Partnership Placements v. LANDMARK INS.

• Decision Date: 30 December 1998
• Docket Number: No. 95-CV-1682, No. 97-CV-654.
• Citation: 722 A.2d 837
• Parties: PARTNERSHIP PLACEMENTS, INC., et al., Appellants, v. LANDMARK INSURANCE COMPANY, Appellee.
• Court: D.C. Court of Appeals

722 A.2d 837

PARTNERSHIP PLACEMENTS, INC., et al., Appellants, v. LANDMARK INSURANCE COMPANY, Appellee.

Nos. 95-CV-1682, 97-CV-654.

District of Columbia Court of Appeals.

Argued February 20, 1998.

Decided December 30, 1998.

Robert M. Gilchrest, Los Angeles, CA, with whom Michael P. Gurdak, Washington, DC, Lester O. Brown, Los Angeles, CA, and Steven J. Mintz, Washington, DC, were on the brief, for appellants.

Steven R. Migdal, Annapolis, MD, for appellee.

Before TERRY and RUIZ, Associate Judges, and KING, Senior Judge.¹

TERRY, Associate Judge:

Appellants² filed a complaint against appellee Landmark Insurance Company after Landmark refused to defend certain parties in a lawsuit filed against them in 1987.³ The trial court, ruling that appellants' claims were barred by the statute of limitations, granted summary judgment in favor of Landmark. Appellants noted an appeal (No. 95-CV-1682), which was fully briefed by both sides and placed on the calendar for oral argument. Three days before the date on which the case was to be heard, appellants filed a motion to postpone the argument so that they might file a motion in the trial court to vacate the judgment under Super. Ct. Civ. R. 60(b). We granted the request for postponement (quite reluctantly, because it came so late), and appellants filed their Rule 60(b) motion. The trial court denied it on the ground that it was untimely, and appellants noted a second appeal (No. 97-CV-654), which we consolidated with the first. Before this court appellants make four arguments. First, they contend that Landmark waived the statute of limitations. Second, they argue that Landmark is estopped from raising the statute of limitations as a defense. Third, they maintain that Landmark acknowledged a duty of coverage under D.C.Code § 28-3504 (1996), thereby removing the case from the statute of limitations. Finally, they contend that the court erred in denying their Rule 60(b) motion. We reject all four arguments and affirm both the summary judgment and the denial of the Rule 60(b) motion.

I. FACTUAL BACKGROUND

In 1986 Landmark issued an insurance policy to the National Investment Development Corporation ("NIDC")⁴ providing general liability coverage for 132 properties throughout the United States from January 1, 1986, to January 1, 1987.⁵ One of the properties covered by the policy was the Tyler House Apartments, located in the District of Columbia. On March 3, 1987, a group of Tyler House tenants filed a multicount complaint⁶ in the Superior Court of the District of Columbia ("the Tyler House litigation") against Tyler House Apartments, Ltd. ("THAL"), Partnership Investor Services, Inc. ("PISI"), Beltway Management Company ("Beltway"), and two individuals, Stephen D. Moses and John L. Wagner. THAL and PISI subsequently declared bankruptcy,⁷ and the case was eventually settled.

On March 19, 1987, sixteen days after the complaint was filed, NIDC notified Landmark of the Tyler House litigation and requested coverage under the general liability policy. Mark Heath, Landmark's litigation supervisor, denied coverage and any duty to defend in a letter dated June 3, 1987.

More than two years later, on July 14, 1989, Beltway filed a complaint against Landmark in the United States District Court for the District of Columbia ("the Beltway litigation") seeking a declaratory judgment that Landmark had a duty to defend it under the same policy that is at issue in this case.⁸ On September 19, 1990, the court ruled in favor of Beltway, holding that Landmark indeed had such a duty. Beltway Management Co. v. Lexington-Landmark Insurance Co., 746 F.Supp. 1145 (D.D.C.1990).

Apparently prompted by that decision, Scott Carr, who at that time was counsel for NIDC and all six appellants, telephoned Mark Heath on November 6, 1990, to request coverage once again for the Tyler House litigation. In that conversation, according to Carr's affidavit, Heath told Carr that Landmark would provide defense costs to appellants and seek contribution from other insurers. However, after Carr sent Heath two letters attempting to confirm these statements, Heath retreated from his position and wrote in a letter dated December 4, 1990, that Landmark would deny coverage to Ross and Rozet but that it might have a duty to defend NIDC, PISI, and Stephen Moses.⁹ At the same time, Heath noted that those parties also had other insurance policies that would cover the Tyler House litigation. On August 21, 1992, Landmark issued a check payable to NIDC in the amount of $50,000. The words "good faith payment of legal expenses" appear on the face of the check.

