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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 21, 2003 Decided December 9, 2003

No. 02-7134

THOMAS P. ATHRIDGE AND THOMAS P. ATHRIDGE, JR.,

APPELLANTS

v.

AETNA CASUALTY & SURETY CO.,

APPELLEE

Appeal from the United States District Court

for the District of Columbia

(No. 96cv02708)

Erik S. Jaffe argued the cause and filed the briefs for

appellants.

Geoffrey H. Genth argued the cause for appellee. With

him on the brief was Lee H. Ogburn.

 Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.
2

Before: GINSBURG, Chief Judge, and EDWARDS, Circuit

Judge, and WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge

WILLIAMS.

WILLIAMS, Senior Circuit Judge: This case is one of many

arising out of a 1987 automobile accident in which Jorge

Iglesias, driving a car owned by his aunt and uncle, struck

and severely injured Thomas P. Athridge. Here Athridge

and his father have sued Aetna Casualty and Surety Company, insurer of Jorge’s parents at the time of the accident, both

in the Athridges’ own right and as Jorge’s assignees. See

Athridge v. Iglesias, 950 F. Supp. 1187, 1194 (D.D.C. 1996)

(ordering Jorge to convey to the Athridges his chose-in-action

assets). The Athridges claim (1) indemnification under the

auto insurance policy between Aetna and the Iglesiases; (2)

bad faith violation of certain duties and of the covenant of

good faith and fair dealing; and (3) misrepresentations and

omissions under the District of Columbia Consumer Protection Procedures Act (‘‘Consumer Protection Act’’), D.C. Code

§ 28–3905(k)(1).

The magistrate judge granted summary judgment in Aetna’s favor on all counts. In his first order he found that

Aetna’s actions did not constitute bad faith. Athridge v.

Aetna Cas. & Sur. Co., No. CIV.A. 96–2708, 2001 WL 214212,

at *5–12 (D.D.C. March 2, 2001). In his second he found that

Jorge was excluded from coverage under Aetna’s insurance

policy, and therefore that the Athridges could not maintain an

indemnification claim. Athridge v. Aetna Cas. & Sur. Co.,

163 F. Supp. 2d 38, 48 (D.D.C. 2001). And he rejected the

Athridges’ claim under the Consumer Protection Act. Id. at

55–56. The Athridges argue that the magistrate judge erred

in all of these rulings.

Because there is a factual issue relating to whether Aetna’s

policy exclusion applies to Jorge, the magistrate judge incorrectly granted summary judgment on the Athridges’ indemnification claim. We therefore reverse and remand on that

claim. We affirm the magistrate’s grants of summary judgment on the Athridges’ bad faith and Consumer Protection
3

Act claims (the latter on grounds different from the magistrate’s).

* * *

We have already described both the underlying facts and

the procedural history of this case in some detail. See

Athridge v. Rivas, 141 F.3d 357, 359–60 (D.C. Cir. 1998)

(‘‘Rivas I’’); Athridge v. Rivas, 312 F.3d 474, 475–77 (D.C.

Cir. 2002) (‘‘Rivas II’’). Facts will be developed here as

necessary to resolve specific issues.

* * *

Indemnification

Aetna asserts two grounds why we should affirm the

magistrate judge’s grant of summary judgment on the Athridges’ indemnification claim. Aetna first argues that issue

and claim preclusion bar the claim. Alternatively, Aetna

argues that the magistrate correctly found that Jorge’s accident wasn’t covered by Aetna’s insurance policy because the

policy excluded any ‘‘person using a vehicle without a reasonable belief that the person is entitled to do so.’’ We reject

the preclusion theories (which if correct would have completely disposed of the issue). On the merits, we affirm the

magistrate’s interpretation of the policy exclusion, but remand because there are material facts in dispute as to

whether that exclusion, so construed, applies.

Preclusion. Aetna brought a declaratory judgment action

against Jorge in the District of Columbia Superior Court in

1990, seeking and receiving a determination that Aetna’s

exclusion in fact applied. Here Aetna argues that under

principles of issue preclusion this judgment bars the Athridges, as Jorge’s assignees, from seeking indemnification. See,

e.g., Yamaha Corp. v. United States, 961 F.2d 245, 254 (D.C.

