Court Opinion

ID: 1022544
Source: CourtListenerOpinion
Date Created: 2013-07-04 23:23:52.539749+00
Date Added: 2024-06-11T15:37:02.140338
License: Public Domain

UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                             No. 05-1773

ANDREW KLOPMAN,

                                             Plaintiff - Appellant,

           and

GAYLE KLOPMAN,

                                                          Plaintiff,

           versus

ZURICH AMERICAN INSURANCE COMPANY OF ILLINOIS,

                                              Defendant - Appellee.

Appeal from the United States District Court for the District of
Maryland, at Baltimore. Williams D. Quarles, Jr., District Judge.
(CA-04-2529-WDQ)

Argued:   February 1, 2007                    Decided:   May 9, 2007

Before MOTZ, GREGORY, and SHEDD, Circuit Judges.

Affirmed by unpublished opinion. Judge Gregory wrote the opinion,
in which Judge Motz and Judge Shedd joined.

ARGUED: Daniel P. Doty, SCHULMAN & KAUFMAN, L.L.C., Baltimore,
Maryland, for Appellant. Linda S. Woolf, GOODELL, DEVRIES, LEECH
& DANN, L.L.P., Baltimore, Maryland, for Appellee.     ON BRIEF:
Howard J. Schulman, SCHULMAN & KAUFMAN, L.L.C., Baltimore,
Maryland, for Appellant. Joseph B. Wolf, GOODELL, DEVRIES, LEECH
& DANN, L.L.P., Baltimore, Maryland, for Appellee.

Unpublished opinions are not binding precedent in this circuit.

                               -2-
GREGORY, Circuit Judge:

     The question before the Court is whether Andrew Klopman has

proven by “clear and positive” evidence that he had an insurance

policy with Zurich American Insurance Company of Illinois (“ZAICI”)

covering one of his rental properties.   Finding that Klopman has

not met his burden of proof, we affirm the decision below granting

summary judgment to the insurance company.

                                I.

     In October 2003, a former tenant sued Klopman in Maryland

state court for personal injuries arising from exposure to lead

paint at 3719 Towanda Avenue (“the property”), a rental property

Klopman owned from April 1983 until May 1984. Believing that ZAICI

had insured the property under a $300,000 policy, Klopman asked the

company to defend and indemnify him in the lawsuit. ZAICI refused,

claiming that it had not insured the property.

     In June 2004, Klopman initiated this action for a declaratory

judgment that ZAICI is obligated to defend and indemnify him in the

lead paint lawsuit.   ZAICI removed the action to federal court,

where the district judge granted summary judgment in ZAICI’s favor

because, the judge found, Klopman could not prove the existence of

an insurance policy by “clear and positive” evidence, as required

under Maryland law.

                               -3-
     Klopman does not have the original policy or a duplicate

because, he contends, a basement flood destroyed his business

records in 1992.          Nonetheless, he maintains that his insurance

agent, Barton Keiser of Keiser & Keiser, obtained the insurance in

keeping with Klopman and Keiser’s routine practice of securing

insurance for the many investment properties Klopman owned.

     Klopman and Keiser do not recollect whether Keiser ever

notified or was told by Klopman to notify an insurance carrier of

Klopman’s purchase of 3719 Towanda Avenue, whether they ever saw an

insurance policy listing the property as an insured property, or

whether Keiser ever provided Klopman with proof of insurance.

Rather, Klopman primarily bases his assertion that the property was

insured on a copy of a declarations page.              A declarations page is

usually the first page of an insurance policy, exclusive of the

cover, and it contains limited information about the policy.

Klopman received the copy of the declarations page he has submitted

into evidence from an attorney he retained in 2001 for another lead

paint     suit.     The     attorney     received    the     document   from   an

investigator she hired because all of Klopman’s business records

were destroyed.      The investigator, in turn, received the document

from an insurance broker with whom Klopman worked in the mid-1980s.

