Progressive Insurance Co. v. Wasoka
Annotate this Case
Progressive Insurance Co. v. Wasoka (2003-451); 178 Vt. 337; 885 A.2d 1166
2005 VT 76
[Filed 08-Jul-2005]
NOTICE: This opinion is subject to motions for reargument under
V.R.A.P. 40 as well as formal revision before publication in the Vermont
Reports. Readers are requested to notify the Reporter of Decisions,
Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
any errors in order that corrections may be made before this opinion goes
to press.
2005 VT 76
No. 2003-451
Progressive Insurance Company Supreme Court
On Appeal from
v. Rutland Superior Court
Gregory Wasoka and Robert Cerdeira June Term, 2004
Richard W. Norton, J.
Laurie LeClair and Susan J. Flynn of Clark, Long, Werner & Flynn, P.C.,
Burlington, for Plaintiff-Appellant.
Mark E. Furlan of Abatiell Associates, P.C., Rutland, for
Defendant-Appellee Wasoka.
John E. Brady and Brendan P. Donahue of Brady & Callahan, P.C.,
Springfield, for Defendant-Appellee Cerdeira.
PRESENT: Amestoy, C.J., (FN1) Dooley, Johnson, Skoglund and Reiber, JJ.
¶ 1. JOHNSON, J. Progressive Insurance Company appeals from a
denial of its motion for summary judgment against its insured, Gregory
Wasoka, for fraud in the inducement of an automobile insurance policy.
Progressive claims on appeal that the trial court misunderstood its motion
for summary judgment and erroneously dismissed the entire case when
Progressive had filed its motion based on only one of its claims.
Progressive contends the trial court also erred by treating Wasoka's
response as a cross-motion for summary judgment, which it claims raised new
matters, without giving Progressive thirty days to respond. We affirm
because we agree the motion asked the court to void the policy for fraud in
the inducement as evidenced by Wasoka's noncooperation, defendant's
response was directly related to fraud in the inducement, and the court's
decision nineteen days later indicated that the undisputed facts did not
show that Progressive was entitled to judgment on this issue. As a result,
no further issues were left and the complaint was dismissed. Moreover, if
there was prejudice as a result of the procedure the trial court followed,
Progressive failed to come forward with any evidence of it, other than the
unsubstantiated claims of counsel, despite filing two post-judgment
motions.
¶ 2. The agreed facts are as follows. In July 2000, Gregory Wasoka
purchased a Vermont automobile insurance policy from agent Steve Shortle of
C.G. McCullough Insurance Agency, Inc., of Killington, Vermont. In May
2001, Wasoka was involved in an automobile/bike accident in Connecticut
with Robert Cerdeira. After informing Progressive of the accident, Wasoka
agreed to be interviewed by Progressive agents on May 10, 2001 and May 22,
2001 respectively as part of the investigation. Progressive made no
request that either of these first two interviews be given under oath. In
a letter dated August 15, 2001, Progressive requested that Wasoka submit to
a third interview, this time under oath. Wasoka received the letter but
did not reply. In August 2002, Wasoka submitted to deposition by
Progressive's counsel.
¶ 3. In the course of investigating the accident, Progressive
learned the following uncontested facts that it submitted for consideration
with its motion: (1) at the time of the accident, Wasoka was a student at
Naugatuck Valley Community College in Connecticut, (2) at the time of both
of the May 2001 investigatory interviews Wasoka was staying with his
parents in Connecticut, (3) at the time of the second interview Wasoka was
employed by Gary Industries in Connecticut, and (4) while Wasoka received
limited mail at his brother's residence in Killington, Vermont, including
his Progressive insurance bills, he received mail at his parent's house in
Connecticut. (FN2)
¶ 4. Additionally, the following facts were submitted by Wasoka in
the course of the investigation and deposition. During his second May
interview, Wasoka stated he worked at the Killington Ski Resort in the fall
and winter of 2000 while staying at his brother's condo in Killington. In
August, 2002, Wasoka testified in deposition that he lived in four
different places at the time he purchased his insurance policy including
his brother's residence in Killington, Vermont, his grandmother's cottage
on Lake Bomoseen in Vermont, a friend's house in Winchester, New Hampshire,
and his parent's house in Connecticut. Wasoka also testified in deposition
that all that was required to obtain his Vermont insurance policy was his
Vermont driver's license and a mailing address. He testified that he had
known agent Shortle all his life as a family friend and that Shortle was
aware, from conversations with Wasoka's father, that Wasoka traveled
between many different places when he purchased the policy.
¶ 5. Progressive filed suit against Wasoka and Cerdeira in January
2002 seeking a declaratory judgment that Wasoka's insurance contract "is
void ab initio due to [Wasoka's] fraudulent representations, and that there
is no coverage under its policy for any claims arising out of the incident
with Mr. Cerdeira due to Mr. Wasoka's failure to cooperate with Progressive
and misrepresentations made in the course of presenting his claim." The
contract contains the following cooperation clause: "[a] person claiming
coverage under this policy must . . . allow us to take signed or recorded
statements, including statements under oath, and answer all reasonable
questions we may ask, when and as often as we may reasonably require."
¶ 6. Progressive filed a "Motion for Summary Judgment" on January
28, 2003, claiming that "[d]efendant deliberately breached a policy
provision that would have enabled his insurer to investigate the issue of
fraud in the inducement of the policy, a legal issue that would void
coverage. . . . By this motion, Plaintiff requests judgment from the court
that Defendant's breach of contract voids the insurance contract ab
initio." The motion goes on to say, some pages later, that Wasoka's
actions, refusal to submit to an examination under oath and his refusal to
sign a bilateral reservation of rights/non-waiver agreement, must be
viewed as "admissions of fraud in the inducement of the policy, voiding
coverage ab initio." At all times, the motion asked the trial court to
find that the policy was void for fraudulent inducement as evidenced by
Wasoka's alleged noncooperation.
¶ 7. By the time Progressive filed the motion for summary
judgment, it had deposed Wasoka under oath, exactly the result it was
seeking prior to filing the declaratory judgment action. Not surprisingly,
Wasoka used this deposition in filing his "Opposition to Summary Judgment"
to show that, regardless of the circumstantial evidence that Progressive
sought to rely on for voiding the policy, he had not, in fact, committed
fraud in the inducement of the insurance policy. Wasoka devoted five full
pages to why Progressive had failed to present sufficient evidence of
residence fraud. He argued that he had not failed to cooperate under the
terms of the contract, that Progressive had failed to produce evidence of
prejudice resulting from his alleged noncooperation as is required under
Smith v. Nationwide Mutual Insurance Co., 2003 VT 61, ¶ 10, 175 Vt. 355,
830 A.2d 108, (FN3) and that he had an absolute right to refuse an examination
under oath where the purpose of the examination was to further
Progressive's fraud claim against Wasoka. Wasoka asked for summary
judgment in his favor pursuant to V.R.C.P. 56(c)(3).
