Appellate Case: 23-2113 Document: 010111036565 FILED Date Filed: 04/23/2024 Page: 1 United States Court of Appeals Tenth Circuit
PUBLISH April 23, 2024 UNITED STATES COURT OF APPEALS Christopher M. Wolpert Clerk of Court FOR THE TENTH CIRCUIT _________________________________
TRAVELERS CASUALTY INSURANCE COMPANY OF AMERICA,
Plaintiff - Appellee,
v. No. 23-2113
A-QUALITY AUTO SALES, INC.; FELICIA RICHESIN, individually and as owner of A-Quality Auto Sales, Inc.; SHAWN RICHESIN, individually and as owner of a A-Quality Auto Sales, Inc.,
Defendants - Appellants,
and
RNS AUTO SERVICES, LLC; SAM MONTOYA, individually and as owner and principal of RNS Auto Services, LLC; MIKE KOTA; GLYNN PATRICK AGUILAR,
Defendants. _________________________________
Appeal from the United States District Court for the District of New Mexico (D.C. No. 1:22-CV-00545-KWR-LF) _________________________________
Geoffrey R. Romero, Law Offices of Geoffrey R. Romero (Phillip G. Sapien and Joseph A. Sapien, Sapien Law, LLC, with him on the briefs), Albuquerque, New Mexico, for Defendants – Appellants. Appellate Case: 23-2113 Document: 010111036565 Date Filed: 04/23/2024 Page: 2
Jennifer A. Noya, Modrall, Sperling, Roehl, Harris & Sisk, P.A. (Shannon N. Nairn with her on the brief), Albuquerque, New Mexico, for Plaintiff – Appellee. _________________________________
Before McHUGH, MURPHY, and CARSON, Circuit Judges. _________________________________
McHUGH, Circuit Judge. _________________________________
In this insurance dispute case, Appellants seek reversal of the district court’s
entry of declaratory judgment that the amount available under an insurance policy is
at most $500,000 rather than $1,000,000. Specifically, Appellants assert that (1) the
dispute was not ripe for resolution under Article III of the Constitution, (2) two
different abstention doctrines should have caused the district court to stay or dismiss
the case, and (3) summary judgment was prematurely granted against them before
they could take discovery to develop material facts necessary to oppose summary
judgment.
Exercising jurisdiction under 28 U.S.C. § 1291, we affirm the district court’s
entry of declaratory judgment.
I. BACKGROUND
In January 2016, Felicia and Shawn Richesin purchased a Subaru at an auto
auction with the intent to conduct any necessary repairs before reselling the vehicle
from the dealership they owned, A-Quality Auto Sales, Inc. (together with Felicia
and Shawn Richesin, the “Richesins”). Before reselling the vehicle, the Richesins
took it to Sam Montoya d/b/a RNS Auto Services (together with its principals and
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employees, “RNS”) for a mechanical evaluation, inspection, and repairs. On
February 2, 2016, the Richesins retrieved the Subaru from RNS, but when they drove
it onto the highway, they began noticing mechanical issues with the car. The
Richesins pulled onto the side of the highway where Ms. Richesin exited the vehicle
and was struck by another car, causing severe injuries.
At the time of the incident, RNS had an effective garage insurance policy (the
“Policy”) from Travelers Casualty Company of America (“Travelers”). The Policy
provided commercial general liability coverage with a per-occurrence limit of
$500,000, and a “General Aggregate” limit of $1,000,000. App. Vol. II at 323. The
Policy defined “Occurrence” as “an accident, including continuous or repeated
exposure to substantially the same general harmful conditions.” Id.
The driver of the vehicle that struck Ms. Richesin was underinsured, so the
Richesins looked to RNS and its insurer, Travelers, for additional compensation for
her injuries. On April 16, 2016, Travelers offered the Richesins $500,000—what they
believed to be the Policy limit—in exchange for a release of RNS. The Richesins’
counsel rejected the offer, taking the position that there were multiple occurrences
and therefore the Policy’s aggregate limit of $1,000,000 was available.
