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Ameron International Corporation v. Continental National American Group Dba Cna

November 23, 2011

AMERON INTERNATIONAL CORPORATION, PLAINTIFF,
v.
CONTINENTAL NATIONAL AMERICAN GROUP DBA CNA, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Hon. Otis D. Wright, II United States District Judge

O

Order GRANTING Defendants' Rule 56(d) Motion and DENYING without prejudice Plaintiff's Motion for Partial Summary Judgment [10] [Filed 10/13/11]

I. INTRODUCTION

Pending before the Court is Plaintiff, Ameron International Corporation's ("Ameron" or "Plaintiff"), Motion for Partial Summary Judgment. (Dkt. No. 10.) Defendants, Continental Insurance Company ("CIC") and Continental Casualty Company ("CCC") (collectively, "Defendants"), filed an Opposition on November 7, 2011, in which they moved the Court to deny Plaintiff's Motion pursuant to Federal Rule of Civil Procedure 56(d) ("Rule 56(d)"). (Dkt. No. 14.) Plaintiff filed a Reply on November 14, 2011. (Dkt. No. 17.) Having considered the arguments in support of and in opposition to the instant Motion, the Court deems the matter appropriate for decision without oral argument. See Fed. R. Civ. P. 78; L.R. 7-15. For the reasons discussed below, Defendants' Rule 56(d) Motion is hereby GRANTED and Plaintiff's Motion for Partial Summary Judgment is DENIED without prejudice.

II. BACKGROUND

The underlying lawsuit in this insurance coverage dispute was brought against Ameron by Vicki Branville ("Branville"), who alleged that, between 1966 and 1971, she was exposed to asbestos fibers attached to clothing worn by her father and brother during their employment at an Ameron facility (the "Branville case"). (SUF Nos. 17, 18.)*fn1 Allegedly, as a result of this "second-hand" or "take-home" exposure, Branville eventually contracted mesothelioma and passed away. (SUF Nos. 19, 20.)

Between 1966 and 1971, Ameron maintained insurance coverage with five different carriers: (1) Defendant CIC, as successor to a comprehensive primary liability insurance policy issued by the Harbor Insurance Company for the period June 1, 1964 to June 1, 1967; (2) Defendant CCC, who issued a primary liability policy for the period June 1, 1969 to June 1, 1972; (3) Chubb, who issued a primary liability insurance policy for the period June 1, 1967 to June 1, 1969; (4) Fireman's Fund Insurance Company ("Fireman's Fund"), who issued a policy for the period June 1, 1972 to June 1, 1975; and

(5) Truck Insurance Exchange ("Truck"), who issued a policy for the period June 1, 1975 to July 1, 1988. (SUF Nos. 1, 7; SGI No. 47.)

On May 2, 2011, the parties to the Branville case reached a $2.5 million settlement (the "Settlement") and Ameron submitted requests to the above-mentioned insurers regarding funding for the Settlement. (SUF No. 28; SGI No. 49.) Defendants contend, and Plaintiff disputes, that the insurers agreed to allocate the Settlement, and to share indemnity and defense on a pro rata basis, calculated by time-on-risk. (SGI No. 54.) Subsequently, Chubb and CIC paid a portion of the settlement. (SGI Nos. 49, 50.) Fireman's Fund paid nothing, however, allegedly because it reached a separate settlement agreement with Ameron. (SGI No. 51.) Defendants assert, and Plaintiff disputes, that Truck paid less than its "pro rata" share of the Settlement because it unilaterally concluded that the $2.5 million settlement was unreasonable. (SGI Nos. 53-55.) As a result of Truck's purported unwillingness to fund the entire settlement amount, there was a shortfall in Ameron's coverage. (SGI No. 53.)

On July 13, 2011, Ameron filed the instant case in Los Angeles Superior Court, alleging breach of contract and breach of the implied covenant of good faith and fair dealing against CIC and CCC. (Dkt. No. 1.) Defendants removed the action to federal court on August 22, 2011, invoking diversity jurisdiction pursuant to 28 U.S.C. § 1332. (Id.) Plaintiff then filed the instant Motion for Partial Summary Judgment on October 13, 2011, seeking "a determination that Defendants breached their respective policies in failing to provide sufficient coverage for [the Settlement]." (Mot. at 1.) Specifically, Plaintiff contends that: (1) CIC must fund the Settlement up to the policy limit of $5 million under California's purportedly "well-settled" "all-sums" rule; and (2) CCC must fund the Branville Settlement above the exhausted aggregate policy limit, because the limit applies only to completed operations claims, which does not include Branville's claim for "take-home" asbestos contamination. (See Mot. at 1-2; Pl.'s Mem. Re: Evid. Objections at 2.) Defendants dispute Plaintiffs contentions in this respect, and also argue that the instant Motion is premature under Rule 56(d).

III. LEGAL STANDARD

Under Rule 56(d), "[i]f a non-movant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition, the court may:

(1) defer considering the motion or deny it; (2) allow time to obtain affidavits or declarations or to take discovery; or (3) issue any other appropriate order." To obtain a postponement or denial of a motion for summary judgment to allow for further discovery, Defendants must show: "(1) [f]acts indicating a likelihood that controverting evidence exists as to material fact; (2) [s]pecific reasons why such evidence was not discovered or obtained earlier in the proceeding (i.e.[,] good cause); (3) [s]teps or procedures by which [Defendants] propose[] to obtain such evidence within a reasonable time; [and] (4) [a]n explanation of how those facts will suffice to defeat the pending summary judgment motion." Thommeny v. Paramount Pictures Corp., No. CV 10--6951--VBF (FMOx), 2011 WL 2899340, at *2 (C.D. Cal. July 13, 2011) (citing Tashima, and Wagstaffe, California Practice Guide: Fed. Civ. Proc. Before Trial, § 14:114 (Rutter Grp. Ed., 2008); Tatum v. City & County of San Francisco, 441 F.3d 1090, 1101 (9th Cir. 2006)).

A Rule 56(d) "'continuance of a motion for summary judgment for purposes of conducting discovery should be granted almost as a matter of course unless the non-moving party has not diligently pursued discovery of evidence.'" Stonebreaker v. Stonebreaker, No. 11cv797 WQH (WVG), 2011 WL 5361155, at *4 (S.D. Cal. Nov. 4, 2011) (quoting Burlington N. Santa Fe R.R. v. The Assiniboine and Souix Tribes of the Ft. Peck Reservation, 323 F.3d 767, 773--74 (9th Cir. 2003)). Indeed, "[d]istrict courts should grant a Rule 56(d) motion 'fairly freely' where a summary judgment motion is filed before a party has had a realistic opportunity to pursue discovery relevant to its theory of the case." U.S. Equal ...


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