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Metropolitan Property & Cas. Ins. Co. v. McCarthy

United States District Court, D. Maine

December 2, 2014

METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY, Plaintiff
v.
SUSAN McCARTHY, et al., Defendants

For METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY, Plaintiff: JEFFREY T. EDWARDS, LEAD ATTORNEY, PRETI, FLAHERTY, BELIVEAU, & PACHIOS, LLP, PORTLAND, ME.

For SUSAN MCCARTHY, Individually and as Mother and Next Friend of MCM, Defendant: MICHAEL J. DONLAN, LEAD ATTORNEY, VERRILL DANA LLP, PORTLAND, ME.

RECOMMENDED ENTRY OF FINAL JUDGMENT AND DENIAL OF MOTION TO AMEND ANSWER AND ORDER ON MOTIONS TO SUBSTITUTE PARTY AND ENLARGE TIME

John H. Rich, III, United States Magistrate Judge.

As contemplated during my July 9, 2014, teleconference with the parties, see ECF No. 61 at 2, defendant Susan McCarthy has filed a motion to substitute herself for co-defendant Glynis Dixon McCormack, a motion to amend her answer to assert a counterclaim, and a motion to enlarge time to permit her to file simultaneous applications for attorney fees incurred in this action and in a related state-court action, see Defendant's Motion To Amend Answer To Add Counterclaim (" Motion To Amend") (ECF No. 66); Defendant Susan McCarthy's Motion To Substitute a Party (" Motion To Substitute") (ECF No. 62); Defendant's Motion for Enlargement of Time (" Motion To Enlarge") (ECF No. 65). For the reasons that follow, I recommend that the court enter final judgment in this case and deny the Motion To Amend, and I deny the Motion To Substitute and grant the Motion To Enlarge.

I. Motion To Amend

McCarthy moves pursuant to Federal Rule of Civil Procedure 15(a) to amend her answer to add a counterclaim against plaintiff Metropolitan Property and Casualty Insurance Company (" Metropolitan") for breach of contract, a " reach and apply" claim pursuant to 24-A M.R.S.A § 2904, and unfair claims settlement practices. See Motion To Amend; Defendant Susan McCarthy's [Proposed] Amended Answer and Counterclaim (" Proposed Amended Answer") (ECF No. 66-1), attached thereto.

McCarthy alleges that (i) on February 8, 2012, she filed a personal injury lawsuit in the Maine Superior Court, York County, on behalf of herself and her son, MCM, against McCormack, individually and as guardian of ZC (the " State Suit"), (ii) McCormack tendered the defense of that suit to Metropolitan, her homeowner's insurer, and (iii) Metropolitan notified McCormack that there was no coverage and that it had no duty to defend against McCarthy's claims. See [Proposed] Counterclaims, commencing on page 5 of Proposed Amended Answer, ¶ ¶ 8, 10.

On May 4, 2012, Metropolitan filed the instant action, seeking a declaratory judgment that it had no duty to defend or indemnify McCormack for McCarthy's claims. See ECF No. 1. On June 10, 2013, this court entered an order granting McCormack's cross-motion for summary judgment and denying that of Metropolitan. See ECF No. 44. On June 19, 2013, Metropolitan filed a notice of its appeal of that decision to the First Circuit. See ECF No. 48.

McCarthy alleges that, by order dated December 9, 2013, the Maine Superior Court approved a settlement in the State Suit that included the assignment to the McCarthys of all of the McCormacks' rights in the Metropolitan policies. See Proposed Counterclaims ¶ ¶ 14-16.[1] She asserts that, as part of the settlement, the parties also stipulated to a consent judgment. See id. ¶ 17.

On January 24, 2014, the First Circuit requested clarification from this court " as to the disposition of all claims in the case[, ]" noting that the briefing raised the question of whether it had appellate jurisdiction because, although the court had granted McCormack's motion for summary judgment, " it did not explain how it was treating the indemnification claim." ECF No. 53. On January 28, 2014, this court issued a clarification, stating that this court understood that Metropolitan's request for a declaration that it had no duty to indemnify McCormack was based solely on its claim that it had no duty to defend McCormack, and " the suit currently on appeal before the First Circuit did not encompass this issue [indemnification]." ECF No. 54 at 2-3. This court added that it " clarifie[d] its view that Metropolitan's suit was fully resolved by the Court's June 10, 2013 opinion and order finding that Metropolitan had a duty to defend McCormack in the McCarthy suit." Id. at 3.

On June 5, 2014, the First Circuit affirmed the court's order on the parties' cross-motions for summary judgment. See ECF No. 56. The First Circuit stated in a footnote:

Before oral argument, we raised a question about our appellate jurisdiction because Metropolitan originally had sought a declaration that it had no duty to defend or indemnify McCormack, and the district court's order, consistently with McCormack's motion for summary judgment, addressed only the duty to defend. The district court subsequently clarified that the lawsuit as litigated did not encompass the issue of Metropolitan's duty to indemnify. Accordingly, there is no bar to our review of the judgment on the duty to defend.

Id. at 2 n.1 (emphasis in original)

Metropolitan opposes the motion on the bases that there has been a final judgment ending this case, as a result of which it is too late to amend pleadings, and that two of the claims in the proposed counterclaim, breach of contract (Count I) and unfair claims settlement practices (Count III), were compulsory counterclaims pursuant to Federal Rule of Civil Procedure 13(a) and, hence, have been waived. See Plaintiff's Memorandum of Law in Opposition to Defendant's Motion To Amend Answer To Add Counterclaim (" Opposition/Amend") (ECF No. 67) at 2-4; Fed.R.Civ.P. 13(a)(1)(A) (" A pleading must state as a counterclaim any claim that -- at the time of its service ...


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