Cir. 1992) (stating issue preclusion standard). But at oral

argument Aetna conceded that the Athridges, as judgment

creditors of Jorge, have a claim for indemnification in their

own right, not just as Jorge’s assignees. See generally Eric
4

Mills Holmes, Holmes’s Appleman on Insurance 2d § 112.10,

at 339 (2d ed. 2000). Because the Athridges were not parties

to the Superior Court action between Jorge and Aetna, that

action cannot bar the Athridges from litigating coverage in

the indemnification claim they pursue in their own right.

Aetna’s claim preclusion theory rests on the Athridges’

1992 losing suit against Aetna, as the Iglesiases’ insurer,

under the Diplomatic Relations Act. See 28 U.S.C. § 1364

(allowing direct suit against the insurers of certain diplomatic

personnel); Rivas I, 141 F.3d at 358 (affirming grant of

summary judgment in Aetna’s favor). Aetna argues that in

this suit the Athridges could have sought a declaratory

judgment that Jorge was covered by Aetna’s insurance policy.

See Aetna Cas. & Sur. Co. v. State Farm Mut. Auto. Ins. Co.,

380 A.2d 1385, 1386–87 (D.C. 1977) (allowing declaratory

judgment actions as to policy coverage before liability has

been determined). Because claim preclusion bars claims that

a litigant might have raised in prior litigation, see, e.g., Drake

v. FAA, 291 F.3d 59, 66 (D.C. Cir. 2002), Aetna argues that

the Athridges’ failure to contend that Jorge’s conduct was

covered by the policy bars them from doing so here.

In response, the Athridges argue that Aetna’s policy contained a ‘‘no-action’’ clause that would have prevented them

from seeking a declaratory judgment before Jorge’s liability

was established. See Aetna auto insurance policy, at Joint

Appendix (‘‘J.A.’’) 23 (‘‘[N]o legal action may be brought

against us until TTT the amount of that obligation has been

finally determined by judgment after trial.’’). While the

preclusive effect of federal court litigation is a question of

federal law, see 17 Charles Alan Wright et al., Federal

Practice and Procedure § 4226, at n.10 (2d ed. 1988), the

meaning and effect of the no-action clause depend on District

of Columbia law in this diversity action. See, e.g., Messina v.

Nationwide Mut. Ins. Co., 998 F.2d 2, 4 (D.C. Cir. 1993) (per

curiam).

Maryland law, to which the District commonly looks for

guidance in the absence of its own precedents, see Conesco

Indus. Ltd. v. Conforti & Eisele, Inc., 627 F.2d 312, 315 (D.C.
5

Cir. 1980), provides some support for Aetna’s position. While

Maryland has a rule barring an injured claimant from bringing a direct action against the tortfeasor’s liability insurer

before a verdict on liability is rendered (evidently a public

policy equivalent of Aetna’s no-action clause), it makes an

exception for declaratory judgment actions ‘‘concerning separate and independent policy coverage issues.’’ Harford Mut.

Ins. Co. v. Woodfin Equities Corp., 687 A.2d 652, 658 (Md.

1997). A court in the District might regard the policy’s noaction provision as similarly allowing a pre-judgment lawsuit

on the coverage issue, which here is wholly independent of

liability.

But a party invoking claim preclusion has the burden of

establishing its elements, Gen. Elec. Co. v. Deutz Ag, 270 F.3d

144, 158 (3d Cir. 2001), and there are at least two potential

holes in Aetna’s theory. First, assuming the District were to

follow Harford, it might regard a specific contract bar as

more compelling than a judge-made rule of policy, and thus

be less ready to create an exception for declaratory judgments on separate and independent issues. Second, there is

at least a hint in District law of resistance to pre-judgment

suits by the injured claimant against an insurer: in Donaldson v. Home Indemnity Co., 165 A.2d 492 (D.C. 1960), the

court rejected an insurer’s claim preclusion theory where the

tortfeasor had unsuccessfully litigated his indemnification

right through a third-party claim in the plaintiff’s suit against

him. The court said, without explanation, that the plaintiff

‘‘did not and could not bring the insurance company into the

case.’’ Id. at 493–94. Given these uncertainties, Aetna has

not met its burden of proving that the Athridges could have

brought a declaratory judgment action in 1992, and we therefore must reject Aetna’s claim preclusion defense.

