Interstate Fire & Cas. Co. v. Apartment Mgmt. Consultants LLC
| Decision Date | 13 July 2018 |
| Docket Number | Case No. 13-CV-278-J |
| Citation | 328 F.Supp.3d 1242 |
| Parties | INTERSTATE FIRE & CASUALTY COMPANY and Fireman's Fund Insurance Company, Plaintiffs, v. APARTMENT MANAGEMENT CONSULTANTS LLC, and Sunridge Partners LLC, Defendants. |
| Court | U.S. District Court — District of Wyoming |
Ashley Brooke Vinson Crawford, Danielle Crockett Ginty, Pro Hac Vice, Shawn Hanson, Pro Hac Vice, Akin Gump Strauss Hauer & Feld LLP, San Francisco, CA, Corinne E. Rutledge, Erin Arnold Barkley, J. Kent Rutledge, Lathrop & Rutledge, Cheyenne, WY, for Plaintiffs.
Michael Bidart, Pro Hac Vice, Ricardo Echeverria, Pro Hac Vice, Steven Messner, Pro Hac Vice, Shernoff Bidart Echeverria LLP, Claremont, CA, Robert W. Tiedeken, Wolf Tiedeken & Woodard, Cheyenne, WY, for Defendants.
ORDER ON VARIOUS MOTIONS FOR SUMMARY JUDGMENT
This matter comes before the Court on a number of pending motions for summary judgment, including:
The Court has reviewed the motions, all matters of record and the materials offered in support of the parties' respective submissions, the applicable law and is fully advised. For the reasons stated below, the Court FINDS and ORDERS as follows:
Background
The following background is derived from the parties' pleadings, the record, and the parties' various submissions and all supporting materials that have been filed in this action. This is not an exhaustive recitation of the background, but is sufficient to set out the underlying facts and issues that have been raised for consideration now.
1. Interstate Fire & Casualty Company ("Interstate") issued a Comprehensive General Liability Insurance policy to Commercial Industrial Building Owner's Alliance, Inc. d/b/a CIBA, policy number SGL 1002220 ("Primary Policy"), for a two year term, March 31, 2010 to March 31, 2012, with a $1,000,000 per occurrence and a $2,000,000 General Aggregate limit for the policy term. Doc. 6, Amended Complaint, ¶ 12.1 Amended Complaint; also at Doc. 143, Ex. A.
2. The Primary Policy contains a "Named Insured Endorsement" identifying CIBA as a named insured, as well as any associate of CIBA "to whom an Evidence or Certificate of Insurance has been issued and which describes the specific location coverage is limited to." Doc. 6, ¶ 13.
3. CIBA issued Certificates of Insurance to Sunridge and AMC, identifying them as named insureds under the Primary Policy. Doc. 6, ¶ 14.
4. The Primary Policy includes an exclusion relied upon by the plaintiffs in the Amended Complaint, which states:
5. Interstate issued an Excess Liability Policy (which is in excess of the Primary Policy) to CIBA, bearing policy number PFX73097172 ("Interstate Excess Policy"), for a two year term, from March 31, 2010 to March 31, 2012, with a limit of $10,000,000 per occurrence, with a $10,000,000 aggregate for the policy term. Doc. 6, ¶ 15.
6. The Interstate Excess Policy contains a "Schedule of Named Insureds" identifying, among others, CIBA as a named insured, as well as any associate of CIBA "to whom an Evidence or a Certificate of Insurance has been issued and which describes the specific location coverage is limited to." Doc. 6, ¶ 16.
7. Sunridge and AMC are considered named insureds under the Interstate Excess Policy. Doc. 6, ¶ 17.
8. Fireman's Fund issued an Excess Liability Policy (which is in excess of the Interstate Excess Policy) to "CIBA, et al as per First Underlying Insurance," bearing policy number SHX-000-7262-3879 ("Fireman's Fund Excess Policy") for a two-year term, from March 31, 2010 to March 31, 2012, with a limit of $15,000,000 per occurrence, with a $15,000,000 aggregate for the policy term. The Fireman's Fund Excess Policy identifies "underlying insurance" as the Interstate Excess Policy. Doc. 6, ¶ 18, and n. 1.
