     Case: 15-41550      Document: 00513695315         Page: 1    Date Filed: 09/28/2016




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                     United States Court of Appeals
                                                                              Fifth Circuit

                                    No. 15-41550                            FILED
                                  Summary Calendar                  September 28, 2016
                                                                       Lyle W. Cayce
                                                                            Clerk
GASPAR GONZALEZ,

              Plaintiff - Appellant

v.

PHILADELPHIA INDEMNITY INSURANCE COMPANY,

              Defendant - Appellee




                   Appeal from the United States District Court
                        for the Southern District of Texas
                              USDC No. 1:14-CV-215


Before KING, DENNIS, and COSTA, Circuit Judges.
PER CURIAM:*
       Plaintiff–Appellant Gaspar Gonzalez sued his auto insurer, Defendant–
Appellee Philadelphia Indemnity Insurance Company, for breach of contract
after it refused to pay Gonzalez’s underinsured motorist claim. Philadelphia
moved for summary judgment, arguing that Gonzalez had failed to give it
timely notice of his settlement with the underinsured motorist, as required by



       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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                                       No. 15-41550
the policy. The district court granted summary judgment for Philadelphia and
denied Gonzalez’s motion for reconsideration. Gonzalez appealed. For the
following reasons, we AFFIRM the judgment of the district court.
               I. FACTUAL AND PROCEDURAL BACKGROUND
        On August 16, 2010, Gaspar Gonzalez was involved in an accident with
another motorist. The other motorist was driving a vehicle owned by her
mother and insured by Allstate Indemnity Company. Her father owned the
Allstate policy. At the time of the accident, Gonzalez was acting in the course
and scope of his employment with Alarm Security Group LLC. Accordingly, he
was covered under Alarm Security’s insurance policy with Philadelphia
Indemnity Insurance Company (“Philadelphia”).                    The policy included an
endorsement providing uninsured/underinsured motorist coverage.                           The
endorsement        provided    that    damages       resulting     from    accidents     with
underinsured vehicles 1 were covered under the policy “only if” Philadelphia
was “given prompt written notice of [any] tentative settlement” with the
underinsured motorist and             Philadelphia “[a]dvance[d] payment to the
‘insured’ in an amount equal to the tentative settlement within 30 days after
receipt of notification.” The endorsement expressly excluded “any claim settled
without [Philadelphia’s] consent,” unless the “insured” gave Philadelphia
“prompt written notice” of any “tentative settlement” and Philadelphia
“[a]dvance[d] payment to the ‘insured’ in an amount equal to the tentative
settlement within 30 days after receipt of notification.”
        On August 27, 2012, Gonzalez’s counsel notified Philadelphia by letter
that        Gonzalez    was    pursuing      claims      for   (among       other     things)
uninsured/underinsured motorist benefits arising from the August 2010


        1 The policy defined an underinsured vehicle as, inter alia, one whose liability policy
“[i]s not enough to pay the full amount the covered ‘insured’ is legally entitled to recover as
damages.”
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                                 No. 15-41550
accident. Philadelphia responded a few weeks later confirming receipt of the
letter, stating that Philadelphia “ha[d] established a file and [was] proceeding
to investigate the facts,” and requesting further information from Gonzalez,
including the police report, his theory of liability, a completed Personal Injury
Protection form, a completed affidavit of no insurance form, and medical bills
and records. On September 24, 2012, Gonzalez’s counsel supplied some of the
requested information, including medical bills showing costs of at least
$26,000.
      On November 2, 2012, Gonzalez settled with the other motorist, her
parents, and Allstate for $25,000—the limit of the Allstate policy.          The
settlement released these parties from all liability arising from the August
2010 accident. Gonzalez did not notify Philadelphia of this settlement until
March 6, 2014, when his counsel sent Philadelphia a letter stating that
Gonzalez “w[ould] be making an Underinsured Claim” against Alarm
Security’s policy with Philadelphia because his claimed damages exceeded the
$25,000 settlement. After Philadelphia refused to pay his claim, Gonzalez sued
Philadelphia for breach of contract. Philadelphia removed the case to the
United States District Court for the Southern District of Texas. See 28 U.S.C.
§§ 1332, 1441.
      Philadelphia moved for summary judgment and the district court
granted its motion. The district court concluded that Gonzalez’s failure to
timely notify Philadelphia of the settlement prejudiced Philadelphia as a
matter of law and this prejudice entitled Philadelphia to summary judgment.
Gonzalez moved for reconsideration, attaching the previously un-submitted
correspondence between his counsel and Philadelphia from August to
September 2012.       He argued this correspondence demonstrated that
Philadelphia had notice and the opportunity to investigate the underinsured
claim prior to settlement.       The district court denied the motion for
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                                No. 15-41550
reconsideration, declining to consider the evidence because Gonzalez failed to
show cause for not timely submitting this evidence—which had been in his
possession since 2012. The district court also reasoned that even if it were to
consider this evidence, the correspondence merely showed that Philadelphia
had notice of Gonzalez’s underinsured motorist claim, not of his tentative
settlement with the motorist. Gonzalez timely appealed.
                        II. STANDARD OF REVIEW
      We review a grant of summary judgment de novo, applying the same
standard as the district court. Rogers v. Bromac Title Servs., L.L.C., 755 F.3d
347, 350 (5th Cir. 2014). Summary judgment is proper “if the movant shows
that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “A genuine
dispute as to a material fact exists ‘if the evidence is such that a reasonable
jury could return a verdict for the nonmoving party.’” Rogers, 755 F.3d at 350
(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). When the
district court refuses to consider the attachments to a motion for
reconsideration, we review denial of that motion for abuse of discretion.
Templet v. HydroChem Inc., 367 F.3d 473, 477 (5th Cir. 2004). “Under this
standard of review, the district court’s decision and decision-making process
need only be reasonable.” Id. (citing Ford Motor Credit Co. v. Bright, 34 F.3d
322, 324 (5th Cir. 1994)).
                              III. PREJUDICE
      On appeal Gonzalez argues that even if he failed to timely notify
Philadelphia of the settlement, this lack of notice did not prejudice
Philadelphia. He notes that the settlement was for the other motorist’s policy
limit and characterizes the other motorist as a “young low-wage earning
driver.” Based on these facts, he claims that any rights that Philadelphia lost


