Chartis Property Casualty Company v. Huguely
Filing
86
MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 3/20/2017. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
CHARTIS PROPERTY CASUALTY CO.
:
v.
:
Civil Action No. DKC 13-1479
:
GEORGE W. HUGUELY, V, ET AL.
:
MEMORANDUM OPINION
Presently
pending
and
ready
for
resolution
in
this
declaratory judgment action is a motion for summary judgment
filed
by
Plaintiff
(“Plaintiff”).
Chartis
(ECF No. 64).
Property
Casualty
Company
The issues have been briefed and
a hearing was held on January 10, 2017.
For the following
reasons, the motion for summary judgment will be granted.
I.
Background1
This case involves the intersection of three actions in
which George W. Huguely, V (“Defendant”) is the defendant: a
criminal case, a civil case, and this insurance coverage case.
A.
Criminal Case
Early on the morning of May 3, 2010, one of Yeardley Love’s
roommates
found
her
dead
in
her
bedroom.
Commonwealth, 63 Va.App. 92, 99-100 (2014).
Huguely
v.
Defendant, who had
dated Yeardley Love “on and off” for years, had been drinking
1
Unless otherwise noted, the facts outlined here are
undisputed or construed in the light most favorable to
Defendant, the non-moving party.
alcohol heavily on May 2 and went to her house late that night.
Id. at 99, 101.
He admitted to police that he kicked a hole in
her bedroom door to gain access to her room, had a physical
altercation with her during an argument, and left her bleeding
on her bed.
Id. at 102 n.4.
In a 2012 trial, a jury in the
Circuit Court for the City of Charlottesville, Virginia found
Defendant responsible for her death and guilty of second degree
murder.
Id. at 105.
After his trial, Defendant petitioned for appeal of his
conviction
to
the
Court
of
Appeals
of
Virginia
on
numerous
grounds, and the Court of Appeals granted Defendant’s petition
on several procedural issues.
(ECF Nos. 24-2; 24-3).
The Court
of Appeals later affirmed Defendant’s conviction, Huguely, 63
Va.App. at 131, and, subsequently, the Supreme Court of Virginia
and
the
Supreme
Court
of
the
United
Defendant’s petitions for review.
a
Writ
of
Defendant has since
the
Charlottesville court where his trial was originally held.
(ECF
B.
for
denied
in
No. 73-2).
Petition
each
(ECF No. 64-6); Huguely v.
Virginia, 136 S.Ct. 119 (2015) (mem.).
filed
States
Habeas
Corpus
The post-conviction proceedings are ongoing.
Civil Case
On April 26, 2012, interested party Sharon D. Love (“Ms.
Love”), as administrator of the estate of Yeardley Love, brought
a civil suit against Defendant in the Circuit Court for the City
2
of
Charlottesville.
alleges
that
Love’s
(ECF
Defendant
injuries
and
No.
was
1-1).
the
death.
Her
proximate
(ECF
No.
amended
cause
1-2,
complaint
of
at
Yeardley
4).
The
alternative counts of the complaint include ordinary negligence,
“gross negligence – indifference and acting with utter disregard
of
caution,”
“willful
and
wanton
negligence
–
acting
with
conscious disregard and reckless indifference,” “assault and/or
battery,” and punitive damages.
(Id. at 4-9).
Based on section
8.01-419 of the Virginia Code, the suit alleges Yeardley Love
had a life expectancy of another 58.9 years and seeks nearly
thirty million dollars in compensatory damages and an additional
one million dollars in punitive damages.
(Id. at 10-11).
In
November 2015, the circuit court stayed its proceedings to allow
this court to act in the instant insurance coverage case, but
some discovery between those parties has continued.
73-4, at 2-3).
Trial is now set for July 2018.
(ECF No.
(See Case No.
DKC-13-3088, ECF No. 25, at 6).
C.
Insurance Case
The
case
in
this
court
concerns
whether
Plaintiff,
an
insurance company, is contractually obligated to defend and to
indemnify Defendant in the Civil Case.
Murphy
and
Andrew
Murphy,
III,
Interested parties Marta
Defendant’s
mother
father (together with Defendant, “Respondents”),
homeowners’
insurance
policy
and
3
an
excess
and
step-
purchased a
insurance
policy
(together, “the Policies”) from Plaintiff.
(ECF No. 1 ¶ 24).2
The Policies include broad indemnification provisions that state
that Plaintiff “will pay damages an insured person is legally
obligated
to
pay
for
personal
injury
.
.
.
caused
by
an
occurrence covered by this policy . . . unless stated otherwise
or an exclusion applies.”
(ECF No. 64-8, at 15).
In addition
to indemnity, the Policies agree to “pay the costs to defend an
insured person against any suit seeking covered damages . . .
even if the suit is false, fraudulent or groundless.”
(Id.).
After Ms. Love filed her complaint in the Civil Case, Plaintiff
acknowledged Defendant’s claim for coverage in that case and
told Defendant that it would provide coverage pursuant to a
reservation of its rights under the Policies.
(ECF No. 59 ¶
54).
Plaintiff
then
began
an
investigation
of
the
matter
determine its contractual obligations under the Policies.
¶¶ 55-64).
to
(Id.
Plaintiff sought to examine Defendant under oath,
but he has refused to submit to such an examination, asserting
his Fifth Amendment right against self-incrimination.
80-87).
2
(Id. ¶¶
After Defendant’s counsel in the Criminal Case told
The homeowners’ insurance policy and the excess insurance
policy were both in effect from January 25, 2010, until January
25, 2011. (ECF No. 59 ¶¶ 28, 41). Where the two policies use
essentially the same language, they are considered together and
referred to as “the Policies” in this opinion. Where there are
relevant differences to the provisions in each policy, each
policy is identified individually.
4
Plaintiff that Defendant would “decline any visit or contact
with representatives” from Plaintiff, it initiated this suit,
naming Respondents and Sharon Love as interested parties and
seeking
a
declaratory
judgment
that
it
was
not
required
to
defend or to indemnify Defendant in the Civil Case under either
of
the
Policies.
(ECF
No.
1).
Plaintiff
alleged
that
Defendant’s refusal to cooperate with its investigation violated
a provision of the Policies setting out the insured’s duties
after a loss.
The homeowners’ insurance policy requires an
insured to “[s]ubmit to a separate examination under oath” “as
often
as
[Plaintiff]
homeowners’ and
reasonably
require[s],”
and
both
the
excess insurance policies require an insured to
“[a]ssist and cooperate with [Plaintiff] in the conduct of the
defense by helping [it] . . . [t]o secure and give evidence and
obtain
the
attendance
of
witnesses.”
(Id.
¶¶
36,
49).