The declarations page indicates that it belongs to a ZAICI policy,

numbered Special Multi-Peril (“SMP”) 70 87 816, that was issued

through    George   F.    Brown   &    Sons,   a   surplus   lines   broker    and

                                        -4-
authorized     agent       of    ZAICI.1      The    declarations        page    contains

Klopman’s name and address and indicates that the policy’s coverage

period    is   May   27,        1982   to   May    27,    1983    and   its   premium    is

$2,505.99, including $72.99 for a state surplus lines tax.                             3719

Towanda Avenue is not one of the three properties listed on the

declarations page (nor are several of the approximately nine other

properties Klopman owned that year).                     The declarations page does,

however, indicate that the policy incorporated by reference a form

L6415 or L6416.        An L6415 or L6416 typically lists the additional

properties, if any, covered by a policy.                         Klopman does not have

this or any other form.

     ZAICI’s extensive search for the alleged policy and a copy of

the declarations page was unsuccessful. ZAICI acknowledges that if

the policy in fact existed, it would have been destroyed by now

pursuant to the company’s policy of destroying files after ten

years.

                                             II.

        We review the district court’s summary judgment ruling de

novo,    viewing     the    facts      in   the    light    most     favorable    to    the

nonmoving party and drawing all reasonable inferences in that

     1
      Surplus lines insurance is a type of insurance available
when, due to the nature and severity of the risk, an insured cannot
obtain coverage from insurers authorized to do business in the
state of Maryland. See Md. Code Ann., Ins. § 3-301 (2005).

                                             -5-
party’s favor.    See Varghese v. Honeywell Int’l, Inc., 424 F.3d

411, 416 (4th Cir. 2005).    Summary judgment is justified if the

pleadings, depositions, answers to interrogatories, and affidavits

demonstrate that there is no genuine factual issue for trial and

that the moving party is entitled to judgment as a matter of law.

Fed. R. Civ. P. 56(c).    “[J]udgment as a matter of law is proper

only if ‘there can be but one reasonable conclusion as to the

verdict.’”   Varghese, 424 F.3d at 411 (quoting Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 250 (1986)).

     The proponent of an original writing——here, Klopman——typically

must produce the writing to prove its contents.       Fed. R. Evid.

1002.   But if the original is lost or destroyed in good faith,

other evidence of the writing’s content is admissible.      Fed. R.

Evid. 1004(1).   As with all other issues of fact, the trier of fact

determines whether the asserted original ever existed and whether

the other evidence accurately reflects the original’s contents.

Fed. R. Evid. 1008.

     Because the instant case is a diversity dispute between

alleged parties to an insurance contract, Maryland law governs as

to the burden of proof Klopman must meet.         In Maryland, the

proponent of a lost insurance policy “must establish the fact of

loss and the terms and conditions of the policies by ‘clear and

positive’ evidence.”   In re Wallace & Gale Co., 275 B.R. 223, 230

(D. Md. 2002), vacated in part on other grounds, 284 B.R. 557 (D.

                                -6-
Md. 2002), aff’d, 385 F.3d 820 (4th Cir. 2004); see also Barranco

v. Kostens, 54 A.2d 326, 328 (Md. 1947) (“The evidence necessary to

establish a lost instrument and to prove its contents must be clear

and positive and of such a character as to leave no reasonable

doubt as to its terms and conditions.”).

     Maryland courts have not yet clarified whether the “clear and

positive” standard approximates the “mere preponderance” standard

or the “clear and convincing” standard.      Accordingly, federal

courts in Maryland have sometimes chosen one standard and sometimes

chosen the other.   Compare Lowry’s Reports, Inc. v. Legg Mason,

Inc., 271 F. Supp. 2d 737, 757 n.3 (D. Md. 2003) (assuming that the

standard requires clear and convincing evidence), with Klopman v.

Zurich Am. Ins. Co., No. Civ. WDQ-04-2529, 2005 WL 1367080, at *2

n.5 (D. Md. June 7, 2005) (assuming that the standard requires

“substantially more than a preponderance”); see also Wallace, 275

B.R. at 230 n.6 (contrasting the standards chosen by various

courts).   Rather than decide the standard’s meaning, we proceed

merely with the understanding that Klopman’s evidence must at least

“leave no reasonable doubt” as to the existence and the terms and

conditions of the insurance policy he insists ZAICI issued to him.

