Liberty Marina Limited Partnership et al v. Hanover Insurance Company

Filing 35

MEMORANDUM AND ORDER denying without prejudice Defendant's 12 Motion to Dismiss; denying as moot Plaintiff's 18 Motion to Strike; denying as moot Plaintiff's 19 Motion for Leave to File an Opposition; denying as moot Defendant's 31 Motion to Rescind; entering an abbreviated and expedited SCHEDULING ORDER. Signed by Judge Ellen L. Hollander on 3/2/2015. (dass, Deputy Clerk)

United States District Court
District Of Maryland
Chambers of
Ellen Lipton Hollander
District Court Judge

101 West Lombard Street
Baltimore, Maryland 21201
410-962-0742

March 2, 2015
MEMORANDUM TO COUNSEL
Re:

Liberty Marina Limited Partnership et al. v. Hanover Insurance Company
Civil Action No. ELH-14-2595

Dear Counsel:
As you know, plaintiffs Liberty Marina Limited Partnership (“Liberty Marina”) and
Liberty Yacht Club, Inc. (“Liberty Yacht Club”) filed suit against defendant Hanover Insurance
Company (“Hanover”), see ECF 2 (“Complaint”), to recover for damage to a marina in
Edgewater, Maryland, pursuant to an insurance policy issued by Hanover. Id. ¶ 1. In particular,
the Complaint includes three counts: Breach of Contract (Count I); Lack of Good Faith (Count
II); and “Declaratory Judgment Appraisal” (Count III).1 Id. ¶¶ 25-51.
Defendant filed a “Motion to Dismiss” (ECF 12), supported by a memorandum of law
(ECF 12-1) (ECF 12 and ECF 12-1 are hereafter collectively referred to as “Motion to Dismiss”).
Hanover also filed three exhibits (ECF 12-2 through ECF 12-4). In particular, defendant
represented that ECF 12-2, the “Marine Schedule of Coverages”, and ECF 12-3, the
“Commercial Marina Conditions”, are part of the insurance policy at issue in this case (ECF 122 and ECF 12-3, collectively, “First Policy”).2 See ECF 12-1 ¶¶ 3, 7. Plaintiffs opposed the
Motion to Dismiss (ECF 14, Opposition), supported by ten exhibits. See ECF 14-1 through ECF
14-10. Defendant replied (ECF 17, “Reply”).3 In the Reply, defendant stated, ECF 17 at 1
(internal citation omitted):
As an initial matter, Hanover supplements and amends its Motion to
Dismiss by attaching a complete and correct certified policy of insurance
applicable to this matter. Plaintiffs were previously provided with an incorrect
copy of their policy, which was erroneously attached to and cited in Hanover’s
Motion to Dismiss. Hanover apologizes to Plaintiffs and to the Court for this
inadvertent oversight.
1

Suit was filed in the Circuit Court of Anne Arundel County and was removed to this
Court by defendant based on diversity of citizenship. See 28 U.S.C. § 1332(a); ECF 1.
2

The third exhibit submitted by defendant is a letter from James W. Wood, Executive
General Adjuster for Hanover, dated June 20, 2014. See ECF 12-4.
3

Plaintiffs also filed a Motion to Remand (ECF 15), which defendant opposed (ECF 16).
The Motion to Remand remains pending.

