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TRANSPORT INS. CO. v. TIG INS. CO.
202 Cal.App.4th 984 (2012)
Court of Appeals of California, First District, Division Two.
January 13, 2012.
In late 1996, Nalepa retained counsel at a second law firm, Deborah Cohen of Pepper Hamilton & Scheetz (Pepper Hamilton), which had assisted Transport in another matter. As his letter to Ms. Cohen put it: "We are getting
involved in this effort because of [a prior] litigation you have filed .... I've spoken to Eve Rosen and she has blessed our involvement at this point. I am hopeful that your office will be able to assist Transport further in recovering what appears to be long overdue reinsurance proceeds." Nalepa's letter ends with this: "This file is troublesome from a number of aspects and your considered legal opinion will be helpful."3 By November 1996, Pepper Hamilton had drafted a complaint against another of Transport's reinsurers, and a note on the front of the draft asked whether other reinsurers, such as Unigard, Seaton's predecessor, should be added as a defendant. Ms. Cohen communicated with Transport several times about the statute of limitations, including, for example, in a July 1997 memorandum where she expressed concern about the possible application of the statute of limitations, and advised that the issue could "not sit." A November 19, 1997 letter from Ms. Cohen was similar, expressing "concern about the statute of limitations on some of these billings." Following the December 1997 Supreme Court decision in Aerojet, supra, 17 Cal.4th 38, Ms. Cohen wrote Nalepa, advising Transport that it should update its billing to TIG, "provide a reasonable time period" for questions, and then demand payment, and "[i]f payment is not made, litigation should be commenced...." In July 1998, Transport sent updated bills to TIG for expenses, stating that "all billings are due 30 days after receipt." In June 1999, Transport sent another bill to TIG, accompanied by a cover letter drafted by Ms. Cohen, which letter she described as follows: "I have tried to `wordsmith' the letter to set this up for litigation." Following the September 1999 settlement with Aerojet, Transport brought in a third law firm, Luce Forward, Hamilton & Scripps (Luce Forward), to allocate the settlement between the Aerojet sites and between loss and expense, in order to bill the reinsurers. Some issues arose as to just how to apportion, and one attorney at Luce Forward told Transport that "it is unlikely that anyone is just going to write a check" regarding the proposed allocation, and another that his "expectation was that the matter was likely to go to litigation at the end of the day." They also warned Transport regarding the
statute of limitations.4 Transport's Rosen "understood [in 1999] that ultimately there was going to be some litigation." Indeed, in September 1999, attorneys at Luce Forward drafted a complaint by Transport against TIG and Seaton.5 It was not until many years later that Transport filed any lawsuit.
1. Ario v. Underwriting Members of Lloyd's of London (Pa.Commw.Ct. 2010) 996 A.2d 588, 597, the case cited to us by Transport after the briefing was closed, describes Stronghold similarly: "In Continental Casualty, where the policy established that loss covered under the policy must be reported to the reinsurer `as soon as practicable,' the court concluded that the insurer's cause of action for payment did not arise until notice of loss was provided to the reinsurer and the reinsurer was afforded a reasonable time in which to decide whether and how much it would pay."
2. In fact, the claimed reasons for Transport's overlength reply brief are that the reinsurers' respondent's briefs do not accurately recite the evidence and cite "irrelevances," and that because the primary issue is "whether the trial court committed instructional error, Transport is entitled to view and present the trial evidence in the light most favorable to the claim of instructional error."
3. At trial, Nalepa testified as follows: "I, quite frankly, to this day don't know what Transport was doing with [its collection efforts] and who had the responsibility at their end."
4. Seaton requests judicial notice of material it asserts might be germane, and TIG's brief also mentions this. We deny the request for judicial notice.
5. According to Transport, this and the earlier draft complaint are of no significance because they were for declaratory relief only and did not contain a cause of action for breach of contract.
6. Focusing on Judge Woolard's comments in her tentative ruling, and that her subsequent order did not contain what she said, Transport's brief says things such as this: "[T]he trial court did not expressly address the equitable tolling issue in its written rulings, but clearly ruled against Transport on this issue because it did not include equitable tolling in the rule it ultimately adopted, despite Transport's detailed argument on this point in its moving papers. [Citations.] ... Given that, in its tentative ruling, the trial court indicated it would apply equitable tolling [citation] but, after hearing TIG's arguments on this issue [citations], it excluded equitable tolling from its written ruling, we would ... argue that the trial court unquestionably `determined that equitable tolling should not apply.'" As will be shown, this is an overstatement.
7. TIG's proposed instruction would have told the jury: "TIG contends that Transport filed this lawsuit too late. To establish this defense, TIG must prove that this action was not commenced within four years of the date on which the claim sued on arose. You must decide when the claim arose, that is when TIG failed to pay the amounts allegedly due under the terms and conditions of [policies] FR 297 and FR 298. If TIG's failure to pay the alleged amounts due took place before January 26, 2002, Transport's lawsuit was filed too late and is barred by the statute of limitations."
8. As indicated, Transport's opening brief referred to its reply in support of its new trial motion, which contained an argument that Judge Woolard's ruling was "law of the case." TIG took issue with this, and Transport's reply brief concedes that law of the case could not pertain, as the doctrine "has no application in trial court proceedings without an appellate decision. (People v. Barragan (2004) 32 Cal.4th 236, 246 [9 Cal.Rptr.3d 76, 83 P.3d 480].)"
9. The treatise goes on to note that "review on appeal from the final judgment has been allowed in exceptional cases," citing Gackstetter v. Frawley (2006) 135 Cal.App.4th 1257, 1269 [38 Cal.Rptr.3d 333]. (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial, supra, ¶ 10:385, pp. 10-149 to 10-150 (rev. # 1, 2011).) Gackstetter is one of the cases Transport relies on here.
10. This may be problematic, in light of the lengthy statute of limitations involved. (See Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 380 [2 Cal.Rptr.3d 655, 73 P.3d 517] ["Because plaintiffs had three or four years after discovery, and up to ten years after the project's completion, to bring their suits for latent construction defects, many of the concerns that might warrant equitable tolling are ameliorated."]. Cf. Flintkote v. General Accident Assurance Co. of Canada (N.D.Cal. 2007) 480 F.Supp.2d 1167, 1179-1180 [holding equitable tolling could apply to four-year statute of limitations in asbestos case].)
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