Court Opinion

ID: 9732468
Source: CourtListenerOpinion
Date Created: 2023-08-26 16:22:14.474782+00
Date Added: 2024-06-11T15:22:32.085546
License: Public Domain

FERREN, Associate Judge,
dissenting:
I respectfully dissent because I believe there are genuine issues of material fact that preclude summary judgment.
I.
The release at issue provides:
WHEREAS, CUMIS Insurance Society, Inc. (“CUMIS”) issued a bond number CPC 09992 dated January 11, 1972, with various endorsements and renewals, to Bolling Federal Credit Union (“Bolling”);
WHEREAS, Bolling has made various claims under the bond for losses allegedly resulting from the unfaithful performance of its employees;
WHEREAS, CUMIS and Bolling have agreed to compromise the losses allegedly incurred by Bolling;
THE PARTIES THEREFORE AGREE:
In consideration of the sum of two-hundred and fifty thousand dollars ($250,000) paid by CUMIS to Bolling, receipt of which is acknowledged, Bolling hereby RELEASES, ACQUITS AND FOREVER DISCHARGES CUMIS Insurance Society, Inc., its agents, servants and employees, for all claims of any kind or character which Bolling has or may have against CUMIS to the date of this release under the above referenced bond, its endorsements and renewals, including but not limited to all matters relating to Civil Action No. 13573-79 filed in the Superior Court of the District of Columbia.
IN WITNESS WHEREOF, Bolling Federal Credit Union has affixed its seal by an authorized officer on this the 7[th] day of February, 1980.
This release refers to claims for losses under paragraph A of the bond:
THIS BOND PROVIDES COVERAGE
A. For direct loss of, or damage to, any property, as defined herein, caused by the fraud or dishonesty of any of the Insured’s employees, as herein defined, and directors, committed anywhere, whether acting alone or in collusion with others, or through the failure on the part of such employee, excluding directors acting as directors except for fraud or dishonesty, to well and faithfully perform his duties.
The only basis for a claim here — as both the preamble to the release and paragraph A of the bond make clear — is a “loss” caused by the failure of a Bolling employee to perform his or her duties faithfully. Thus, the critical question is whether Boll-ing’s 24 claims in this lawsuit, attributable to improper loans by unfaithful employees, are claims under the bond for “losses” that Bolling had or may have had “to the date of this release.”
A loan, whether in default or not, will not ripen into a loss until reasonable business practices require a writeoff. Thus, each of the 24 loans for which Bolling makes a claim (of which 17 were in default at the time the release was executed) presents a question of fact: under Bolling’s policy for writing off loans (which must accord with reasonable business practices), was the transaction a “loss,” or should it have been deemed a “loss,” as of the date of the release? Only if so could it be a claim “which Bolling has or may have against CUMIS to the date of this release under the above referenced bond” (emphasis added). See Saslaw v. Rosenfeld, 148 A.2d 311, 312 (D.C.1959) (“release discharging all ‘... causes of actions ... claims and demands whatsoever in law or in equity ...’ which [appellant] had or might have as of the date of the release” read by court to “relinquish[ ] all rights to sue on any claim which [appellant] might have had against appellee prior to the effective date of the release.” (emphasis added)).
Because the record does not show whether any, let alone all, of the 24 loans repre*388sented actual pr imputable losses as of the date of the release, February 7, 1980, there was no basis Ifor summary judgment that all 24 loan transactions represented claims for which Bolling signed a release.
The majorit|y premises its opinion on a perception that both parties intended a general release or all Bolling’s claims attributable to employee transactions, not merely to actual or imputable losses, as of the date of the release. The problem is that the release does not say this. Although the body of the release does refer to “claims of any kind or character,” two facts are unassailable: (1) Bjolling’s release of claims is limited to claims that Bolling “has” (actual) or “may have’ (imputable) “to the date of this release,” not thereafter; and (2) there cannot possibly be a “claim[] of any kind or character J.. under the above referenced bond” lj>y the date of the release, unless there has been an actual or imputable loss by that date. That requires a claim-by-claim ¡factual determination.
The majority actually appears to agree with this analysis, for my colleagues acknowledge thajt “the language in the release must necessarily be read to encompass losses of' which Bolling had knowledge, as well jas those which existed but were not yet jidentified, at the time the release was signed ” (emphasis added). Ante at 385. ¡And yet the majority then violates its own reading of the release, for, in affirming summary judgment, my colleagues conclude that Bolling also released unidentified losses that may have accrued, under usual business practices, after the release had been signed.
The majority goes on to charge Bolling with responsibility for “articulatpng] and bargaining] for appropriate language of reservation, if that was its intent.” Ante at 386. This admonition, however, ignores the fact that by expressly limiting the effect of the release to claims “to the date of this release,” the parties have articulated, with appropriate language, a reservation of claims arising from post-release losses. The majority’s reading of the release gives no effect to this language. Moreover, if, as the majority suggests, this release was intended to encompass claims arising from losses that accrued both before and after the date of its execution, I would charge Cumis with responsibility for articulating and bargaining for language that made clear this exceedingly broad purpose. Such a purpose could easily have been memorialized by simply referring to all claims arising both before and after the release date with respect to loans made by a specified group of employees. Thus, the flaw in the majority’s analysis is twofold: first, it violates a cardinal principle of interpreting contracts by rendering meaningless one of the terms expressly included by the parties, Restatement (Second) of ContRacts § 203(a) (1979); and, second, it reads the release to have an expansive meaning which the parties easily could have expressed but did not.1
*389In summary, Cumis should not prevail here automatically under the release; each claim must be evaluated as to whether it does — or does not — represent an actual or imputable loss to Bolling as of the release date.
II.
Cumis further argues that even if the court were to rule that the release does not warrant summary judgment — i.e., that one or more of the 24 claims accrued after February 7, 1980 — Cumis must prevail under paragraph 9 of the General Conditions of the bond, which provides:
TERMINATION AS TO EMPLOYEES AND DIRECTORS. This bond, insofar as it covers losses caused by employees and directors, shall be deemed terminated as respects subsequent losses caused by any employee or director — (a) as soon as the Insured learns of any fraudulent or dishonest act on the part of such employee or director, without prejudice to the loss of any Property then in his or her custody, or (b) as soon as the Insured learns of lack of faithful performance claim payment by any surety or insurer as a result of lack of faithful performance by such employee, without prejudice to the loss of any Property then in his or her custody, or (c) at noon of the 15th day after receipt by the Insured of written notice of the Society’s desire it terminate this Bond as to such employee or director.
Cumis’ theory is that, once it has paid a claim with respect to certain unfaithful employees, the bond is terminated as to those employees, and that any subsequent claim with respect to them is accordingly barred. I disagree.
Paragraph 9 precludes claims for “subsequent losses,” i.e., losses after the “Insured learns of a lack of faithful performance claim payment” with respect to loans by particular unfaithful employees. This provision is intended to prevent an insured from relying on those same employees, and continuing to receive insurance coverage, once it learns of the unfaithful performance and recovers insurance for it.
But, clearly, paragraph 9 does not preclude payment of more than one claim for uncompensated losses from loans that such an employee had made before the insured reasonably should have discovered the employee’s misconduct. The bar to recovery under paragraph 9 after an insured has received a claim payment is “without prejudice to the loss of any Property then [i.e., at the time of a claim payment] in his or her custody.” Although this language is written as though the employee had absconded with and retained custody of property, it must be construed with reference to the kind of loss transaction contemplated by the parties in executing the bond. Thus, it obviously covers a situation, such as this, where there is a second claim for losses attributable to an employee who unfaithfully put property (here, loan proceeds) in the custody of a third party before discovery of the unfaithful deed.
III.
Because there are genuine issues of material fact as to whether Bolling’s 24 claims are barred by the release, and because paragraph 9 of the General Conditions of the bond does not preclude Bolling’s claims in the event any of them survives the release, I would reverse and remand for trial.

