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December 30, 1998



Before Terry and Ruiz, Associate Judges, and King, Senior Judge.[fn*] [fn*] Judge King was an Associate Judge of the court at the time of argument. His status changed to Senior Judge on November 23, 1998.

The opinion of the court was delivered by: Terry, Associate Judge:

Appellants *fn1 filed a complaint against appellee Landmark Insurance Company after Landmark refused to defend certain parties in a lawsuit filed against them in 1987. *fn1 The trial court, ruling that appellants' claims were barred by the statute of limitations, granted summary judgment in favor of Landmark. Appellants noted an appeal (No. 95-CV-1682), which was fully briefed by both sides and placed on the calendar for oral argument. Three days before the date on which the case was to be heard, appellants filed a motion to postpone the argument so that they might file a motion in the trial court to vacate the judgment under Super. Ct. Civ. R. 60(b). We granted the request for postponement (quite reluctantly, because it came so late), and appellants filed their Rule 60(b) motion. The trial court denied it on the ground that it was untimely, and appellants noted a second appeal (No. 97-CV-654), which we consolidated with the first. [722 A2d Page 839]

Before this court appellants make four arguments. First, they contend that Landmark waived the statute of limitations. Second, they argue that Landmark is estopped from raising the statute of limitations as a defense. Third, they maintain that Landmark acknowledged a duty of coverage under D.C.Code § 28-3504 (1996), thereby removing the case from the statute of limitations. Finally, they contend that the court erred in denying their Rule 60(b) motion. We reject all four arguments and affirm both the summary judgment and the denial of the Rule 60(b) motion.


In 1986 Landmark issued an insurance policy to the National Investment Development Corporation ("NIDC") *fn2 providing general liability coverage for 132 properties throughout the United States from January 1, 1986, to January 1, 1987. *fn2 One of the properties covered by the policy was the Tyler House Apartments, located in the District of Columbia. On March 3, 1987, a group of Tyler House tenants filed a multi-count complaint *fn2 in the Superior Court of the District of Columbia ("the Tyler House litigation") against Tyler House Apartments, Ltd. ("THAL"), Partnership Investor Services, Inc. ("PISI"), Beltway Management Company ("Beltway"), and two individuals, Stephen D. Moses and John L. Wagner. THAL and PISI subsequently declared bankruptcy, *fn2 and the case was eventually settled.

On March 19, 1987, sixteen days after the complaint was filed, NIDC notified Landmark of the Tyler House litigation and requested coverage under the general liability policy. Mark Heath, Landmark's litigation supervisor, denied coverage and any duty to defend in a letter dated June 3, 1987.

More than two years later, on July 14, 1989, Beltway filed a complaint against Landmark in the United States District Court for the District of Columbia ("the Beltway litigation") seeking a declaratory judgment that Landmark had a duty to defend it under the same policy that is at issue in this case. *fn3 On September 19, 1990, the court ruled in favor of Beltway, holding that Landmark indeed had such a duty. Beltway Management Co. v. Lexington-Landmark Insurance Co., 746 F. Supp. 1145 (D.D.C. 1990).

Apparently prompted by that decision, Scott Carr, who at that time was counsel for NIDC and all six appellants, telephoned Mark Heath on November 6, 1990, to request coverage once again for the Tyler House litigation. In that conversation, according to Carr's affidavit, Heath told Carr that Landmark would provide defense costs to appellants and seek contribution from other insurers. However, after Carr sent Heath two letters attempting to confirm these statements, Heath retreated from his position and wrote in a letter dated December 4, 1990, that Landmark would deny coverage to Ross and Rozet but that it might have a duty to defend NIDC, PISI, and Stephen Moses. *fn4 At the same time, Heath noted that those parties also had other insurance policies that would cover the Tyler House litigation. On August 21, 1992, Landmark issued a check payable to NIDC in the amount of $50,000. The words "good faith payment of legal expenses" appear on the face of the check.

In the meantime, Heath contacted other insurance companies to seek contribution from them. When those carriers refused to [722 A2d Page 840]

contribute, Heath asked Steven Migdal, counsel for Landmark, to draft a complaint against them, seeking a declaratory judgment that the other carriers were liable for their pro rata share in defending the Tyler House litigation. The complaint was drafted sometime in 1991, but it was never filed. Later, after the present suit began, appellants sought to depose Mr. Migdal in order to obtain more information about the draft complaint. However, after hearing testimony from Mr. Migdal on May 19, 1995, that he did not recall either writing the complaint or sending it to anyone, *fn5 the Circuit Court for Anne Arundel County, Maryland, issued a protective order barring the deposition. Some time thereafter Mr. Migdal was deposed in a case that was pending in California. *fn5 In the course of that deposition, he admitted that he took part in preparing the draft complaint. Migdal also testified in the California trial.

On June 1, 1995, appellants deposed Mark Heath. Because Heath said during his deposition that certain documents were missing from his claim file, appellants requested discovery of his complete file activity notes on June 6. On June 22 Landmark sent Heath's notes, partially redacted to exclude privileged material, to counsel for appellants. They did not object to the omissions from the notes until the complete unredacted notes surfaced in 1996 in the California litigation. According to an affidavit from Philip Cook, counsel for appellants in the California case, Landmark provided him with a full copy of the notes. Some of the portions which had been redacted in the District of Columbia litigation (the instant case) revealed that Landmark recognized it had a duty to defend appellants in the Tyler House litigation. *fn6


Landmark filed a motion for summary judgment, asserting inter alia that appellants' claims were barred by the statute of limitations. *fn7 After a hearing, the trial court granted the motion. The court ruled that the three-year statute of limitations on a claim for breach of an insurance contract begins to run when the insured receives notice of rejection of a claim under the policy. Landmark had denied coverage on June 3, 1987, in Mr. Heath's letter. The court therefore concluded that any action against Landmark should have been filed by June 3, 1990. Because ...

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