The interpretation of Exclusion 11. Their indemnification

claim having survived Aetna’s preclusion defense, the Athridges argue that the magistrate judge erred in finding that

Jorge was excluded from coverage under Exclusion 11 of the

policy. The Athridges argue that the magistrate misinterpreted the exclusion, which provides that Aetna
6

do[es] not provide Liability Coverage: TTT For any person using a vehicle without a reasonable belief that the

person is entitled to do so.

J.A. 18. The Athridges argue that the policy distinguishes

for some purposes between ‘‘family members’’ of the policyholder and ‘‘any person using your auto,’’ J.A. 17; extending

that distinction to Exclusion 11, they say that Jorge, as a

‘‘family member,’’ is not covered by its ‘‘any person’’ language. We disagree.

While the Athridges cite some cases supporting the distinction between an insurance policy’s use of the phrase ‘‘family

member’’ and its use of the phrase ‘‘any person,’’ see AIG

Hawaii Ins. Co. v. Smith, 891 P.2d 261, 270 (Hawaii 1995)

(stating that ‘‘the selective use of the terms ‘any person’ and

‘family member’ TTT creates mutually exclusive classes’’);

United Servs. Auto. Ass’n v. Dunn, 598 So.2d 1169, 1170 (La.

Ct. App. 1992) (same); Am. States Ins. Co. v. Adair Indus.,

Inc., 576 N.E.2d 1272, 1275 (Ind. App. 1991) (same), none of

those cases is binding on the District of Columbia courts, and

they appear to represent the minority view on this issue.

See, e.g., Hartford Ins. Co. of the Midwest v. Halt, 646

N.Y.S.2d 589, 591–93 (N.Y. App. Div. 1996) (discussing relevant cases and finding that the ‘‘vast majority of courts

considering the issue TTT hold that ‘any person’ means exactly

that, necessarily including any ‘family member’ ’’).

Perhaps recognizing that problem, the Athridges assert

that the split in the case law requires us to find that the

contract provision at issue is ambiguous, and argue that

under District of Columbia law such an ambiguity should be

resolved in their favor. See Unklesbee v. Homestead Fire

Ins. Co., 41 A.2d 168, 169 (D.C. 1945) (‘‘A contract of insurance is to be construed liberally in favor of the insured and

strictly as against the insurer.’’).

We find no ambiguity in the term ‘‘any person,’’ except in

the sense that clever lawyers with strong motivation can

always imagine multiple meanings for any word in any context. That is not enough under District of Columbia law. In

the District, courts ‘‘are to give the words used in an insur-
7

ance contract ‘their common, ordinary, and TTT popular meaning.’ ’’ Quadrangle Dev. Corp. v. Hartford Ins. Co., 645 A.2d

1074, 1075 (D.C. 1994) (citation omitted). Courts should not

seek out ambiguity where none exists. Medical Serv. of Dist.

of Columbia v. Llewellyn, 208 A.2d 734, 736 (D.C. 1965).

Here, ‘‘any person’’ is unambiguous and necessarily includes

the named insured and his family members, including Jorge.

Compare Smalls v. State Farm Mut. Auto. Ins. Co., 678 A.2d

32, 35 (D.C. 1996) (finding policy exclusion for ‘‘any bodily

injury to TTT any insured or any member of insured’s family’’

clear and unambiguous) (emphasis omitted); Halt, 646

N.Y.S.2d at 591 (‘‘The vast majority of courts considering the

issue TTT hold that, because the term ‘any person’ is unambiguous and has no technical or otherwise restricted definition in

the policy itself, it should be accorded its common meaning.’’).

