Quiroz v. C & G Welding, Inc. et al

REPLY/MEMORANDUM in Support

E.D. La.February 20, 2019

4839-9479-3096v2 2909084-000023 02/19/2019 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA ROBERT L. QUIROZ, Plaintiff, versus C&G WELDING, INC., et al. Defendants. NO. 2:16-cv-15427 SECTION “A” JUDGE JAY C. ZAINEY MAGISTRATE DIVISION #5 MAG. MICHAEL B. NORTH REPLY MEMORANDUM IN FURTHER SUPPORT OF OSF UNDERWRITERS’ MOTION TO ENFORCE JUDGMENT AND FOR ATTORNEYS’ FEES C&G’s correspondence of January 14, 20191 is neither a “settlement offer” nor an “olive branch” as C&G would have the Court believe. It is yet another declaration that C&G will continue to refuse to abide by the Court’s Order confirming C&G’s obligation under the MSC – that it must pay OSF Underwriters’ attorneys’ fees and costs incurred (both before and after Doiron) in defense of this lawsuit.2 In various correspondence3 (including a lunch meeting in advance of the January 10, 2019 status conference with the Court), counsel for OSF Underwriters have advised C&G over and over again that its unequivocal refusal to pay the defense cost incurred prior to Doiron is unacceptable. OSF Underwriters likewise advised the Court of their position during the last two status conferences on December 11, 2018, and January 10, 2019, although the Court was not 1 R. Doc. 149-2. 2 R. Doc. 133. 3 See generally, Exhibit A, email correspondence of August 28, 2018; September 5-6 and 11, 2018; December 11 and 18, 2018. Case 2:16-cv-15427-JCZ-MBN Document 154 Filed 02/20/19 Page 1 of 5 2 4839-9479-3096v2 2909084-000023 02/19/2019 presented with the exhaustive details regarding the handling of the defense and indemnity claim, or the back and forth between counsel for OSF Underwriters and counsel for C&G. Because of C&G’s unwarranted refusal to honor its obligations under the MSC, OSF Underwriters have incurred (and continue to incur) unnecessary fees and costs in pursuing their right to defense and indemnity, even after the Court’s Order confirming C&G’s obligations. OSF Underwriters are certainly aware that they cannot recover the fees and costs expended in pursuing defense and indemnity obligations against C&G, as referenced in prior pleadings, court conferences, and communications with C&G’s counsel. However, as the Court has determined, OSF Underwriters can recover the costs and fees incurred in defense of the suit by C&G’s employee.4 Thus, OSF Underwriters are not interested in settling a claim for fees/costs to which the Court has already ruled they are entitled under the MSC. There is simply nothing to settle. As set forth in its memorandum in support of its Motion to Enforce Judgment, OSF Underwriters recognize that the MSC does not provide for attorneys’ fees incurred in pursuing C&G’s defense and indemnity obligations, and OSF Underwriters are not attempting to collect those fees.5 And, OSF Underwriters have already advised C&G that it has separated out the costs/fees incurred in defense via email on January 4, 2019, stating that as of that date, $67,632.62 represented “the costs/fees expended only in the defense of the claims following demand for defense and indemnity.”6 C&G has not requested invoices itemizing the amounts expended, but OSF Underwriters are happy to provide them to C&G. OSF Underwriters acknowledge that C&G should have the opportunity to assess the reasonableness of defense fees/costs, and they are not (at this time) seeking any declaration by the Court regarding the reasonableness of these fees. After 4 R. Doc. 133. 5 R. Doc. 149-1, p. 5, n. 14. 6 Exhibit B, Email correspondence dated January 4, 2019 (emphasis added). Undersigned counsel had previously advised C&G’s counsel (on December 11 and December 18, 2018, that the defense costs exceeded $65,000). Case 2:16-cv-15427-JCZ-MBN Document 154 Filed 02/20/19 Page 2 of 5 3 4839-9479-3096v2 2909084-000023 02/19/2019 OSF Underwriters submit the invoices of costs/fees to C&G, if C&G believes that the amounts are unreasonable, it can take that issue up with the Court. But, the reasonableness of the fees are not at issue here. The current motion is merely asserted to ask the Court to confirm what it has already ruled in upholding the defense and indemnity provisions of the MSC – that C&G is required to pay all of OSF Underwriters’ reasonable costs/fees incurred in defense of