Opinion
Case No. CV98-320-S-EJL.
August 10, 2000
ORDER
On November 29, 1999, this Court entered a Memorandum Decision and Order denying Plaintiff Monarch Greenback, L.L.C.'s Motion for Partial Summary Judgment re: Duty to Defend (Docket No. 18) and granting Defendant Monticello Insurance Company's Motion for Summary Judgment (Docket No. 23). Docket No. 42. In direct response to that order, Defendant Monticello submitted a bill of costs (Docket No. 44) and submitted a Request for Entry of Proposed Judgment in their favor. In response to Defendant Monticello's request, Plaintiff Monarch filed an objection arguing that the proposed judgment was inappropriate since it purported to dismiss Plaintiff Monarch's separate bad faith claims even though they had never been briefed nor decided by the Court. Docket No. 46. Defendant Monticello responded by arguing that the bad faith issue was "impliedly" decided when this Court held that there was no fairly debatable question of law as to the application of the pollution exclusion contained in the Monarch-Monticello policy. Docket No. 49. Plaintiff Monarch then filed a Request for Certification to the Idaho Supreme Court. Docket No. 54. Defendant Monticello objected to the request. Docket No. 59.
1. ORDER OF CLARIFICATION
It appears from the requests presently filed with the Court that there is some confusion as to whether the Court intended to dispose of all claims asserted by Plaintiff Monarch against Defendant Monticello. Accordingly, this Court issues this Order of Clarification.
This action was initially filed on July 6, 1998 in the District Court of the Fourth Judicial District for the County of Elmore, State of Idaho and was removed to this Court on August 6, 1998 pursuant to 28 U.S.C. § 1441. On May 1, 1999, Monarch moved for partial summary judgment on Monticello's duty to defend (Docket No. 18) after allegedly reaching an agreement with defense counsel to file cross-motions for summary judgment on coverage issues before addressing the bad faith claims. On May 21, 1999, Monticello responded by filing its own motion for summary judgment. Docket No. 23. Regardless of whether there was any understanding or agreement between the parties, both motions, and all subsequent pleadings, specifically address the coverage claims and neither submit nor address the bad faith claims alleged by Monarch in its complaint.
Monarch argues that the parties understood that the bad faith claims would involve different factual issues than those underlying the duty to defend, and agreed to file cross-motions for summary judgment on coverage before addressing the bad faith claims.
After a thorough review of the pleadings submitted, applicable portions of the record and applicable case law, this Court found that Monticello had no duty to defend Monarch and that Monticello was not required to seek a declaratory judgment as to whether the pollution exclusion applied. However, the issue of bad faith was not, and has never been, submitted to the Court and the Court has made no dispositive ruling with regard to that issue. Accordingly, despite Monticello's present argument, this Court's November 29, 1999 Memorandum Decision and Order did not dispositively resolve the entire case in favor of Monticello and Monarch is not necessarily precluding from asserting a claim for bad faith. See e.g., White v. Unigard Mutual Insurance Co., 112 Idaho 94, 97, 730 P.2d 1014, 1017 (1986) ("the tort of bad faith is not a tortious breach of contract . . . [i]t is a separate intentional wrong, which results from a breach of a duty imposed as a consequence of the relationship established by contract"); Truck Ins. Exch. v. Bishara, 128 Idaho 550, 554, 916 P.2d 1275, 1278 (1996) ("the insured can bring an independent action in tort for the insurer's bad faith in handling the claim"); Deese v. State Farm Mutual Automobile Insurance Co., 172 Ariz. 504, 509, 838 P.2d 1265, 1270 ("absence of a breach of an express term of the policy is not fatal to a bad faith claim where the plaintiff can prove a breach of the implied covenant of good faith and fair dealing . . . a plaintiff may simultaneously bring an action both for breach of contract and for bad faith, and need not prevail on the contract claim in order to prevail on the bad faith claim, provided plaintiff proves a breach of the implied covenant of good faith and fair dealing").
