Estate of Adams v. Cont'l Ins. Co.
| Citation | 161 A.3d 70,233 Md.App. 1 |
| Decision Date | 01 June 2017 |
| Docket Number | No. 1065, Sept. Term, 2014,1065, Sept. Term, 2014 |
| Parties | ESTATE OF Harold L. ADAMS, et al. v. CONTINENTAL INSURANCE COMPANY, et al. |
| Court | Court of Special Appeals of Maryland |
233 Md.App. 1
161 A.3d 70
ESTATE OF Harold L. ADAMS, et al.
v.
CONTINENTAL INSURANCE COMPANY, et al.
No. 1065, Sept. Term, 2014
Court of Special Appeals of Maryland.
June 1, 2017
Argued by: Arnold M. Weiner (Barry L. Gogel, Michael D. Berman, Rifkin, Weiner, Livingston, Levitan & Silver, LLC, H. Russell Smouse, Law Office of Peter G. Angelos, Baltimore, MD), John Amato, IV (Goodman, Meagher & Enoch, LLP, Andrew H. Baida, Rosenberg Martin, Greenberg, LLP, Baltimore, MD), on the briefs, for Appellant.
Argued by: James P. Ruggeri (Shipman & Goodwin LLP, Washington, D.C., Robert L. Hoegle, Mary S. Diemer, Nelson, Mullins, Riley & Scarborough LLP, Washington, D.C., Neil E. Duke, Ober, Kaler LLP, Baltimore, MD), Harry Lee (Catherine D. Cockerham, Steptoe & Johnson, LLP, Washington, D.C., Andrew Janquitto, Mudd, Harrison & Burch, LLP, Towson, MD), the briefs, for Appellee.
Panel: Kehoe, Beachley, James A. Kenney, III (Senior Judge, Specially Assigned), JJ.*
Beachley, J.
In this opinion, we attempt to finally resolve asbestos-related litigation stemming from complaints filed in the Circuit Court for Baltimore City more than twenty years ago. Appellants consist of plaintiffs represented by three different groups of law firms: 1) the Law Offices of Peter
Angelos ("LOPA plaintiffs" or "LOPA"); 2) Goodman, Meagher & Enoch, LLP and Clifford Cuniff; Ashcraft & Gerel ("GME/Cuniff/A & G Plaintiffs"); and 3) Skeen, Goldman, LLP ("Goldman Plaintiffs").1
Appellants were plaintiffs in asbestos-related litigation against MCIC Inc. (formerly McCormick Asbestos Company, "MCIC"). In a lawsuit filed in the Circuit Court for Baltimore City on May 20, 2005, appellants sought, for the second time, additional insurance coverage and proceeds pursuant to a 1994 settlement agreement with appellees, MCIC and its insurers: United States Fidelity and Guaranty Company ("USF & G"); Royal Insurance Company ("Royal");2 Liberty Mutual Insurance Company; Continental Insurance Company ("Continental");3 and Hartford Accident and Indemnity Company ("Hartford"). Appellants brought claims against appellees for negligent misrepresentation, fraudulent misrepresentation, and fraud by concealment. Specifically, appellants claim that the appellees fraudulently obtained the settlement by intentionally misrepresenting the extent of MCIC's available insurance coverage, and that the appellees knew that their misrepresentations regarding the available coverage were false.
In August 2012, appellees filed motions for summary judgment, arguing that appellants' claims were time-barred pursuant to the three-year statute of limitations in Maryland Code (1973, 2013 Repl. Vol.) § 5–101 of the Courts and Judicial Proceedings Article ("CJP").4 Appellees argued, inter alia , that appellants were on inquiry notice of their claims as early as 1997 or 1998, shortly after this Court published its opinion in
Commercial Union Ins. Co. v. Porter Hayden Co. , 116 Md.App. 605, 698 A.2d 1167 (1997), cert. denied , 348 Md. 205, 703 A.2d 147 (1997).
On November 20, 2012, the circuit court dismissed appellants' claims on the basis that they were time-barred. Appellants present several questions for our review,5 which we have rephrased as follows:
1. Did the circuit court err in finding that, as a matter of law, the appellants' claims were barred by the statute of
limitations because appellants were on inquiry notice of the misrepresentations as early as 1997?