Plaintiff has claimed that Defendant’s refusal to submit to an
examination constituted a material breach of the Policies and
resulted in actual prejudice to its ability to identify defenses
to
its
coverage
Defendant’s
obligations,
residency
and
which
provisions
included
in
the
issues
over
Policies
that
exclude coverage for intentional or criminal acts.
(Id. ¶¶ 54-
60).
Plaintiff
moved
for
complaint on July 3, 2013.
summary
judgment
(ECF No. 8).
5
on
its
original
Respondents moved to
deny or defer consideration of that summary judgment motion (ECF
No. 25), and, at the same time, moved to stay the case pending
the outcome of Defendant’s appeal in the Criminal Case (ECF No.
24).
No.
Respondents’ motion to stay was joined by Ms. Love.
28).
The
proceedings
Virginia
court
pending
Court
of
granted
his
Respondents’
criminal
Appeals
had
appeal
accepted
motion
because:
multiple
to
(ECF
stay
(1)
the
issues
for
appellate review in the Criminal Case, (2) the Insurance Case
could benefit from the factual development in the Criminal Case,
and (3) the court in the Civil Case appeared likely to stay that
case.
(ECF No. 36, at 7-10).
Among the reasons favoring the
stay, the court noted that “resolution of the Criminal Case may
clarify the issues for which [Plaintiff] is claiming relief:
[Defendant’s] criminal acts could become a reason for denying
coverage.”
On
direct
(Id. at 10).
January
appeals
reopened.
5,
in
2016,
his
(ECF No. 56).
after
Defendant
criminal
had
proceedings,
exhausted
this
case
all
was
Plaintiff’s unopposed motion for leave
to amend its complaint was granted.
Plaintiff added two new
counts seeking a declaratory judgment that it was not required
to defend or to indemnify Defendant under either policy because
the Civil Case resulted from his commission of a criminal act.
(ECF No. 59).
does
not
Under the homeowners’ insurance policy, coverage
extend
to
personal
injuries
6
“resulting
from
any
criminal, willful, intentional or malicious act,” and, under the
excess insurance policy, coverage does not extend to injuries
“[a]rising out of any criminal, willful, fraudulent, dishonest,
intentional,
or
malicious
(Id. ¶¶ 39, 52).3
act”
(together,
“the
Exclusions”).
Plaintiff then filed the instant motion for
summary judgment, arguing that the Exclusions and Defendant’s
failure to cooperate each provide an independent basis to deny
(ECF No. 64).4
coverage.
opposition,
After
and
reviewing
parties
with
Plaintiff
the
some
Respondents and Ms. Love responded in
replied.
motion
papers,
tentative
(ECF
Nos.
the
court
conclusions
supplemental briefing on several issues.
73;
75;
provided
and
76).
the
requested
(ECF No. 79).
On
January 10, 2017, the court held a joint hearing on the instant
motion and a motion for summary judgment in case DKC-13-3088 by
3
Neither party has argued that the terms “resulting from”
and “arising out of” are materially distinct or that the two
exclusions should be treated differently with regard to criminal
acts.
The two exclusions are thus considered together in this
opinion.
4
Although it does not challenge the issue in this motion,
Plaintiff has reserved the right to challenge whether Defendant
qualifies as an “insured person” under the Policies.
An
“insured person” is defined as “[the persons named in the
Policies] or a family member,” and a “family member” is defined
as “a person related to [the named insured] by blood, marriage
or adoption that lives [with the named insured].”
Plaintiff
notes that Defendant’s refusal to answer questions under oath
has prevented it from being able to determine his residency as
it relates to this provision of the Policies.
(ECF No. 59 ¶¶
62-64). Respondents have refuted this contention, pointing out
that both Mr. and Mrs. Murphy have been deposed by Plaintiff.
(ECF No. 73, at 20).
7
State Farm Fire and Casualty Company, which provided another
insurance policy to Mr. Murphy under which Defendant has claimed
coverage as an insured.
II.
(See Case No. DKC-13-3088, ECF No. 1).
Standard of Review
A motion for summary judgment will be granted only if there
exists no genuine dispute as to any material fact and the moving
party
is
entitled
to
judgment
as
a
matter
of
law.
See
Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986);
Anderson
v.
Liberty
Lobby,
Inc.,
477
U.S.
242,
(1986); Emmett v. Johnson, 532 F.3d 291, 297 (4th Cir. 2008).
prevail
on
a
motion
for
summary
judgment,
the
moving
250
To
party
generally bears the burden of showing that there is no genuine
dispute as to any material fact.
248-50.
Liberty Lobby, 477 U.S. at
A dispute about a material fact is genuine “if the
evidence is such that a reasonable jury could return a verdict
for the nonmoving party.”
inquiry,
a
court
must
Id. at 249.
view
the
facts
In undertaking this
and
the
reasonable
inferences drawn therefrom “in the light most favorable to the
party
opposing
the
motion,”
Matsushita
Elec.
Indus.
Co.
v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting United
States v. Diebold, Inc., 369 U.S. 654, 655 (1962)); see also
EEOC v. Navy Fed. Credit Union, 424 F.3d 397, 405 (4th Cir.
2005), but a “party cannot create a genuine dispute of material
fact
through
mere
speculation
or
8
compilation
of
inferences.”
Shin v. Shalala, 166 F.Supp.2d 373, 375 (D.Md. 2001) (citation
omitted).
III. Applicable Law
In
diversity
actions,
a
district
court
applies
the
substantive law and choice of law rules of the state in which
the court sits.
Padco Advisors, Inc. v. Omdahl, 179 F.Supp.2d
600, 605 (D.Md. 2002) (citing Erie R.R. Co. v. Tompkins, 304
U.S. 64, (1938)).
In contract claims, Maryland applies the
doctrine of lex loci contractus, meaning that the law of the
place where the contract was made applies.
Hart, 327 Md. 526, 529 (1992).
Allstate Ins. Co. v.
“The locus contractus is the
place where the last act is performed which makes an agreement a
binding contract.”
241
Md.
delivery
Grain Dealers Mut. Ins. Co. v. Van Buskirk,
58,
65-66
of
the
(1965).
policy
In
and
constitute these “last acts.”
Mallick,
160
Md.
71,
81
an
the
insurance
payment
of
contract,
the
the
premiums
Id. (citing Sun Ins. Office v.
(1931)).
Plaintiff
has
provided
undisputed evidence that Respondents received the Policies at
their residence in Maryland.
(ECF No. 64-12, at 2).5
Therefore,
Maryland substantive law applies to the contract dispute here.
5
The Policies covered residences in both California and
Maryland and may have also been delivered to California.
(ECF
No. 64-12, at 2). Because all parties have applied Maryland law
in
their
papers
throughout
this
litigation
and
neither
Respondents nor Ms. Love disputes the fact that the Policies
were received in Maryland, Maryland law will be applied.
