Professional Documents
Culture Documents
MAY 30 2001
PATRICK FISHER
Clerk
No. 00-2287
(D.C. No. CIV 99-1191 KBM/LCS)
(D. N.M.)
Defendant-Appellee.
ORDER AND JUDGMENT
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument.
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
summary judgment to
See Marathon
Because jurisdiction in the district court was based on diversity of the parties,
requiring that we apply the law of the forum state,
after appellant filed to leave to amend her complaint a second time, almost nine
months after the complaint was first amended, did Chicago inform Buena Vistas
principal, Dr. Ghaffari, that punitive damages were not covered by the policy. At
the time of Chicagos notice to Dr. Ghaffari on March 17, 1999, trial on the
underlying case against Buena Vista was set for April 29, 1999, some six weeks
later. On April 21, 1999, Chicago issued a formal reservation of rights letter to
Buena Vista regarding the potential punitive damages. Trial was ultimately held
on June 18, 1999. From the outset of the case, Chicago provided Buena Vista
with a defense, hiring counsel recommended by Dr. Ghaffari. Dr. Ghaffari made
inquiry with another attorney following Buena Vistas March 17, 1999 letter, but
he declined to represent Buena Vista with regard to punitive damages, opining
that it would be difficult to get additional counsel at that stage of the proceedings.
Before the district court,
Chicago was estopped from asserting the punitive damages exclusion in the policy
because Chicago had assumed and conducted Buena Vistas defense on all issues
at trial and because it did not send notice of its reservation of rights on the
punitive damages until shortly before trial was scheduled to begin.
The parties
Appellant had also raised claims alleging breach of contract and bad faith
(continued...)
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Chicagos favor. The court held that, while estoppel could apply under these
facts in light of Chicagos delay in reserving its rights as to the punitive damages
coverage, the facts did not support a presumption of prejudice arising from that
delay. The court further held that appellant was required to demonstrate
prejudice, i.e. , detrimental reliance, on Chicagos assumption of the defense and
its failure to reserve its rights as to punitive damages promptly after appellants
first claim for punitive damages.
Opinion and Order). The court concluded that appellant had failed to come
forward with sufficient admissible evidence demonstrating prejudice.
Id. at 32.
The court noted that Buena Vista had been represented by counsel of its own
choosing and there was no evidence that the outcome of the trial would have
differed had Buena Vista retained separate counsel. Also, the evidence showed
that even had Buena Vista been able to locate counsel willing to take on
representation as to the punitive damages after Buena Vistas March 17, 1999,
notice, Buena Vista was financially unable to pay a retainer at that time.
(...continued)
by Chicago. The district court noted that appellant had not submitted evidence
supporting these claims and ruled for Chicago on them as a matter of law.
Appellant does not challenge this portion of the district courts order on appeal,
and has therefore waived any issues with regard to these claims.
State Farm Fire
& Cas. Co. v. Mhoon , 31 F.3d 979, 984 n.7 (10th Cir. 1994).
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Fire & Casualty Co. , 317 F.2d 96 (10th Cir. 1963), and
& Casualty Co. v. Progressive Casualty Co.
See Appellants Br. at 6-8. These decisions deal with circumstances where no
reservation of rights was ever made by the insurer, a point on which the district
court relied to distinguish them. Appellant contends that there should be no
difference between the result in these cases--
See Appellants Br .
of Family Servs. , 218 F.3d 1133, 1138 n.2 (10th Cir. 2000). After our review of
the record on appeal, we agree with the district court that the undisputed evidence
shows counsel provided Buena Vista with an uncompromised and vigorous
defense of the punitive damages allegations. Appellees Supp. App. at 32.
In her reply brief, appellant disputes this conclusion and takes issue with
statements contained in counsels affidavit, which was attached to Chicagos
response to appellants summary judgment motion. Appellants App. at 153-57.
These arguments were not presented to the district court and therefore will not be
considered on appeal. See Martinez , 218 F.3d at 1138 n.2. For this same reason,
this court denies appellants request to remand the case to the district court so that
she can show prejudice. Appellants explanation that she did not think it
necessary to present evidence demonstrating prejudice is belied by her
memorandum in support of her motion for
summary judgment, wherein she
(continued...)
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Appellant did not demonstrate prejudice resulting from Chicagos late reservation
of rights.
Finally, we address appellants request for certification of this issue to the
New Mexico Supreme Court, included in her appellate reply brief. We agree with
appellee that appellants request is both untimely and violative of this courts
rules. See 10th Cir. R. 27.1(C) (stating that a request for certification should be
made in a separate motion and at the same time as the movants merits brief).
Further, we disagree with appellant that the district courts decision results in
a strained and nonsensical interpretation of New Mexico law, as noted above,
and deny her request.
(...continued)
acknowledged the possibility that she might have to show prejudice. Appellants
App. at 28-29. In any case, her burden on summary judgment was to come
forward with evidence demonstrating that she was entitled to judgment as a matter
of law. [T]o preserve the integrity of the appellate structure, we should not be
considered a second-shot forum, a forum where secondary, back-up theories
may be mounted for the first time.
Tele-Communications, Inc. v. Commr , 104
F.3d 1229, 1233 (10th Cir. 1997) (citation omitted). Parties are encouraged to
give it everything theyve got at the trial level.
Id.
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Stephen H. Anderson
Circuit Judge
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