2. Did the circuit court err in granting summary judgment without permitting appellants to conduct additional discovery?
We answer the first question in the negative, and need not decide the second. Accordingly, we affirm the judgment of the circuit court.
FACTUAL AND PROCEDURAL BACKGROUND
Appellants Litigate Abate I while MCIC and Its Insurers Pursue Settlement
MCIC, which was founded in 1934, sold and installed asbestos insulation products. By the early 1970s, it was clear that asbestos was hazardous, and MCIC ceased selling and installing asbestos-containing products in approximately 1973.
In the late 1980s, several law firms, including those representing appellants, collectively filed several thousand lawsuits against MCIC asserting personal injury claims resulting from exposure to asbestos-containing products. In April 1990, the cases of 8,555 plaintiffs were consolidated for trial ("Abate I ").
While the Abate I lawsuit was pending, MCIC and its insurers pursued settlement of the lawsuits against MCIC. On February 14, 1992, MCIC's attorney, John Nagle III, Esq. ("Nagle"), wrote a letter to LOPA attorney Thomas Friedman, Esq. ("Friedman"), with an attached schedule of all available insurance policies sold to MCIC. The schedule contained a note claiming that the list was prepared by USF & G on behalf of MCIC, and the information provided was "based primarily on secondary evidence of coverage." The schedule also contained two columns under the heading "products coverage," one listing "per person limit[s]," and the other listing "per occurrence limit[s]." Framing the settlement discussion in terms of available "products coverage" had, as we will explain, a significant impact on the amount of coverage appellants received in settlement, as well as on the eventual causes of action in this case.
On February 27, 1992, Friedman responded, submitting a total demand of $19,527,900. Mr. Friedman concluded his letter saying:
From the insurance information you supplied, it appears that your client may, in a best case scenario, not have
sufficient insurance coverage to satisfy our demand. Under these circumstances, we are prepared to recommend in settlement of all our claims the total amount of your insurance coverage. It is imperative, therefore, that you determine as expeditiously as possible the exact amount of insurance coverage and that our tender is submitted to your principal.6
(Emphasis added). Notably, Friedman recommended seeking all available coverage, and not just "products coverage."
On July 8, 1992, the jury found MCIC strictly liable for asbestos-related injuries suffered by foreseeable users and foreseeable bystanders.7 Settlement discussions pertaining to damages ensued, with counsel for MCIC repeatedly stating that there were "limited assets available to MCIC," and that bankruptcy proceedings or a settlement with another claimant could likely impact the amount appellants could recover.
On December 7, 1992, Nagle sent a letter to Friedman enclosing a revised schedule of insurance (dated November 6, 1992) that was, in most respects, identical to the earlier version. The schedule identified the "per person" and "per occurrence" limits as "products coverage." Nagle indicated that he was providing the information "as it [was] related to [him] by USF & G," noting that "no physical copies of policies of insurance exist with respect to coverage provided to MCIC by its various insurers over the decades," and explaining that "the policies were disposed of prior to the time when MCIC
was first named as a defendant," and "[a]ll reasonable efforts have been made to locate such policies."
The 1994 Settlement Agreement
On September 14, 1993, Baltimore City Circuit Court Administrative Judge Joseph H.H. Kaplan held a conference to discuss settlement. Nagle had requested the conference so that MCIC could propose to pay approximately $13 million, all of MCIC's remaining insurance coverage, to settle all of the cases pending against MCIC. At the conference, appellants' attorneys requested all of the policies that the insurers had ever issued to MCIC, but counsel for the insurers claimed that the policies could not be produced for review. Nagle insisted that the approximately $13 million offer represented MCIC's remaining insurance assets. Appellants' counsel insisted on reviewing the policies before accepting any settlement, and Judge Kaplan instructed the insurers to provide whatever policy documents they possessed in anticipation of future settlement discussions.
The Nagle Documents
On October 15, 1993, Nagle sent a letter to appellants' counsel with "insurance coverage documents" attached, which he indicated were "recently provided to [him] by the respective carriers of MCIC, Inc."8 We shall refer to these documents as the "Nagle Documents." The letter stated that Royal had not yet provided him with policy information, but that he would deliver those documents once he received them. The letter also included two tables which summarized the "limits of each carrier and
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