Metropolitan Group Property and Casualty Insurance Company v. Fite ( 2022 )

1 2 3 4 5 UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON AT TACOMA 7 METROPOLITAN GROUP PROPERTY CASE NO. 3:20-cv-05697-JHC 8 AND CASUALTY INSURANCE COMPANY, now known as FARMERS ORDER 9 GROUP PROPERTY AND CASUALTY INSURANCE COMPANY, 10 Plaintiff, 11 v. 12 AUSTIN FITE, 13 Defendant. 14 AUSTIN FITE, Consolidated Plaintiff, 15 v. 16 METROPOLITAN GROUP PROPERTY 17 AND CASUALTY INSURANCE COMPANY, now known as FARMERS 18 PROPERTY AND CASUALTY INSURANCE COMPANY and 19 METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY, 20 now known as FARMERS PROPERTY AND CASUALTY INSURANCE COMPANY, 21 registered foreign insurers doing business in the State of Washington; and “JOHN AND 22 JANE DOES” 1-10, 23 Consolidated Defendants. 24 1 This matter comes before the Court on Metropolitan Property and Casualty Insurance 2 Company’s (“MetLife”) Motion for Leave to File Supplemental Pleadings. Dkt. # 87. The 3 Court has considered the submissions in support of and in opposition to the motion, the 4 applicable law, and the case file. Being fully advised, the Court GRANTS the motion. 5 First, the Court concludes—and the parties do not dispute—that modification of the case 6 caption to reflect Metropolitan’s new ownership is reasonable. Dkts. ## 87 at 3, 89 at 2. If this 7 case proceeds to trial, the Court will craft an appropriate jury instruction to minimize confusion 8 as to why the policies at issue are labeled “MetLife Auto and Home.” 9 MetLife also argues that it should be permitted to file supplemental pleadings that reflect 10 the fact that the judgment in the underlying state court liability action has been vacated. Dkt. # 11 87 at 7–11, citing Fed. R. Civ. P. 15. Austin Fite opposes the motion, arguing that MetLife’s 12 efforts are dilatory and that any amendment would be untimely and futile. Dkt. # 89 at 5–12. 13 Leave to amend or supplement pleadings under Fed. R. Civ. P. 15 should generally be 14 liberally given, but this liberality is subject to several restrictions. DCD Programs, Ltd. v. 15 Leighton, 833 F.2d 183, 186 (9th Cir. 1987). Leave need not be granted where the amendment 16 would cause the opposing party prejudice, is sought in bad faith, constitutes an exercise in 17 futility, or creates undue delay. Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 18 (9th Cir. 1989) (citing Leighton, 833 F.2d at 186; Foman v. Davis, 371 U.S. 178, 182, (1962)). 19 The Court concludes that MetLife did not unduly delay in seeking leave to amend its 20 pleadings. Although the Court of Appeals vacated the judgment on liability and allocation of 21 fault on November 9, 0221, and then modified its opinion on reconsideration on April 12, 2022, 22 Fite then petitioned the Washington Supreme Court for review. The Washington Supreme Court 23 denied Fite’s petition for review on September 7, 2022 and MetLife filed its motion less than two 24 1 months later. Fite v. City of Puyallup, 200 Wash. 1004, 516 P.3d 377 (2022). It was not 2 unreasonable for MetLife to wait until the vacatur became final before moving for leave to file 3 supplemental pleadings, and the Court sees no other indicia of dilatory motives or bad faith. 4 The Court also concludes that Fite would not be unduly prejudiced if it grants MetLife’s 5 motion. Fite argues that, if MetLife is permitted to assert its proposed affirmative defense, 6 “discovery would have to be reopened so that Mr. Fite can acquire new information from 7 [MetLife]” about its claim handling process. Dkt. # 89 at 8. But this logic is flawed. MetLife is 8 not arguing that it first denied Fite’s claims because of any potential liability defense, so the 9 proposed amendments are irrelevant to Fite’s extracontractual claims. The amendments would 10 be relevant only to MetLife’s complaint for declaratory relief and Fite’s breach of contract claim, 11 and for those claims no additional discovery or witnesses would be required since they depend 12 solely on the language of the policy. Fite also argues that “additional witnesses will have to be 13 added to address what otherwise should be undisputed facts—that Mr. Fite was/is entitled to 14 recover damages from Mr. Mudd who has paid his limited liability policy limits and who at trial 15 conceded liability and the absence of comparative fault.” Id. Contrary to his assertion, the 16 question of whether Fite is entitled to recover damages from Mudd is highly disputed, and 17 MetLife conceded this fact in their initial answer and complaint presumably because at that point 18 the judgment had not yet been vacated. Dkt. # 87 at 5. And the Court does not see how 19 additional witness testimony would aid in resolving the mainly legal question of whether an 20 insured can establish that he is “legally entitled” to recover damages from a tortfeasor when the 21 underlying state court action remains unresolved. Although the Court acknowledges that 22 discovery is closed and the trial is three months away, MetLife simply seeks to correct the record 23 with updated information about the underlying state court case and these corrections should not 24 l require additional discovery. If Fite believes that these supplemental pleadings will require a 2 || reopening of discovery, he may file a motion with this Court. 3 Lastly, granting MetLife leave to file supplemental pleadings would not constitute an 4 exercise in futility. Fite argues that the proposed amendments—which reference the vacated 5 ||judgment in the state court action—would be futile because there is no requirement under 6 || Washington Law that an insured claiming UIM benefits acquire a judgment against the 7 || underinsured third-party tortfeasor. Dkt. # 89 at 8-12. Fite may take the position that the state 8 court proceeding does not affect this Court’s ability to find that he is covered under the policy 9 and entitled to recover from MetLife. But the existence of a dispute over the effect of that 10 proceeding does not imply futility. 11 Accordingly, the Court GRANTS MetLife’s Motion for Leave to File Supplemental 12. || Pleadings. Dkt. #87. The Court directs the Clerk to update the case caption to reflect MetLife’s 13 new ownership. 14 Dated this 23rd day of November, 2022. 15 16 c / ohn x . Chur 17 John H. Chun United States District Judge 18 19 20 21 22 23 24