
Limited, Pronav Corporation and Pronav International, Inc.
and/or subsidiary companies and/or affiliated companies
and/or associated companies for their respective rights and
interests.
The policy’s amended definitions further provide:
The word ‘Insured’ shall mean the Insureds named above and
all subsidiaries, affiliated, associated or allied companies,
corporation, foundations, firms, joint ventures, partnerships,
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or any entities entered into, acquired, or formed, now
existing, which may have existed, or hereafter be constituted
after the effective date of this policy by any such Insured and
over which such Insured has any ownership interest, or exerts
financial control, or has assumed or exercised management
control, or for which the Insured has obligation to provide
insurance. (R. at 53) (emphasis added).
Thus, according to the plain language of the policy, Mr. Bartle and Garmin needed
more than to be a joint venture, partnership, or other entity in order to qualify as an
“Insured”. Mr. Bartle needed to create one of the specified business entities with Garmin
(e.g., a joint venture or partnership) and, in addition, Garmin must have had an ownership
interest in the entity, been obliged to provide insurance, or have exerted financial or
managerial control over this entity. Neither the district court below—nor we, reviewing
those facts properly before the district court—find any evidence of an ownership interest,
insurance obligation, or any financial or managerial control by Garmin over Mr. Bartle or
the business entity they allegedly entered into.
There is no evidence showing Mr. Bartle was ever paid a salary by Garmin or
received any financial backing from Garmin in his construction of the plane and use of
the G900X. Mr. Bartle had no written contract with Garmin, and Garmin never provided
Mr. Bartle any sort of instruction or restrictions as he worked on incorporating the
G900X into his Lancair IV-P aircraft. Garmin did list Mr. Bartle’s Ultimate Group as the
supplier for the bracket he developed in the G900X installation manual for the Lancair
IV-P aircraft. However, even this, which Mr. Bartle says reveals the existence of
financial cooperation and a business partnership, does not qualify Mr. Bartle as an
“Insured” because Garmin still exerted no financial or management control in the
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development or sale of this bracket simply by listing the Ultimate Group as its supplier.
Nor is there any evidence Garmin had any ownership interest in the plane, the bracket, or
the alleged joint venture revolving around Mr. Bartle’s use of the G900X. Similarly, Mr.
Bartle points to no evidence Garmin had any obligation to provide insurance to Mr.
Bartle or the alleged joint venture.
Mr. Bartle does refer to other exhibits he submitted to the district court which he
says further demonstrate the existence of an “Insured” relationship between Mr. Bartle
and Garmin, but none, so far as this court can tell, he properly cited to in compliance with
District of Kansas Rule 56.1. Mr. Bartle argues that “[t]hrowing Bartle out of court
without having considered his evidence runs counter to the well-known policy of the
courts to decide matters on the merits rather than on the process.” (Appellant’s Br. at
27.) However, this case does not present a problem of failing to follow the sort of
procedural nicety or technicality we have been willing to ignore in the past. See, e.g.,
Queenan v. Mays, 90 F.2d 525, 528 (10th Cir. 1937) (refusing to dismiss an appeal on the
basis that an insolvent bank was not named with its receiver on the petition for appeal).
The district court concluded, and Mr. Bartle acknowledged, that the exhibits
submitted could not be feasibly used by the district court without great difficulty. The
district court cannot be expected to review evidence, evaluate arguments, or arrive at
reasoned conclusions without usable citations. In this case the merits cannot be separated
from the process, and ultimately Mr. Bartle bore the responsibility to present evidence
that would allow a rational trier of fact to find in his favor. See Adler v. Wal-Mart Stores,
Inc., 144 F.3d 664, 670, 672 (10th Cir. 1998).
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CONCLUSION
Based on the information properly submitted to the district court, we hold that Mr.
Bartle does not qualify as an “Insured” under the policy. We therefore AFFIRM the
district court’s grant of summary judgment to Appellees.
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