Privratsky v. Liberty Mutual Fire Insurance Company

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAI‘I
SHAWN D. PRIVRATSKY,
Plaintiff,
v.
LIBERTY MUTUAL FIRE
INSURANCE COMPANY,
Defendant.
Case No. 21-cv-00390-DKW-RT
ORDER OVERRULING
OBJECTIONS TO FINDINGS &
RECOMMENDATION OF U.S.
MAGISTRATE JUDGE1
Pending before the Court are Defendant Liberty Mutual Fire Insurance
Company’s (Defendant or Liberty) objections to the Findings & Recommendation
(F&R) of the assigned U.S. Magistrate Judge to deny Liberty’s Bill of Costs.
Among other things, the Magistrate Judge denied the Bill of Costs after finding
that Liberty failed to meaningfully meet-and-confer in an effort to resolve any
disputes about the claimed costs, as required by Local Rule 54.1(c). 	In its
objections, Liberty argues, inter alia, that the Magistrate Judge should not have
found that it failed to engage in a good faith meet-and-confer conference regarding
its proposed Bill of Costs or that this alleged failure was cause to deny the same.
Having reviewed the parties’ briefing and the record generally, the Court
disagrees with Liberty that the F&R should not be adopted on the ground that
1 Pursuant to Local Rule 7.1(c) & (d), the Court elects to decide this matter without a hearing.
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Liberty failed to meet-and-confer consistent with Local Rule 54.1. 	Notably, as the
Magistrate Judge found, the record shows that, despite needing to meet and confer
about its claimed costs, it was not until slightly less than an hour before said
meeting, that Liberty decided to provide counsel for Plaintiff with any
documentation supporting the claimed costs. 	The fact that Plaintiff’s counsel was
unable to meaningfully discuss the claimed costs is, thus, hardly earth-shattering,
given that, at that time, Liberty was claiming in excess of $120,000 in costs.
Therefore, for the reasons more fully discussed below, Liberty’s objections, Dkt.
No. 395, are OVERRULED, the F&R, Dkt. No. 388, is ADOPTED, and the Bill of
Costs, Dkt. No. 361, is DENIED.
RELEVANT PROCEDURAL BACKGROUND2
On June 14, 2023, a jury returned a Special Verdict, finding that (1) Plaintiff
Shawn Privratsky (Plaintiff or Privratsky) had not proven Liberty’s breach of a
duty to pay benefits under the parties’ insurance policy, (2) Plaintiff had
nonetheless proven Liberty acted in bad faith, and (3) Plaintiff had not proven
Liberty’s bad faith caused him damage. 	Dkt. No. 350. 	On June 16, 2023, the
Clerk of Court entered Judgment. 	Dkt. No. 360.
2 The Court assumes the parties’ familiarity with the procedural and factual background of this
case and, thus, only sets forth the background necessary for an understanding of the instant issue.
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Two weeks later, on June 30, 2023, Liberty filed a Bill of Costs, seeking
$80,069.86 in taxable costs. 	Dkt. No. 361.3 	On July 7, 2023, Privratsky filed an
objection to the Bill of Costs. 	Dkt. No. 363.
On August 31, 2023, the Magistrate Judge entered the F&R, denying
Liberty’s Bill of Costs. 	Dkt. No. 388. 	The Magistrate Judge did so because (1)
procedurally, Liberty failed to meet-and-confer in compliance with Local Rule
54.1, and (2) on the merits, (a) the jury found that Liberty engaged in bad faith and
(b) Liberty had not been “forthright” about failing to meet-and-confer under Local
Rule 54.1.
On September 14, 2023, Liberty filed a motion for reconsideration of the
F&R. 	Dkt. No. 392. 	On October 30, 2023, the Magistrate Judge denied the
motion for reconsideration. 	Dkt. No. 394. 	Therein, the Magistrate Judge once
again found that Liberty had failed to comply with Local Rule 54.1 and that
Liberty’s conduct (both its own and that of its counsel) warranted denying the Bill
of Costs on the merits.
On October 31, 2023, Liberty filed the instant objections to the F&R,
challenging the Magistrate Judge’s findings that Liberty failed to comply with
3 On the same day, Liberty also filed an Errata, correcting certain exhibits filed in support of the
Bill of Costs. 	Dkt. No. 362.
