Opinion ID: 672338
Heading Depth: 2
Heading Rank: 2

Heading: The Claim of Waiver of Coverage by PSC.

Text: 46 In its opposition to PSC's motion for summary judgment, CNA presented evidence purportedly creating triable issues of fact as to waiver of coverage by PSC. 5 CNA introduced a July 25, 1977, letter from PSC's attorney, Mr. Bryans, to Lloyd's agent Mendes & Mount, notifying the insurer of the Waranch action. In part the letter stated that I expect there may be some argument over whether or not Public Service Company is covered under its excess policies in this action.... Principal Brief of Appellant, App. 1 at 0109. CNA also introduced a telephone notation written by counsel for CNA, Mr. Brandt, summarizing a conversation with counsel for PSC, Mr. Bryans, on May 20, 1980. The notation stated: 47 5/20/80 I called Dick Bryans--Case has been taken over by Jim Tarpey but he told me that they had filed another motion for summary judgment with the [court] and that the [court] finally denied all claims except for civil discrimination and that has been sent to the Public Utilities Commission for further attention. Mr. Bryans stated that was the only claim left and that was not covered under the policy so we would not be involved. He did not want to send me anything in writing because he did not want to put himself in a position of telling us we could close our file. He suggested that I check back with him in Sept. since case has not yet been disposed of. I don't feel HO [Home Office] will allow me to close yet. Will diary for Sept. 48 Id. at 0110 (emphasis in original). In addition, CNA introduced a July 13, 1983, letter to Lloyd's agent, Mendes & Mount, in which PSC's counsel, Mr. Flanagan, stated that I will be discussing this matter with my client [PSC] and determine whether it wishes to pursue the coverage issue with you. Id. at 0111-0113. 6 Finally, CNA contends that its waiver defense is supported by the fact that CNA did nothing to pursue its claim between an October 6, 1983, letter from Lloyd's to PSC's Claims Director--stating that [a]fter further study and reflection [PSC] might consider withdrawal of this claim, id. at 0115, 7 --and the spring of 1986. Principal Brief of Appellant at 22. 49 We feel that the district judge properly held that the evidence introduced by CNA failed to create a triable issue of fact as to waiver of insurance coverage by PSC. CNA had the burden of proof on the waiver issue. See Air Products & Chemicals, Inc. v. Louisiana Land and Exploration Co., 867 F.2d 1376, 1379 (11th Cir.1989); Ingersoll Milling Machine Co. v. M/V Bodena, 829 F.2d 293, 300 (2d Cir.1987). 8 It is true that waiver and estoppel are generally issues of fact, but CNA had to introduce sufficient evidence for a reasonable jury to find the voluntary abandonment or surrender by [PSC] of a right known by [it] to exist, with the intent that such right shall be surrendered and [PSC] be forever deprived of its benefits. Roderick v. City of Colorado Springs, 193 Colo. 104, 563 P.2d 3, 5 (1977). 50 The evidence of CNA on the waiver issue would not support a finding that PSC voluntarily abandoned a known right to coverage with the intent that such right be surrendered. At best, the evidence shows that PSC recognized that coverage was questionable and a potential subject of disagreement, and that PSC delayed for some time the assertion of its claim. 9 However, the mere statement that there may be argument over coverage does not, without more, estop an insured from asserting coverage. See Dryden v. Ocean Accident & Guarantee Corp., Ltd., 138 F.2d 291, 294-95 (7th Cir.1943) (insured's letter acknowledging coverage disagreement and indicating intent not to press large claims of this kind now does not estop insured from later asserting coverage for such claims). See also Newcastle County v. Hartford Acc. and Indem. Co., 673 F.Supp. 1359, 1364 (D.Del.1987) (rejecting as evidence of waiver an insured's risk manager's statement that risk was excluded from coverage, noting that he was a lay person and that he gave no explanation for his conclusion). Moreover, the record is devoid of evidence indicating an intent on the part of PSC to relinquish its rights under the CNA policy. Indeed, the relevant evidence tends to show a contrary intent. For example, according to Mr. Brandt's memorandum of his telephone conversation with counsel for PSC, Mr. Bryans, quoted above, the latter expressly stated that he did not want to put himself in a position of telling [CNA] we could close our file. Principal Brief of Appellant, App. 1 at 0110. 51 In short, CNA's waiver defense, on which CNA bore the burden of proof, was supported at best by a scintilla of evidence insufficient for a fair-minded jury to reasonably find for CNA on the waiver issue. Anderson, 477 U.S. at 252, 106 S.Ct. at 2512 (noting that a mere scintilla of evidence is insufficient to withstand summary judgment). Accordingly, the district court did not err in rejecting CNA's waiver defense as a matter of law in its summary judgment ruling. 