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Wells Cargo, Inc., A Corporation v. Transport Insurance Company

August 10, 2011

WELLS CARGO, INC., A CORPORATION, PLAINTIFF,
v.
TRANSPORT INSURANCE COMPANY, A CORPORATION, DEFENDANT.



The opinion of the court was delivered by: B. Lynn WINMILLChief U.S. District Court Judge

MEMORANDUM DECISION AND ORDER

INTRODUCTION

The Court has before it Transport Insurance Company's Motion for Continuance Under Rule 56(d) (Dkt. 89). For the reasons explained below, the Court will deny the motion.

LEGAL STANDARD

The Court may postpone deciding a motion for summary judgment in order to give the nonmoving party more time to gather evidence. Fed.R.Civ.P. 56(d). Rule 56(d) requires that the non-movant show "by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition." Fed.R.Civ.P. 56(d).

ANALYSIS

Pending before the Court are cross-motions for summary judgment addressing the following issues: (1) whether Transport has a duty to defend Wells Cargo in the underlying environmental proceeding under the Transport policies; (2) whether the amounts associated with and paid in connection with the Remedial Investigation and Feasibility Study ("RI/FS") constitute defense costs or indemnity costs under the terms of the Transport policies; and (3) the applicable law that will be applied to the two foregoing issues. Transport contends that it needs to conduct discovery in order to appropriately oppose Wells Cargo's motion for summary judgment on these three issues. Transport supports its Rule 56(d) motion with the affidavit of counsel.

1. Choice of Law

First, Transport contends that it needs to conduct discovery regarding the choice of law issue. Transport appears to agree that Idaho has adopted the Restatement (Second) of Conflict of Laws, § 193. Section 193 states that insurance coverage disputes are governed by the law of the state which the parties understood was to be the principal location of the insured risk unless some other state has a more significant relationship under the principles stated in Sections 6 and 188. Transport focuses its arguments on Section 188, which states that the Court must primarily consider the following: (1) the place of contracting; (2) the place of negotiation of the contract; (3) the place of performance; (4) the location of the subject matter of the contract; and (5) the domicile, residence, nationality, place of incorporation and place of business of the parties. REST 2d CONFL § 188.

Transport argues that it has not been allowed to conduct any discovery in this case regarding any of these factors. Transport contends that discovery would provide admissible evidence that the place of contracting and the place of negotiation was California, that the place of performance was California, and that the location of the subject matter of the Transport policies was California.

Although Transport may not have conducted discovery on these matters in this case, Wells Cargo points out that the court granted Transport an opportunity to do such discovery during jurisdictional discovery in the preliminary case filed in California. Before dismissing that action for lack of jurisdiction, the court permitted Transport to conduct discovery related to Wells Cargo's contacts with California. Wells Cargo has provided the Court with evidence that Transport took advantage of that discovery opportunity. Michael Decl., Exs. 1-7, Dkt. 92-2. Therefore, Transport has not been denied an opportunity to gather sufficient information supporting its argument on the choice of law issue.

With respect to Section 6, Transport limits its argument to a claim that discovery will also disclose the parties' justifiable expectations of what law should apply. However, Wells Cargo correctly points out that comment g to Section 6 indicates that "[g]enerally speaking, it would be unfair and improper to hold a person liable under the local law of one state when he had justifiably molded his conduct to conform to the requirements of another state." REST 2d CONFL § 6, cmt. g. Here, there does not appear to be any dispute that Transport insured Wells Cargo in multiple states, suggesting that Transport did not mold its conduct to any particular state. Discovery on this issue would do nothing here. Presumably, that is why Transport makes little of this argument, other than to state that discovery will disclose the parties' justifiable expectations. Accordingly, the Court finds that Transport has not provided sufficient specified reasons why it cannot present facts essential to justify its opposition to the motion for summary judgment related to the choice of law issue.

2. Duty to Defend

Transport next argues that it needs to conduct discovery on factual issues related to whether Transport has a duty to defend Wells Cargo in connection with the United States Forest Service administrative proceeding related to the North Maybe Mine. Transport argues that it must conduct discovery because the Forest Service initiated the underlying proceeding by a PRP letter rather than a complaint filed in court. ...


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