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Sierra Pacific Power Co. v. The Hartford Steam Boiler Inspection and Insurance Co.

United States District Court, D. Nevada

April 15, 2015

SIERRA PACIFIC POWER COMPANY, a Nevada Corporation, Plaintiff,
THE HARTFORD STEAM BOILER INSPECTION AND INSURANCE COMPANY, a Connecticut Corporation; and ZURICH AMERICAN INSURANCE COMPANY, a New York Corporation, as successor in interest to ZURICH INSURANCE COMPANY, U.S. Branch; Defendants.


LARRY R. HICKS, District Judge.

Before the Court is Plaintiff Sierra Pacific Power Company's ("Sierra Pacific") Motion for Further Clarification. Doc. #259.[1] Defendants Hartford Steam Boiler Inspection and Insurance Company and Zurich American Insurance Company (collectively "Defendants") filed an Opposition (Doc. #264), to which Sierra Pacific replied (Doc. #266). Also before the Court is Defendants' Motion for Relief under Rules 52(b), 58(e), and 60. Doc. #262. Sierra Pacific filed an Opposition (Doc. #265), to which Defendants replied (Doc. #267).

I. Factual Background and Procedural History

This case involves a dispute regarding insurance coverage that Sierra Pacific procured from Defendants. Sierra Pacific operates power generation stations in Nevada and California. Defendants insure Sierra Pacific's facilities, including the Farad Dam on the Truckee River in California ("the Dam"). The Dam was completely destroyed by a flood in 1997, at which point Sierra Pacific filed a claim for damages with Defendants.

Following a three-day bench trial on April 8 to 10, 2008, as well as written briefing and written closing arguments by the parties, the Court awarded declaratory relief and entered judgment in favor of Sierra Pacific in accordance with the Court's Findings of Fact and Conclusions of Law. Doc. #164; Doc. #165. Therein, the Court determined that the actual cash value ("ACV"), with proper deduction for depreciation, of the Dam was $1, 261, 000. Doc. #164 at 8. The Court also reaffirmed its earlier findings that Defendants' payment of $1, 011, 200 to Sierra Pacific in April 2001 did not constitute an agreement as to the ACV, or satisfaction of ACV coverage under Defendants' policy. Id. at 4-5, 7. The Court further determined that the "actual estimated cost to replace" the Dam was $19, 800, 000. Id. at 5 ¶21.

On October 10, 2008, Sierra Pacific filed a Motion to Reconsider the Court's determination of the Dam's ACV. Doc. #166. On July 10, 2009, the Court denied Sierra Pacific's Motion, finding that the Dam's ACV had already been litigated.[2] Doc. #182. Thereafter, the parties filed notices of appeal. Doc. #183; Doc. #187. On July 27, 2012, the Ninth Circuit Court of Appeals issued a Memorandum vacating the Court's finding that the ACV of the Dam was $1, 261, 200, and remanded so that the Court could determine the ACV based on reducing the replacement cost of $19, 800, 000 by the "appropriate" depreciation, and fashion an appropriate order tolling the three-year period for replacing the Dam.[3] Doc. #213 at 17. The Ninth Circuit rejected Sierra Pacific's argument that the Dam's ACV should be calculated as the full replacement cost without any depreciation. Id. at 6. The Ninth Circuit also rejected the argument that the parties had agreed to an ACV. Id. at 7. The Ninth Circuit went on to reject the proposed ACV of $1, 261, 200 because it was not related to the replacement cost of $19, 800, 000. Id.

On October 18, 2013, the Court held a Status Conference and ordered the parties to submit briefing on the issue of depreciation. Doc. #219. On September 19, 2014, the Court held that based on the evidence presented at trial, it was appropriate to apply a 50% rate of depreciation for the in-river Dam and a 5% rate of depreciation for the wing wall, and that subtracting this depreciation from the full replacement cost yielded an ACV of $12, 216, 600. Doc. #225 at 7. Defendants and Sierra Pacific both filed Motions to Reconsider the September 19, 2014, Order. Doc. #228; Doc. #229.