9
Maryland law does not, however, govern procedural rules in
this court, even when jurisdiction is based on diversity.
parties
failed
to
account
for
the
distinction
The
between
substantive law and procedural rules in their initial papers and
presented arguments based solely on Maryland law, which does not
govern certain aspects of the instant dispute, as noted below.
IV.
Denial of Coverage Based on a Criminal Act
In
Maryland,
insurance
policies
are
to
be
construed
pursuant to “ordinary principles of contract interpretation.”
Megonnell v. United Servs. Auto. Ass’n, 368 Md. 633, 655 (2002).
Thus, the words used in an insurance policy should be given
“their
“meaning
usual,
term.”
a
ordinary,
reasonably
and
prudent
accepted
layperson
meaning”
would
–
i.e.,
attach
to
the
the
Bausch & Lomb Inc. v. Utica Mut. Ins. Co., 330 Md. 758,
779 (1993).
Where the provisions of an insurance policy are
unambiguous, the meaning of the terms is determined by the court
as a matter of law.
Cole v. State Farm Mut. Ins. Co., 359 Md.
298, 305 (2000).
The two Exclusions bar coverage for liability “resulting
from any criminal, willful, intentional or malicious act” and
“[a]rising out of any criminal, willful, fraudulent, dishonest,
intentional,
or
malicious
act,”
respectively.
According
to
Plaintiff, “the exclusive basis of Sharon D. Love’s claims in
the Civil [Case] is the injury and harm caused by [Defendant] to
10
[Yeardley] Love that ultimately resulted in Love’s death.”
No. 64-1, at 13).
(ECF
Plaintiff is clearly correct that Ms. Love’s
suit “results from” and “arises out of” Defendant’s acts on the
night
of
Yeardley
Love’s
death.
Each
complaint is based on that incident.
36,
43,
48).
Respondents
count
of
Ms.
Love’s
(ECF No. 1-2 ¶¶ 19, 27,
themselves
admitted
that
the
allegations in Ms. Love’s complaint are based on “the same facts
and circumstances underlying [his] criminal proceedings.”
(ECF
No. 73, at 4).
Plaintiff’s basic argument for summary judgment is simple.
Plaintiff has introduced undisputed evidence that Defendant was
convicted
of
second
“Defendant’s
degree
conviction
murder.
for
Plaintiff
second
degree
contends
[murder]
.
that
.
.
establish[es] that his acts . . . in connection with Love’s
death were criminal in nature.”
the
Civil
Case
is
based
on
(ECF No. 64-1, at 18).
those
same
actions,
Because
Plaintiff
contends that any liability it will incur in the Civil Case
resulted from Defendant’s criminal act of second degree murder,
which means he is not entitled to coverage under the Policies.
A.
Duty to Pay Damages
1.
Interpreting the Exclusion
Whether the Plaintiff has a duty to pay damages in the
Civil Case thus depends on whether its evidence of what happened
that
night
–
namely,
Defendant’s
11
criminal
conviction
–
is
sufficient to show that he committed a criminal act under the
Policies.
Giving the words their ordinary meaning, a “criminal
act” is any act prohibited by a criminal law.
See Nationwide
Mut. Ins. Co. v. Jones, No. JFM-05-2792, 2006 WL 361336, at *4
(D.Md. Feb. 15, 2006) (interpreting a criminal acts exclusion to
mean an act “defined as criminal by Maryland law”); see also
Allstate Ins. Co. v. Burrough, 120 F.3d 834, 840 (8th Cir. 1997)
(interpreting a criminal acts exclusion to mean an act “defined
as criminal by the Arkansas Criminal Code”).
Although an issue
might arise if the criminal laws in the state where the act
occurred
differed
from
the
criminal
laws
of
the
state
of
insurance, both Maryland and Virginia criminalize second degree
murder and define it in the same way as pertinent to the conduct
underlying Defendant’s conduct.
Compare Md.Code Ann., Criminal
Law §2-204 (West 2002), with Va.Code Ann. § 18.2-32 (1998).6
Attempting to give significance to Defendant’s intoxication
on the night of Yeardley Love’s death, Ms. Love devotes a large
portion of her opposition to the motion for summary judgment to
arguing
that
criminal acts.
6
the
Exclusions
here
apply
only
to
intentional
In her view, even if the evidence shows that
Both states also reject voluntary intoxication as a
defense for second degree murder. See, e.g., Hook v. State, 315
Md. 25, 28-29 (1989); Wright v. Commonwealth, 234 Va. 627, 629
(1988). For this reason, Ms. Love’s arguments that Defendant’s
voluntary intoxication creates a dispute of fact over his intent
are not material to whether he committed the act of second
degree murder.
12
Defendant committed a crime, the Exclusions from coverage are
not triggered unless that criminal act was also intentional,
which,
she
further
argues,
cannot
be
proved
solely
by
Defendant’s conviction for second degree murder.
Ms.
Love
first
points
out
that
the
portions
of
the
Exclusions that mention criminal acts appear under the heading
“Intentional Acts.”
(ECF No. 75, at 13-15).
She also suggests
that the headings should be read continuously with the text
beneath them as a “complete thought” in the excess insurance
policy.
that
(Id. at 14).
exclusion
would
Applying this method, the language of
bar
coverage
for
an
[a]rising out of any criminal . . . act.”
“Intentional
(Id.).
Act
Finally,
reading the provisions of the Exclusions as part of the broader
contract, Ms. Love asserts that the Policies “clearly provide[]
coverage for unintentional or negligent acts – even if those
same acts also may happen to constitute a crime.”
(Id. at 11).
She points to Young v. Brown, 658 So.2d 750, 754 (La.Ct.App.
1995),
in
‘criminal
which
acts,’
a
Louisiana
as
used
court
in
stated
the
susceptible of more than one meaning.”
that
coverage
“[t]he
exclusion
term
is
The Young court held
that, despite the disjunctive text, an exclusion of coverage for
“the intentional or criminal acts of an insured person” required
that the criminal acts at issue be intentional as well.
No. 75, at 13-14).
(ECF
According to Ms. Love, the Exclusions are at
13
least ambiguous in the context of insurance law as to whether
intent is required, and, therefore, summary judgment cannot be
granted.
Plaintiff counters that an ambiguous title or heading does
not create ambiguity in the contract where it is followed by
clear specific language.
Bernhardt v. Hartford Fire Ins. Co.,
102 Md.App. 45, 55 (1994); see also Berretta USA Corp. v. Fed.
Ins.
Co.,
17
F.App’x
250,
(4th
255
Cir.
2001)
(unpublished
opinion).
It also asserts that Ms. Love’s “complete thought”
method
reading
to
the
contract
is
“nonsensical
and
unsupported by Maryland law.”