A. The State Litigation
On December 23, 2016, the Richesins filed suit against Travelers and nine
other parties—a mixture of individual and entity defendants along with their
insurers—in New Mexico state court asserting more than a dozen tort and state
statutory claims. As to Travelers, the state court complaint asserted one count for
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unspecified declaratory judgment regarding the Policy, and one tort count for loss of
consortium. Travelers moved to be dismissed on grounds that under long-standing,
New Mexico Supreme Court precedent, injured third parties do not—absent limited
circumstances—have standing to sue the tortfeasor’s insurer: “there is no privity
between an injured party and the insurer of the negligent defendant in the absence of
a contractual provision or statute or ordinance to the contrary; therefore the injured
party has no claim directly against the insurance company.” App. Vol. I at 215
(quoting Raskob v. Sanchez, 970 P.2d 580, 581 (N.M. 1998)). The state court granted
Travelers’ motion on October 30, 2017, and dismissed all claims against Travelers
with prejudice.
In early 2022, nearly five years after Travelers was dismissed from the state
court litigation, the Richesins and RNS entered into a series of agreements under
which RNS would (1) direct Travelers to pay the $500,000 per-occurrence Policy
limit to the Richesins, (2) stipulate to its liability for the Richesins’ injuries and agree
to allow the state court to “award legal damages . . . upon an evidentiary hearing,”
(3) assign its rights under the Policy to the Richesins, and (4) assign to the Richesins
“90% of all bad faith and related claims” RNS may have held against any insurer.
App. Vol. I at 11–12. In exchange, the Richesins agreed they would not seek
satisfaction of any judgment entered in the state court litigation against RNS.
Travelers subsequently paid the Richesins $500,000 subject to a reservation of
“all policy defenses.” Id. at 12.
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Following the assignment of the Policy to the Richesins—which cured the
privity defect that caused Travelers’ dismissal from the state litigation in 2017—
Travelers moved to intervene for purposes of seeking declaratory judgment on the
question of which Policy limit applies. The Richesins opposed intervention, arguing
that (1) the motion to intervene was untimely, (2) intervention was “not proper in the
instant litigation,” and (3) Travelers’ intervention would cause them prejudice. App.
Vol. II at 308–09. In response to the Richesins’ opposition, Travelers withdrew its
motion to intervene in the state court litigation.
B. The Federal Litigation
On July 22, 2022, less than two weeks after the Richesins filed their opposition
to Travelers’ intervention in the state court action, Travelers filed a complaint in
federal district court asserting a single count against the Richesins and RNS for a
judicial declaration “that the accident in which Felicia Richesin was injured is a
single occurrence and the [Policy] liability coverage limit for this accident is
$500,000.” App. Vol. I at 15.
On September 12, 2022, the Richesins moved to dismiss, arguing that (1) the
district court should abstain, as a discretionary matter, under the doctrine announced
in Brillhart v. Excess Insurance Company of America., 316 U.S. 491 (1942), and
(2) the district court was compelled to abstain under Younger v. Harris, 401 U.S. 37
(1971).
On January 23, 2023, while the Richesins’ motion to dismiss remained
pending, Travelers moved for summary judgment on its sole claim for declaratory
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judgment. Travelers’ motion contained a mere five statements of undisputed material
facts consisting of excerpts of the Policy and an assertion that the “State Court
Complaint arises from a single occurrence.” App. Vol. II at 324.
In opposing summary judgment, the Richesins did not dispute any of
Travelers’ statements of undisputed material facts and offered no argument regarding
why Travelers’ construction of the Policy was wrong. Instead, the Richesins asserted
that the motion for summary judgment was premature and “must be stayed to afford
defendants an opportunity to conduct discovery.” Id. at 339.
On June 22, 2023, the district court denied the Richesins’ motion to dismiss,
concluding that the Brillhart factors weighed in favor of entertaining the action under
the Declaratory Judgment Act. The district court did not address the Richesins’
argument that abstention was required under Younger.