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                                 No. 15-41550
as a result of the settlement had no value; therefore, the lack of notice did not
prejudice Philadelphia.
      “Texas law requires a showing of prejudice in order to raise breach of a
notice requirement as a defense against claims on [automobile] insurance
policies.” Ridglea Estate Condominium Ass’n v. Lexington Ins. Co., 415 F.3d
474, 479 (5th Cir. 2005); see PAJ, Inc. v. Hanover Ins. Co., 243 S.W.3d 630,
636–37 (Tex. 2008); Hernandez v. Gulf Grp. Lloyds, 875 S.W.2d 691, 693–94
(Tex. 1994). In a recent pair of cases, we addressed when the insured’s failure
to provide notice causes the insurer prejudice as a matter of law. In Berkley
Regional Insurance v. Philadelphia Indemnity Insurance (Berkley I), we
considered a policy requiring notice of certain events in order for coverage to
apply. 690 F.3d 342, 344 (5th Cir. 2012). We explained that such notice
provisions afford the insurer “valuable rights,” such as “the rights to ‘join in’
the investigation, to settle a case or claim, and to interpose and control the
defense.” Id. at 348. We stated that notice given after a case is “over” —after
a verdict is rendered or a final settlement is reached—is not just late, but
“wholly lacking,” and prejudices the insurer by depriving it of “a seat at the
mediation table” and “the ability to do any investigation or conduct its own
analysis of the case.” Id. at 350–51. We concluded that the insurer had
presented sufficient facts to avoid summary judgment on the issue of prejudice
and remanded the case for further consideration. Id. at 352. On appeal after
remand, we found that the insured failed to adduce additional evidence
creating a genuine dispute of material fact regarding prejudice and prejudice
had therefore been established as a matter of law. Berkley Reg’l Ins. Co. v.
Phila. Indem. Ins. Co. (Berkley II), 600 F. App’x 230, 236–37 (5th Cir. 2015)
(per curiam) (unpublished).
      Our reasoning in Berkley I and Berkley II dictate the outcome in this
case. The policy here also required notice in order for coverage to apply. It
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                                      No. 15-41550
required Gonzalez to provide Philadelphia with “prompt written notice of [any]
tentative settlement” with an underinsured motorist. And Gonzalez’s notice
was similarly “wholly lacking”: the settlement was executed on November 2,
2012, yet Gonzalez did not provide Philadelphia with notice of the settlement
until March 6, 2014, over 16 months later. 2 As we recognized in Berkley I and
Berkley II, this post-settlement notice deprived Philadelphia of valuable,
bargained-for rights, including the rights to investigate the facts and parties
to the settlement, participate in the settlement negotiations, and pursue
subrogation. It makes no difference that Berkley dealt with post-verdict notice;
the insurer loses the same valuable rights when it receives post-settlement
notice.
       In arguing that the rights Philadelphia lost had no value, Gonzalez relies
on Hernandez v. Gulf Group Lloyds, 875 S.W.2d 691 (Tex. 1994). But this case
is easily distinguishable. In Hernandez, the Texas Supreme Court stated that
in some circumstances failure to timely notify an insurer of settlement will not
cause prejudice and thus will not relieve the insurer of liability. Id. at 693.
However, in Hernandez, the insurer stipulated that (1) it had never before
refused to settle a claim for the full limit of the uninsured/underinsured
motorist policy, (2) the tortfeasor had no assets other than the policy and this
was not likely to change in the foreseeable future, and (3) the insurer did not
incur any financial loss as a result of the lack of notification. Id. at 693–94.
Here, Philadelphia makes no similar stipulations; rather, it argues that