(ECF No. 76, at 13).
points
thought”
out
that
a
“complete
reading
of
entirely
Plaintiff
the
excess
insurance policy exclusion would perplexingly bar coverage for
an “Intentional Act [a]rising out of any . . . intentional . . .
act.”
(ECF No. 76, at 13).
In fact, a closer look at the
Policies shows that Ms. Love’s method fails to account for the
language prior to the numbered headings of excluded acts, which
states, “This insurance does not provide coverage for liability,
defense costs or any other cost or expense . . . .”
(ECF No.
64-11,
language
at
actually
15).
forms
provisions,
so
Read
complete
long
as
in
full
context,
thoughts
the
with
headings
this
each
are
not
prior
of
the
ensuing
included.
For
example, when read this way, the Exclusion in the excess policy
reads, “This insurance does not provide coverage for liability,
14
defense costs or any other cost or expense . . . [a]rising out
of any criminal, willful, fraudulent, dishonest, intentional, or
malicious act.”
method
makes
Looking at the other numbered headings, this
complete
sentences
without
complete gibberish with them inserted.
11,
at
15
(“This
insurance
does
the
headings
and
(See, e.g., ECF No. 64-
not
provide
coverage
for
liability, defense costs or any other cost or expense . . . 3.
Watercraft
[a]rising
operation,
loading
out
or
of
the
unloading
ownership,
of
any
maintenance,
watercraft
.
.
use,
.
.”
(emphasis added to heading)).
Furthermore, the vast majority of other courts either have
refused to follow the Young holding or independently ruled that
clauses that cover both intentional and criminal acts like the
one
here
do
not
require
intent
for
criminal
acts.
See
Littlefield v. Acadia Ins. Co., 392 F.3d 1, 8-12 (1st Cir. 2004);
Allstate Ins. Co. v. Brown, 16 F.3d 222, 225 (7th Cir. 1994);
Allstate Ins. Co. v. Burrough, 914 F.Supp. 308, 312 (W.D.Ark.
1996);
Allstate
Ins.
Co.
v.
Barnett,
816
F.Supp.
492,
497
(S.D.Ind. 1993); Hooper v. Allstate Ins. Co., 571 So.2d 1001,
1003
(Ala.
1990);
20th
Century
Ins.
Co.
v.
Schurtz,
112
Cal.Rptr.2d 547, 553-54 (Cal.Ct.App. 2001); Allstate Ins. Co. v.
Schmitt, 238 N.J.Super. 619, 630 (1990); Steinke v. Allstate
Ins. Co., 86 Ohio App. 798, 803-04 (1993); Allstate Ins. Co. v.
Sowers, 97 Or.App. 658, 660-61 (1989);
15
Allstate Ins. Co. v.
Peasley, 131 Wash.2d 420, 428-430 (1997).
The Young court also
suggested that any criminal acts exclusion – i.e. even one that
prohibited criminal acts alone as opposed to the “intentional or
criminal acts” clause at issue in that case – would not cover
unintentional criminal acts because “[l]osses . . . resulting
from negligent, non-intentional conduct are precisely the losses
a liability policy buyer expects to insure against.”
So.2d at 753-754.
Young, 658
The Court of Special Appeals of Maryland
explicitly refused to accept such an argument in Medical Mutual
Liability Insurance Society of Maryland v. Azzato, 94 Md.App.
632,
640-41
excludes
(1993),
coverage
holding
for
that
injuries
a
criminal
arising
out
acts
of
provision
acts
that
“constitute both [negligent] malpractice and criminal behavior.”
As that court pointed out:
All activity that is expressly excluded from
coverage in this or any other insurance
policy would, at least arguably, be covered
if not so excluded. Thus, it would make no
sense to interpret this policy to be
ambiguous simply because the activity it
excludes would, absent the exclusion, be
covered.
Id.7
Ms. Love’s argument thus runs contrary to Maryland law.
The criminal act provisions in the Exclusions do not require
that the criminal act be intentional.
7
In addition to Maryland and the jurisdictions cited in the
previous paragraph, more courts have questioned this notion from
Young.
See Am. Family Mut. Ins. Co. v. White, 204 Ariz. 500,
503 n.1 (Ariz.Ct.App. 2003) (rejecting Young and citing numerous
16
2.
Defendant’s Criminal Conviction
Without directly proposing that res judicata or collateral
estoppel
should
be
applied
here,
Plaintiff
argues
that
Defendant’s criminal conviction “conclusively” shows that he has
committed a criminal act.
(ECF No. 76, at 5).
To the degree
that Plaintiff attempts to prevent the relitigation in this case
of the issues decided in another case, its argument could be
construed as an application of collateral estoppel.
At the
motions hearing, Plaintiff acknowledged that collateral estoppel
is inapplicable in the instant case, because, under Virginia law
which
applies
to
this
issue,
courts
must
“adhere[]
to
the
principle of mutuality which holds that ‘a litigant is generally
prevented
from
invoking
the
preclusive
force
of
a
judgment
unless he would have been bound had the prior litigation of the
issue reached the opposite result,’” Rawlings v. Lopez, 267 Va.
4, 5 (2004) (quoting Norfolk & W. Ry. v. Bailey Lumber Co., 221
Va. 638, 640 (1980)).
Where jurisdiction is based on diversity,
“the law of the state where the District Court sits . . .
controls
questions
of
res
judicata
and
collateral
estoppel.”
St. Paul Fire & Marine Ins. Co. v. Lack, 476 F.2d 583, 585 (4th
Cir. 1973).
This court applies Maryland law, and Maryland, in
turn, applies the preclusion rules from the state where the
cases not cited here); Bailey v. Lincoln Gen. Ins. Co., 255 P.3d
1039, 1047-48 (Colo. 2011) (distinguishing Young); Am. Family
Mut. Ins. Co. v. Hadley, 264 Neb. 435, 443-46 (2002)
(distinguishing Young).
17
original judgment was rendered.
In this case, then, Virginia
law applies to Defendant’s Virginia conviction.
See Rourke v.
Amchem Products, Inc., 384 Md. 329, 347-352 (2004) (“[W]e hold
that,
in
applying
full
faith
and
credit
to
the
Virginia
judgment, a Maryland court must treat the judgment precisely the
same
as
requires
applied
it
would
that
in
we
be
treated
apply
the
Virginia.”).
in
a
Virginia
preclusion
Although
court,
rules
most
and
that
that
would
jurisdictions
be
have
allowed the use of non-mutual collateral estoppel, Virginia does
not.
to
Rawlings, 267 Va. at 4.
Defendant’s
criminal
Because Plaintiff was not a party
case,
it
cannot
rely
on
collateral
estoppel.
