Denver v. Markel Am. Ins. Co.

1

RYAN DENVER, Plaintiff, v. MARKEL AMERICAN INSURANCE COMPANY, Defendant.

Civil Action No. 22-cv-11150-ADB

United States District Court, D. Massachusetts

March 12, 2024

MEMORANDUM AND ORDER

ALLISON D. BURROUGHS U.S. DISTRICT JUDGE

On July 17, 2021, Plaintiff Ryan Denver (“Denver”) was operating his boat when it struck an obstruction “Daymarker No. 5,” in Boston Harbor, resulting in injuries to multiple passengers and one death (the “Incident”). [ECF No. 7 ¶¶ 17-19 (“First Amended Complaint” or “FAC”)]. Denver had an insurance policy through Defendant Markel American Insurance Company (“Markel”). [Id. ¶¶ 6, 8-10] see also [ECF No. 35-1^[1] (the “Policy”)]. This dispute relates to the parties' obligations under the Policy. See generally [FAC]. Now pending before the Court is Markel's motion for judgment on the pleadings on Counts I and II of the FAC. [ECF No. 33]. For the reasons set forth below, the motion is GRANTED as to Count I and DENIED as to Count II.

I. STANDARD OF REVIEW

“After the pleadings are closed-but early enough not to delay trial-a party may move for judgment on the pleadings.” Fed.R.Civ.P. 12(c). Courts considering motions for judgment on the pleadings use a standard similar to the one used for motions to dismiss under Federal Rule of Civil Procedure 12(b)(6), except that a “Rule 12(c) motion, unlike a Rule 12(b)(6) motion, implicates the pleadings as a whole.” Aponte-Torres v. Univ. of P.R., 445 F.3d 50, 54-55 (1st Cir. 2006).

“Judgment on the pleadings is proper ‘only if the uncontested and properly considered facts conclusively establish the movant's entitlement to a favorable judgment.'” Zipperer v. Raytheon Co., 493 F.3d 50, 53 (1st Cir. 2007) (quoting Aponte-Torres, 445 F.3d at 54). That said, “[t]o survive a motion for judgment on the pleadings, a complaint must allege sufficient facts to ‘state a claim to relief that is plausible on its face.'” Sevelitte v. Guardian Life Ins. Co., 55 F.4th 71, 79 (1st Cir. 2022) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007))). “Those factual allegations cannot be ‘meager, vague, or conclusory.'” Id. (quoting Kando v. R.I. State Bd. of Elections, 880 F.3d 53, 63 (1st Cir. 2018) (quoting SEC v. Tambone, 597 F.3d 436, 442 (1st Cir. 2010) (en banc))).

II. BACKGROUND

A. Procedural History

The parties have brought several claims and counterclaims that, in general, seek a ruling that Markel is, or is not, obligated to indemnify and defend Denver for claims stemming from the Incident. See infra. Specifically, on November 4, 2022, Denver filed the First Amended Complaint, [FAC], asserting claims for (1) breach of contract (Count I), [id. ¶¶ 46-50], (2) bad faith (Count II), [id. ¶¶ 51-54]; and (3) a declaratory judgment that “Markel is obligated to cover Plaintiff for the alleged losses” (Count III), [id. ¶¶ 55-56]. On January 13, 2023, Markel answered and counterclaimed, [ECF No. 14 (the “Markel Answer”^[2] and “Counterclaims”)], seeking a declaratory judgment that (1) the policy is null and void, [Counterclaims ¶¶ 46-58]; (2) insurance coverage is excluded under the policy, [id. ¶¶ 59-74]; and (3) Denver breached the policy and the implied and express warranties rendering the policy null and void, [id. ¶¶ 75-88]. Denver answered Markel's Counterclaims on February 24, 2023, [ECF No. 22 (“Denver Answer”)].

On April 21, 2023, Markel moved for judgment on the pleadings on Counts I and II of the FAC. [ECF No. 33]. Denver opposed on May 19, 2023, [ECF No. 39], and Markel replied on June 2, 2023, [ECF No. 43].

Separately, on May 19, 2023, Denver moved to exclude his examination under oath from the Court's consideration of Markel's motion for judgment on the pleadings. [ECF No. 40]. Markel opposed on June 2, 2023. [ECF No. 43].

B. Factual Background

“Because [a Rule 12(c)] motion calls for an assessment of the merits of the case at an embryonic stage, the court must view the facts contained in the pleadings in the light most favorable to the nonmovant and draw all reasonable inferences therefrom . . . .” Perez-Acevedo v. Rivero-Cubano, 520 F.3d 26, 29 (1st Cir. 2008) (alteration in original) (citations and internal quotation marks omitted).