As defendant indicated, it attached to its Reply a new, purportedly complete and
operative insurance policy (ECF 17-1, “Second Policy). The document consists of 176 pages.
ECF 17-1. Significantly, with respect to several of the schedules at issue in this case, there
appear to be material differences between the First Policy and the Second Policy submitted by
defendant. See ECF 17-1; ECF 12-2; ECF 12-3.
As a result of defendant’s misstep, several disputes have arisen between the parties as to
the operative policy and the extent to which plaintiffs should be afforded an additional
opportunity to reply to the Motion to Dismiss, given Hanover’s submission of a new policy. In
particular, plaintiff filed a “Motion to Strike the Policy of Insurance Attached to Defendant’s
Supplement to and Reply in Support of Motion to Dismiss as it has not been Proffered to the
Court with an Appropriate Affirmation” (ECF 18, “Motion to Strike”). Plaintiffs also filed a
“Motion and Request for Leave to File Opposition to ‘Hanover Insurance Company’s
Supplement to and Reply in Support of Motion to Dismiss’” (ECF 19, “Motion for Leave to File
an Opposition”). Plaintiff’s Motion to Strike (ECF 18) and Motion for Leave to File an
Opposition (ECF 19) are supported by the same memorandum of law (ECF 20) and thirteen
exhibits (ECF 20-2 through ECF 20-14). Defendant opposed the Motion for Leave to File an
Opposition (ECF 22).
Hanover also filed a “Motion to for Leave to File a Sur Reply [sic] to the Extent That the
Memorandum Filed on November 13, 2014, is Deemed to Go Beyond a Reply to the Motion to
Strike” (ECF 25, “Motion for Leave to File Sur Reply”). By Order dated November 17, 2014
(ECF 27), I granted the Motion for Leave to File Sur Reply to provide the plaintiffs with an
opportunity to respond to arguments in connection with the Second Policy. I also stated:
“[D]efendant may move to rescind this Order on the ground that it was improvidently granted.”
ECF 27 at 1.
On November 24, 2014, defendant filed a “Request to Rescind This Court’s November
17, 2014 Order” (ECF 31, “Motion to Rescind”). Hanover asked the Court to reconsider its
decision to grant plaintiffs leave to file a surreply.
Plaintiffs’ Motion to Strike (ECF 18), plaintiffs’ Motion for Leave to File an Opposition
(ECF 19), and defendant’s Motion to Rescind (ECF 31) are now pending.
The threshold question raised by defendant’s Reply and the motions that followed is
which insurance policy controls. Defendant insists that the Second Policy is operative, ECF 17
at 1, while plaintiffs dispute its authenticity, ECF 20 at 7, and contend that the First Policy
governs. ECF 28 at 5. In plaintiffs’ view, given the uncertainty with respect to which policy
applies, “[they] should be afforded reasonable discovery before the court acts on [defendant’s
Motion to Dismiss, which] is now a motion for summary judgment.” ECF 20 at 8.
In evaluating the sufficiency of a complaint in connection with a Rule 12(b)(6) motion, a
court ordinarily “may not consider any documents that are outside of the complaint, or not
expressly incorporated therein . . . .” Clatterbuck v. City of Charlottesville, 708 F.3d 549, 557
(4th Cir. 2013); see Bosiger v. U.S. Airways, 510 F.3d 442, 450 (4th Cir. 2007). However, a