¶ 8. Progressive did not respond to Wasoka's memorandum. On
August 4, 2003, the trial court denied summary judgment for Progressive and
instead granted judgment in favor of Wasoka. The trial court analyzed the
issues by referencing the case that Progressive's own motion identified as
the "law applicable to the present matter:" Fireman's Fund Insurance Co.
v. Knutsen, 132 Vt. 383, 324 A.2d 223 (1974) and 8 V.S.A. § 4205 cited
therein. Pl.'s Mot. at 6. It concluded, based on Fireman's Fund, that
under 8 V.S.A. § 4205, an automobile liability policy may not be voided for
false statements in the application unless the insurer shows that the
statements were made with actual intent to deceive or that the false
statements materially affected the insurer's risk. 132 Vt. at 387-88, 324 A.2d at 227. Because Progressive had not produced evidence capable of
satisfying those requirements, it was not entitled to summary judgment on
its fraud in the inducement claim. Likewise, the trial court found that
the policy could not be void, on the same theory, for the refusal to
cooperate because Progressive had not met the prejudice standard as
reaffirmed in our recent decision in Nationwide. See 2003 VT 61, ¶ 10
(affirming summary judgment against insurer on noncooperation claim because
insurer failed to "adduce any evidence that its insured's breach placed the
insurer in a substantially less favorable position than it would have been
had the insured fully cooperated").
¶ 9. Progressive subsequently filed a "Motion to Vacate the Court's
Opinion and Order of August 4, 2003" in which it argued that the court had
committed a "procedural impossib[ility]" in ruling against Progressive on
the issue of fraud, an issue it claimed it did not raise. (FN4) No
additional documents were attached to this motion. The trial court denied
the motion in September 2003. Towards the end of September 2003, nearly
two months after the summary judgment order, Progressive filed a "Motion
for Reconsideration or Clarification and Submission of Counsel's Affidavit
Regarding the Subjective Intent of Counsel in Filing Summary Judgment
Motion." There, Progressive argued it was entitled to relief pursuant to
V.R.C.P. 60(b)(1) as the attached affidavit of Progressive's counsel stated
that it was not her subjective intent to raise the issue of residency fraud
in her motion. The court also denied this motion on two grounds: (1)
Progressive's summary judgment motion did not state it was seeking partial
summary judgment on only one aspect of its claim for declaratory relief,
and (2) the subjective intent of Progressive's counsel did not trump the
objective language of the motion including the motion's closing sentences
which read: "In the present matter, Defendant's failure to allow
Progressive to investigate the fraud must be viewed as circumstantial
evidence of fraud, as well as a clear breach of contract. Thus, Mr.
Wasoka's policy should be void ab initio." This appeal followed.
¶ 10. Progressive's claims on appeal are (1) that the trial court
erred in granting summary judgment in favor of Wasoka because failure to
cooperate, not residence fraud, was the basis of Progressive's motion, (2)
the trial court abused its discretion in denying Progressive's motions to
vacate and/or for relief from judgment, and (3) the trial court should have
given Progressive an opportunity to brief the issue of prejudice before it
ruled.
I.
¶ 11. Progressive's first claim is that the trial court committed
an impossibility in ruling on an issue that was not before it. It claims
it moved for summary judgment on the issue of whether Wasoka's failure to
cooperate voided the policy for fraud in the inducement, and that this was
a separate legal claim from whether Wasoka had made misrepresentations
about his residence to obtain an insurance policy, which was conduct that
also amounted to fraud in the inducement. In other words, Progressive had
the same legal claim, fraudulent inducement, supported by different pieces
of evidence. It wanted the trial court to consider only one piece of
circumstantial evidence, and disregard later evidence, to reach the same
legal conclusion that the policy was void for fraud in the inducement.
¶ 12. Progressive relied on Fireman's Fund, 132 Vt. at 387-88, 324 A.2d at 227, as the law governing its motion for summary judgment. In that
case, we held that an insurance contract may be void ab initio (FN5) due to
fraud in the inducement of a policy, and that failure to comply with an
investigation of fraud may be circumstantial evidence of fraud. See
Fireman's Fund, 132 Vt. at 388, 324 A.2d at 227 ("[P]ositive proof of
fraudulent misrepresentation is seldom to be had, and the law will allow
consideration of a wide range of circumstantial evidence. . . . so long as
that evidence . . . contributes something to the establishment of a
rational basis for inferring the ultimate fact."). The language of
Progressive's motion belies its appellate claim that its argument on
noncooperation was not linked to its broader theory of fraud in the
inducement.
Plaintiff Progressive moves for summary judgment on the grounds
that Mr. Wasoka's acknowledged contractual breach-his failure to
submit to an examination under oath-voids the insurance contract
ab initio since an examination under oath is a condition precedent
to coverage. Further, Progressive moves for summary judgment on
the grounds that Mr. Wasoka's two breaches of duty, his refusal to
submit to an examination under oath and his extended refusal to
sign a bilateral reservation of rights/non-waiver agreement must
be viewed as admissions of fraud in the inducement of the policy,
voiding the coverage ab initio.
Pl.'s Mot. & Mem. at 5 (Emphasis added). (FN6)
¶ 13. Although we have also held that an insurer may avoid its
coverage obligations because of an insured's failure to cooperate if the
insured's noncooperation actually prejudices the insurer's defense of the
underlying claim, see American Fidelity Co. v. Kerr, 138 Vt. 359, 362, 416 A.2d 163, 165 (1980), Progressive states that this rule is "inapplicable"
to its summary judgment motion.
¶ 14. Progressive tried to distinguish Nationwide by claiming it was
not seeking summary judgment on whether Wasoka cooperated with the
underlying claim investigation, i.e., the accident for which he was
seeking coverage. Indeed, it could not, because Wasoka had submitted to an
interview on that subject. It limited its noncooperation claim to Wasoka's
failure to submit to an examination under oath, claiming that this amounted
to circumstantial evidence of fraud under Fireman's Fund. Progressive's
motion stated that defendant "deliberately breached a policy provision that
would have enabled his insurer to investigate the issue of fraud in the
inducement of the policy, a legal issue that would void coverage."
¶ 15. One of the difficulties with Progressive's motion is that, by
the time it had filed the motion, it had had the opportunity to investigate
its fraud claim by taking Wasoka's deposition. Thus, when the case came to
the trial judge, many facts had been developed and Progressive was in a far
different position from the point, some months earlier, when Wasoka had not
responded to its request for an interview under oath. After Wasoka
submitted to deposition, the significance of the inference that the trial
court might draw from Wasoka's previous failure to cooperate as evidence of
fraud disappeared; the court had before it the direct evidence on the issue
of residency fraud that Progressive claimed it was being deprived of
because of Wasoka's earlier noncooperation. If we take Progressive's
argument on appeal to its logical conclusion, it is essentially claiming
that it was error for the trial court not to artificially halt the case at
the point of Wasoka's earlier refusal and void coverage for fraudulent
inducement based on the circumstantial evidence of noncooperation.