Accordingly we find that Exclusion 11 of Aetna’s policy

would indeed exclude Jorge’s behavior from coverage if at the

time of the accident he was ‘‘using [the] vehicle without a

reasonable belief’’ that he was entitled to do so.

But the Athridges argue that a factual controversy exists

over whether Jorge had such a ‘‘reasonable belief’’ at the time

of the accident, precluding the grant of summary judgment.

We have already found in a previous appeal that the evidence

submitted by the Athridges in that case—which is the same

as they submit here—was enough to create a jury question as

to whether Jorge had consent to use the car on the day of the

accident. See Rivas II, 312 F.3d at 478 (discussing evidence).

If he had consent, he almost certainly had a reasonable belief

in his entitlement to use the car. We thus reverse the

magistrate judge’s grant of summary judgment on the Athridges’ indemnification claim.

Bad faith

The Athridges also argue that the magistrate judge erred

in granting summary judgment in Aetna’s favor on their

claim of Aetna’s bad faith violation of the duties of candor and

due care, and of the covenant of good faith and fair dealing.

As Jorge’s assignees, the Athridges argue that Aetna acted in

bad faith by: (1) failing to appoint independent counsel to
8

represent Jorge in the District of Columbia Superior Court

declaratory judgment proceeding; (2) twice in the liability

proceeding between Jorge and the Athridges providing Jorge

with temporary counsel that favored Aetna’s interests over

Jorge’s; and (3) failing to affirmatively seek a settlement

between Jorge and the Athridges. We again turn to District

of Columbia law to analyze these claims.

Independent counsel claim. The Athridges acknowledge

that Aetna was within its rights to bring a suit for declaratory

judgment against Jorge. See, e.g., Smalls, 678 A.2d at 34;

Cent. Armature Works, Inc. v. Am. Motorists Ins. Co., 520 F.

Supp. 283, 288 (D.D.C. 1980). But they argue that Aetna had

a duty to appoint counsel to defend Jorge in that suit, even

though Jorge already had his own counsel. The parties

address this claim under an apparent assumption that it

would have survived the Superior Court’s finding against

Jorge that Aetna’s insurance policy excluded him from coverage for the accident at issue. We, too, proceed under that

assumption, without resolving it.

The Athridges point to three cases supposedly supporting

their theory. Mut. Serv. Cas. Ins. Co. v. Luetmer, 474

N.W.2d 365, 369 (Minn. App. 1991); Miller v. Shugart, 316

N.W.2d 729, 733 (Minn. 1982); Nat’l Gen. Ins. Co. v. Ozella,

307 N.E.2d 745, 749 (Ill. App. 1974). These cases are not

binding on District of Columbia courts, and are in any event

easily distinguished. Ozella did not find any duty to provide

its insured with a lawyer in the company’s declaratory judgment action against him, but merely upheld a trial court

decision, ‘‘in the interest of justice,’’ that the indigent insured

defendant should be represented at trial, and taxing the

attorneys’ fees to the plaintiff insurance company. Ozella,

307 N.E.2d at 749. In justifying this decision, the Illinois

appeals court relied on a case holding that a primary insurer,

rather than the excess insurer, was responsible for defending

a suit against its client. See id. (citing Fireman’s Fund

Indem. Co. v. Freeport Ins. Co., 173 N.E.2d 543, 546 (Ill. App.

1961)). Even ignoring its reliance on an off-point case, Ozella

does not support the Athridges’ proposition. Jorge was

represented by an attorney in the declaratory judgment
9

action brought by Aetna. The Athridges are not claiming

that Aetna should pay Jorge’s attorney’s fees; instead, they

are claiming that Aetna should have provided Jorge additional counsel, separate from the one his family had already hired

for him.

Shugart is similarly off-point. There, the insurance company brought a declaratory judgment action against the insured

as to the scope of the policy, ‘‘appropriately providing another

set of attorneys to defend the insureds’’ in that action. 316

N.W.2d at 733. The focus of the case was the avoidance of

conflicts of interest among counsel in insurance cases. The

quoted phrase is pure dictum, and apparently offhand dictum

at that.