About two weeks later, on July 7, 2023, the district court granted summary
judgment to Travelers, declaring that “the February 2, 2016[,] accident in which
Felicia Richesin was injured ‘is a single occurrence and the [Policy] coverage limit
for [that] accident is $500,000.’” App. Vol. II at 377 (third alteration in original)
(quoting App. Vol. I at 15). With respect to the Richesins’ argument that they needed
discovery before opposing summary judgment, the court construed it as a motion
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under Federal Rule of Civil Procedure 56(d) and denied it on both procedural and
substantive grounds.1
II. ANALYSIS
On appeal, the Richesins assert (1) the dispute was not ripe for resolution as an
Article III justiciability matter, (2) the district court erred by declining to abstain
under Brillhart, (3) the district court erred by declining to abstain under Younger, and
(4) the district court erred by denying their Rule 56(d) motion, thereby denying them
discovery needed to meaningfully oppose Travelers’ motion for summary judgment.
We address each assignment of error in turn below.
A. Ripeness in the Declaratory Judgment Context
The Declaratory Judgment Act states in pertinent part that
[i]n a case of actual controversy within its jurisdiction . . . , any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.2
28 U.S.C. § 2201(a).
The Act’s reference to “case[s] of actual controversy,” the Supreme Court
holds, refers to “Cases” and “Controversies” that are justiciable under Article III of
1 The Richesins did not answer the complaint within the fourteen-day period prescribed by Federal Rule of Civil Procedure 12(a)(4) following the denial of their motion to dismiss. 2 As the language of 28 U.S.C.§ 2201(a) implies, the Declaratory Judgment Act merely creates the remedy of declaratory relief and does not, on its own, confer subject-matter jurisdiction. Travelers’ complaint pleaded diversity jurisdiction under 28 U.S.C. § 1332.
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the Constitution. See MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007)
(quoting Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 240 (1937)). “Article III has
long been interpreted as forbidding federal courts from rendering advisory opinions.”
Columbian Fin. Corp. v. BancInsure, Inc., 650 F.3d 1372, 1376 (10th Cir. 2011). “It
is not the role of federal courts to resolve abstract issues of law.” Id. “Rather, they
are to review disputes arising out of specific facts when the resolution of the dispute
will have practical consequences to the conduct of the parties.” Id.
The Supreme Court instructs that courts may exercise their authority to resolve
a declaratory judgment action consistent with Article III when “the facts alleged,
under all the circumstances, show that there is a substantial controversy, between
parties having adverse legal interests, of sufficient immediacy and reality to warrant
the issuance of a declaratory judgment.” MedImmune, Inc., 549 U.S. at 127 (quoting
Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941)).
It is the final portion of the above justiciability test—“sufficient immediacy
and reality”—with which the prudential doctrine of ripeness is concerned. That is,
ripeness considers timing: whether events have progressed far enough to be sure that
declaratory judgment will resolve a live dispute with practical consequences. See
New Mexicans for Bill Richardson v. Gonzales, 64 F.3d 1495, 1499 (10th Cir. 1995).
We have distilled Article III’s ripeness requirement into a two-factor analysis,
examining (1) “the fitness of the issue for review,” and (2) “the hardship to the
parties” of withholding judicial review. See Tex. Brine Co., LLC & Occidental Chem.
Corp., 879 F.3d 1224, 1229–30 (10th Cir. 2018).
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With respect to the “fitness for review” factor, we consider “whether
determination of the merits turns upon strictly legal issues or requires facts that may
not yet be sufficiently developed.” Id. at 1229 (emphasis omitted) (quotation marks
omitted). And relevant here, the “fitness” inquiry also considers “whether the case
involves uncertain or contingent future events that may not occur as anticipated, or
indeed may not occur at all,” circumstances which, when present, preclude a finding
of ripeness. New Mexicans for Bill Richardson, 64 F.3d at 1499 (quoting 13A
Wright, Miller & Cooper, Federal Practice & Procedure, § 3532 at 112). With
respect to the “hardship” factor, we consider “whether withholding review will place
the parties in ‘a direct and immediate dilemma.’” Tex. Brine Co., LLC, 879 F.3d at
1230 (quoting United States v. Bennett, 823 F.3d 1316, 1327 (10th Cir. 2016)).