See Barranco, 54 A.2d at 328.   Having done so, we find that there

is reasonable doubt if not as to the existence of policy #SMP 70 87

816, at least as to the terms and conditions of the policy.

                                -7-
                                    III.

        We first consider Klopman’s evidence regarding the existence

of a policy issued to him by ZAICI.         Klopman primarily relies on

the copy of the declarations page associated with policy #SMP 70 87

816.2       In addition, Klopman has shown that ZAICI revised a record

retention policy governing SMP policies, specifically, by June of

1984.       From this, we may infer that, despite its protests to the

contrary, ZAICI indeed issued SMP policies in 1983 such as policy

#SMP 70 87 816.3        The copy of the declarations page, which bears

ZAICI’s name as the insurer and Klopman’s name as the insured, plus

the inference that ZAICI issued SMP policies is circumstantial

evidence that ZAICI issued an SMP policy to Klopman.

        Klopman    supplied   additional   evidence   from   his   business

ledgers, copies of which show that he wrote two checks in 1982 to

Keiser & Keiser totaling the exact amount of the premium listed on

the declarations page.        These ledgers plus the declarations page

        2
      We overlook the admissibility problems plaguing the copy of
the declarations page because Klopman’s claim fails whether or not
we deem the page admissible. In brief, those problems are that (1)
the copy of the page barely qualifies as a duplicate because it is
partially illegible and contains handwritten notes, (2) Klopman has
not offered evidence sufficient to authenticate the page, and (3)
the page constitutes hearsay.     See Fed. R. Evid. 901(a), 801,
1001(4), 1003.
        3
      In ruling otherwise, the district court failed to take the
evidence in the light most favorable to Klopman.      Instead, the
court credited the testimony of a ZAICI underwriter that, from 1978
to 1983, ZAICI issued stand-alone “Owner’s, Landlord’s and
Tenant’s” policies, not package policies like the SMP policy
identified on the declarations page.

                                     -8-
are circumstantial evidence that Klopman paid for policy #SMP 70 87

816 and therefore the policy existed.             We note that ZAICI’s

inability to find the policy is not evidence, as ZAICI argues, that

the policy never existed.     ZAICI acknowledges that if policy #SMP

70 87 816 in fact existed, ZAICI would have destroyed the policy

information pursuant to its record retention policy.

     Klopman’s final evidence as to the existence of a policy

is that ZAICI defended and paid a claim under policy #SMP 70 87 816

in 1986.   That year, Klopman settled a lawsuit by a former tenant,

Theresa St. Pierre, for injuries sustained in a September 12, 1982

slip and fall at 2828 Frederick Avenue, another rental property

Klopman owned.    The settlement documents reflect that ZAICI, on

behalf of Klopman, paid St. Pierre $6,575 in exchange for St.

Pierre’s agreement to release ZAICI and Klopman from all claims and

demands.   ZAICI’s own records confirm these details.        A printout

titled   “Claim   Summary   Information”   from   ZAICI’s   database   of

computerized claims information identifies the policy number (70 87

816), a claim number, a claimant named Theresa Arsenault,4 an

accident date of September 12, 1982, a brief description of the

claim (slip and fall), the amount paid to indemnify the claim

($6,575), a   supervisor’s name, a date for the last activity on the

file, and the status of the claim (closed).          Although Klopman’s

     4
      We may presume that Theresa St. Pierre was known by two
surnames because even Klopman’s documents from the lawsuit refer to
“Theresa St. Pierre” and “Theresa Arsenault.”

                                  -9-
name       does   not   appear   on   ZAICI’s      printout,   the   printout   and

Klopman’s settlement documents together are circumstantial evidence

that Klopman had a policy numbered SMP 70 87 816 and issued by

ZAICI.5

       In sum, viewing the evidence in the light most favorable to

Klopman, we find that he has produced sufficiently clear evidence

for a reasonable fact-finder to conclude that ZAICI issued policy

#SMP 70 87 816 to him.