¶ 16. Progressive argues nevertheless that Wasoka, in defending
against the legal issue of fraudulent inducement, raised a new issue to
which Progressive was entitled to thirty days to respond. Instead, the
trial court reached a decision after nineteen days. Progressive did not
respond to Wasoka's opposition to its motion, so the trial court reached a
decision on Progressive's original papers and Wasoka's response. (FN7)
¶ 17. Wasoka's response to summary judgment was wholly within the
bounds of the legal issue raised by Progressive. Wasoka argued the
contract was not void for fraudulent inducement because all of the
circumstances of his residence had been made known to defendant's agent,
Shortle. He also argued that Progressive was required to show prejudice in
a noncooperation case and that judgment could not be had on his failure to
submit to an examination under oath because no prejudice was shown under
Nationwide. Thus, when Wasoka pleaded facts that responded to the
inference of residence fraud created by the circumstantial evidence of
noncooperation, he was hardly raising a new or different legal issue. He
pointed to evidence that he believed overcame Progressive's evidence, and
challenged Progressive's idea that the prejudice requirement did not apply
because of the manner in which it had framed the legal issue.
¶ 18. It strains credulity that Progressive could have been
surprised by the trial court's decision. Under the law Progressive relied
upon, Fireman's Fund, Progressive was entitled to show fraud in the
inducement of the policy in different ways, with different pieces of
evidence, and to try to convince the trial court to adopt the idea that
prejudice was not relevant to its claim of noncooperation with an
investigation of fraud. But proving the same legal claim in two different
ways does not equal two different legal claims. At all times, Progressive
had one legal claim - fraudulent inducement of the insurance policy by
residency fraud. It was not entitled to artificially limit the trial
court's consideration to only a part of the evidence that bore on the
claim.
¶ 19. As the trial court's decision illuminates, it addressed the
legal issue raised - fraudulent inducement. The totality of the evidence
demonstrated that Progressive had no claim for fraudulent inducement under
any theory, a conclusion Progressive does not challenge on appeal. Instead,
Progressive chooses to cling exclusively to the notion that the trial court
made a procedural mistake in not giving it thirty days to respond to the
additional facts pled by Wasoka on the legal issue Progressive had asked
the court to decide. There was no error. (FN8)
II.
¶ 20. Despite two subsequent requests for relief in the trial court
over a period of two months, Progressive has failed to show it was
prejudiced by the trial court's interpretation of its motion. (FN10)
Progressive has consistently failed to present any additional evidence it
would have brought forward had it known the trial court was considering
summary judgment against it on this issue. It is a long-established rule
in this state that for an error to be reversed, the appellant must show how
the error genuinely harmed the prosecution of its case. See Crawford v.
State Highway Bd., 130 Vt. 18, 285 A.2d 760, 764 (1971) (Where the party
against whom an error was committed has not been prejudiced by it, the
judgment will not be reversed for such error); In re M.B., 147 Vt. 41, 44,
509 A.2d 1014, 1016 (1986) (same); V.R.C.P. 61 ("[N]o error or defect in
any ruling or order . . . is ground for . . . vacating, modifying or
otherwise disturbing a judgment or order, unless refusal to take such
action appears to the court inconsistent with substantial justice.").
¶ 21. Specifically in the context of summary judgment, the Second
Circuit has held that "[w]hen the moving party cannot plausibly claim that,
had it been given notice of the district court's consideration of summary
judgment against it, it would have brought forth additional evidence, the
district court's failure to give notice is harmless and a remand is
futile." Bridgeway Corp. v. Citibank, 201 F.3d 134, 140 (2d Cir. 2000).
Here, the trial court rendered judgment on the legal issue presented.
Progressive has consistently failed to show it was prejudiced by this
ruling. Progressive's assertion of procedural error in this case is
analogous to the moving party's claim in Bridgeway that the court wrongly
awarded summary judgment against it without notice. There the Second
Circuit held that a remand was useless because the moving party presented
no additional evidence it would have brought forward had it known summary
judgment was being considered against it. Id. at 140. Similarly, assuming
arguendo that the trial court erred by granting summary judgment after
nineteen days instead of waiting thirty days for any Progressive reply,
remanding now would unnecessarily waste judicial resources. Despite
multiple post-judgment opportunities to present any additional evidence it
would have brought forward if it had been given the full thirty days it
believes it had to reply, Progressive has consistently failed to do so.
¶ 22. Five pages of Wasoka's responsive memorandum are devoted to a
defense of residency fraud. Had Progressive replied to Wasoka's memorandum
in opposition, it could have, and should have, brought forward any
additional evidence it had of fraud at that time. (FN10) Even though
Progressive failed to reply to Wasoka's memorandum after nineteen days,
Progressive still could have presented additional evidence of the alleged
fraud in either its "Motion to Vacate" dated August 8, 2003, or its "Motion
for Reconsideration or Clarification" dated September 29, 2003. In these
motions, however, Progressive makes only vague, unsupported assertions of
additional facts of fraud.
¶ 23. In its motion to vacate, Progressive states, "the evidence
available from the insurance agent does not match that provided by Mr.
Wasoka." This assertion finds no support in any documentation. In its
"Motion for Reconsideration or Clarification" filed almost two months
later, Progressive asserts, "[t]here are significant factual disputes
regarding the issue of fraud in the inducement of the policy, and if given
an opportunity by the Court, Plaintiff can present these facts." Again,
this is a bare assertion unsupported by any specific evidence appropriate
for a court deciding summary judgment.
¶ 24. On appeal, Progressive points to the conspicuous lack of an
affidavit by its agent as support for its position that it did not intend
to raise the issue of residency fraud on summary judgment. This argument
is without merit. In light of the fact that Progressive presumably had
easy access to its own agent, we see no reason why Shortle's affidavit
would not have been submitted in either of Progressive's subsequent
requests for relief had it been of material use to Progressive's case.
This is especially true where "the evidence available from the insurance
agent" is directly referenced in Progressive's motion to vacate.
Furthermore, as an issue of judicial efficiency, Progressive should have
submitted this affidavit, and any other documentation it had of Wasoka's
alleged fraud, to the trial court when the case was still before that
court. Progressive cannot credibly contend that the trial court made a
mistake based on a lack of evidence when Progressive did not submit the
very evidence the trial court would need to correct its alleged mistake.
¶ 25. It is a basic principle of summary judgment that mere
allegations of counsel unsupported by documented evidence are not enough to
create a genuine issue of material fact. See Foster & Gridley v. Winner,
169 Vt. 621, 624, 740 A.2d 1283, 1286 (1999) (mem.) (defendant's
unsupported allegations are insufficient to create a genuine issue of
material fact); Kelly v. Town of Barnard, 155 Vt. 296, 299, 583 A.2d 614,
616 (1990) (trial court may enter judgment against a party who makes mere
allegations and denials, and who fails to set forth specific facts to show
the existence of a genuine issue for trial); see also 10B C. Wright, et
al., Federal Practice and Procedure § 2738, at 356 (3d ed. 1998) ("[M]ere
reargument of a party's case or the denial of an opponent's allegations
will be disregarded [in the consideration of summary judgment]."). By
relying entirely on an affidavit of its attorney's subjective intent,
Progressive has apparently sought to direct this Court's attention away
from the fact that Progressive was not genuinely prejudiced by the trial
court's interpretation of its motion. There is no reason to remand this
case to grant Progressive even more time to present evidence of residency
fraud when, after multiple opportunities over more than two months,
Progressive has already failed to do so.