. It is interesting to note that the majority suggests its reading of the release might well be different if "the| sheer number of loans made by the malfeasant agents [had] precluded Bolling’s investigation” o'r if "additional potential losses [had been] undiscoverable at the time the release was signed.” Ante at 386, n. 7. The record in this case contains absolutely no evidence of the totjal number of loans made by the malfeasant employees; nor does it indicate in any way that ¿¡oiling was able to estimate the extent of the losses it could expect to incur from loans that did pot ripen into losses until after the date of the release. Although counsel for Bolling indicated during oral argument that the 24 transactions pt issue in this case are the only loans that Bolling now argues ripened into losses after the release date, he did not state how many loans by malfeasant employees did not become losses or whether Bolling had any way of determining, at the time the release was signed, the likelihood that such loans would become losses.
In determining whether an issue of fact exists for summary judgment purposes, any doubt must, of course, be resolved against the moving party. Turner v. American Motors General Corp., 392 A.2d 1005, 1006.(D.C.1978). It should therefore be presumed that Bolling’s ability to discover the extent of the losses it would incur after the release — a factor which the majority properly recognizes to be important — was lacking. Thus, far from ”underscor[ing]" the validity of the analysis used by the majority, the absence of evidence regarding the predictability *389of Bolling’s post-release losses strongly supports a conclusion that factual issues remain to be resolved and summary judgment was inappropriate.