9. As Sunridge and AMC are named insureds under the Interstate Excess Policy, they are also considered named insureds under the Fireman's Fund Excess Policy. Doc. 6, ¶ 20.
10. The Primary Policy, the Interstate Excess Policy, and the Fireman's Fund Excess Policy have been collectively referred to as the "Insurance Policies" in the plaintiffs' amended complaint. Doc. 6, ¶ 20.
11. Sunridge Partners, LLC ("Sunridge") owns the Sunridge Apartments in Casper, Wyoming and from at least February 2011 to the present, Robert Ctvrlik has been the Managing Member of Sunridge. Doc. 6, ¶ 6, Doc. 51, Ex. B (Robert Ctvrlik affidavit); Doc. 143, Ex. B.
12. Apartment Management Consultants, LLC ("AMC") operates and manages these Wyoming apartments. Doc. 6, ¶ 8. From July 2010 to present, Martha Knudson has served as the General Counsel for AMC. Doc. 51, Ex. C (Knudson affidavit); Doc. 143. Ex. C.
13. Amber Lompe was a tenant in the Sunridge Apartments, Apartment # 436, in Casper, Wyoming. Doc. 6, ¶ 10.
14. On May 2, 2012, Amber Lompe filed a Complaint naming AMC and Sunridge as defendants in a lawsuit filed by Amber Nicole Lompe in the United States District Court for the District of Wyoming, Case No. 12-CV-88-J, Amber Nicole Lompe v. Sunridge Partners, LLC and Apartment Management Consultants, LLC ("Lompe action"). In her complaint, Lompe alleged she was poisoned by carbon monoxide gas in her apartment in Casper, Wyoming causing her serious injuries and damages. The complaint alleged the defendants were negligent, grossly negligent, reckless, willful and wanton acts and omissions directly, legally, and proximately caused serious injuries to plaintiff Lompe. It also disclosed and stated that she sought to recover, in addition to other compensatory damages, exemplary and punitive damages, "in a reasonable amount to be proved at trial, sufficient to adequately punish the defendants and to serve as a deterrent and warning against future conduct of the type alleged in this complaint[.]" 12-CV-88, Doc. 1.
15. Shortly after being served with the complaint in the Lompe action, AMC tendered defense of the matter to its insurer, Interstate, "one of the Fireman's Fund Companies." 12-CV-88, Doc. 51, Ex. C, Knudson Affidavit; 13-CV-278, Doc. 143, Ex. C.
16. By letter dated April 12, 20122 addressed to Knudson and the LLC Members, Kelly Lemoine, Senior Coverage Analyst, "on behalf of Interstate Fire and Casualty Company, one of the Fireman's Fund Companies" wrote:
13-CV-278, Doc. 141, Ex. 8; Doc. 143, Ex. E. This letter did not expressly include any reservation of rights, disclosure of any exclusions, or assert any other basis for denying or limiting coverage.
17. Peter Dusbabek wrote Bob and Jeff Ctvrlik and Martha Knudson on May 21, 2012, regarding the complaint that had been filed. Dusbabek had been engaged by the insurer to represent AMC and Sunridge in the Lompe litigation. In that letter he states:
The insurance information we have for Sunridge indicates that there is a $1 million per occurrence primary liability limit with $75 million in excess liability (schedule attached). These limits are far in excess of any anticipated damages in this case. Whether the damage claim presents an exposure that would exceed the primary $1 million limit is unknown, however, any excess carrier whose policy may come into play should be placed on notice of the claim immediately. Notably, the complaint contains a punitive damage claim. We do not view this as a punitive damage case, but liability policies generally do not cover punitive damages.
Doc. 141, Ex. 13. In that letter, Dusbabek, after explaining the risks of dual representation of both AMC and Sunridge, requested that the defendants both consent to dual representation of Sunridge and AMC. There is no reservation of rights with respect to punitive damages referenced by Dusbabek nor is there anything that suggests he would have...
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