Next, the parties argue at length over whether Defendant’s
conviction
Although
is
the
admissibility
admissible
parties
of
as
cited
criminal
evidence,
to
Maryland
convictions,
and
to
cases
what
effect.
discussing
admissibility
court is based on the Federal Rules of Evidence.
in
the
this
The United
States Court of Appeals for the Fourth Circuit has affirmed that
the Federal Rules of Evidence are “validly enacted procedural
rules” that govern even in diversity cases.
E.g., Hottle v.
Beech Aircraft Corp., 47 F.3d 106, 109 (4th Cir. 1995).
Of all the procedural and quasi-procedural
rules and practices that are applied in the
federal
courts,
the
Federal
Rules
of
Evidence are the least affected by the
doctrine announced in Erie Railroad Company
v. Tompkins.
The principle that governs
18
today is stated easily. . . . [I]f an
Evidence Rule covers a disputed point of
evidence, the Rule is to be followed, even
in diversity cases, and state law is
pertinent only if and to the extent the
applicable Rule makes it so.
19 Charles Alan Wright, Arthur Miller, et al., Federal Practice
and Procedure § 4512 (3d ed. 2016).
Federal Rule 803(22) creates an exception to the hearsay
rule in civil cases for:
Evidence of a final judgment of conviction
if:
(A) the judgment was entered after a trial
or guilty plea, but not a nolo contendere
plea;
(B)
the
conviction
was
for
a
crime
punishable by death or by imprisonment for
more than a year; [and]
(C) the evidence is admitted to prove any
fact essential to the judgment. . . .
The pendency of an appeal may be shown but
does not affect admissibility.
Defendant’s
judgment
conviction
is
proceedings.
judgment
even
final
Because
as
it
meets
these
despite
the
is
requirements.
his
Rule
being
ongoing
allows
directly
First,
his
post-conviction
consideration
appealed,
of
a
collateral
attack does not preclude it from being sufficiently final here.
Second,
the
judgment
was
entered
after
a
trial.
Third,
Defendant was convicted of second degree murder under section
18.2-32 of the Virginia Code, a crime punishable by imprisonment
19
for more than a year.8
Finally, the Rule mandates that the
conviction must be “admitted to prove any fact essential to the
judgment.”
Here, Plaintiff alleges that Defendant’s liability
in the Civil Case arises out of his commission of the criminal
act of second degree murder.
It was essential to Defendant’s
conviction for second degree murder for the jury to find that he
had committed a malicious killing.
Turner v. Commonwealth, 23
Va.App. 270, 274 (1996) (defining second degree murder under
Virginia law).
The evidence of his conviction is being admitted
to prove that he committed that same criminal act.
Therefore,
the final requirement has been met, and Defendant’s conviction
is admissible in this court.
Respondents
nor
Ms.
Love
At the motions hearing neither
contested
the
admissibility
of
Defendant’s conviction under the Federal Rules.
The
Advisory
Committee’s
note
on
Rule
803(22)
provides
clarity as to the effect of such evidence:
When the status of a former judgment is
under
consideration
in
subsequent
litigation, three possibilities must be
noted: (1) the former judgment is conclusive
under the doctrine of res judicata, either
as a bar or a collateral estoppel; or (2) it
is admissible in evidence for what it is
worth; or (3) it may be of no effect at all.
. . . The rule does not deal with the
substantive effect of the judgment as a bar
or collateral estoppel.
When, however, the
doctrine of res judicata does not apply to
make the judgment either a bar or a
8
Defendant
imprisonment.
was
sentenced
20
to
twenty-three
years
collateral estoppel, a choice is presented
between the second and third alternatives.
The rule adopts the second for judgments of
criminal conviction of felony grade.
This
is the direction of the decisions, Annot.,
18 A.L.R.2d 1287, 1299, which manifest an
increasing reluctance to reject in toto the
validity of the law’s factfinding processes
outside the confines of res judicata and
collateral estoppel. While this may leave a
jury with the evidence of conviction but
without means to evaluate it, as suggested
by Judge Hinton, Note 27 Ill.L.Rev. 195
(1932), it seems safe to assume that the
jury will give it substantial effect unless
defendant offers a satisfactory explanation,
a
possibility
not
foreclosed
by
the
provision.
Given this description, Defendant’s conviction is admissible as
rebuttable evidence here for what it is worth.
See also Semler
v. Psychiatric Inst. of Washington, D.C., 538 F.2d 121, 127 (4th
Cir. 1976) (holding that the district court was “free to assign
. . . the weight it saw fit” to evidence submitted pursuant to a
conviction under Rule 803(22)).
In response to this standard, Respondents suggest that what
Defendant’s conviction is worth should be viewed in light of
Brohawn
v.
Transamerica
Ins.
Co.,
276
Md.
396
(1975).
The
Brohawn court explained that a guilty plea may be admissible in
a subsequent civil proceeding, but the criminal defendant should
be given an opportunity to explain the plea in the civil action.
Id. at 403-04.
Respondents’ argument is that if a guilty plea,
which acts as an admission and is followed by a conviction, is
not conclusive, a conviction by a jury should not be conclusive
21
either.
For that reason, they argue, the court should reject
Plaintiff’s
contention
that
Defendant’s
conviction
“thereby
establish[es] conclusively that [Defendant] acted criminally in
causing the death of Love.”
There
are
(ECF No. 64-1, at 14).
significant
differences
between
a
criminal
conviction based on a guilty plea and one based on a verdict in
a jury trial, but delving into them is not required here.
The
Advisory Committee’s note clarifies that the conviction should
not be conclusive, suggesting that a fact-finder might give a
conviction
might
offer
“substantial
a
effect”
“satisfactory
but
noting
explanation”
that
for
the
a
defendant
conviction.
The summary judgment standard also gives Respondents leeway.
At
this stage in the case, if Respondents or Ms. Love presented any
evidence refuting the conviction, there might be a dispute over
a material fact, and Plaintiff’s motion could not succeed.
Both
the motion papers and the motions hearing have given the parties
the opportunities described in Brohawn.
At oral argument, the
court specifically asked Respondents and Ms. Love whether they
forecast
evidence
to
rebut
the
facts
underlying
Defendant’s
conviction; neither party argued that he had not committed the
murder of Ms. Love.
By way of Defendant’s criminal conviction,
then, Plaintiff has produced evidence that Defendant committed
the criminal act of second degree murder, and that the same act
or acts gave rise to his potential liability in the Civil Case.
22
Neither Respondents nor Ms. Love have presented any evidence
disputing these facts.
C.
Respondents’ Rule 56(d) Motion
Respondents contend in their opposition that they have not
presented any evidence to rebut Plaintiff’s arguments because
the parties have not yet engaged in discovery.