Finally, in Luetmer, the Minnesota court of appeals said,

‘‘Clearly, if the insurer seeks a declaratory judgment, it

should provide its insured with separate counsel.’’ 474

N.W.2d at 369 (citing Shugart). This was also dictum, as

Luetmer was considering the question of when there is

enough of a conflict of interest between the insured and the

insurer, in a suit by the victim against the insured, to justify

the insured’s demand that the insurer pay the fees of counsel

hired by the insured. A dictum mis-citing another dictum is

pretty feeble support for the Athridges’ theory.

Finding no basis for supposing that District law imposes a

requirement that an insurer provide an already represented

insured with additional counsel in a declaratory judgment

action on the scope of the policy, we affirm the magistrate

and reject the Athridges’ independent counsel claim.

Conflict of interest claim. Aetna twice provided Jorge

with temporary counsel during the liability proceeding in

which the Athridges were ultimately awarded a $5.5 million

judgment against Jorge. See Athridge v. Iglesias, 950 F.

Supp. 1187, 1194 (D.D.C. 1996). The Athridges claim that the

counsel provided by Aetna pursued Aetna’s interests rather

than Jorge’s. While the Athridges do not characterize all

these allegations as legal malpractice claims, their arguments

are based on the premise that Aetna’s attorneys violated a

duty owed to Jorge. This sounds much like a claim of legal
10

malpractice. More important, for purposes of the District’s

requirement of expert evidence to support any non-obvious

malpractice claim (discussed below), any claim arising out of

the conflict of interest alleged here is similar to legal malpractice claims in the key dimension: the factors to be balanced

are obviously not common knowledge.

To establish legal malpractice in the District of Columbia,

‘‘a plaintiff must establish the applicable standard of care, a

breach of that standard, and a causal relationship between

the violation and the harm complained of,’’ Mills v. Cooter,

647 A.2d 1118, 1123 (D.C. 1994), and ‘‘[u]nless the attorney’s

lack of care is so obvious that the jury can find negligence as

a matter of common knowledge, the standard and its violation

must be proved by expert testimony,’’ id. The Athridges

presented no expert testimony as to the applicable standard

of care or its violation. See Athridge v. Aetna Cas. & Sur.

Co., No. CIV.A. 96–2708, 2001 WL 214212, at *10 (D.D.C.

March 2, 2001). Thus the question is whether a jury could

reasonably find, as a matter of common knowledge, that

Aetna’s attorneys acted negligently toward Jorge. It could

not.

The Athridges’ first theory is that the Aetna-provided

attorneys ‘‘intentionally delayed the damages trial so that

Aetna could obtain its declaratory judgment and not have to

defend during the period of uncertainty regarding coverage.’’

But it was potentially in Jorge’s interest that the damages

trial be continued pending Aetna’s action for a declaratory

judgment. As the motion for continuance itself pointed out,

‘‘should the Superior Court conclude that coverage and a

defense through Aetna is appropriate, it is anticipated that

the possibility of a settlement in this case will be greatly

enhanced.’’ J.A. 129. In fact, a lawyer who was hired by

Jorge’s family and who represented him throughout the

Athridges’ lawsuit against Jorge was also on the motion for a

continuance (though his name was evidently signed by another attorney, J.A. 130); his participation undercuts any idea

that the motion clearly manifested undue loyalty to Aetna.

Thus, even if expert testimony established that the delay of

the damages trial was a breach of duty, it was not so obvious
11

a breach that a jury could find liability as a matter of common

knowledge.

The Athridges also argue that the second attorney provided

by Aetna to Jorge defended him only on liability and ignored

damages. Had Aetna been responsible for Jorge’s defense,

failure to argue damages would seem an obvious breach of

duty. As Aetna points out, however, it was not responsible

for Jorge’s defense, a fact that Jorge knew: Aetna received

the favorable declaratory judgment in 1991, and the damages

trial did not start until 1996. See Athridge v. Iglesias, 950 F.