“Ripeness is a question of law, which we review de novo.” New Mexicans for Bill
Richardson, 64 F.3d at 1499.
The Richesins’ principal argument in connection with their ripeness challenge is
that the need to resolve the question of which Policy limit applies depends on an
uncertain or contingent future event that may or may not occur as anticipated.
Specifically, the Richesins argue that the state court’s award of damages at some
unknown time in the future may or may not exceed $500,000 (the Policy limit that
Travelers believes, and the district court concluded based on the unambiguous language
of the Policy, applies).3
3 The Richesins relatedly argue that the dispute is not ripe because, after the state court awards damages per the agreement between the Richesins and RNS, 9 Appellate Case: 23-2113 Document: 010111036565 Date Filed: 04/23/2024 Page: 10
We have little trouble concluding Travelers’ complaint established Article III
jurisdiction. Our precedent is clear that district courts may, consistent with Article III,
exercise their authority to resolve insurance coverage disputes via the Declaratory
Judgment Act so long as there exists a real controversy between the parties regarding
their rights and responsibilities under the relevant policy. Such circumstances are present
where “an identifiable[,] specific [insurance] claim has risen above the horizon,” even
when the “injured party . . . ha[s] [not] sued the insured.” Columbian Fin. Corp., 650
F.3d at 1383–84 (collecting cases establishing that insurance coverage disputes are
justiciable under the Declaratory Judgment Act even in the absence of underlying tort
litigation). The Richesins provide no authority, and we have found none, for the
proposition that a suit seeking a judicial declaration of the limits available under a policy
is not ripe unless and until judgment in the underlying tort litigation is entered in an
amount above the policy limit advocated by the insurer.
“Travelers can be joined in the state case and the parties can litigate the coverage issue.” Opening Br. at 26. Boiled to its essence, this argument implies that a declaratory judgment action is never ripe if the underlying dispute can conceivably be litigated in a future, coercive suit. To state the argument is to refute it; the Declaratory Judgment Act provides the federal courts with a mechanism to resolve the rights and responsibilities of parties before a coercive suit, and the attendant time and expense, is initiated. 28 U.S.C. § 2201(a) (“[A]ny court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.”). If the Richesins’ preferred conception of ripeness in the declaratory judgment context were countenanced, the Declaratory Judgment Act would be rendered nugatory since most, if not all, issues properly resolved in declaratory judgment actions are capable of being litigated in a future, coercive suit. 10 Appellate Case: 23-2113 Document: 010111036565 Date Filed: 04/23/2024 Page: 11
The Richesins unambiguously concede they have demanded more from Travelers
than $500,000 under the Policy. See Oral Argument at 11:17–11:22, Travelers Cas. Ins.
Co. of Am. v. A-Quality Auto Sales, Inc., No. 23-2113 (10th Cir. March 19, 2024),
https://www.ca10.uscourts.gov/sites/ca10/files/oralarguments/23-2113.mp3 (the court:
“There’s no dispute that your demand from Travelers is more than $500[,000].”
Appellants’ Counsel: “That is . . . correct.”). And Travelers has consistently maintained
that the accident was a single occurrence and therefore the Policy limit is $500,000. Thus,
there exists a real controversy between the parties.
Travelers’ invocation of the Declaratory Judgment Act to conclusively establish its
rights and responsibility under the Policy before it faced the coercive action the Richesins
admit they intend to bring is in the heartland of disputes properly resolved under the
Declaratory Judgment Act. We are therefore satisfied that “the facts alleged, under all the
circumstances, show that there is a substantial controversy, between parties having
adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a
declaratory judgment.” MedImmune, Inc., 549 U.S. at 127 (quoting Md. Cas. Co., 312
U.S. at 273). We thus hold that the district court properly exercised jurisdiction over this
ripe request for declaratory judgment.