On July 27, 2021, Markel issued Denver the Policy, which covers the period from June 28, 2021 through June 28, 2022. [Markel Answer ¶ 10].

The Incident occurred on July 17, 2021, when Denver was operating the Vessel with seven passengers on board. [FAC ¶ 17]; see also [Denver Answer ¶ 14]. The Vessel was damaged, six passengers were rescued, at least some with alleged injuries, and one passenger drowned. [FAC ¶¶ 18-19]; see also [Denver Answer ¶ 15].

Several provisions of the Policy are relevant here. First, the Policy includes coverage limits of, among others, $680,000 for the Vessel (the “Hull, Agreed Value”) and $2,000,000 for “Protection and Indemnity.” [Markel Answer ¶¶ 11; Policy at 5].

Second, the “General Conditions” provide the following:

3. Misrepresentation or Fraud[.] All insurance provided by this policy will be null and void if you, at any time, either intentionally conceal or misrepresent any fact, regardless of materiality, or if you misrepresent or conceal any material fact regardless of intent. No action or inaction by us will be deemed a waiver of this provision....

8. Legal Action Against Us[.] a. No suit or action may be brought against us unless there has been full compliance with all terms of this policy. b. With respect to coverage provided under PHYSICAL DAMAGE, no suit or action may be brought against us unless the action is brought within 12 months after the date you first have knowledge of the loss....

12. Claim or Suit Against You[.] You must immediately notify us and send us every demand notice, summons or other legal papers received by you or your representative, if a claim is made or a suit is brought against you for liability that is covered under this policy. We will pay the ensuing cost of the suit and have the sole right to control the defense of the suit. We also have the option of naming attorneys to represent you in the suit.

13. General Duties Following a Loss[.] . . . After requested by us, you must file within ninety (90) days thereof, with us or our authorized agent, a written statement about the details of the loss. This statement must be signed and sworn by you. You, as often as we may reasonably require, will: a. exhibit to any person we designate all that remains of any property that may be covered under this policy; b. submit and subscribe to examinations under oath by any person named by us. If more than one person is examined, we have the right to examine and receive statements separately from each person and not in the presence of the others; c. produce for examination and permit extracts and copies of all books of account, bills, invoices, other vouchers and any other tangible items related to the claimed loss, or certified copies thereof if the originals are lost, at such reasonable time and place as may be designated by us or our representative. You must cooperate with us in the investigation, defense or settlement of any loss. If you do not comply with these general duties, then no coverage for the loss will be provided.

[Policy at 12-14]; see also [Markel Answer ¶ 41].

Third, the “General Exclusions” provision states that

No coverage is provided under this policy for loss or damage, liabilities incurred by any person, injury or damages or expenses of any type for loss caused by, resulting from or arising out of: . . .

6. Willful or intentional misconduct or criminal act on the part of any insured or during any illegal activity on the part of the insured.

[Policy at 14-15].^[3]

On July 26, 2021, Markel was informed of the Incident and the request for defense and indemnification. [Markel Answer ¶ 20]. On July 27, 2021, Markel sent Denver a “7/27/2021 Reservation of Rights” letter. [Id. ¶¶ 21-22]; see also [ECF No. 39-23 (“7/27/2021 Reservation of Rights Letter”)]. The 7/27/2021 Reservation of Rights Letter provides, among other things, the following:

[Markel] is reserving its rights regarding the defense and indemnification of this accident. [Markel] will continue to investigate this matter under this Reservation of Rights letter. [Markel] reserves the right to investigate and disclaim coverage for any damages that are not covered under the binder referenced, as specifically set forth below. The following will outline the position being taken by [Markel] to Ryan Denver.

Background[.] Following notification of this accident received on 07/26/2021 from Global Marine Insurance Agency and a letter of representation from Michael J. Connolly at Hinckley Allen, [Markel] reviewed the binder and information available to [Markel] to also include online reports. According to the loss notice, it is alleged that Mr. Denver was operating the vessel within the Boston Harbor when he struck a navigational marker. There were six passengers that were injured and one passenger Jeanice Julce, was fatally wounded. The state attorney's office and the FBI are involved in the ongoing investigation.... [I]t is noted that the policy provides, in relevant part, as follows:

General Exclusions[.] No coverage is provided under this policy for loss or damage, liabilities incurred by any person, injury, or damages or expenses or any type for loss caused by, resulting from or arising out of: 6. Willful or intentional misconduct or criminal act on the part of any insured, or during any illegal activity on the part of any insured....

To the extent that this accident occurred as a result of any willful or intentional misconduct or criminal act, or during any illegal activity by the insured, there is no coverage under this

...