Supp. 1187, 1194 (D.D.C. 1996). In this context, any Aetna

contribution to Jorge’s defense seems like a windfall benefit

for Jorge—at least without an allegation that Aetna, Svengalilike, talked Jorge’s lawyers out of a better defense. Even if

expert testimony established that the conduct of Aetna’s

lawyer somehow constituted a breach of duty, however, the

fact that Aetna had no duty to defend Jorge on either

damages or liability shows that it is not so obvious a breach

that a jury could find negligence as a matter of common

knowledge.

Settlement claim. The third of the Athridges’ bad faith

claims arises from Aetna’s alleged failure to seek settlement

between Jorge and the Athridges. Even if this claim has some

basis in fact, compare J.A. 193 (letter from Athridges’ attorney to Irving Starr offering to settle for chose-in-action

assets) with J.A. 321–22 (magistrate judge’s finding that he

has never seen even a hint that the Athridges would have

settled their case against Jorge), it fails because Aetna had no

legal obligation to seek a settlement between Jorge and the

Athridges following the 1991 declaratory judgment stating

that Jorge was not covered under Aetna’s insurance policy.

Compare Kremen v. Maryland Auto Ins. Fund, 770 A.2d 170,

181 (Md. 2001) (finding bad faith failure to settle in a case

where there was no dispute that insured was covered by

insurance policy). Again, even if expert testimony could

establish that this failure to seek a settlement somehow

constituted a breach of duty, this was not so obvious a breach

that a jury could find negligence as a matter of common

knowledge.
12

Consumer Protection Act

The Athridges’ final argument on appeal is that the magistrate judge erred by granting summary judgment in Aetna’s

favor on their claims under the District of Columbia Consumer Protection Procedures Act (‘‘Consumer Protection Act’’),

D.C. Code § 28–3905(k)(1). The magistrate found that the

Athridges could not maintain such a claim because Jorge was

not a ‘‘consumer’’ within the meaning of the Act, because

Aetna’s potential coverage of Jorge was not a ‘‘trade practice’’

under the Act, and because Jorge did not suffer damages

sufficient to sustain an action for a violation of the Act.

Athridge v. Aetna Cas. & Sur. Co., 163 F. Supp. 2d 38, 55–56

(D.D.C. 2001). While we agree with the Athridges that the

magistrate judge misinterpreted the Consumer Protection

Act, we affirm the grant of summary judgment on the ground

that Aetna’s alleged material misrepresentations or omissions

could not, as a matter of law, have had a tendency to mislead.

See Alicke v. MCI Communications Corp., 111 F.3d 909, 912

(D.C. Cir. 1997) (affirming grant of summary judgment on

Consumer Protection Act claims because defendant’s actions

could not have misled consumer).

It is a violation of the Consumer Protection Act for any

person to misrepresent a material fact which has a tendency

to mislead or to fail to state a material fact if such failure

tends to mislead, whether or not a consumer is in fact misled,

deceived or damaged thereby. D.C. Code §§ 28–3904(e)-(f).

The Act defines a consumer as ‘‘a person who does or would

purchase, lease (from), or receive consumer goods or services,

TTT or a person who does or would provide the economic

demand for a trade practice.’’ D.C. Code § 28–3901(a)(2).

And it defines a trade practice as ‘‘any act which does or

would create,TTT make available TTT or effectuate, a sale,

lease or transfer, of consumer goods or services.’’ D.C. Code

§ 28–3901(a)(6). Finally, ‘‘goods and services’’ are ‘‘any and

all parts of the economic output of society, at any stage or

related or necessary point in the economic process, and

includes consumer credit, franchises, business opportunities,

real estate transactions, and consumer services of all types.’’