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Local Rule 54.1 and that the Bill of Costs should be denied on the merits. 	Dkt.
No. 395. 	On November 14, 2023, Privratsky filed a response to Liberty’s
objections. 	Dkt. No. 396.
This Order now follows.
STANDARD OF REVIEW
Pursuant to Section 636(b)(1)(A) of Title 28 of the United States Code, with
certain exceptions not applicable here, a district court may reconsider the decision
of a Magistrate Judge on a pretrial matter only when the decision is clearly
erroneous or contrary to law. 	Otherwise, pursuant to 28 U.S.C. Section
636(b)(1)(B), a district court may refer a matter to a Magistrate Judge for findings
and recommendations. 	The court must then “make a de novo determination of
those portions of the report or specified proposed findings or recommendations to
which objection is made.” 	28 U.S.C. § 636(b)(1)(B).4
DISCUSSION
Liberty challenges the Magistrate Judge’s denial of the Bill of Costs on
procedural grounds under Local Rule 54.1 and the alternative denial on the merits.
4 Here, because the Court does not find any error, even under de novo review, in the Magistrate
Judge’s finding with respect to Liberty’s failure to comply with Local Rule 54.1, it is
unnecessary to decide whether the Bill of Costs, which was filed post-trial, is a pre-trial matter to
which the clearly erroneous standard of review applies.
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Nonetheless, because it is dispositive, the Court addresses only Liberty’s
procedural objection.
First, Liberty argues that it complied with Local Rule 54.1. 	More
specifically, Liberty asserts that, on June 26, 2023, it reached out to Plaintiff’s
counsel to schedule a conferral on its Bill of Costs, the meeting was scheduled for
June 28, 2023, Liberty’s counsel provided a “summary of the costs” in an “easily-
understandable format” to Plaintiff’s counsel, even though, according to Liberty,
Local Rule 54.1 did not require it to do so, Liberty offered to reschedule the
meeting after it “became apparent” Plaintiff’s counsel would not engage in
meaningful discussions, and Liberty “had to file” the Bill of Costs by June 30,
2023. 	Dkt. No. 395-1 at 7-9.
The Court disagrees with the picture Liberty attempts to paint for several
reasons. 	First, the premise that Liberty “had to file” the Bill of Costs by June 30,
2023 is simply wrong. 	Local Rule 54.1 has no such mandatory language.
Instead, the rule provides that, “[u]nless otherwise ordered by the court,” a bill of
costs must be filed within 14 days of Judgment. 	Local Rule 54.1(b). 	In other
words, just like Liberty subsequently did with respect to its motion for attorney’s
fees, see Dkt. Nos. 368-369, Liberty could have either stipulated with Privratsky to
an extension of Local Rule 54.1’s requirements or, alternatively, moved the Court
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for such an extension. 	Liberty, however, did neither. 	Instead, the record reflects
that Liberty proceeded to create an entirely avoidable time-jam by self-imposing a
hard deadline on its meet-and-confer discussions.
A further faulty premise to Liberty’s objections is the assertion that they
were under no obligation to provide Plaintiff’s counsel with the “summary of
costs” or, apparently, any documentation to support their roughly $120,000 Bill of
Costs demand because Local Rule 54.1 does not expressly require any such thing.
This is inaccurate. 	Local Rule 54.1(c) expressly requires the parties to meet-and-
confer “in an effort to resolve any disputes about the claimed costs….” 	Implicit in
this conferral requirement is that the side claiming costs provide its adversary with
the means with which to meaningfully confer.5 	Here, Liberty chose to use a
“summary of costs” to facilitate the conferral. 	Another party may opt to use some
other form of documentation -- for example, the provision of supporting invoices
or a different version of Liberty’s “summary.” 	The point is that, while the Court
agrees that there is no express requirement for a party to provide a “42-page”
“easily-understandable” summary of costs, there is a requirement for the parties to
5 Put another way, it would be difficult for the parties to resolve disputes if the side claiming costs
provided its adversary with no supporting documentation for the costs claimed, as Liberty
appears to contend. 	In Liberty’s world, it appears enough for it to simply state a cost and a
dollar amount – that would rarely alone provide the basis for a meaningful conferral and
certainly does not do so here.