this matter, including those incurred prior to the Doiron decision. C&G’s allegation that “[b]efore the Doiron decision, OSF Underwriters accepted without protest C&G’s denial of OSF’s tender of defense and indemnity” is untruthful at best. OSF and OSF Underwriters did not simply roll over after C&G’s denials. After repeated requests to C&G for defense and indemnity (all which C&G denied), OSF filed a cross-claim7 on August 24, 2017 – well before Doiron was decided in January 2018 – asserting its rights against C&G. Filing a cross-claim for defense and indemnity against C&G is the complete opposite of “acceptance without protest.” Further, in October 2017, shortly after OSF filed its cross-claim, OSF filed for bankruptcy, and there was an automatic stay in place as to OSF at the time of the Doiron decision in January 2018. Rather than attempt to lift the automatic stay, Quiroz amended his complaint on April 3, 2018 (after Doiron), to assert a direct action against OSF Underwriters. The direct action against OSF Underwriters – not Doiron – prompted undersigned counsel to renew demands for defense and indemnity and to file a cross-claim on behalf of OSF Underwriters against C&G. The sole reason that OSF Underwriters did not formally assert a claim against C&G in this lawsuit prior to Doiron is because its assured was in bankruptcy, and OFS Underwriters were not parties to the litigation – not because OSF Underwriters “accepted” C&G’s position (which they clearly did not). 7 R. Doc. 30. Case 2:16-cv-15427-JCZ-MBN Document 154 Filed 02/20/19 Page 3 of 5 4 4839-9479-3096v2 2909084-000023 02/19/2019 OSF Underwriters reached out to C&G regarding defense and indemnity in an attempt avoid the unnecessary costs of continued litigation on the cross-claim, considering the clarity of the law in the Fifth Circuit after Doiron and Crescent Energy. OSF Underwriters’ demands were met by months and months of delays on the part of C&G, requiring OSF Underwriters to continue funding their own defense against the claims by C&G’s employee. Ultimately, C&G’s repeated delays (particularly after C&G failed to respond to OSF Underwriters’ refusal to waive pre-Doiron fees in September 2018),8 and C&G’s denial of OSF Underwriters’ demand for pre- Doiron costs/fees prompted OSF Underwriters to file the underlying Motion for Summary Judgment. Contrary to C&G’s assertions, Doiron did not alter OSF Underwriters’ posture towards C&G’s defense and indemnity obligations. Doiron simply made crystal clear what OSF Underwriters already knew – that C&G was responsible to defend and indemnity OSF Underwriters and its assured against the claims asserted by C&G’s employee in this lawsuit. C&G’s reasoning for its original denial of defense and indemnity is immaterial. OSF Underwriters are “entitled to the benefit of the [Doiron] rule[,]” which the Court correctly applied.9 And, C&G admittedly “does not contest the Court’s ruling.”10 Accordingly, OSF Underwriters respectfully requests that the Court order C&G to pay reasonable attorneys’ fees and costs incurred in defense of this lawsuit from the date of the filing of the suit, order C&G to pay interest from the Court’s Order granting OSF Underwriters’ Motion for Summary Judgment on November 15, 2018, and order C&G to pay OSF Underwriters’ attorneys’ fees and costs incurred in bringing this motion. 8 See generally, Exhibit A. Specifically, OSF Underwriters were forced to file their Motion for Summary Judgment after C&G did not provide a response to the September 11, 2018 email as promised. 9 Crawford v. Falcon Drilling Co., 131 F.3d 1120, 1124 (5th Cir. 1997) (quoting Harper v. Virginia Dep't of Taxation, 509 U.S. 86, 113 (1993)). 10 R. Doc. 151, p. 4 (emphasis added). Case 2:16-cv-15427-JCZ-MBN Document 154 Filed 02/20/19 Page 4 of 5 5 4839-9479-3096v2 2909084-000023 02/19/2019 Respectfully submitted, BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ, PC /s/ Kristen L. Hayes ROBERT C. CLOTWORTHY (#04204), T.A. CHRISTOPHER M. HANNAN (#31765) KRISTEN L. HAYES (#36490) 201 St. Charles Avenue, Suite 3600 New Orleans, LA 70170 Telephone: (504) 566-5200 Facsimile: (504) 636-4000 Email: rclotworthy@bakerdonelson.com Email: channan@bakerdonelson.com Email: klhayes@bakerdonelson.com ATTORNEYS FOR OSF UNDERWRITERS Case 2:16-cv-15427-JCZ-MBN Document 154 Filed 02/20/19 Page 5 of 5