III.
¶ 26. Additionally, the trial court did not abuse its discretion in
denying both Progressive's motion to vacate and its Rule 60(b) "Motion for
Reconsideration or Clarification." Having decided that the trial court
reasonably interpreted Progressive's motion as raising the issue of
residency fraud, and having already discussed Progressive's lack of
substantive evidence in support of its assertions of error, we affirm the
trial court's denial of the motion to vacate. As to Progressive's Rule
60(b) motion, "[t]he decision on a Rule 60(b) motion is committed to the
sound discretion of the trial court and will stand on review unless the
record clearly and affirmatively indicates that such discretion was
withheld or otherwise abused." Bingham v. Tenney, 154 Vt. 96, 99, 573 A.2d 1185, 1186 (1990). The burden is on the party challenging the denial to
demonstrate an abuse of discretion. Id. Here, Progressive fails to show
an abuse of discretion.
¶ 27. Progressive again relies solely on its affidavit of counsel in
support of its claim that it is entitled to relief based on "mistake,
inadvertence, surprise, or excusable neglect" pursuant to V.R.C.P.
60(b)(1). An award of Rule 60(b) relief in this case based solely on the
stated subjective intent of counsel would be inconsistent with our case
law. In the context of Vermont Rule of Civil Procedure 68 offers, we have
held that "objective intent" controls and that no relief pursuant to Rule
60(b) is warranted based on an attorney's stated subjective intent behind
an offer. Rule v. Tobin, 168 Vt. 166, 174, 719 A.2d 869, 874 (1998)
(citing Webb v. James, 172 F.R.D. 311, 316 (N.D. Ill.1997)). This case is
analogous to those in which attorneys have argued, after the fact, for a
different interpretation of a Rule 68 offer based on their subjective
intent. In relying entirely on counsel's sworn statement of her intent,
Progressive's Rule 60(b) motion failed to articulate a ground upon which
relief can be granted. Accordingly, we find no abuse of discretion in the
court's decision to deny it.
¶ 28. Progressive's appeal does not challenge the trial court's
grant of summary judgment on the merits. Instead it focuses exclusively on
what it perceives as procedural defects of the trial court's rulings. In
light of our rejection of Progressive's procedural arguments, we affirm the
trial court's grant of summary judgment without discussion of the merits.
See Rowe v. Brown, 157 Vt. 373, 379, 599 A.2d 333, 337 (1991) ("Issues not
raised on appeal are deemed waived.").
Affirmed.
FOR THE COURT:
_______________________________________
Associate Justice
------------------------------------------------------------------------------
Dissenting
¶ 29. DOOLEY, J., dissenting. Since Progressive Insurance
Company's argument to this Court is based on its claim that it never made a
summary judgment motion based on fraudulent inducement, Progressive will
immediately capture the thrust of the majority's opinion from the opening
sentence: "Progressive Insurance Company appeals from a denial of its
motion for summary judgment against its insured, Gregory Wasoka, for fraud
in the inducement of an automobile insurance policy." Ante, ¶ 1. I
believe the opening sentence is symptomatic of the short shrift that the
Court's decision has given to Progressive's action and arguments, and
cannot subscribe to it. Accordingly, I dissent.
¶ 30. The main issue in this case was whether Progressive was
entitled to thirty days to answer its insured's response to Progressive's
motion for summary judgment, hardly an earth shattering issue. In this
case, however, the majority has upheld what is de facto a default judgment
against Progressive. In doing so, it has denied the thirty days to respond
by torturing the language of Progressive's motion for summary judgment to
find in it a frivolous and unsupported summary judgment claim that its
insured fraudulently induced Progressive to issue the policy by
misrepresenting the state of his residency. Any appearance of fairness is
further undercut by the trial court's acceptance of Wasoka's response to
the summary judgment motion six months after it was filed, when Rule of
Civil Procedure 56(c)(1) normally requires that it be filed within thirty
days, while denying Progressive even a thirty-day response period. I
believe that in cases of serious doubt-and this is at least such a case-we
should err on the side of giving every litigant, including an insurance
company, an opportunity to present its case on the merits-that is, its day
in court. I doubt we would endorse denying that right in this case if the
trial court had entered judgment for an insurance company, and we should
not do so when the situation is reversed.
¶ 31. Underlying this case, there is a serious question about
summary judgment motion procedure. Rule 56(c)(1) gives a party up to
thirty days to respond to a motion for summary judgment, but specifies no
time limit, and gives no authorization for a rebuttal response by the
moving party. Our general motion rule, V.R.C.P. 78(b)(1), also contains no
authorization for, and gives no time limit for, a rebuttal response. (FN11)
The trial court has defaulted Progressive for failing to file a rebuttal to
Wasoka's response "despite having approximately three full weeks to do so,"
apparently believing that Progressive's counsel should have known that it
had to file a response and three weeks exceeded whatever deadline the court
had in mind. As I stated above, this came in a case where the court had
just allowed Wasoka six months to respond to the original motion. Even if
I agreed with the majority on the main issue of the case, I would hold that
Progressive should have been given at least thirty days to respond because
it was responding to substantial new facts and law. I also believe that we
should refer this issue to the rules committee so this kind of case does
not arise again. No system based on a trial judge's power to disclose a
deadline after the fact to default a party will appear fair.
¶ 32. My main difference with the majority is over its conclusion
that Progressive's motion for summary judgment was based on a theory of
fraud in the inducement. Progressive's complaint raises two distinct
reasons why it was not required to pay Wasoka's claim: "Mr. Wasoka's
insurance policy . . . is void ab initio due to his fraudulent
representations" and "there is no coverage under [the] . . . policy for any
claims . . . due to Mr. Wasoka's failure to cooperate with Progressive."
(FN12) The latter reason is explained in the complaint: "Mr. Wasoka has
failed to cooperate with Progressive by, among other things, refusing to
respond to Progressive's requests for additional information and its
request for his examination and oath."
¶ 33. Progressive filed for summary judgment only on its second
ground for not paying Wasoka's insurance claim-that Wasoka breached the
terms of the insurance policy by failing to cooperate with Progressive and
submit to an examination under oath as required in the policy. This is
explained in one of the opening paragraphs of the motion:
The present matter is an insurance coverage case where Defendant
deliberately breached a policy provision that would have enabled
his insurer to investigate the issue of fraud in the inducement of
the policy, a legal issue that would void coverage. Fireman's
Fund Ins. Co. v. Knutsen, 132 Vt. 383 (1974). By this motion,
Plaintiff requests judgment from the court that Defendant's breach
of contract voids the insurance contract ab initio.
On page 4, the motion states, "[t]he subject motion is based on Mr.