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, 448-49 (4th
Cir. 2011).
party
The Fourth Circuit has held, however, that “the
opposing
summary
judgment
cannot
complain
that
summary
judgment was granted without discovery unless . . . more time
was
needed
for
discovery.”
Harrods
Ltd.
v.
Sixty
Internet
Domain Names, 302 F.3d 214, 244 (4th Cir. 2002) (quoting Evans v.
Techs. Applications & Serv. Co., 80 F.3d 954, 961 (4th
1996)).
Cir.
To raise 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
discovery.
Fed.R.Civ.P.
56(d);
see
Harrods, 302 F.3d at 244-45.
“Notably,
‘Rule
56(d)
affidavits
discovery for the sake of discovery.’”
cannot
simply
demand
Hamilton v. Mayor & City
Council of Balt., 807 F.Supp.2d 331, 342 (D.Md. 2011) (quoting
23
Young v. UPS, Inc., No. DKC-08-2586, 2011 WL 665321, at *20
(D.Md.
Feb.
14,
2011)
aff’d,
707
F.3d
437
(4th
Cir.
vacated on other grounds, 135 S.Ct. 1338 (2015)).
2013),
The party
seeking discovery must identify “specific facts that were not
already available to him.”
McKinnon v. Blank, No. DKC-12-1265,
2013 WL 781617, at *12 (D.Md. Feb. 23, 2013); see also Boyd v.
Guiterrez,
214
F.App’x
(affirming
denial
of
322
a
(4th
56(d)
Cir.
motion
2007)
(per
because
curiam)
appellant’s
affidavit had “failed to identify any facts essential to his
opposition that were not already available to him” from prior
administrative
proceedings);
Nana-Akua
Takyiwaa
Shalom
v.
Payless Shoesource Worldwide, Inc., 921 F.Supp.2d 470, 481 n.16
(D.Md. Feb. 5, 2013) (quoting Price ex rel. Price v. Western
Resources, Inc., 232 F.3d 779, 783 (10th Cir. 2000), for the
proposition that a Rule 56(d) affidavit must “identify[ ] the
probable facts not available and what steps have been taken to
obtain these facts”).
The affidavit must also provide the court
with “a reasonable basis to suggest that the requested discovery
would reveal triable issues of fact.”
McKinnon, 2013 WL 781617,
at 10; Nana-Akua, 921 F.Supp.2d at 481 n.16; see also Richard v.
Leavitt, 235 F.App’x 167, 167 (4th Cir. 2007) (affirming denial
of a Rule 56(d) request when the plaintiff failed to provide a
basis
for
existed).
believing
that
the
information
sought
actually
Put simply, Rule 56(d) does not authorize “fishing
24
expedition[s].”
Morrow
v.
Farrell,
187
F.Supp.2d
548,
551
(D.Md. 2002), aff’d, 50 F.App’x 179 (4th Cir. 2002); see also
Wright v. Eastman Kodak Co., 550 F.Supp.2d 371, 382 (W.D.N.Y.
2008), aff’d, 328 F.App’x 738 (2d Cir. 2009) (“While a Rule
56[(d)] discovery request may be granted to allow a plaintiff to
‘fill material evidentiary gaps,’ it may not be premised solely
on speculation as to evidence which might be discovered[.]”).
Respondents labeled their response to Plaintiff’s motion
for
summary
Plaintiff’s
alternative,
judgment
second
as
a
“memorandum
motion
for
to
deny
motion
summary
or
in
opposition
judgment
defer
or,
judgment
in
to
the
pending
discovery,” and filed a declaration by their lawyer stating that
further discovery is necessary “to find evidence that will allow
[Defendant] to fully respond” to Plaintiff’s motion.
73,
at
1;
73-5,
at
3).
In
the
declaration
(ECF Nos.
and
in
a
corresponding section of their opposition to summary judgment,
Respondents suggest that the necessary discovery would include
“locating and deposing . . . any neighbors who heard or saw
anything in Ms. Love’s residence on the night of her death;
locating and deposing witnesses who interacted with [Defendant]
or [Yeardley] Love on the night of the incident who could speak
to their conditions and state of mind; locating and deposing law
enforcement officers engaged in the investigation of [Yeardley]
Love’s death . . . ; and obtaining experts who could opine as to
25
[Yeardley] Love’s cause of death, [Defendant’s] ability to form
intent,
and
the
applicable.”
criminal
standards
which
may
or
may
not
be
(ECF No. 73, at 14).
Although inquiry into these topics could be relevant in
determining whether Defendant committed second degree murder,
Respondents
have
not
explained
collect such information.
Plaintiff’s
possession,
undoubtedly
Case.
have
been
why
discovery
is
needed
to
None of the information above is in
and
all
relevant
of
to
these
Defendant
inquiries
in
his
would
Criminal
Respondents also acknowledge that “much of the discovery
which [they] would need in this action has already occurred” in
the
Civil
Case.
completion
of
(ECF
No.
Defendant’s
73,
at
14).
Criminal
Case
But
despite
and
the
the
ongoing
discovery in his Civil Case, Respondents have not provided any
evidence in opposition to Plaintiff’s motion that refutes his
criminal conviction or explained what they expect to find in
discovery.
In short, they have not articulated why discovery is
needed to obtain such evidence or given the court any reason to
believe
that
there
may
be
evidence
undermining
Defendant’s
criminal conviction that they could obtain with discovery.
Respondents’
discoverable
56(d)
information
affidavit
that
mentions
they
aver
is
only
not
one
piece
of
available
to
them: “what, if any, standard for criminal behavior [Plaintiff]
is using in an attempt to disclaim coverage under the ‘criminal
26
acts’ exclusion.”
(ECF No. 73-5, at 3).
Respondents’ counsel
declares that he will need to depose Plaintiff’s designee for
this information because it “is something that can only be known
by Plaintiff and something that is essential for [Defendant] to
understand in order to fully and effectively respond.”
(Id.).
According to Respondents, until Defendant knows what criminal
act Plaintiff is “charging” him with, they cannot formulate a
response.
Assuming arguendo that Plaintiff must identify the
specific criminal acts it believes Defendant committed, it has
quite clearly identified second degree murder as the criminal
act from which the liability in the Civil Case arose.
that
the
argument
whole
in
the
of
Plaintiff’s
present
evidence
motion
is
for
its
Defendant’s
Given
exclusion
criminal
conviction for second degree murder, there is little room for
confusion
about
what
crime
Plaintiff
is
alleging
here.
Respondents therefore cannot substantiate a need for discovery
by seeking that information from Plaintiff, and their affidavit
under Rule 56(d) fails to justify deferring consideration of the
summary judgment motion presently.
