IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA
October 29, 2009
ALLSTATE INSURANCE COMPANY, AS SUCCESSOR-IN-INTEREST TO NORTHBROOK EXCESS AND SURPLUS INSURANCE COMPANY, FORMERLY NORTHBROOK INSURANCE COMPANY, PLAINTIFF,
CENTURY INDEMNITY COMPANY, AS SUCCESSOR TO CCI INSURANCE COMPANY, AS SUCCESSOR TO CIGNA SPECIALTY INSURANCE COMPANY, FORMERLY KNOWN AS CALIFORNIA UNION INSURANCE COMPANY; AND GREATER NEW YORK MUTUAL INSURANCE COMPANY, DEFENDANTS.
The opinion of the court was delivered by: Rufe, J.
MEMORANDUM OPINION AND ORDER
On April 15, 2009, Plaintiff Allstate Insurance Company ("Allstate") filed a Motion for Summary Judgment against Defendants Century Indemnity Company ("Century") and Greater New York Mutual Insurance Company ("GNY").*fn1 On May 22, 2009, Century filed a Brief Opposing Allstate's Summary Judgment and Supporting Century's Cross-Motions.*fn2 In its opposition brief, Century moves for a continuance and additional discovery pursuant to Federal Rule of Civil Procedure 56(f). Century contends that it did not have an opportunity to take discovery on the issue of whether Century's policy contains an aggregate limit. Century alleges that it failed to obtain this discovery because Allstate raised the issue at a deposition a mere three (3) days before the end of the discovery period. In considering Century's Rule 56(f) motion, the Court has considered Allstate's Motion for Summary Judgment, Century's Motion in Opposition, and Allstate's Reply Brief to Century's Motion for Partial Summary Judgment and Cross-Motions.*fn3 For the following reasons, Century's motion for a continuance and additional discovery is GRANTED.
I. FACTUAL AND PROCEDURAL SUMMARY
The claims between Allstate, Century, and GNY arise out of a settlement reached between Allstate and its insured, Arkema, Inc.*fn4 Allstate originally issued quota share excess insurance to Arkema's predecessor, J.F. Jelenko, from January 1, 1977 to January 1, 1983.*fn5 Century issued excess insurance to J.F. Jelenko from January 1, 1979 to January 1, 1980, and retained a 40% quota share of the same layer during the 1979-1980 policy period (Allstate retained 60% during that period).*fn6 GNY issued the underlying primary insurance to J.F. Jelenko from August 14, 1969 to August 14, 1975.
The insured manufactured asbestos-containing dental products, and the underlying claimants allege exposure to the asbestos contained in these dental products during the parties' respective policy periods (1969-1983).*fn7 The underlying claims consist of both products liability claims and premises liability claims.*fn8 On April 1, 2004, Arkema filed a complaint against Allstate, Employers of Wausau, and Employers' Insurance Company in the Eastern District of Pennsylvania seeking a declaratory judgment as to the rights and obligation of each insurer regarding Arkema's asbestos liabilities.*fn9 From June 15, 2004 through September 15, 2006, the court issued multiple orders staying the litigation to permit the parties to negotiate a settlement.*fn10 As a result of the settlement discussions, Allstate and Arkema negotiated a settlement of Arkema's asbestos liabilities pursuant to a coverage-in-place agreement ("CIP").*fn11 As of April 15, 2009, Allstate has paid $1,575,000 in indemnity and $183,294 in defense pursuant to the CIP.*fn12
On October 2, 2006, Allstate filed a Complaint against Century and GNY seeking declaratory relief and contribution from each defendant.*fn13 On December 21, 2006, GNY filed its Answer and a Cross-Claim against Century. On June 20, 2007, Century filed its Answer and a Cross-Claim against GNY. Pursuant to the Amended Scheduling Order dated May 21, 2008, the Court directed the parties to complete fact discovery by October 15, 2008; according to both parties' pleadings, the discovery deadline was extended thereafter until February 15, 2009.