Wasoka's breach of policy for failure to submit to an examination under
oath," and later, "the subject motion is based on Mr. Wasoka's breach of
contract and failure to cooperate with Progressive's legitimate
investigation regarding the issue of residency." These and similar
statements appear at least six times in the motion.
¶ 34. The majority concludes, however, that despite this language
in the motion, other language, and the cases cited, show that Progressive
was actually relying on a form of fraud in the inducement. The majority
fails to distinguish between Progressive's actual argument-that failure to
cooperate should have the same remedy as fraud in the inducement-and its
characterization of the argument-that Progressive alleged fraud in the
inducement. Thus, in its conclusion, Progressive argued from Fireman's
Fund that in matters of fraud in the inducement a showing of intent to
deceive is unnecessary because "[i]t would be consistent for the Vermont
Supreme Court to find that an insured's failure to submit to an examination
under oath, the tool of an insurer to investigate issues of fraud, should
void coverage." When read in context, all of Progressive's references to
fraud in the inducement relate to the need for a similar remedy and not to
a claim of fraud in the inducement in this case.
¶ 35. Much of the majority's analysis relates to the weakness of
Progressive's argument in its motion for summary judgment and that the
cases relied upon were mainly fraud in the inducement cases. Progressive
has not appealed the denial of the motion for summary judgment on the
merits, and I agree that it should have been denied on the merits of what
it presented. I particularly agree that Fireman's Fund Insurance Co. v.
Knutsen offered no support for an argument that a policy should be void if
the insured fails to cooperate by refusing to submit to an examination
under oath. As the majority, the trial court and Wasoka emphasized, the
force of Progressive's legal arguments were greatly undermined by this
Court's decision in Smith v. Nationwide Mutual Insurance Co., 2003 VT 61,
175 Vt. 355, 830 A.2d 108, a decision issued after Progressive filed its
motion for summary judgment and memorandum of law. But all of this is
beside the point in this appeal. Weakness in the claim Progressive made
does not somehow turn it into a different claim, as the majority finds.
¶ 36. Because I believe that this case represents a trap for the
unwary and so much of the disagreement over it depends on the
characterization of the motion Progressive made, I have attached
Progressive's motion for summary judgment at the end of this dissent.
[Attachment not available online] Contrary to the majority's apparent
view, this should not be an exercise in trying to find words that support
the outcome that Progressive made a motion that Progressive asserts it did
not make, but instead in reading the motion overall to determine fairly
what were the grounds for its summary judgment motion. The reader can
decide which characterization of it is more accurate and whether, as the
majority claims, I have quoted "selectively" from it.
¶ 37. I am also persuaded by another very important factor in this
case, one ignored by the majority. If Progressive made a motion for
summary judgment based on fraud in the inducement, that motion was utterly
frivolous. No fact in Progressive's statement of undisputed facts went to
fraud in the inducement. (FN13) See V.R.C.P. 56(c)(2) (requiring movant to
attach statement of the "material facts" it claims are undisputed). Put
more directly, none of the facts went to the "inducement" of Progressive to
write the policy on July 23, 2000 and, other than the statement that
plaintiff purchased the policy on that date, all facts described events
that occurred after that date and could not have involved inducement for
writing the policy. All of the other material attached to the motion went
to Wasoka's failure to cooperate in giving a statement under oath or to
enter into a reservation-of-rights agreement.
¶ 38. The frivolous nature of the argument the majority claims
Progressive made is obvious from the majority's constant description of
that argument. Thus, the majority says in a number of places that
Progressive argued that Wasoka committed "fraud in the inducement as
evidenced by Wasoka's noncooperation." Ante, ¶¶ 1, 6. If that sentence
appeared in any other context than this opinion, one would wonder if it
were a mistake since the alleged "noncooperation" occurred over a year
after the "inducement" of Progressive to issue the policy. In his
response, Wasoka seized on this point arguing in support of his position
that Progressive had produced no evidence in support of a claim of fraud in
the inducement:
Defendant Gregory Wasoka submits that Plaintiff's Motion for
Summary Judgment, does not present any evidence of the following:
(1) evidence of an insurance application;
(2) evidence of any misrepresentation made to the insurance
agent;
(3) evidence of an alleged misrepresentation that was
material to liability coverage;
(4) evidence that defendant Wasoka's intent was anything
other than to insure himself in the State of Vermont at the time
of the insurance "application;" or
(5) evidence that coverage under the policy required Vermont
residency.
Wasoka was right. Progressive's motion and supporting material did not go
to any of the elements of fraud in the inducement. Where there is a
dispute over the meaning and intent of a motion, construing it in a way to
make it frivolous is wrong, particularly where the effect of that
construction is to default it from ever having the opportunity to present
the main claim in its complaint.
¶ 39. This returns us to what is in issue as a result of the
characterization of Progressive's summary judgment motion. Because fraud
in the inducement as a result of Wasoka's residency was not raised in
Progressive's motion, it was raised for the first time by Wasoka. (FN14)
As a result, Wasoka was the movant on this issue, and Progressive was
entitled to thirty days to respond as the nonmovant. V.R.C.P. 56(c)(1).
The court erred by not affording Progressive this response time and,
consequently, Progressive was prejudiced because it never had an
opportunity to submit facts pertaining to the residency issue.
¶ 40. While we have not addressed this procedural issue directly,
our decisions are fully consistent with this result. We have demanded that
if the trial court enters summary judgment sua sponte it must provide the
opposing party with an opportunity to respond. Kelly v. Town of Barnard,
155 Vt. 296, 306, 583 A.2d 614, 620 (1990) ("In Vermont, before the court
can grant summary judgment, it must give the opposing party a reasonable
opportunity to show the existence of a fact question." (quotations
omitted)). Similarly, we "recognize[d] the general rule that summary
judgment should not be granted on an issue not raised in the summary
judgment motion unless the party against whom summary judgment is granted
is given full and fair notice and opportunity to respond to the issue prior
to the entry of summary judgment." State v. Therrien, 2003 VT 44, ¶ 23
n.3, 175 Vt. 342, 830 A.2d 28. Other jurisdictions have held that where a
new legal issue is raised in a cross motion for summary judgment, the
original movant becomes the adverse party on the issue and is entitled to a
thirty-day response time as set out in Rule 56. See Hill v. Chambless, 757 So. 2d 409, 411 (Ala. 2000) (reversing for failure to provide full response
time); In re Persons, 311 N.W.2d 919, 923 (N.D. 1981) (reversing dismissal
where opposing party was not accorded full response time). Using the
similar Federal Rule of Civil Procedure 56, the federal courts agree that
when a party requests summary judgment on a new legal issue, the opposing
party is entitled to a renewed response time. See, e.g., Burns v. Gadsden
State Cmty. Coll., 908 F.2d 1512, 1516 (11th Cir. 1990) (reversing for
failure to provide response time); Cia. Petrolera Caribe, Inc. v. Arco
Caribbean, Inc., 754 F.2d 404, 410 (1st Cir. 1985) (explaining that party
should have opportunity to respond); Russell v. Atlas Van Lines, Inc., 411 F. Supp. 111, 115 (E.D. Okla. 1976) (providing party time to respond before
it ruled on summary judgment motion).