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confer, and a conference, particularly on a subject like the matter of costs, cannot
take place in a vacuum, which is what Liberty’s position would produce.
Once these erroneous premises are removed, Liberty’s remaining assertions
lose any force. Specifically, Liberty contends that, after it “became apparent” that
Plaintiff’s counsel would not engage in “meaningful discussions”, Liberty offered
to “reschedule” the conferral. 	Dkt. No. 395-1 at 9. 	Liberty’s declaration of
counsel, however, reflects that the alleged offer to reschedule the conferral was
limited to “the next day”, i.e., June 29—a day that the parties appear to agree that
Plaintiff’s counsel was preparing for a deposition in another matter. 	See Dkt. No.
395-2 at ¶¶ 20-21. 	In other words, because Liberty self-imposed a hard filing
deadline of June 30 upon itself, the offer to reschedule was confined to a day
Plaintiff’s counsel could not confer—this is not a reasonable offer to reschedule
the conferral. 	Moreover, although Liberty conveniently now asserts that it would
have stipulated to “additional time to review” its summary of costs, counsel fails to
suggest that this inclination was ever conveyed to Plaintiff’s counsel. 	See id. at
¶ 22. 	Finally, as discussed further below, although Liberty’s counsel believes that
it was “apparent” Plaintiff’s counsel would not engage in “meaningful discussions”
regarding the Bill of Costs, at the very least, this is hardly surprising given it is
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undisputed that counsel was not provided with the 42-page summary until
approximately an hour before the meeting.
In this light, the Court agrees with the Magistrate Judge that Liberty failed to
comply with Local Rule 54.1(c).
Second, Liberty argues that, even if it failed to comply with Local Rule
54.1(c), this was “excusable” because conferral was “futile given Privratsky’s
position that Liberty was not the prevailing party and counsel’s refusal to confer
further.” 	Dkt. No. 395-1 at 10-12. 	This argument is premised upon Liberty’s
assertions that Plaintiff’s counsel held an “unwavering position” that Liberty was
not the prevailing party in this case, Plaintiff’s counsel’s “demeanor”, and
Plaintiff’s counsel’s refusal to “further interact” on any specific costs. 	Id. 	In
other words, Plaintiff’s counsel was at fault for the failure to confer. 	The record
supports no such accusation, however. 	In fact, not even Liberty’s declaration of
counsel provides such support. 	Therein, Liberty’s counsel states that Plaintiff’s
counsel’s positions during the meeting were (1) Liberty was not the prevailing
party and thus not entitled to costs, (2) he was busy preparing for a deposition the
next day, and (3) he did not have time to review the summary of costs. 	Notably,
missing from Plaintiff’s counsel’s purported positions is the one that he would not
“interact” with Liberty on any specific cost because Liberty was not a prevailing
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party. 	Instead, at most, Liberty’s counsel’s declaration supports the suggestion
that Plaintiff’s counsel would not further interact on June 28 (or June 29) because
he was preparing for a deposition—not because he simply could not countenance
further discussion. 	As for Liberty’s counsel’s reliance on Plaintiff’s counsel’s
“demeanor”, the Court rejects any contention that Liberty’s subjective reading of
someone’s demeanor on a telephone call could support a finding of futility, as
Liberty suggests.
The Court rejects Liberty’s argument that the meet-and-confer process under
Local Rule 54.1(c) was futile. 	As a result, the Court OVERRULES Liberty’s
objections to the F&R, Dkt. No. 395, and ADOPTS the Magistrate Judge’s
recommendation to deny the Bill of Costs for failure to comply with Local Rule
54.1(c).
CONCLUSION
For the reasons set forth herein, Liberty’s objections, Dkt. No. 395, are
OVERRULED, the F&R, Dkt. No. 388, is ADOPTED, and Liberty’s Bill of Costs,
Dkt. No. 361, is DENIED.
IT IS SO ORDERED.
Dated: December 18, 2023 at Honolulu, Hawai‘i.
___________________________
Derrick K. Watson
Chief United States District Judge
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