B. Brillhart Abstention
The Richesins next argue that even if the district court had Article III jurisdiction
to hear and resolve this case, it should have nevertheless abstained from hearing the case
under Brillhart.
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The Brillhart abstention doctrine is potentially implicated whenever a
litigant’s request for declaratory relief in federal court threatens “[g]ratuitous
interference with the orderly and comprehensive disposition of a [parallel] state court
litigation.” 316 U.S. at 495. “Ordinarily,” the Brillhart Court opined, “it would be
uneconomical as well as vexatious for a federal court to proceed in a declaratory
judgment suit where another suit is pending in a state court presenting the same
issues, not governed by federal law, between the same parties.” Id.
As the Court later characterized the effect of Brillhart:
The question for a district court presented with a suit under the Declaratory Judgment Act, the [Brillhart] Court found, is “whether the questions in controversy between the parties to the federal suit, and which are not foreclosed under the applicable substantive law, can better be settled in the proceeding pending in the state court.”
Wilton v. Seven Falls Co., 515 U.S. 277, 282 (1995) (quoting Brillhart, 316 U.S. at 495).
The Richesins face an exceedingly steep hill in seeking reversal of the district
court’s decision not to abstain under Brillhart owing to an onerous standard of review.
“The Supreme Court has long made clear that the Declaratory Judgment Act ‘gave the
federal courts competence to make a declaration of rights; it did not impose a duty to do
so.’” State Farm Fire & Cas Co. v. Mhoon, 31 F.3d 979, 982 (10th Cir. 1994) (quoting
Pub. Affs. Assocs., Inc. v. Rickover, 369 U.S. 111, 112 (1962)). This feature of the
Declaratory Judgment Act, the Supreme Court instructs, has long “been understood to
confer on federal courts unique and substantial discretion in deciding whether to declare
the rights of litigants.” Wilton, 515 U.S. at 286. As a result, we accord considerable
deference to a district court’s determination whether to entertain a declaratory judgment
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action and review its decision only for a “clear abuse of discretion.” United States v. City
of Las Cruces, 289 F.3d 1170, 1179 (10th Cir. 2002).
“To guide the district courts in the exercise of such substantial discretion,” id.
at 1183, we have adopted several factors to be weighed by a district court when asked to
abstain from hearing a declaratory judgment action in favor of parallel state court
litigation, directing courts to consider:
[1] whether a declaratory action would settle the controversy; [2] whether it would serve a useful purpose in clarifying the legal relations at issue; [3] whether the declaratory remedy is being used merely for the purpose of “procedural fencing” or “to provide an arena for a race to res judicata”; [4] whether use of a declaratory action would increase friction between our federal and state courts and improperly encroach upon state jurisdiction; and [5] whether there is an alternative remedy which is better or more effective.
Mhoon, 31 F.3d at 983 (alterations in original) (quoting Allstate Ins. Co. v. Green, 825
F.2d 1061, 1063 (6th Cir. 1987)).
“We give the district court’s assessment of each [Brillhart/Mhoon] factor great
deference,” and we do “not reevaluate the district court’s assessment of each” factor. City
of Las Cruces, 289 F.3d at 1179, 1183. Rather, the scope of our review is limited to
considering only “whether the court’s assessment was so unsatisfactory as to constitute
an abuse of discretion.” Id. at 1179.
The district court faithfully conducted the Brillhart/Mhoon exercise, analyzing
how each factor applied to the relationship between the federal declaratory action and the
purportedly parallel state court litigation and concluding that each factor weighed in favor
of exercising its discretion to hear and resolve Travelers’ declaratory judgment action.
The Richesins have not directed us to any portion of that analysis that contained error, let
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alone that the district court’s assessment of the Brillhart/Mhoon factors “was so
unsatisfactory as to constitute an abuse of discretion.” Id. at 1179. We thus affirm the
district court’s decision not to abstain under Brillhart.