B. Allstate's Motion for Summary Judgment
On April 15, 2009, Allstate filed a Motion for Summary Judgment against Century and GNY. In its supporting brief, Allstate maintains, in part,*fn14 that Century's 1979-1980 policy does not contain an explicit aggregate limit.*fn15 Allstate argues that "'[w]here... the language of the contract is clear and unambiguous, a court is required to give effect to that language.'"*fn16 Therefore, Allstate requests the Court to "declare that the [Century] Policy has no aggregate limit."*fn17
In response, Century filed a Brief in Opposition to Allstate's Motion for Summary Judgment and supporting affidavit.*fn18 In its brief, Century contends that Allstate first raised the aggregate limit issue during the deposition of Century's witness, Alexandra Tanyoun (Allstate deposed Ms. Tanyoun on February 12, 2009).*fn19 Century maintains that all paper discovery and the depositions of all of Allstate witnesses "had been completed before Allstate advanced the contention that the [Century] policy had no aggregate limit."*fn20 Further, Century asserts that it attempted to obtain additional discovery after Allstate filed its summary judgment motion, but Allstate refused to respond to Century's requests.*fn21 As a result of Century's alleged inability to take discovery on this issue, Century requests an order for a continuance on the aggregate limit issue and additional discovery from Allstate pursuant to Federal Rule of Civil Procedure 56(f).*fn22
Allstate counters that Century fails to establish how the request for additional discovery would be productive.*fn23 First, Allstate contends that Century was aware, or should have been aware, that its policy did not contain an aggregate limit.*fn24 Second, Allstate has produced its entire underwriting file as well as its corporate representatives for deposition, arguing that Century already has the information it needs on this issue.*fn25 Finally, Allstate posits that, even assuming Century first learned of the aggregate limit issue on February 12, 2009 (at the deposition of Ms. Tayoun), Century had an opportunity to seek an extension for additional discovery prior to the February 15, 2009 discovery deadline.*fn26
II. STANDARD FOR SUMMARY JUDGMENT
Rule 56(f) provides that: When Affidavits are Unavailable. If a party opposing the motion shows by affidavit that, for specified reasons, it cannot present facts essential to justify its opposition, the court may:
(1) deny the motion;
(2) order a continuance to enable affidavits to be obtained, depositions to be taken, or other discovery to be undertaken; or
(3) issue any other just order.*fn27
The moving party's supporting affidavit must identify with specificity: (1) the particular information that is sought, (2) how, if uncovered, it would preclude summary judgment, and (3) why it has not been previously obtained.*fn28 Further, the party requesting a continuance must demonstrate due diligence both in pursuing discovery before the summary judgment motion is filed, and in pursuing the continuance after the motion is made.*fn29
As stated above, to prevail on a Rule 56(f) motion, the moving party must demonstrate with specificity: (1) the particular information that is sought, (2) how, if uncovered, that information would preclude summary judgment, and (3) why it has not been previously obtained.*fn30
Although Century's briefs and affidavits specify the information sought and the reason that the information was not previously obtained ( i.e., as a result of Allstate raising the issue of an aggregate limit at the end of the discovery period), Century does not specify how that information would alter the outcome of the Court's summary adjudication. Nonetheless, "a district court is under a duty to ensure that an opposing party has been given a reasonable opportunity to compile an evidentiary record before ruling on a motion for summary judgment."*fn31 As such, "Rule 56(f) should be liberally construed."*fn32 The Court agrees with Century's contention that without the additional discovery, "the record on which this Court will be asked to adjudicate Allstate's motion will be incomplete."*fn33
Further, the Court observes that Century has been otherwise diligent in pursuing discovery on the existence of an aggregate limit in Century's policy, notwithstanding Allstate's apparent efforts to raise the issue at the final hour. Allstate belatedly raised the issue of the existence of an aggregate limit at a deposition three days before the fact discovery deadline.*fn34 By that time,
Century had timely completed its depositions of Allstate witnesses and obtained paper discovery.*fn35
When Century attempted to obtain additional discovery on the issue of an aggregate limit after Allstate filed its summary judgment motion, Allstate refused to respond to Century's additional discovery requests.*fn36 A few weeks later, Century filed the instant Motion for additional discovery.
Allstate asserts that, even assuming that Century did not learn of the aggregate limit issue until the deposition of Ms. Tanyoun, Century had an opportunity to seek an extension for discovery. However, this "opportunity" consisted of three days. It would be inequitable to deny Century additional discovery for failing to seek a discovery extension, in which Century's failure directly results from the curious manner in which Allstate raised this claim.
Moreover, the lack of a fully developed record on all relevant issues impacts on this Court's accurate consideration of the legal and factual issues in this case. The impact of this failure not only precludes this Court's present consideration of Allstate's Motion for Summary Judgment but also interjects a certain level of inequity into the mediation efforts that the Court has expected the parties to engage in to resolve their legal disputes. Therefore, in the interest of justice and exercising the Court's discretion, Century's Motion pursuant to Rule 56(f) will be GRANTED.
An appropriate Order follows.