Accordingly,
Defendant’s
unrebutted
criminal
conviction
provides sufficient evidence that he committed a criminal act
when he caused the death of Yeardley Love.
Plaintiff is thus
entitled to summary judgment with regard to its duty to pay
damages in the underlying civil suit.
27
B.
Duty to Defend
The fact that Plaintiff is not obligated to pay damages in
the underlying suit does not necessarily entitle it to summary
judgment on all of its claims.
Insurance policies that impose a
duty to defend along with liability coverage act as “‘litigation
insurance’ as well, protecting the insured from the expense of
defending suits brought against him.”
Brohawn, 276 Md. at 410.
Even where an insurer’s duty to defend against a suit is based
on its potential liability in that suit, then, the duties are
“distinct conceptually.”
Md. 1, 15 (2004).
Walk v. Hartford Cas. Ins. Co., 382
Because the duty to defend covers even false,
fraudulent, and groundless suits (ECF No. 64-8, at 15), it is
the allegations in the tort suit, not other discernable facts,
that govern this inquiry.
In determining whether a liability
insurer has a duty to provide its insured
with a defense in a tort suit, two types of
questions ordinarily must be answered: (1)
what is the coverage and what are the
defenses under the terms and requirements of
the insurance policy? (2) do the allegations
in the tort action potentially bring the
tort claim within the policy’s coverage?
The first question focuses upon the language
and requirements of the policy, and the
second question focuses upon the allegations
of the tort suit.
St. Paul Fire & Marine Ins. Co. v. Pryseski, 292 Md. 187, 193
(1981).
Because the duty to defend is a “broader” duty, Walk,
382 Md. at 15, if there is any doubt as to “whether or not the
28
allegations of a complaint against the insured state a cause of
action within the coverage of a liability policy sufficient to
compel the insurer to defend the action, such doubt will be
resolved in [the] insured’s favor.”
Aetna Cas. & Sur. Co. v.
Cochran, 337 Md. 98, 107 (1995) (quoting U.S. Fid. & Guar. Co.
v. Nat’l Paving Co., 228 Md. 40, 54 (1962)).
As to whether Ms. Love’s allegations “potentially bring the
tort claim within the policy’s coverage,” Pryseski, 292 Md. at
193, Plaintiff argues that if it has no duty to pay damages
because of Defendant’s conviction, there can be no potentiality
of coverage creating a duty to defend.
Respondents
overturned
counter
in
his
that
pending
if
(ECF No. 82, at 3).9
Defendant’s
habeas
conviction
proceedings
and
he
were
was
acquitted in a subsequent trial, then he would no longer be
excluded under the criminal acts provision but might still be
liable to Ms. Love on her negligence claims.
5).
(ECF No. 83, at
They maintain that even if the likelihood of this sequence
of events is low, Maryland law commands that “any potentiality
of coverage, no matter how slight, gives rise to a duty to
defend.”
9
Litz v. State Farm Fire & Cas. Co., 346 Md. 217, 226
Although Maryland courts generally apply the “exclusive
pleading rule,” which dictates that “a determination of a
potentiality of coverage [should be] made solely by reference to
the insurance policy and the complaint,” Cochran, 337 Md. at
106, the parties agree that Defendant’s criminal conviction can
be considered here, at least if it qualifies as a firmly
established judicial decree. (See ECF Nos. 82, at 6-7; 83, at 4
n.4).
29
(1997).
They point to Grain Dealers Mut. Ins. Co. v. Marino,
200 Cal.App.3d 1083 (Cal.App.6th Dist. 1988), in which the lower
court held that there was no duty to defend under an intentional
acts exclusion based on collateral estoppel from the insured’s
criminal trial, and the appellate court reversed that decision
after
the
insured’s
Defendant’s
habeas
conviction
were
proceeding
similarly
was
successful.
vacated,
If
Respondents
argue, Plaintiff would have a duty to defend, and, therefore, a
slight potentiality exists.
Marino does not support Respondents’ position.
The trial
court in Marino ruled in the insurer’s favor while the insured’s
habeas proceeding was pending or forthcoming.
The appeals court
did not vacate that decision during the pendency because of the
potential for a duty to defend, but rather stayed the appellate
review
until
challenge.
after
the
insured
had
succeeded
in
his
habeas
The Marino court relied on the Restatement, which
stated:
If, when the earlier judgment is set aside
or reversed, the later judgment is still
subject to a post-judgment motion for a new
trial or the like, or is still open to
appeal, or such motion has actually been
made and is pending or an appeal has been
taken and remains undecided, a party may
inform the trial or appellate court of the
nullification of the earlier judgment and
the consequent elimination of the basis for
the later judgment. The court should then
normally set aside the later judgment.
30
Marino, 200 Cal.App.3d at 1089 (citing Restatement (Second) of
Judgments § 16 cmt. c (Am. Law Inst. 1982)).
The appellate
court’s holding was not that the trial court had wrongly decided
the
case,
but
that,
after
the
criminal
conviction
had
been
vacated, there was no final judgment on the merits, which had
been critical to the trial court’s use of collateral estoppel.
Id.
at
1088-89.
because
the
Furthermore,
parties
in
Marino
that
had
case
is
distinguishable
produced
at
least
some
evidence that the insured’s conduct was not intentional, id. at
1087, whereas none of the parties have presented any evidence
that Defendant’s conduct here was not criminal.
Respondents also read too much into the phrase “no matter
how slight” from Litz.
When applying the potentiality standard,
the Litz court cited to a prior opinion of the Court of Appeals
that describes the threshold as “reasonable potential.”
346 Md. at 231 (citing Cochran, 337 Md. at 112).
facts
of
that
case,
the
court
found
that
Litz,
Based on the
the
insured
was
covered, id. at 230, not that he might be, and therefore it had
no trouble at all finding a “reasonable potential.”
Id. at 231.
The “no matter how slight” language came directly from a law
review article that also notes that the potentiality rule is
construed broadly in order to provide protection to the insured
even when the third party’s claims are “groundless, false, or
fraudulent.”
Andrew
Janquitto,
31
Insurer’s
Duty
to
Defend
in
Maryland, 18 U.Balt.L.Rev. 1, 13-14 (1988).
The article later
summarizes
the
the
“maxims
that
should
guide
inquiry
into
whether allegations create a potentiality” and states that the
duty to defend arises “if there is a reasonable possibility”
that the claim is within the scope of the policy.
Id. at 16.
Moreover, Maryland courts have firmly established that a
criminal
defendant’s
constitutional
rights
against
incrimination do not extend beyond his direct appeals.
Archer v. State, 383 Md. 329, 344 (2004).
selfSee
There is no reason to
think that Maryland would hold that the same negligible and
nearly unending potential for habeas relief warrants an ongoing
duty to defend, especially where, as here, Respondents have not
argued Defendant’s actual innocence.