¶ 41. Even if I accepted that Progressive had raised fraud in the
inducement in its complaint, I would hold that Progressive was entitled to
thirty days to respond to Wasoka's motion. Under the majority's analysis,
this has turned into a form of "magic words" case. That is, the majority
has held that if the summary judgment movant raises some form of "fraud in
the inducement" by using those words somewhere in its motion, the opposing
party is entitled to raise anything with respect to fraud in the inducement
without giving the original moving party the right to reply as a nonmovant.
This holding distorts the procedure called for in the rules. Here Wasoka
responded with additional uncontested material facts going to his residency
at the time of the issuance of the policy and extensive discovery materials
on this issue. None of this was covered in Progressive's filings that
accompanied its summary judgment motion.
¶ 42. Wasoka submitted additional new facts in support of a
cross-motion for summary judgment. Irrespective of whether the issue was
covered in Progressive's original motion, Rule 56(c)(1) applies by its
terms to give Progressive thirty days to respond to Wasoka's motion.
Indeed, this is the only logical reading of the rule because it does not
provide for rebuttal and would not otherwise require Progressive to submit
its own version of undisputed facts in response to those raised by Wasoka.
See V.R.C.P. 56(c)(2). To hold that the evidence narrowing requirements of
Rule 56(c)(2) do not extend to new facts raised by the original opponent
greatly undercuts this procedure in a case where the incantation of the
magic words was found to be enough to start the process.
¶ 43. The majority responds that the facts were not new to
Progressive, and that is all that counts. (FN15) It is irrelevant whether
the facts were new to Progressive; they were new to the court and, in this
"magic words" case, went in an entirely different direction from
Progressive's filings and raised questions of law that Progressive never
briefed. The rule must be administered with a bright line opportunity to
respond; under the majority's distinction, litigants would never know how
long they had to respond.
¶ 44. Finally, I believe that the only possible remedy for the
failure to accord Progressive the proper time to respond is a reversal of
the summary judgment so that Progressive can respond to Wasoka's motion and
filings. In reaching this conclusion, I disagree with the majority that a
harmless error analysis will decide this case for Wasoka. Rule 56 grants
an adverse party thirty days to present affidavits and a memorandum in
response to a motion for summary judgment, and the superior court had no
discretion to shorten this time limit. The court failed to honor this
requirement and to issue summary judgment when it did.
¶ 45. The basic federal law, adopted by a majority of federal
courts, is that noncompliance with the time provisions of the summary
judgment rule deprives the trial court of authority to decide the motion.
Osbakken v. Venable, 931 F.2d 36, 37 (10th Cir. 1991) ("It is settled law
that noncompliance with the time provisions of Rule 56(c) deprives the
court of authority to grant the motion for summary judgment unless the
opposing party has waived this requirement."); Winbourne v. E. Air Lines,
Inc., 632 F.2d 219, 223, 223 n.5 (2d Cir. 1980) (citing cases and noting
that while a minority of federal courts apply a harmless error analysis for
failure to comply with the procedural requirements of Rule 56, the majority
of courts hold that "a procedural defect vitiates the entry of summary
judgment against the non-moving party"). There is a place for harmless
error analysis only if the record shows that the party against whom summary
judgment is issued could not have brought forward additional material facts
to defeat the motion. This is the holding of Bridgeway Corp. v. Citibank,
201 F.3d 134 (2d Cir. 2000), a case in which the party against which
summary judgment was granted had admitted in its filings that the evidence
was sufficient to enable the court to decide whether to grant summary
judgment on the issue it did. See id. at 140 ("Bridgeway repeatedly
claimed to the district court that it had introduced sufficient evidence on
that very issue."). The majority has taken Bridgeway a large step beyond
its rationale by holding that Progressive, as the party contesting the
summary judgment procedure, must demonstrate by a post-judgment filing what
it would have filed in opposition to Wasoka's motion and that it would have
won the summary judgment motion. Federal law does not impose such a
requirement.
¶ 46. Bridgeway depends in turn on a line of Second Circuit cases
that reversed summary judgment decisions because they were issued without
giving the losing party a sufficient opportunity to respond. The main
precedent is Ramsey v. Coughlin, 94 F.3d 71 (2d Cir. 1996), which developed
the harmless error rule as follows:
Where it appears clearly upon the record that all of the
evidentiary materials that a party might submit in response to a
motion for summary judgment are before the court, a sua sponte
grant of summary judgment against that party may be appropriate if
those materials show that no material dispute of fact exists and
that the other party is entitled to judgment as a matter of law.
Before granting summary judgment sua sponte, the district court
must assure itself that following the procedures set out in Rule
56 would not alter the outcome. Discovery must either have been
completed, or it must be clear that further discovery would be of
no benefit. The record must, therefore, reflect the losing
party's inability to enhance the evidence supporting its position
and the winning party's entitlement to judgment.
Appellate review of a grant of summary judgment is de novo. The
record here, which consists solely of Ramsey's submission in
support of his own motion, does not meet the test set out above.
Discovery here has been concluded, but we have no way of knowing
whether all pertinent materials obtained in discovery are before
us. Had the procedures required by Rule 56 been used and had
appellees moved for summary judgment, the state of the evidence
concerning the crucial issue of appellees' personal involvement
would have been clarified.
Id. at 74 (citations omitted). This case is in the same posture as Ramsey;
discovery has been completed but only part of it was before the court.
Just as the Ramsey court reversed on that basis, without imposing on the
losing party to show what was in that discovery, we must also.
¶ 47. Although we have not addressed directly the application of
harmless error in a case where the trial court granted summary judgment
without providing one party a sufficient opportunity to respond to the
motion, we have considered cases where the trial court went outside the
pleadings and converted a motion to dismiss into a motion for summary
judgment without giving notice to the adverse party. Rule 12(b) requires
that the court give all parties "reasonable opportunity to present all
material made pertinent to such a motion by Rule 56." V.R.C.P. 12(b).
Where the trial court has granted summary judgment without complying with
the notice and opportunity to respond requirement of the rule, we have
routinely reversed summary judgment without requiring the losing party to
show what evidence it would have submitted to the trial court. See Bennett
Estate v. Travelers Ins. Co., 138 Vt. 189, 191, 413 A.2d 1208, 1209 (1980)
(reversing summary judgment because plaintiff was not given an opportunity
to submit material after motion to dismiss was converted to a summary
judgment motion); see also Nash v. Coxon, 152 Vt. 313, 315, 565 A.2d 1360,
1361 (1989) (same). Reflecting a similar policy, we recently reversed the
dismissal of a complaint under Rule 12(b) because the losing party was not
accorded the opportunity to address the grounds for dismissal and that
party might have "be[en] able to amend the complaint sufficiently to state
a claim entitling the plaintiff to relief." Huminski v. Lavoie, 173 Vt.