                                            IV.

       Notwithstanding this initial showing, Klopman has not produced

similarly clear evidence as to the terms and conditions of policy

#SMP 70 87 816.          Klopman argues, for example, that he has proved

the policy’s contents by placing into the record examples of the

form L6415 or L6416 noted on the declarations page.                    Such forms

typically list the additional properties covered by a policy and

specifically        state   that      the    policy   covers   those   additional

properties.         The sample forms in the record, however, are not

associated with policy #SMP 70 87 816, the policy Klopman alleges

       5
      A ZAICI claims specialist testified that ZAICI’s decision to
pay a claim does not mean that a policy existed.   According to the
claims specialist, ZAICI paid claims in three circumstances: (1)
when a policy existed; (2) by mistake; or (3) when paying a claim
was cheaper than determining whether a policy existed. Construing
the evidence in the light most favorable to Klopman and drawing all
justifiable inferences in his favor means presuming that ZAICI paid
the St. Pierre claim associated with policy #SMP 70 87 816 because
the policy in fact existed.

                                            -10-
ZAICI issued him.6     More importantly, the forms are not clear

evidence of the terms and conditions of policy #SMP 70 87 816: the

forms unambiguously state that they are to be attached “to [the]

Policy . . . to complete said policy.”     J.A. 58, 60.   Thus, even if

the forms were the very forms associated with Klopman’s policy,

they would establish only the policy’s additional terms, not its

original or core terms.   For this reason, it is immaterial that, as

Klopman emphasizes, a ZAICI underwriter testified that the sample

forms contained language that ZAICI would have used.         The forms’

language is insufficient to meet Klopman’s burden.

     To prove the policy’s contents further, Klopman highlights the

testimony by a ZAICI underwriter that, from 1978 to 1983, ZAICI

used standard policy forms pre-printed by the Insurance Services

Office.   The record, however, contains none of these standard

policy forms.   Nor does the record contain an example of any policy

ZAICI issued the year Klopman purchased and allegedly insured 3719

Towanda   Avenue.      Examples    of    standard   policy   forms   or

contemporaneous policies issued by ZAICI would provide evidence of

the terms of Klopman’s lost policy.7

     6
      In fact, one of the forms has an expiration date indicating
that it expired three years before Klopman insists ZAICI issued him
a similar form. The other form bears no date at all.
     7
      For this reason, we note that Klopman’s reliance on Lowry’s
Reports, Inc. v. Legg Mason, Inc., 271 F. Supp. 2d 737 (D. Md.
2003), is misplaced.    In Lowry’s Reports, a magazine publisher
sought to prove the existence of a lost magazine subscription
agreement. To meet its burden, the publisher (1) testified that it

                                  -11-
     Klopman also seeks to prove the policy’s contents by way of an

affidavit from Keiser swearing to knowledge Keiser gained from over

thirty years as an insurance agent and broker.    Keiser states in

relevant part:

     Based on my personal experience and knowledge . . . it
     was standard industry practice in 1982 and 1983 for
     policies of insurance with liability coverage without
     exception to contain language that stated, in effect,
     that the insurance company would pay in behalf of the
     insured all sums which the insured became legally
     obligated to pay as damages because of bodily injury and
     property damage to the extent of the insurance caused by
     an occurrence and also pay for the cost of defense of any
     law suit.

     . . .

     Based on my own standard and routine business practices
     and those of Keiser & Keiser, as well as my years of
     personal experience as an insurance broker . . . I am
     able to state the following. Policy #SMP 70 87 816
     contained language which stated that the insurance
     company would pay, on behalf of the insured, all sums
     which the insured became legally obligated to pay as
     damages because of bodily injury and property damages to
     the extent of the insurance caused by an occurrence and
     arising out of the ownership, maintenance or use of the
     insured premises and that the company had the duty to
     defend any suit against the insured seeking damages on
     account of such bodily injury or property damage.

required every subscriber to execute an identical subscription
agreement, (2) “offer[ed] several contemporaneous subscription
agreements, executed by others, as evidence of the terms of the
‘lost’ . . . agreement,” and (3) presented evidence of the
defendant’s annual payment to the magazine and the defendant’s name
and address on the magazine delivered. Id. at 757. Although, like
the publisher, Klopman testified that he added every new rental
property he purchased to the same ZAICI policy, he has not taken
the additional (and necessary) step of offering contemporaneous
policies to establish the terms of his lost policy.