       2Gonzalez argues that the August through September 2012 correspondence, in which
he stated his intent to pursue an uninsured/underinsured motorist claim and provided
documentation of medical costs of at least $26,000, put Philadelphia on notice that his
damages could exceed the other motorist’s policy limits. Because we conclude Gonzalez failed
to show cause for not timely filing this evidence, we need not consider this argument.
Regardless, as the district court concluded, this correspondence merely shows that
Philadelphia had notice of the underinsured motorist claim, not that it had notice of the
settlement.
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                                      No. 15-41550
Gonzalez’s failure to notify deprived it of valuable rights. The fact that the
other motorist was allegedly a “young low-wage earning driver” does not
necessarily diminish the value of those rights. Gonzalez provides no evidence
of the motorist’s finances beyond his characterization. And the settlement also
released the motorist’s parents from liability. Yet Gonzalez offers no evidence
that the motorist’s parents could not have paid beyond the $25,000 policy limit.
As the district court noted, had Philadelphia received notice of the tentative
settlement, “[t]his is precisely the type of information that [Philadelphia] could
have investigated before releasing those parties from liability.”
       Gonzalez has presented no evidence that would create a genuine dispute
of material fact regarding prejudice. We apply the reasoning of Berkley I and
Berkley II and conclude that Gonzalez’s failure to provide timely notice of the
settlement deprived Philadelphia of valuable rights and prejudiced it as a
matter of law. Summary judgment is proper in this circumstance.
                       IV. MOTION FOR RECONSIDERATION
       Gonzalez argues that the interests of justice required the district court
to grant his motion for reconsideration and deny summary judgment. A timely
motion for reconsideration is treated as a motion to alter or amend judgment
under Federal Rule of Civil Procedure 59(e). Edward H. Bohlin Co. v. Banning
Co., 6 F.3d 350, 353 (5th Cir. 1993). “[A] motion to alter or amend the judgment
under Rule 59(e) ‘must clearly establish either a manifest error of law or fact
or must present newly discovered evidence.’” Rosenblatt v. United Way of
Greater Hous., 607 F.3d 413, 419 (5th Cir. 2010) (alteration in original)
(quoting Rosenzweig v. Azurix Corp., 332 F.3d 854, 864 (5th Cir. 2003)). 3 Such


       3 It is not clear which of these grounds was the basis for Gonzalez’s motion for
reconsideration. On appeal, Gonzalez attempts to characterize his motion for reconsideration
as one based on manifest legal error. Yet in his motion, Gonzalez made no mention of this
basis; instead he attached “additional evidence” to the motion and argued that this
“additional evidence” should change the court’s decision. The district court accordingly
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motions “cannot be used to raise arguments which could, and should, have been
made before the judgment issued.” Rosenzweig, 332 F.3d at 863 (quoting
Simon v. United States, 891 F.2d 1154, 1159 (5th Cir. 1990)).
      Gonzalez’s motion for reconsideration was based on previously un-
submitted evidence that he claimed demonstrated that Philadelphia had notice
of his underinsured motorist claim. But this evidence is not newly discovered.
As the district court noted, and Gonzalez does not dispute, this evidence has
been in his possession since 2012. Gonzalez has not offered any explanation
for why he did not timely submit this evidence. And, as the district court noted,
this evidence would not change the outcome of its decision because the evidence
merely indicated that Philadelphia was aware of Gonzalez’s underinsured
motorist claim, not that it had notice of the settlement, which is the notice
required by the policy. With notice merely of Gonzalez’s claim, Philadelphia
could not compare the findings of its investigation with the terms of the
settlement or participate in settlement negotiations. Gonzalez’s evidence does
not undermine the district court’s conclusion that the lack of notice prejudiced
Philadelphia as a matter of law. Accordingly the district court did not abuse
its discretion in denying Gonzalez’s motion for reconsideration.
                                 V. CONCLUSION
      For the foregoing reasons, we AFFIRM the judgment of the district court.




treated the motion as being based on newly discovered evidence. Regardless of the basis,
Gonzalez’s motion for reconsideration lacks merit.
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