D.C. Code § 28–3901(a)(7).
13

These definitions make clear that Jorge, as a person potentially insured by Aetna’s policy with the Iglesiases, is a

person who ‘‘would TTT receive consumer goods or services,’’

and as such is a ‘‘consumer’’ for purposes of the Act, even if

he was not the party who purchased the insurance. Similarly, because Aetna’s insurance contract could effectuate the

transfer of consumer services to Jorge, the contract between

Aetna and the Iglesiases is a ‘‘trade practice,’’ even if Jorge

was not a party to the contract. See also Banks v. District of

Columbia Dep’t of Consumer & Regulatory Affairs, 634 A.2d

433, 437 (D.C. 1993) (discussing ‘‘trade practices’’ under the

Act).

While the Act’s coverage of Jorge and his relation to Aetna

seems clear, we have doubts about the magistrate’s alternative holding that Jorge did not suffer damages sufficient to

sustain an action for a violation of the Act. While the

Athridges are right that a misrepresentation can be a violation of the Act even if the consumer is not harmed, D.C. Code

§ 28–3904, a court action (as opposed to administrative measures) requires a showing of damages. Osbourne v. Capital

City Mortgage Corp., 667 A.2d 1321, 1329–30 (D.C. 1995).

But the magistrate’s conclusion that none of the supposed

misrepresentations could have injured Jorge, because he was

‘‘an impecunious high school dropout’’ who ‘‘never paid a

penny’’ of the $5.5 million judgment against him and ‘‘has now

been discharged in bankruptcy,’’ Athridge v. Aetna Cas. &

Sur. Co., 163 F. Supp. 2d at 56, is an oversimplification. In

the context where this issue most often arises, claims of bad

faith failure to settle, there is a split in the law: under the socalled ‘‘judgment rule,’’ the insurer is liable for the full excess

of the judgment over the policy limits; under the ‘‘payment

rule,’’ in the case of an insolvent judgment debtor, damages

are commonly limited to the debtor’s net assets. See Gray v.

Grain Dealers Mut. Ins. Co., 871 F.2d 1128, 1131–32 (D.C.

Cir. 1989); Medical Mut. Liab. Ins. Soc. v. Evans, 622 A.2d

103, 114–16 (Md. 1993); see also Gray, 871 F.2d at 1131–32

n.5 (discussing some variations). As we noted in Gray, not all

of the states embracing the judgment rule have considered

the case of an insolvent insured. We note that Maryland
14

(whose case law the District commonly follows) is among

those jurisdictions following the judgment rule, Evans, 622

A.2d at 114–16, though not without qualms. We will assume

arguendo that under the Act the District would follow the

judgment rule; even apart from that, the Athridges have

failed to state a claim under the Act.

Broad as the Act is, it requires a representation or omission that would ‘‘tend to mislead.’’ D.C. Code § 28–3904(e).

Aetna’s alleged material misrepresentations or omissions

could not, as a matter of law, have had such a tendency. All

of them relate to an advocate’s traditional presentation of his

client’s side in litigation. See Amended Complaint, at J.A.

231–38 (alleging, for example: that Aetna’s attorney expressly represented to the district court that Aetna’s declaratory

action would have a substantial impact upon the Athridges’

claims, while Aetna had no intention of naming the Athridges

as parties to its declaratory judgment action; that Aetna did

not comply with District of Columbia Superior Court Rule

19(c), which requires disclosure of the existence of necessary

parties with an explanation of why such parties were not

joined; that Aetna falsely represented to the Superior Court

that the Iglesiases were citizens of the District of Columbia,

when it knew or should have known that they were citizens of

Spain; that Aetna failed to disclose facts that suggested the

Superior Court might not have subject matter jurisdiction;

and that Aetna failed to disclose to Jorge that he was entitled

to remove the declaratory action to federal court). If these

statements were actionable under the Consumer Protection

Act, either adversary litigation would be completely transformed, or every lawsuit would spawn two more lawsuits,

each of them in turn spawning two lawsuits, ad infinitum.

We cannot imagine that the District of Columbia legislature

intended such a result, and therefore affirm the magistrate’s

dismissal of these counts.

* * *

For the reasons stated above, the magistrate judge’s decision is reversed and remanded for further proceedings relat-
15

ing to the disputed issue of Jorge’s ‘‘reasonable belief’’ at the

time of the accident. The judgment is otherwise affirmed.

So ordered.