Golden Bear Ins. Co. v. Evanston Ins. Co.

564 F.Supp.3d 922

GOLDEN BEAR INSURANCE COMPANY, Plaintiff,

v.EVANSTON INSURANCE COMPANY, StarStone Specialty Insurance Company, Defendants.

Case No. 2:20-cv-00027-RFB-EJY

United States District Court, D. Nevada.

Signed September 30, 2021

Pamela A. McKay, McKay Law Firm, Chtd., Las Vegas, NV, for Plaintiff.

David Plouff, Pro Hac Vice, Clark Hill LLP, San Diego, CA, Gary A. Hamblet, Pro Hac Vice, Clark Hill LLP, Los Angeles, CA, Nicholas M. Wieczorek, Clark Hill PLLC, Las Vegas, NV, for Defendant Evanston Insurance Company.

Byron L. Ames, Chet A. Glover, Ames & Ames LLP, Las Vegas, NV, for Defendant StarStone Specialty Insurance Company.

ORDER

RICHARD F. BOULWARE, II, UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

Before the Court for consideration is Plaintiff's Motion for Summary Judgment or in the alternative, Partial Summary Judgment [ECF No. 51 ], Defendant StarStone's Counter Motion for Summary Judgement [ECF No. 64 ], Defendant Evanston's Motion for Summary Judgement [ECF No. 66 ], and Plaintiff's Appeal of the Magistrate Judge's Order on Plaintiff's Motion to Strike [ECF No. 90 ].

II. PROCEDURAL BACKGROUND

Plaintiffs filed suit in federal court on January 7, 2020. ECF No. 1. The complaint asserts two claims for relief: a duty to defend claim (for both declaratory relief against Evanston and equitable contribution against both defendants) and a duty to indemnify claim (for both declaratory relief and equitable contribution against both defendants). On February 27, 2020, Defendant Evanston filed an answer and a counterclaim against Plaintiff, seeking declaratory relief on both the duty to defend and duty to indemnify causes of action. ECF Nos. 14, 15. On February 28, 2020 Defendant StarStone filed an answer. ECF No. 18. On March 20, 2020, Plaintiff filed an answer to the Counterclaims. ECF No. 24.

On October 5, 2020, Defendant StarStone filed a motion for judgment on the pleadings. ECF No. 39. On August 27, 2020, the Court denied the motion for judgment on the pleadings. ECF No. 93.

On February 22, 2021, Plaintiff filed a motion for summary judgment or, in the alternative, motion for partial summary judgment. ECF No. 51. On March 15, 2021, Defendants filed a separate motion for summary judgment. ECF Nos. 64, 66. All of the foregoing motions were fully briefed as of April 19, 2021.

On March 10, 2021, Plaintiff filed a motion to strike Defendant StarStone's Designation of Initial Expert Witness, the Expert Report, and all testimony from the Expert. ECF No. 59. Plaintiff argued that the expert's materials are inadmissible because the expert improperly interprets the insurance policies at issue, invading the province of the Court. Defendant StarStone countered that the expert's testimony did not reach any ultimate conclusion of law. ECF No. 67. The Magistrate Judge granted the motion in part and denied the motion in part, finding that some elements of the expert's opinion were inadmissible as improper, and some were inadmissible as irrelevant. Plaintiff requests that the Court set aside the Magistrate Judge's ruling to the extent that some elements of the report were deemed admissible. ECF No. 90.

Oral argument was held on these motions on August 27, 2021. ECF No. 93. This written order follows.

III. FACTUAL BACKGROUND

A. Undisputed Facts

The Court finds the following facts to be undisputed. Plaintiff Golden Bear Insurance Company issued a commercial general liability policy to Henderson Waterpark d/b/a Cowabunga Bay [hereinafter "Cowabunga Bay"] with a period of April 15, 2017 to April 15, 2018. This primary policy had an each occurrence limit of $1,000,000. Plaintiff also issued an excess policy for the same period which had an each occurrence and aggregate limit of $5,000,000. Innovative Attraction Management [hereinafter "IAM"] is a waterpark management company with which Cowabunga Bay entered into a contract for aquatic operations management, consulting services, risk prevention, and lifeguard training. Defendant Evanston Insurance Company issued a commercial general liability policy to IAM with a period of November 27, 2016, to November 26, 2017, with an each occurrence limit of $1,000,000. ECF No. 66-11. Defendant StarStone issued an excess policy for the same period with a per occurrence and aggregate of $10,000,000. ECF No. 51.