Accordingly, Plaintiff is
entitled to summary judgment with regard to its duty to defend
as well.10
V.
Declaratory Judgment While State Action Is Pending
Finally, Respondents argue that declaratory judgment is not
appropriate at this time, given the ongoing nature of the Civil
Case.
In their opposition they rely on Maryland’s “Brohawn
rule,” which states that declaratory judgments are inappropriate
in insurance coverage cases where “the issue upon which coverage
is denied [is] the ultimate issue to be determined in a pending
10
Because Plaintiff is entitled to summary judgment on its
criminal exclusions provision arguments, it is not necessary to
address Plaintiff’s failure to cooperate arguments.
32
suit by a third party.”
Md. 396, 406 (1975).
because
“[f]ederal
Brohawn v. Transamerica Ins. Co., 276
Brohawn is inapplicable here, however,
standards
guide
the
inquiry
as
to
the
propriety of declaratory relief in federal courts, even when the
case is under the court’s diversity jurisdiction.”
White v.
Nat’l Union Fire Ins. Co., 913 F.2d 165, 167 (4th Cir. 1990); see
also
Icarom,
PLC
v.
Howard
Cty.,
Md.,
904
F.Supp.
454,
458
(D.Md. 1995) (refusing to apply Maryland’s declaratory judgment
rules from Allstate Ins. Co. v. Atwood, 319 Md. 247 (1990), a
more recent articulation of Brohawn).
Under federal law, district courts have “some measure of
discretion [as to whether] to entertain a declaratory judgment
action
that
is
otherwise
properly
within
its
jurisdiction.”
Nautilus Ins. Co. v. Winchester Homes, Inc., 15 F.3d 371, 375
(4th
Cir. 1994).
The Fourth Circuit has held that district
courts should not entertain a declaratory judgment action during
the pendency of a related state proceeding “when the result
would
be
to
particular
‘try
issues
a
controversy
without
settling
by
the
piecemeal,
entire
or
to
try
controversy.’”
Mitcheson v. Harris, 955 F.2d 235, 239 (4th Cir. 1992) (quoting
Aetna Cas. & Sur. Co. v. Quarles, 92 F.2d 321, 325 (4th Cir.
1937)).
A court must consider four factors in deciding whether
to make a declaratory judgment in such a case:
(i) the strength of the state’s interest in
having the issues raised in the federal
33
declaratory action decided in the state
courts; (ii) whether the issues raised in
the federal action can more efficiently be
resolved in the court in which the state
action is pending; (iii) whether permitting
the federal action to go forward would
result in unnecessary “entanglement” between
the federal and state court systems, because
of the presence of “overlapping issues of
fact or law[;]”[] and (iv) whether the
declaratory judgment action is being used
merely as a device for “procedural fencing.”
Myles Lumber Co. v. CNA Financial Corp., 233 F.3d 821, 824 (4th
Cir. 2000) (quoting Nautilus, 15 F.3d at 377).
After the court provided the parties with the appropriate
legal standard, neither Ms. Love nor Respondents argued that
declaratory
judgment
would
be
inappropriate
in
this
case.11
Weighing the state court’s interest in resolving coverage issues
as
part
of
the
tort
litigation,
the
Fourth
Circuit
held
in
Mitcheson that the district court should have refrained from
deciding a coverage case where Brohawn might preclude a Maryland
11
Ms. Love did not file supplemental briefing in this case
and confirmed at the motions hearing that she has no objection
to handling the declaratory judgment action prior to the Civil
Case.
Respondents disputed the appropriateness of declaratory
judgment in their opposition in the State Farm case but did not
dispute it in their supplemental opposition here, which was
filed the same day as the State Farm opposition.
At oral
argument, Respondents’ counsel mentioned the Mitcheson case, but
argued only that if the court granted declaratory judgment now
and Defendant was later granted habeas relief, Defendant would
not receive the coverage he deserves under the contract.
Counsel thus appears to have been turning back to Respondents’
arguments about Defendant’s habeas proceedings with regard to
Plaintiff’s duty to defend Defendant in the Civil Case, which,
as discussed above, the court rejects.
34
court from issuing declaratory judgment under Maryland law and
the other legal issues in the coverage suit were “close” and
“problematic.”
955 F.2d at 236, 240.
The same concerns are not
present here, however, where Maryland law governs the contract,
but the Civil Case is taking place in Virginia, which clearly
has little interest in resolving questions of Maryland law.12
As
noted above, the Virginia Circuit Court stayed its proceedings
in the Civil Case specifically to allow this court to make a
determination
efficiency
on
the
support
insurance
resolution
issue,
of
the
so
both
coverage
comity
issue
and
here.
Making a determination on coverage before the trial in the Civil
Case
will
settling
both
the
“serve
legal
a
useful
relations
in
purpose
issue,”
in
clarifying
and
and
“terminate
and
afford relief from the uncertainty, insecurity, and controversy
giving
rise
to
the
proceeding.”
(quoting Quarles, 92 F.2d at 325).
Nautilus,
15
F.3d
at
375
Because Plaintiff’s duties
to defend and indemnify Defendant in the Civil Case represent
12
Moreover, unlike in Mitcheson, the Brohawn rule would not
preclude declaratory judgment here because the “ultimate
issue[s] upon which coverage” is being determined in this case
are different than the issues in the tort litigation.
The
Brohawn insurer was challenging coverage based on the insured’s
intent, which the court in the tort suit would necessarily have
to resolve.
In the instant motion, the ultimate issues are
whether Defendant committed a criminal act or failed to
cooperate with Plaintiff’s investigation as required by the
Policies.
The Virginia court in the Civil Case is unlikely to
resolve either of these inquiries.
Therefore, even if it were
applicable, Brohawn would not dictate that this court should
wait until the completion of the Civil Case.
35
the only controversy between those two parties, adjudication of
the case through declaratory judgment would resolve their entire
dispute.
This dispute is also sufficiently distinct from the
Civil Case so that “overlapping issues of fact or law” would not
cause any entanglement between the federal and state courts.
Indeed, granting summary judgment based on Defendant’s criminal
act here does not “put at risk, by issue preclusion or claim
preclusion, the ability of any state court to adjudicate fairly
the underlying liability.”
Icarom, 904 F.Supp. at 460.
This
also does not appear to be a “procedural fencing” case in which
“a party has raced to federal court in an effort to get certain
issues that are already pending before the state courts resolved
first in a more favorable forum.”
Nautilus, 15 F.3d at 380.
Thus, it is appropriate to issue a declaratory judgment.
VI.
Conclusion
For the foregoing reasons, the motion for summary judgment
filed by Plaintiff Chartis Property Casualty Company will be
granted.
A separate order will follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
36
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