52 C. CNA's Claim of Error in the Judge's Not Compelling 53 Discovery Before Entry of Summary Judgment on Coverage. 54 CNA contends that the district court should not have ruled on PSC's motion for summary judgment before allowing CNA to conduct additional discovery relating to coverage, including its affirmative defenses, and damages. CNA says that by entering summary judgment on coverage before granting relief on its motions for protective orders and its motion to compel discovery, the district court failed to exercise its discretion and unfairly prejudiced CNA. CNA relies principally on Garrett v. City and County of San Francisco, 818 F.2d 1515, 1518-19 (9th Cir.1987). Principal Brief of Appellant at 23-25. 55 In Garrett the Ninth Circuit reversed a summary judgment where the trial judge had granted judgment without first determining the merits of plaintiff Garrett's pending discovery motion. The Ninth Circuit held that Garrett's pending discovery motion satisfied the Fed.R.Civ.P. 56(f) requirement of an affidavit. The rule provides that where it appears from affidavits of a party opposing a summary judgment motion that the party cannot for reasons stated[,] present by affidavit facts essential to justify the party's opposition, the court may refuse the application for summary judgment or order a continuance to permit affidavits to be obtained, or depositions to be taken, or discovery to be had, or may make such other order as is just. The Garrett opinion held the discovery motion, already pending there, satisfied Rule 56(f) by making clear the information sought--personnel records of named persons to show disparate treatment. 56 We are satisfied that the showing made here by CNA is clearly different from that made in Garrett where the specific need for designated records was shown by the pending discovery motion. Here, CNA filed no Rule 56(f) affidavit below. Moreover, the portions of the record relied on by CNA relating to the waiver defense make no showing of specific evidence expected to be obtained by CNA. We have examined CNA's Combined Response to PSC's motions for protective orders respecting depositions and documents, and CNA's Motion to Compel Discovery, Principal Brief of Appellant, App. 1 at 0144-0156, and the transcript of the hearing on the motion for summary judgment where CNA's arguments on discovery were reiterated. Principal Brief of Appellant, App. 2 at 0255-0269. CNA did not develop in its pleadings or argument a showing of reasons sufficient to defeat the entry of summary judgment on coverage. 57 We have observed that [t]here is no requirement in Rule 56, Fed.R.Civ.P., that summary judgment not be entered until discovery is complete. Weir v. Anaconda Co., 773 F.2d 1073, 1081 (10th Cir.1985). Accord Brown v. Chaffee, 612 F.2d 497, 504 (10th Cir.1979) (Plaintiff argues on appeal that summary judgment cannot be granted before discovery is had. There is no such requirement in Rule 56). We are persuaded that here CNA did not make a proper showing for the granting of a continuance in compliance with Rule 56(f), explaining why [the company] cannot present facts to oppose the motion. Dreiling v. Peugeot Motors of America, Inc., 850 F.2d 1373, 1376 (10th Cir.1988). In Dreiling, we noted that 58 [a]lthough the Supreme Court has held that, under Fed.R.Civ.P. 56(f), summary judgment [should] be refused where the nonmoving party has not had the opportunity to discover information that is essential to his opposition, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 n. 5, 106 S.Ct. 2505, 2511 n. 5, 91 L.Ed.2d 202 (1986), this protection arises only if the nonmoving party files an affidavit explaining why he or she cannot present facts to oppose the motion. 59 Id. at 1376. We are not persuaded that CNA made such a showing of inability to oppose the summary judgment motion on coverage without discovery sought. 60 We note that CNA based a major part of its objection to the entry of summary judgment on the need for discovery pertaining to the billings by counsel for PSC. Those billings were relied on by PSC as the basis of its claim for reimbursement for fees and costs, and thus were at the heart of the damages issue. However, the trial judge did not enter a summary judgment ruling on damages; instead, as CNA's brief notes, further discovery on damages was in fact allowed after the summary judgment ruling. Principal Brief of Appellant at 24 n. 7. Moreover, while CNA also complains of the denial of discovery which it says was relevant to CNA's affirmative defense of waiver, Principal Brief of Appellant at 23, CNA indicates no specific type of evidence that would have been probative of waiver of coverage under the standard for proof of such waiver. 61 In sum, we are persuaded that no reversible error has been demonstrated by CNA with respect to the entry of summary judgment on coverage before additional discovery was allowed.