517, 519, 787 A.2d 489, 492 (2001) (mem.).
¶ 48. Our rules impose upon Progressive no duty to file any
post-judgment motion once it was denied summary judgment. It chose to do
so based on the procedural unfairness of a ruling that defaulted it on the
central claim in its suit. The trial court gave no indication in response
to Progressive's motion that it expected Progressive to demonstrate what
facts it would have offered in response to Wasoka's motion had it been
given the opportunity or that it would have considered any additional
facts. Under the guise of defining Progressive's obligation to show
prejudice, the majority has now created new procedural requirements to file
a post-judgment motion and with that motion to file the evidentiary
material that demonstrates it would have prevailed on the summary judgment
motion if it had been allowed to make the filing.
¶ 49. The majority has responded that it really did not require
Progressive to file any post-judgment motion, it simply held that if
Progressive filed a post-judgment motion, it cannot squander its
opportunity to show prejudice by failing to demonstrate the facts it would
have filed in opposition to the summary judgment against it. I believe
that this response goes in the wrong direction. It says to the members of
the bar that they can avoid making a bad prediction about what to put in a
motion to vacate by filing no post-judgment motion and instead appealing to
this Court without giving the trial court an opportunity to correct its
error. We should endorse exactly the procedure Progressive used here when
it brought to the superior court's attention its assertion that the court
made a procedural error in defaulting it.
¶ 50. If we are to create new procedural requirements, we should do
so prospectively by rule, rather than blaming a litigant for failing to
meet requirements of which it had no warning. The waste of judicial
resources is caused by the failure to give Progressive an opportunity to
respond to Wasoka's summary judgment motion and not by the inadequacy of
Progressive's attempts to emerge from the box in which it was placed.
Refusal to reverse the decision to default Progressive "appears . . .
inconsistent with substantial justice" and is not harmless error. V.R.C.P.
61.
¶ 51. In summary, we should afford Progressive its day in court on
its main claim that its insured misrepresented his place of residency and
that misrepresentation should void the policy. Whatever we may think about
its case, it is entitled to be treated fairly and evenhandedly and pursuant
to our rules. It was not treated so in this case.
______________________________
Associate Justice
------------------------------------------------------------------------------
Footnotes
FN1. Chief Justice Amestoy sat for oral argument but did not participate in
this decision.
FN2. Progressive's summary judgment motion also states that following the
second May interview, a Progressive agent learned that Gary Industries had
continually employed Wasoka for thirty five hours per week since 1999.
This assertion, however, is not supported in any documentation, nor is it
cited in the statement of undisputed facts.
FN3. In playing up the purportedly unfair aspects of the court's ruling,
the dissent claims that Wasoka's responsive memorandum cited "substantial
new facts and law." Post, ¶ 3. After reviewing Wasoka's memo and the trial
court's opinion, the only "new" law we find cited is Smith v. Nationwide
Mut. Ins. Co., which, the dissent notes post, ¶ 7, we handed down after
Progressive filed its memo. In Smith, we rejected an insurer's disclaimer
of coverage based on the insured's refusal to cooperate with his insurer's
defense of the underlying liability case at trial. 2003 VT 61, ¶ 1. In so
doing, we reaffirmed our holding in American Fidelity Co. v. Kerr, that an
insurer seeking to avoid coverage based on the insured's noncooperation
must demonstrate both the noncooperation and the " 'the actual prejudice
resulting therefrom.' " Id., ¶ 10 (quoting Amer. Fid. Co., 138 Vt. 359,
362, 416 A.2d 163, 165 (1980)); see also id., ¶ 22. Progressive cited and
distinguished American Fidelity in its brief. See infra, ¶ 13. Moreover,
as the dissent notes, Progressive has not appealed the trial court's
application of Smith to its case as either procedurally unfair or
substantively incorrect. Accordingly, we fail to see why this Court's
issuance of Smith, after Progressive filed its motion, should factor into
our analysis of whether Progressive was entitled, as a matter of law, to
thirty days to respond to Wasoka's memo.
FN4. Vermont Rule of Civil Procedure 56(c)(3) states in pertinent part that
[j]udgment shall be rendered forthwith if the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, referred to in the
statements required by Rule 56(c)(2), show that there is no
genuine issue as to any material fact and that any party is
entitled to judgment as a matter of law.
(Emphasis added.). In its post-judgment motion to vacate the court's
opinion, Progressive acknowledged V.R.C.P. 56(c)(3) as the procedural
source of the court's authority to rule against it, recognizing no less
than four times that Wasoka' response was not a "separate motion for
summary judgment." Progressive protests that V.R.C.P. 56(c)(3) does not,
however, provide the court with the authority to decide, sua sponte, an
issue that Progressive did not raise. We express no opinion here on sua
sponte summary judgment under the rule because we reject Progressive's
claim that its motion did not raise the issue of residency fraud in the
inducement.
FN5. Black's Law Dictionary defines "void ab initio" as "[n]ull from the
beginning, as from the first moment when a contract is entered into."
Black's Law Dictionary 1568 (7th ed. 1999).
FN6. The dissents quotes selectively from Progressive's motion, avoiding
passages like the one above, and claims that Progressive's "actual
argument" was that "failure to cooperate should have the same remedy as
fraud in the inducement." Post, ¶ 6. The dissent claims that, "[w]hen
read in context, all of Progressive's references to fraud in the inducement
relate to the need for a similar remedy and not a claim of fraud in the
inducement in this case." Id. The passage cited above, and Progressive's
reliance on Fireman's Fund does not support the dissent's claim.
Progressive sought the same remedy-voiding the policy ab initio-for the
same wrong-fraud in the inducement. Under Fireman's Fund, Progressive
sought to prove the fraud with circumstantial evidence in the form of
Wasoka's noncooperation with yet another interview, under oath, at which
Progressive could have pursued the issue of residency fraud. While
Fireman's Fund provides two different ways to prove the claim, either by
direct evidence or circumstantial evidence, it does not provide for two
different claims. 132 Vt. at 388, 324 A.2d at 277.
FN7. The dissent protests that Wasoka's introduction of "substantial new
facts" with his filing required the court to provide Progressive thirty
days to respond to the new information. What Wasoka filed was hardly
"new." Wasoka's statement of additional uncontested material facts
included four items. Of these, ¶¶ 19 and 21 were verbatim quotations from
Wasoka's insurance policy with Progressive. Pl.'s Mot. & Mem. at 4.
Similarly, the information contained in additional fact ¶ 22 was derived
from Wasoka's deposition. Progressive's own statement of uncontested facts
drew heavily upon the same deposition, and pages of it were attached as an
exhibit to its motion; therefore, this too cannot be considered new
information as far as Progressive was concerned. The final piece of "new
information" Wasoka included was drawn from Progressive's own response to
Wasoka's interrogatory, which indicated that Wasoka's "[a]pplication [was]
purchased by phone." This is plainly not new information because it was
all known by and available to Progressive at the time it filed its motion.
It was, however, information that was omitted by Progressive.
