United States District Court, E.D. Virginia, Alexandria Division
JOHN F. ANDERSON JUDGE.
MEMORANDUM OPINION & ORDER
GRADY UNITED STATES DISTRICT JUDGE
matter comes before the Court on cross motions for summary
judgment. See Dkt. 28 (Defendant's motion); Dkt.
30 (Plaintiffs motion). For the reasons explained below and
for good cause shown, Defendant's motion is
GRANTED and Plaintiffs motion is
Gateway Residences at Exchange, LLC ("Gateway") is
seeking to recover insurance proceeds to satisfy a default
judgment that Gateway obtained against Defendant Illinois
Union Insurance Company's ('IUIC") insured,
Mechanical Design Group Ltd ("MDG"). Gateway sued
MDG in Fairfax Circuit Court on September 16, 2016, alleging
negligent design by MDG during the design and construction of
a building sometime in 2014. MDG did not appear in the
lawsuit, and Gateway obtained a default judgment in the
amount of $910, 148, plus approximately $22, 000 in
attorney's fees and costs. See Dkt. 1, Ex. 13;
Ex. 7 at ¶ 4-9. Gateway now seeks to recover that
judgment from IUIC, claiming that IUIC is required to
covered MDG under an insurance policy running from February
1, 2014 through February 1, 2015 ("the Policy").
The Policy is a "claims made and reported" policy,
which requires as a condition of coverage that a claim must
be made and reported to the insurer within the
policy period. IUIC alleges that there is no coverage under
the Policy because IUIC received no claim during the
existence of the Policy, which was cancelled at the request
of First Insurance Funding on September 5, 2014. First
Insurance was the premium finance company for the insurance
policy under which MDG had coverage, and First Insurance had
power of attorney over the policy (and thus, according to
IUIC, authority to request cancellation of the policy).
Gateway disputes the validity of the policy's
cancellation. In the alternative, IUIC argues that the
Policy's natural termination date was February 1, 2015,
and thus even in the absence of a proper cancellation, the
Policy would have ended prior to IUIC's notification of
Gateway's claim on September 2, 2016.
Court heard oral arguments on the motions on March 16, 2018.
Counsel for both parties acknowledged that no genuine issues
of material fact are in dispute, and that this matter is ripe
for summary judgment. Having reviewed the pleadings and
considered the parties' arguments, the Court agrees.
See Minnesota Lawyers Mut., Ins. Co. v. Protostorm,
LLC, 197 F.Supp.3d 876, 882 (E.D. Va. 2016) ("The
interpretation of an insurance policy is a question of law
that is particularly well suited for summary
court shall grant summary judgment if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(a). Summary judgment is appropriate if the
"pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material fact
and that the moving party is entitled to a judgment as a
matter of law." Celolex Corp. v. Catrett, 477
U.S. 317, 322 (1986). A party moving for summary judgment has
the initial burden of showing the court the basis for its
motion and identifying the evidence that demonstrates the
absence of a genuine issue of material fact. Id.
Once the moving party satisfies its initial burden, the
opposing party has the burden of showing, by means of
affidavits or other verified evidence, that there exists a
genuine dispute of material fact. See Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87
reviewing a summary judgment motion, the court must
"draw all justifiable inferences in favor of the
nonmoving party." United States v. Carolina
Transformer Co., 978 F.2d 832, 835 (4th Cir. 1992).
Summary judgment is not appropriate if the resolution of
material issues depends on credibility determinations.
Meyers v. Baltimore Cty., 713 F.3d 723, 730 (4th
Plaintiffs Motion for Summary Judgment
presents three arguments in favor of its motion. First,
Gateway argues that IUIC has waived its "claims made and
reported" defense because IUIC failed to notify Gateway
of MDG's alleged breach of the Policy within 45 days of
IUIC's discovery of a breach, thereby bringing IUIC under
the coverage of Va. Code Ann. § 38.2-2226. Second,
Gateway argues that the Policy was never cancelled or was
inappropriately cancelled, and therefore the Policy remained
in force at the time Gateway notified IUIC of its claim.
Third, Gateway argues that MDG's coverage under the
Policy continued through an "extended reporting period,
" and that Gateway reported its claim to IUIC during the
lifetime of this extended reporting period. All three
arguments fail, for the reasons explained below.
Waiver under Va. ...