                               -12-
J.A. 588-89.      Keiser’s statement, however, is not evidence that

leaves no reasonable doubt as to the terms and conditions of policy

#SMP 70 87 816.    His supposition as to the policy’s contents omits,

for example, any exceptions or unique terms policy #SMP 70 87 816

might have contained.     No court tasked with issuing a declaratory

judgment as to insurance coverage, as sought here, could consult

this bare testimony to determine the limits of ZAICI’s duty to

defend Klopman or the amount ZAICI might be legally obligated to

pay for damages related to 3719 Towanda Avenue.

     Klopman’s final, unsuccessful attempt to prove the contents of

policy #SMP 70 87 816 relates to the policy’s limits.           From an

answer to an interrogatory in the St. Pierre case, Klopman seeks to

prove that the policy provided liability coverage with limits of

$300,000.   In the St. Pierre case, St. Pierre’s lawyers asked

Klopman to “[s]tate the limits of liability of insurance covering

falls on the said . . . property [2828 Frederick Avenue] and attach

a copy of your insurance policy to your Answer.”              J.A. 103.

Klopman   answered:    “Limits   on   OLT   [Owner’s,   Landlord’s,   and

Tenant’s] Insurance Policy are $300,000.00.” Id. Because both the

instant case and the St. Pierre case involved policy #SMP 70 87

816, and because the ZAICI underwriter testified that limits of

liability of $300,000 were not unusual in ZAICI policies between

1978 and 1983, Klopman argues that the answer to the interrogatory

                                  -13-
in the St. Pierre case establishes the policy limit in the instant

case.

     Klopman’s argument fails.      The interrogatory response Klopman

cites concerned his property at 2828 Frederick Avenue, not 3719

Towanda Avenue.       We cannot be certain, then, that the limits

applicable to St. Pierre’s 1982 slip and fall at 2828 Frederick

Avenue——months before Klopman purchased 3719 Towanda Avenue——are

the same limits applicable to another tenant’s 1983 lead paint

injuries at 3719 Towanda Avenue.            Moreover, none of Klopman’s

interrogatory responses in the St. Pierre case identified the

number, issuing insurer, or effective dates of the policy referred

to in the specific response Klopman cites, much less specific

language in the policy. The interrogatory asked Klopman to produce

the policy he relied on, but he did not.           Consequently, Klopman’s

documents from the St. Pierre case shed little light on the terms

and conditions of policy #SMP 70 87 816, especially as those terms

relate to 3719 Towanda Avenue.

     We do not allow a litigant faced with a motion for summary

judgement to “create a genuine issue of material fact through . .

. the building of one inference upon another.”          Beale v. Hardy, 769

F.2d 213, 214 (4th Cir. 1985).       Aside from evidence that ZAICI’s

limit of liability for an unrelated claim arising from an unrelated

injury   on   a   different   property    during   a   different   year   was

$300,000, Klopman has not produced a single term or condition

                                   -14-
related to policy #SMP 70 87 816.             In the absence of proof as to

the terms and conditions of the policy, we do not reach the

question of whether Klopman has proven by clear and positive

evidence that the policy actually covered 3719 Towanda Avenue.

                                        V.

        Although the case at bar is an action for declaratory

judgment, in considering whether summary judgment was properly

granted, the critical question remains “whether a fair-minded jury

could     return   a   verdict   for    the    plaintiff   on   the   evidence

presented.” Anderson, 477 U.S. at 252. Because Klopman has failed

to present evidence “of such a character as to leave no reasonable

doubt” as to the terms and conditions of policy #SMP 70 87 816, we

cannot answer the question in the affirmative.             Barranco, 54 A.2d

at 328.    The decision below is affirmed.

                                                                      AFFIRMED

                                       -15-