In the meantime, Heath contacted other insurance companies to seek contribution from them. When those carriers refused to contribute, Heath asked Steven Migdal, counsel for Landmark, to draft a complaint against them, seeking a declaratory judgment that the other carriers were liable for their pro rata share in defending the Tyler House litigation. The complaint was drafted sometime in 1991, but it was never filed. Later, after the present suit began, appellants sought to depose Mr. Migdal in order to obtain more information about the draft complaint. However, after hearing testimony from Mr. Migdal on May 19, 1995, that he did not recall either writing the complaint or sending it to anyone,¹⁰ the Circuit Court for Anne Arundel County, Maryland, issued a protective order barring the deposition. Some time thereafter Mr. Migdal was deposed in a case that was pending in California.¹¹ In the course of that deposition, he admitted that he took part in preparing the draft complaint. Migdal also testified in the California trial.

On June 1, 1995, appellants deposed Mark Heath. Because Heath said during his deposition that certain documents were missing from his claim file, appellants requested discovery of his complete file activity notes on June 6. On June 22 Landmark sent Heath's notes, partially redacted to exclude privileged material, to counsel for appellants. They did not object to the omissions from the notes until the complete unredacted notes surfaced in 1996 in the California litigation. According to an affidavit from Philip Cook, counsel for appellants in the California case, Landmark provided him with a full copy of the notes. Some of the portions which had been redacted in the District of Columbia litigation (the instant case) revealed that Landmark recognized it had a duty to defend appellants in the Tyler House litigation.¹²

II. THE SUMMARY JUDGMENT

Landmark filed a motion for summary judgment, asserting inter alia that appellants' claims were barred by the statute of limitations.¹³ After a hearing, the trial court granted the motion. The court ruled that the three-year statute of limitations on a claim for breach of an insurance contract begins to run when the insured receives notice of rejection of a claim under the policy. Landmark had denied coverage on June 3, 1987, in Mr. Heath's letter. The court therefore concluded that any action against Landmark should have been filed by June 3, 1990. Because appellants did not file suit against Landmark until September 2, 1994, the court held that their complaint was barred by the statute of limitations.

The trial court rejected appellants' contentions that Landmark was estopped from raising the statute of limitations and that Landmark had acknowledged a duty to provide coverage. First, the court concluded that there was no estoppel because appellants had not shown any misleading conduct that occurred before the statute of limitations expired.¹⁴ Second, the trial court concluded that none of the writings proffered by appellants were sufficient under D.C.Code § 28-3504 to serve as an acknowledgment of liability.

Under Super. Ct. Civ. R. 56(c), a trial court may grant summary judgment only if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. See, e.g., Colbert v. Georgetown University, 641 A.2d 469, 472 (D.C.1994) (en banc)

. Although this court conducts its own independent review of the record, we apply the same substantive standard as the trial court. "Accordingly, we review the record in the light most favorable to the party opposing the motion and resolve against the moving party any doubts about the existence of a material factual dispute." Noonan v. Williams, 686 A.2d 237, 244 (D.C. 1996) (citation omitted).

It is undisputed that appellants did not file their complaint within the three-year limitation period prescribed by statute for claims of this kind. D.C.Code § 12-301(7) (1995); see Dillard v. Travelers Insurance Co., 298 A.2d 222, 224 (D.C.1972)

; Fowler v. A & A Co., 262 A.2d 344, 347 (D.C.1970). Nevertheless, appellants contend that their claims are not barred because Landmark waived the statute of limitations, because it is estopped from asserting the defense,¹⁵ and because it acknowledged a duty to defend, thereby removing the case from the statute of limitations.

A. Did Landmark waive the statute of limitations?

"Under modern law, a waiver of the affirmative defense of the statute of limitations means to abandon, renounce, repudiate, or surrender the privilege or right under such statute of limitations." 1 C. CORMAN, LIMITATION OF ACTIONS, at 175 (1991).¹⁶ In cases in which a party alleges waiver of a limitation period by an insurance carrier, "[t]he general rule is that [the] insurance company is not deemed to have waived [the] period ... unless the company has conceded liability and some discussion of a settlement offer has occurred." Bailey v. Greenberg, 516 A.2d 934, 938-939 (D.C.1986) (footnote omitted); see Toomey v. Cammack, 345 A.2d 453, 455 n. 6 (D.C.1975)

.¹⁷

Appellants rely on several documents and a conversation to support their claim that Landmark waived the statute of limitations: (1) the November 6, 1990, telephone conversation between Scott Carr and Mark Heath; (2) the December 4, 1990, letter from Heath to Carr; (3...