C. Younger Abstention
“Younger provides that a federal court must abstain from deciding a case
otherwise within the scope of its jurisdiction in ‘certain instances in which the
prospect of undue interference with state proceedings counsels against federal
relief.’” Elna Sefcovic, LLC v. TEP Rocky Mountain, LLC, 953 F.3d 660, 669–70
(10th Cir. 2020) (quoting Sprint Commc’ns, Inc. v. Jacobs, 571 U.S. 69, 72 (2013)).
As a mandatory abstention doctrine, we review the district court’s decision to abstain
or decline to abstain under Younger de novo. Weitzel v. Div. of Occupational & Pro.
Licensing of Dep’t of Com., 240 F.3d 871, 875 (10th Cir. 2001).
The Supreme Court has admonished that the “[c]ircumstances fitting within
the Younger doctrine . . . are ‘exceptional.’” Sprint, 571 U.S. at 73 (quoting New
Orleans Pub. Serv., Inc. v. Council of City of New Orleans, 491 U.S. 350, 368
(1989)). Indeed, the possibility of Younger abstention is triggered only when the state
proceeding falls into one of the following categories: “(1) state criminal prosecutions,
(2) civil enforcement proceedings [that take on a quasi-criminal shape], and (3) civil
proceedings involving certain orders that are uniquely in furtherance of the state
courts’ ability to perform their judicial function.” Graff v. Aberdeen Enterprizes, II,
Inc., 65 F.4th 500, 522 (10th Cir. 2023); see also Sprint, 571 U.S. at 79. The Court
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has “not applied Younger outside these three ‘exceptional’ categories,” which “define
Younger’s scope.” Sprint, 571 U.S. at 78.
If and only if the state court proceeding falls within one of the enumerated
“exceptional” types of cases, may courts analyze the propriety of abstention under the
so-called Middlesex conditions. Those conditions ask whether there exists “(1) an
ongoing state judicial . . . proceeding, (2) the presence of an important state interest,
and (3) an adequate opportunity to raise federal claims in the state proceedings.”
Courthouse News Serv. v. N.M. Admin. Off. of Cts., 53 F.4th 1245, 1256 (10th
Cir. 2022) (alteration in original) (internal quotation marks omitted).
In Sprint, the Supreme Court made clear that the Middlesex conditions are
“additional factors appropriately considered by the federal court before invoking
Younger,” but that those factors do not control the application of Younger. Sprint,
571 U.S. at 81. This is so because when applied to a case that does not present one of
the three “exceptional” state court proceedings, “the three Middlesex conditions
would extend Younger to virtually all parallel state and federal proceedings.” Id.
Therefore, the sine qua non of Younger abstention is the presence of an “exceptional”
state court proceeding, and Younger extends “no further.” Id. at 82. Only after the
court determines the case falls within the three categories of exceptional cases do the
Middlesex factors come into play.
Both before the district court and on appeal, the Richesins ignored the threshold
question of whether the state court proceeding qualifies as one of the “exceptional” cases
to which Younger might apply. In its response brief, Travelers points out this defect, but
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in reply, the Richesins make no meaningful attempt to situate the state court proceeding
within one of the “exceptional” categories. Instead, they merely assert in conclusory
fashion that “there is no question that there is an ongoing state court civil proceeding with
which Travelers seeks to interfere,” and then proceed to argue that the Middlesex factors
mandate abstention.4 Reply Br. at 13.
As explained above, the Supreme Court has left no doubt that Younger does not
apply merely because there exists a parallel or related state court proceeding. See Sprint,
571 U.S. at 82 (“[W]e today clarify and affirm that Younger extends to the three
‘exceptional circumstances’ identified [in prior precedent], but no further.”). Because the
Richesins have wholly failed either before the district court or on appeal to even attempt
to explain how the state tort litigation arising from a car accident qualifies as one of the
enumerated “exceptional” cases, and further because our own review confirms that it
does not, we conclude the district court did not err by declining to abstain under Younger.