Moreover, the dissent claims that material facts going towards
Wasoka's residency were not "covered in Progressive's filings that
accompanied its additional motion." Post, ¶ 13. To the contrary,
Progressive material facts ¶¶ 6, 7, 9, 10, 11, and 12 all go to the issue
of his residency by demonstrating the significant ties that he had to
Connecticut prior to purchasing, and during the pendency of, the insurance
coverage. Furthermore, Progressive filed a transcript of Wasoka's second
recorded interview as its exhibit 5. The entire content of this interview
deals with (1) where Wasoka lived and worked, (2) when he lived and worked
at those various places, and (3) the details of the interactions between
Wasoka and the insurance agent who sold him the policy. This information
is relevant because the substantive fraud claim underlying Progressive's
noncooperation allegations is that Wasoka lied about where he was living
and working when he purchased the policy. Progressive claimed it was
entitled to an inference of fraud because Wasoka refused to come to the
interview under oath to discuss these matters.
FN8. By creating the specter that this opinion will work major changes in
summary judgment law, the dissent attempts to obscure the fact that, as is
often the case, Wasoka's response was limited to issues raised by
Progressive's own motion. Despite any reliance that the trial court may
have placed upon timetables in V.R.C.P. 78, our decision on this issue
applies existing summary judgment law and does not intend or warrant any
changes to it. As we have pointed out, the dissent's procedural argument
relies on its assertion that Wasoka's memorandum and motion raised "new"
issues supported by "new" facts. Neither the issues, nor the facts
submitted were new to Progressive, and in such a case we cannot agree with
the dissent's assertion that V.R.C.P. 56(c)(1) automatically affords the
original moving party thirty days to respond. While it may be a good idea
to clarify the rules of summary judgment, no such clarification is needed
to resolve cases like this one.
FN9. We do not agree with the dissent's assertion that our harmless error
analysis in this case creates a new procedural requirement for parties
against whom summary judgment is granted. We agree that our rules impose
no duty to make post-judgment filings prior to appeal. Nonetheless, we
cannot ignore the fact that Progressive chose to make such filings in this
case, having as its only support counsel's affirmations about her
subjective intent in drafting and filing the motion. By filing these
motions, Progressive created its own opportunity to expand the record on
appeal-an opportunity that it has squandered by failing to demonstrate,
with properly supported facts, that it was truly prejudiced by the trial
court's ruling on the summary judgment motion. Infra, ¶¶ 24-25.
FN10. Progressive did not argue before the trial court that it was working
on a response to Wasoka's memorandum when the court ruled on Progressive's
motion, nor did it assert that it intended to respond to Wasoka's
memorandum. Although Progressive claimed in oral argument that it intended
to reply, it failed to make this assertion below in either of its two
motions subsequent to the trial court's summary judgment ruling. Thus, we
decline to consider it here. See Spencer v. Killington, Ltd., 167 Vt. 137,
140, 702 A.2d 35, 36 (1997) ("[W]e will not reverse a lower court when a
party's failure to raise some matter below denied the court an opportunity
to consider it.") (quotations omitted).
FN11. Wasoka argued below that Rule 78(b)(1) imposed a deadline of ten days
to respond to its motion and evidentiary material. That rule gives the
maker of a motion ten days to respond to a memorandum filed by the
opponent. This language is plainly inapplicable to the situation before
us. Progressive's need to respond was not triggered by Wasoka's
memorandum, but instead by the new facts that Wasoka asserted were
undisputed and the extensive additional evidentiary material he submitted.
Moreover, although we have not clearly decided this question, the
procedures for summary judgment motions appear to be governed by Rule 56
and not Rule 78.
FN12. There was also a third reason that Wasoka made misrepresentations in
the course of presenting his claim, but that is not relevant to the issue
before us.
FN13. The majority says that six of the paragraphs "go to the issue of his
residency by demonstrating the significant ties he had to Connecticut prior
to purchasing, and during the pendency of, the insurance coverage." Ante,
n.7. In fact, all of the paragraphs describe events at the time of the
accident, nine months after the policy was purchased, or during the
investigation of the accident and coverage and culminate. For example:
¶ 12. Following the second recorded interview, Progressive had
reason to believe that Mr. Wasoka was a Connecticut resident when
he purchased the Vermont automobile insurance policy. Progressive
suspected fraud in the inducement of the policy.
The factual paragraphs do not relate to "the significant ties that he had
to Connecticut prior to purchasing . . . the insurance coverage," as the
majority states. Ante, n.7. Unless we are prepared to hold that an
insurer's suspicion of fraud in the inducement means that such fraud exists
and voids the policy, another frivolous argument, the statement of
undisputed facts offers no support to a fraud-in-the-inducement argument.
The majority also states that Progressive attached as exhibit 5
[Attached Exhibit 5 not available online] to its statement of undisputed
facts the second recorded interview of Wasoka, taken on May 22, 2001 after
the accident, to show that Wasoka fraudulently induced Progressive to sell
him the policy by misrepresenting his residency as Vermont. Progressive
included three "undisputed facts" from the exhibit in ¶ ¶ 8, 9, 10: (1)
that an employee of Progressive interviewed Wasoka; (2) that during the
interview "Wasoka was still at his parent's home in Connecticut"; and (3)
that during the interview "Wasoka stated that he was currently working at
Gary Industries, a business in Connecticut." Progressive never cited
exhibit 5 as supporting a fraud-in-the-inducement argument in its motion or
memorandum of law, Wasoka ignored it in his response, and the trial court
never used it in its summary judgment decision. The "facts" in the exhibit
were never properly before the superior court for its decision. See
Travelers Ins. Co. v. Demarle, Inc., 2005 VT 53, ¶ 9, 16 Vt. L. Wk. 134
(mem.) (excluding evidence not included in statement of disputed facts from
court's evaluation of summary judgment).
FN14. In footnote 4, the majority claims that Progressive conceded in its
motion to vacate that Wasoka's response was not a separate motion for
summary judgment. What Progressive said over and over again is that it
never raised fraud in the inducement in its summary judgment motion and,
therefore, the court could not find summary judgment against it on that
theory absent a separate summary judgment motion from Wasoka. It added
that the Wasoka response could not be construed as a separate motion so
summary judgment could not be entered against it and that, if Wasoka's
motion was construed as a separate motion for summary judgment, it was
denied thirty days to respond to the motion.
The majority wants to hold Progressive to its position that Wasoka
never filed for summary judgment, while rejecting its underlying condition
that Progressive never filed for summary judgment on fraud in the
inducement. If Progressive never moved for summary judgment on a theory of
fraud in the inducement, it makes little difference if the error is
characterized as granting summary judgment on a ground never raised by the
movant, or granting summary judgment on a new theory raised by the
motion-opponent without sufficient time for the movant to respond. Under
either characterization, Progressive improperly suffered a de facto default
judgment on the merits of its case.
FN15. They were also known by Wasoka at the time of Progressive's motion,
but he was given six months extra to present them to the superior court,
while Progressive was not given thirty days to respond to them.
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