The Court found that Monticello had no duty to defend Monarch because the pollution exclusion applied to all claims asserted. Docket No. 42 at 22.
The Court found that Monticello was not required to seek a declaratory judgment as to whether the pollution exclusion applied because no fairly debatable question of law existed. Docket No. 42 at 22.
While the parties have, to some degree, recently briefed the bad faith issue the parties have not asked for a dispositive ruling on the issue and the Court will not entertain the merits of the bad faith claim in the context of pleadings relating to a proposed judgment and bill of costs.
II REQUEST FOR CERTIFICATION
Currently pending before this Court is Plaintiff Monarch's request for certification to the Idaho Supreme Court on the following questions:
(1) Whether the so-called "absolute pollution exclusion" in standard commercial general liability ("CGL") policies precludes "property damage" coverage where the plaintiff alleges damages resulting from both covered and uncovered causes;
(2) Whether a CGL policy's "personal injury" coverage applies to trespass and nuisance claims based on the entry of materials onto another's property; and
(3) Whether an insurance company breaches its duty to defend by refusing to defend the insured while the insurance company investigates coverage.
Monarch argues that certification is appropriate because the answers to these questions will impact the interpretation and application of standard liability insurance policies in Idaho; because there is no controlling precedent by the Idaho Supreme Court, and courts from other jurisdictions disagree on the issues; and because the immediate determination of Idaho law regarding these questions would materially advance the orderly resolution of the litigation. Monticello argues that Monarch's motion is not timely, that Monarch is attempting to "forum shop," and that the requested questions are not controlling questions of law which would have general application. Rather, Monticello argues that the questions pertain to the application of Idaho's well settled rules of insurance policy interpretation as applied to the facts of this case.
In reviewing the record, the Court finds that during a telephone scheduling conference on January 11, 1999, the parties agreed that the case was ripe for summary judgment with regard to the coverage issues. The parties complied with the briefing schedule and at no time did Monarch contend, request or even raise the possibility that certification of any question to the Idaho Supreme Court was or might be necessary to resolve this matter.
While this Court agrees that certification saves "time, energy, and resources, and helps build a cooperative judicial federalism," Lehman Brothers v. Schein, 416 U.S. 386, 390-91, 94 S.Ct. 1741, 1744 (1974); certification is not compelled or obligatory — even where there is no state law governing an issue. Id. The parties position, from the outset of this litigation, has been that Idaho law is sufficient to resolve this matter. And, while the substantive issues raised by the parties present questions that have not squarely been addressed by the Idaho Supreme Court, the Court is confident that the legal standards were sufficiently clear enough that under the facts of this case the Courts' November 29, 1999 Memorandum Decision and Order was the only plausible resolution. See Santana v. Zilog, INC., 878 F. Supp. 1373, 1376 (D. Idaho 1995) (explaining that federal court need not certify a question of state law where related state authority gives guidance on how the Idaho Supreme Court would decide the question). Furthermore, while the Ninth Circuit appears to grant requests for certification without an express showing of compelling reasons for certification, it is not the practice of this Court to expend valuable judicial resources resolving difficult issues only to issue what, in essence, could be deemed an advisory opinion. Accordingly, at this stage in the litigation, this Court finds that the proper practice and procedure would be for Monarch to file an appeal of this Court's decision and request that the Ninth Circuit Court of Appeals certify the questions to the Idaho Supreme Court.
III. ORDER
Based on the foregoing, and the Court being fully advised in the premises,
IT IS HEREBY ORDERED that Defendant Monticello Insurance Company's Request for Entry of Proposed Judgment is DENIED.
IT IS FURTHER ORDERED that Plaintiff Monarch Greenback, L.L.C.'s Request for Certification is DENIED.
Parties shall have three (3) weeks from the date of this Order to file any dispositive motions on the remaining bad faith claim. If no motion is filed, the Court Clerk, Carol Vaughn, is directed to schedule a telephone scheduling conference to set the matter for trial.
Dated this 10th day of August, 2000.