D. Rule 56(d)
Finally, the Richesins complain that the district court erred by denying their
Rule 56(d) motion, contending they established their need to take discovery before
they could meaningfully oppose summary judgment. Rule 56(d) provides as follows:
When Facts Are Unavailable to the Nonmovant. If a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition, the court may:
4 The Richesins’ Younger arguments provide a useful illustration of the Sprint Court’s concern that, when “[d]ivorced from” an exceptional state court proceeding, “the three Middlesex conditions would extend Younger to virtually all state and federal proceedings.” Sprint Commc’ns, Inc. v. Jacobs, 571 U.S. 69, 81 (2007). 16 Appellate Case: 23-2113 Document: 010111036565 Date Filed: 04/23/2024 Page: 17
(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.
“We review . . . the district court’s denial of deferment for expanded discovery
pursuant to Rule 56(d) . . . for an abuse of discretion.” Birch v. Polaris Indus., Inc.,
812 F.3d 1238, 1249 (10th Cir. 2015) (alterations in original) (internal quotation
marks omitted).
In opposing Travelers’ motion for summary judgment, the Richesins asserted,
as a statement of additional undisputed material fact and based on a supporting
affidavit from their counsel, that they were “unable to meaningfully and substantively
respond to Plaintiff’s Motion because of the following reasons:”
a. The parties have not conducted any written discovery in this case. b. The parties have not deposed Bijan Malboub, the agent, who issued the policy in question. c. The parties have not deposed company representatives of Travelers regarding the coverage at issue. d. There are significant factual issues regarding the coverage that was sought by RNS and coverage that was sold and ultimately bound by Malboub and Travelers. e. Disposition of these factual issues is critical to the coverage issues raised by Plaintiff in their Complaint and their Motion. App. Vol. II at 337.
Before the district court, but not on appeal, the Richesins vaguely argued that
Mr. Malboub’s subjective intent in selling the Policy to RNS could have changed the
meaning of the Policy limits: “Whether Mr. Malboub intended to sell $1M in
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coverage versus $500,000 remains to be seen and discovered.”5 Id. at 340. The
Richesins further stated before the district court that they might have
“misrepresentation and negligent procurement claims” against Travelers based on the
conduct of Mr. Malboub. Id. at 341.
The district court concluded the Richesins’ request was procedurally improper
because they “should have filed their motion for Rule 56(d) discovery before, and not
at the same time as, their response to the summary judgment motion.” Id. at 374.
Because the Richesins “responded to the motion for summary judgment and did not
dispute the material facts,” the district court ruled that it “would therefore exercise its
discretion and decline to consider [the Richesins’] Rule 56(d) motion.” Id. at 375.
But the district court also ruled in the alternative, concluding that it “would
deny [the Richesins’] Rule 56(d) request on the merits.” Id. at 375. In its merits
analysis, the district court reasoned that the Richesins had
not shown how additional time would lead to discovery creating a genuine dispute of material fact, as (1) they have expressly not disputed the material facts in this summary judgment motion, and (2) they seek discovery as to potential future claims which have not been asserted in this case or any other.
5 Presumably, the Richesins meant to argue not that Mr. Malboub’s subjective intent could have changed the terms of the Policy, but rather that statements he made to RNS when selling the Policy may have altered its terms or supplied new ones. We pause to note that the Policy, like virtually all modern contracts, contains language conclusively foreclosing any contract claims based on an alleged breach of a term not contained within the written agreement. See App. Vol. I at 82 (“This policy contains all the agreements between you and us . . . .” (emphasis added)). 18 Appellate Case: 23-2113 Document: 010111036565 Date Filed: 04/23/2024 Page: 19
Id. at 376. The district court also questioned the Richesins’ avowed intent to bring
additional claims in light of their failure to file an answer to the complaint at all, let
alone an answer asserting the counterclaims of “misrepresentation and negligent
procurement.” Id. at 341.
We discern no error, let alone an abuse of discretion, in the district court’s
denial of the Rule 56(d) motion. The Richesins did not dispute any of Travelers’
material facts, and those facts entitled Travelers to summary judgment. The discovery
sought by the Richesins was incapable of altering the summary judgment analysis,
and the district court properly concluded as much.
III. CONCLUSION
For the reasons articulated, we AFFIRM the district court in full.