On December 5, 2014, the Court affirmed that the ACV of the Dam when it was destroyed was $12, 216, 600 and awarded prejudgment interest to Sierra Pacific on this amount less the $1, 600, 000 deductible, and less Defendants' $1, 011, 200 payment, beginning April 3, 2001. Doc. #235 at 7, 9-10. On December 31, 2014, Defendants filed a Motion to Reconsider under Rules 52(b), 58(e), and 60 (Doc. #236), and Sierra Pacific filed a Motion to Clarify (Doc. #238). On February 5, 2015, the Court reaffirmed its ruling that prejudgment interest is appropriate in this case. Doc. #257 at 5. The Court clarified its prior ruling to state that any prejudgment interest should begin to run starting on April 3, 2001, and that Sierra Pacific was at a maximum entitled to prejudgment interest based on the estimated replacement cost of the Dam in 2001, $16, 205, 303, less reductions described in that Order. Id. at 7. The Court held further that its orders on the parties' motions to amend did not disturb the September 30, 2008, Findings of Fact and Conclusions of Law that the applicable insurance policies "provide Sierra with full replacement cost coverage subject to the sublimit liability for flumes and waterways of $29, 000, 000 and the sublimit of liability for California locations of $62, 000, 000." Id. at 9 (quoting Doc. #164 at 8 ¶1).

On March 5, 2015, Sierra Pacific "reluctantly" filed the present Motion for Further Clarification, asking the Court to confirm that if Sierra Pacific rebuilds or replaces the Dam, it could recover "the actual expenditures incurred by Sierra, up to the policy limits of $29, 000, 000 (TIV Dams), $62, 000, 000 (California locations) and an additional $10, 000, 000 of coverage for Demolition and Increased Costs of Construction (DICC)." Doc. #259 at 1-2. Sierra Pacific also asks the Court to clarify that the time for calculating or computing the actual expenditures incurred is "three years after the conclusion of all litigation, including all appeals." Id. at 2. In its own Motion to Reconsider, Defendants again request that the Court reconsider its ruling granting prejudgment interest to Sierra Pacific, this time arguing that the Court exceeded the scope of the Ninth Circuit's remand when it granted prejudgment interest on December 5, 2014. Doc. #263 at 3-4.

II. Legal Standard

Upon motion by a party within twenty-eight days of the entry of judgment, the court may alter or amend its findings under Federal Rule Civil Procedure 59(e). A party can also seek reconsideration under Federal Rule of Civil Procedure 60(b). "Reconsideration is appropriate if the district court (1) is presented with newly discovered evidence, (2) committed clear error or the initial decision was manifestly unjust, or (3) if there is an intervening change in controlling law." Sch. Dist. No. 1J, Multnomah Cnty., Or. v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993). A motion for reconsideration "may not be used to raise arguments or present evidence for the first time when they could reasonably have been raised earlier in the litigation." Carroll v. Nakatani, 342 F.3d 934, 945 (9th Cir. 2003).

A motion for reconsideration is not a substitute for a timely appeal, and a motion can be denied if a party merely uses the motion to reargue its case. See Am. Ironworks & Erectors, Inc. v. N. Am. Const. Corp., 248 F.3d 892, 899 (9th Cir. 2001) (finding that the district court did not abuse its discretion in denying a motion to amend because the moving party merely reargued its case); Wilson v. Sec'y, Dep't of Interior, No. 3:07-cv-0612, 2011 WL 2197538, at *1 (D. Nev. June 6, 2011) ("A Rule 60(b) motion is not a substitute for a timely appeal, ' and a judgment is not void simply because it may have been erroneous.'") (quoting United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 270 (2010)). District courts have discretion regarding whether to grant a motion to amend under Rule 59(e) or 60(b). Wood v. Ryan, 759 F.3d 1117, 1121 (9th Cir. 2014).

III. Discussion

A. Sierra Pacific's Motion for Further ...

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