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court may properly consider documents incorporated into the complaint or attached to the motion
to dismiss, ‘“so long as they are integral to the complaint and authentic.’” U.S. ex rel. Oberg v.
Pennsylvania Higher Educ. Assistance Agency, 745 F.3d 131, 136 (4th Cir. 2014) (quoting
Philips v. Pitt Cty Memorial Hosp., 572 F.3d 176, 180 (4th Cir. 2009)); see Anand v. Ocwen
Loan Servicing, LLC, 754 F.3d 195, 198 (4th Cir. 2014); Am. Chiropractic Ass’n v. Trigon
Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004), cert. denied, 543 U.S. 979 (2004); Phillips
v. LCI Int’l Inc., 190 F.3d 609, 618 (4th Cir. 1999)).
Here, as indicated, plaintiffs have contested the authenticity of the Second Policy. ECF
20 at 7. Therefore, in ruling on the Motion to Dismiss, in order to consider the Second Policy
and any documents submitted by the parties to establish or contest its authenticity, I must convert
the Motion to Dismiss to one for summary judgment. See Fed. R. Civ. P. 12(d).
Ordinarily, summary judgment is inappropriate “where the parties have not had an
opportunity for reasonable discovery.” E. I. du Pont de Nemours & Co. v. Kolon Indus., Inc.,
637 F.3d 435, 448 (4th Cir. 2011). To raise adequately the issue that discovery is needed, the
non-movant typically must file an affidavit or declaration pursuant to Rule 56(d) (formerly Rule
56(f)), explaining why, “for specified reasons, it cannot present facts essential to justify its
opposition” without needed discovery. Fed. R. Civ. P. 56(d); see Harrods Ltd. v. Sixty Internet
Domain Names, 302 F.3d 214, 244-45 (4th Cir. 2002) (discussing affidavit requirement of
former Rule 56(f)). And, “[i]n response, the district court may defer consideration of the
summary judgment motion, deny the motion, or ‘issue any other appropriate order.’” McCray v.
Maryland Dep’t of Transp., 741 F.3d 480, 483 (4th Cir. 2014) (quoting Fed. R. Civ. P. 56(d)).
Notably, “‘Rule 56(d) affidavits cannot simply demand discovery for the sake of
discovery.’” Hamilton v. Mayor & City Council of Baltimore, 807 F.Supp.2d 331, 342 (D. Md.
2011) (quoting Young v. UPS, No. D KC–08–2586, 2011 WL 665321, at *20 (D. Md. Feb. 14,
2011), aff’d., 707 F.3d 437 (4th Cir. 2013), cert. granted, ____ U.S. ____, 134 S.Ct. 2898
(2014)). Indeed, a non-moving party’s Rule 56 request for additional discovery is properly
denied “where the additional evidence sought for discovery would not have by itself created a
genuine issue of material fact sufficient to defeat summary judgment.” Strag v. Bd. of Trs.,
Craven Cmty. Coll., 55 F.3d 943, 954 (4th Cir. 1995).
In this case, plaintiffs never filed an affidavit under Rule 56, explaining the need to
conduct discovery. Moreover, the Fourth Circuit has placed “great weight” on the Rule 56(d)
affidavit and has said that a mere “‘reference to Rule 56(f) [now Rule 56(d)] and the need for
additional discovery in a memorandum of law in opposition to a motion for summary judgment
is not an adequate substitute for [an] affidavit.’” Harrods, 302 F.3d at 244 (quoting Evans v.
Technologies Applications & Serv. Co., 80 F.3d 954, 961 (4th Cir. 1996) (quotation omitted)).
Nevertheless, the Court has “not always insisted on a Rule 56(d) affidavit.” Harrods,
302 F.3d at 244 (citations omitted). Failure to file an affidavit may be excused “if the
nonmoving party has adequately informed the district court that the motion is premature and that
more discovery is necessary” and the “nonmoving party’s objections before the district court
‘served as the functional equivalent of an affidavit.’ ” Id. at 244-45 (internal citations omitted).
Simply stated, the non-moving party’s failure to file a Rule 56(d) affidavit does not obligate a

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district court to issue a summary judgment ruling that is premature. Indeed, if the nonmoving
party makes objections that satisfy the purpose of an affidavit,” it may not need to file a Rule
56(f) affidavit. Id. at 245.
Notwithstanding the absence of a Rule 56 affidavit here, I am satisfied that it is premature
to rule on the defendant’s Motion to Dismiss, given the dispute as to which insurance policy
governs. Therefore, defendant’s Motion to Dismiss (ECF 12) will be DENIED, without
prejudice.
As a result, I will also DENY as moot plaintiff’s Motion to Strike (ECF 18), plaintiff’s
Motion for Leave to File an Opposition (ECF 19), and defendant’s Motion to Rescind ECF (ECF
31).
The abbreviated and expedited schedule below will govern. Each side will be entitled to
12 hours of depositions.
The following Scheduling Order is hereby entered:
DEADLINES
March 16, 2015:

Deadline for requests for modification of initial
Scheduling Order

March 23, 2015:

Plaintiffs’ Rule 26(a)(2) disclosures

March 30, 2015:

Defendant’s Rule 26(a)(2) disclosures

April 6, 2015:

Plaintiffs’ rebuttal Rule 26(a)(2) disclosures

April 13, 2015:

Rule 26(e)(2) supplementation of disclosures and
responses

April 20, 2015:

Discovery deadline; submission of status report

May 8, 2015:

Requests for admission

June 8, 2015:

Dispositive pretrial motions deadline

Despite the informal nature of this Memorandum, it is an Order of the Court and the
Clerk is directed to docket it as such.
Very truly yours,
/s/
Ellen Lipton Hollander
United States District Judge

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