Penn-Star Insurance Company v. Loring Place Realty LLC

Background

Loring Place Realty LLC, a defendant and third-party plaintiff, moved for reconsideration of the court’s March 25, 2024 decision. That earlier decision denied Loring Place’s motion for summary judgment against Phoenix Insurance Company and granted Phoenix’s cross-motion for summary judgment on the issue of Phoenix’s duty to defend. Penn-Star Insurance Company cross-moved for permission to amend its Third Amended Complaint and reassert claims against Phoenix that had previously been dismissed without prejudice.

Reconsideration

The court explained that reconsideration is generally allowed only when there has been a controlling change in the law, new evidence has become available, or reconsideration is needed to correct a clear error or prevent serious unfairness.

The earlier decision had reasoned that the underlying case did not allege facts suggesting that Reynoso’s injury was caused, at least in part, by acts or omissions of Starry, the named insured. A July 30, 2024 deposition of Jad Assasd, Starry’s Senior Director of Technical Operations, provided additional evidence. Assasd’s testimony indicated that Starry was responsible for providing personal safety equipment and may not have adequately provided it or required its use on the day of Reynoso’s accident.

Based on that evidence, the court determined that a reasonable factfinder could conclude that Phoenix had a duty to defend in the underlying action. The court found it seriously unfair to allow Phoenix to avoid the underlying action when the new evidence implicated Starry’s role in the accident. It therefore granted Loring Place’s motion for reconsideration.

Amendment of the Complaint

The court also considered Penn-Star’s request to amend its pleading again. Because the court had dismissed all claims against Phoenix without prejudice on May 2, 2024, and Penn-Star had not previously moved against Phoenix, the court found that Penn-Star had not had an opportunity to use relevant later discovery concerning Phoenix’s duties to defend and indemnify.

The court concluded that Penn-Star would be unfairly harmed if it could not amend its complaint and reassert claims against Phoenix in light of the new information about Starry’s possible role in Reynoso’s accident. The court therefore granted Penn-Star’s cross-motion to further amend the complaint.

Disposition

The court granted Loring Place’s motion for reconsideration and Penn-Star’s motion to further amend its complaint and reassert claims against Phoenix. The Clerk was directed to close the motions at docket numbers 101 and 118, and Penn-Star was ordered to file its Fourth Amended Complaint by January 24, 2025. The order reopened the dispute over Phoenix’s duties but did not finally decide whether Phoenix owed a duty to defend or indemnify.