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Athridge v. Aetna Casualty and Surety Co.

September 29, 2006


The opinion of the court was delivered by: John M. Facciola United States Magistrate Judge


These matters are before me on Defendant's Motion for Summary Judgment [#197] and Plaintiffs' Motion for Partial Summary Judgment [#198]. For the reasons set forth below, both motions will be denied.


This is one of several cases relating to an automobile accident that took place on July 29, 1987, in which then-sixteen-year-old Jorge Iglesias ("Jorge"), driving a car owned by his aunt and uncle ("the Rivases"), struck and severely injured plaintiff Thomas Athridge ("Tommy").*fn1 In this action, Tommy and his father ("the Athridges") brought suit against Aetna Casualty and Surety Company ("Aetna"), insurer of Jorge at the time of the accident, both in their own right and as Jorge's assignees,*fn2 for indemnification, bad faith violations, and unfair trade practices.

This Court entered summary judgment in favor of Aetna on all counts. Initially, this Court found Aetna's actions did not breach any fiduciary duty or the duty of due care, good faith, and fair dealing. Athridge v. Aetna, No. CIV. A. 96-2708, 2001 WL 214212, at *5-12. Following additional briefing, this Court also granted summary judgment in Aetna's favor on claims of indemnification, intentional infliction of emotional distress and abuse of process, and unfair trade practices. Athridge v. Aetna Cas. & Sur. Co., 163 F. Supp. 2d 38, 48 (D.D.C. 2001).

On appeal, the D.C. Circuit reversed and remanded the indemnification claim and affirmed all other grants of summary judgment. Athridge v. Aetna Cas. & Sur. Co., 351 F.3d 1166, 1169-70 (D.C. Cir. 2003). The appellate court affirmed this Court's interpretation of the "reasonable belief" exclusion of Aetna's policy, but found a genuine issue of material fact as to whether Jorge had a reasonable belief in his entitlement to use the car on the day of the accident. Id. Summary judgment for Aetna on the Athridges' indemnification claim was therefore reversed and remanded.

Though the D.C. Circuit found a question of fact for a jury to decide, Aetna again moves for summary judgment on the issue of indemnification. The Athridges move for partial summary judgment to prevent Aetna's defense to their indemnification claim on the basis of estoppel.


To prevail on a motion for summary judgment, a party must establish, on the basis of the "pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby, 477 U.S. 242, 247 (1986). When ruling on such a motion, the Court views the evidence in the light most favorable to the non-moving party. Reeves v. Sanderson Plumbing, 530 U.S. 133, 150 (2000).

A. Estoppel

On remand, the Athridges argue that Aetna is estopped from raising a defense to the indemnification claim because Aetna did not adequately reserve its rights when Paul Pearson, an attorney paid by Aetna, assisted Jorge's private attorney, Irving Starr, in his defense against the Athridges in a related suit before Judge Greene. Plaintiffs' Memorandum in Support of Motion for Partial Summary Judgment ("Pls. Mem.") at 1. A brief review of the undisputed facts in this case is in order. A few days prior to Jorge's trial before the late Judge Greene, Starr ran into Pearson in Arlington court. Pearson had been retained by Aetna to represent Jorge's parents in a related suit brought by the Athridges, for which Pearson ultimately secured dismissal.*fn3 When Starr told Pearson of the upcoming trial and his concern that he would be confronting a substantial and well-financed opponent, represented by a large and prominent law firm, Pearson volunteered to help Starr on what Starr thought was a pro bono basis. Discovery in this case revealed, however, that Pearson convinced Aetna that paying him was in Aetna's interest. Aetna ultimately paid Pearson for the services he provided Jorge by helping Starr at the trial before Judge Greene.

Lest its doing so be deemed a waiver of Aetna's insistence that it had no responsibility to defend or indemnify Jorge, Pearson had Jorge sign a document in which Jorge acknowledged that Pearson's assistance to Jorge at trial was not a waiver of Aetna's position that it had no responsibility to Jorge. The document reads in its entirety as follows:

I, Jorge Iglesias, agree to allow Paul R. Pearson, Arthur, Pearson, & Martin, Ltd., to assist in my defense in the case of Athridge, et al. v. Iglesias, Civ. No. 89-1222 (HHG). I further understand that Mr. Pearson's involvement on my behalf does not constitute a waiver of Aetna's denial of coverage or indemnification of me and that Aetna continues to deny any obligation to me to defend or indemnify me for the claims of Thomas P. Athidge, et al., arising out of the auto/pedestrian accident of July 29, 1987.

Defs. Mem. at 8. The Athridges contend this document fails to adequately reserve Aetna's rights to disclaim liability on their indemnification claim, and as a result Aetna is now ...

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