1. The Underlying Actions

On June 18, 2017, an eight-year old boy drowned while visiting Cowabunga Bay. His estate and parents brought suit against Cowabunga Bay and IAM seeking damages (the "Bankston suit"). Golden Bear accepted Cowabunga Bay's defense of the Bankston suit. Evanston denied Cowabunga Bay's additional insured tender of the Bankston suit, but accepted IAM's tender. Golden Bear settled the Bankston suit for an amount in excess of Golden Bear's primary policy per occurrence limit.

Also on June 18, 2017, two other patrons sustained injuries at the water park. On June 17, 2019, they filed suit against Cowabunga Bay, later adding IAM. Golden Bear accepted Cowabunga Bay's tender (the "Hicks suit"). Evanston denied Cowabunga Bay's additional insured tender, but accepted IAM's tender.

2. StarStone's and Evanston's Insurance Policy

IAM's excess policy (issued by Defendant StarStone) is a "follow form" policy to the Evanston policy. This means that the interpretation of the Evanston policy would and does apply equally to the StarStone policy. The Evanston's primary policy contains a "Blanket Additional Insured Endorsement" which provides that,

"A. Who is an Insured is amended to include as an additional insured any person or entity to whom you are obligated by valid, written contract to provide such coverage, but only with respect to negligent acts or omissions of the Named Insured and only with respect to any coverage not otherwise excluded in the policy. However: (1) the insurance afforded to such additional insured only applies to the extent permitted by law; and (2) if coverage provided to the additional insured is required by a contract or agreement, the insurance afforded to such additional insured will not be broader than that which you are required by the contract or agreement to provide for such additional insured."

A $500 premium to include the Blanket Additional Insured was paid as part of the "Commercial General Liability Coverage Part Declarations."

3. Contracts between IAM and Cowabunga

It is undisputed that there were two written contracts between IAM and Cowabunga Bay, (1) a December 24, 2015 Contract for Consulting Services (including risk prevention and lifeguard training) and (2) a December 24, 2015 Contract for Services (including aquatic operations management). The second of these contracts for aquatic operations management, includes the following language:

"Indemnity. (A) Manager shall defend, indemnify and hold harmless the Client, its agents, officers, directors, employees, successors and assigns from and against losses, liabilities, damages, claims, costs, settlements, suits and attorney fees relating to or arising from the acts or omissions by Consultant, its employees, agents, sub-contractors in performance or non-performance of this Contract from any cause whatsoever, including, but not limited to: (i) breach of its representations or warranties or other obligations hereunder, and/or (ii) negligent acts or omissions, and/or (iii) willful misconduct.... Insurance. (A) The Manager shall procure and keep in force and effect at all times during the term of this Agreement and any extension thereof, insurance policies and coverages as noted in the sample certification in Annex C hereto."

While a majority of the text of Annex C appears illegible, the title of the document is "Certificate of Liability Insurance" and it is issued to IAM by their insurance agent, Haas & Wilkerson Insurance.

4. Events Related to the Blanket Additional Insured

Finally, it is undisputed that Cowabunga Bay at some point prior to April 12, 2017 requested to be added as an additional blanket insured under IAM's Evanston Policy and that on April 12, 2017, Cowabunga Bay requested that IAM provide proof that it was added as an additional insured to IAM's Evanston Policy. IAM's insurance agent, Haas & Wilkerson, and a representative from RT Specialty, the managing general agency for Evanston, once again discussed the blanket additional insured issue on July 20, 2017.

IV. LEGAL STANDARD

A. Summary Judgment

Summary judgment is appropriate when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show "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) ; accord Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

When considering the propriety of summary judgment, the court views all facts and draws all inferences in the light most favorable to the nonmoving party. Gonzalez v. City of Anaheim, 747 F.3d 789, 793 (9th Cir. 2014). If the movant has carried its burden, the nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts .... Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial." Scott v. Harris, 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007) (alteration in original) (internal quotation marks omitted).

It is improper for the Court to resolve genuine factual disputes or make credibility determinations at the summary judgment stage. Zetwick v. Cty. of Yolo, 850 F.3d 436, 441 (9th Cir. 2017) (citations omitted).

V. DISCUSSION

Plaintiff moves for summary judgment as to all claims or in the alternative as to specific points of law regarding the duty to indemnify and duty to defend claims. Defendants move for summary judgment regarding each of Plaintiff's causes of action. Plaintiff seeks a declaratory judgment clarifying the parties’ rights and obligations regarding the duty to...