C.A. Jones Mgmt. Grp., LLC v. Scottsdale Indem. Co.
| Decision Date | 20 June 2016 |
| Docket Number | CIVIL ACTION NO. 5:13-CV-00173-TBR-LLK |
| Parties | C.A. JONES MANAGEMENT GROUP, LLC, et al., Plaintiffs/Counterclaim Defendants, v. SCOTTSDALE INDEMNITY COMPANY, Defendant/Counterclaim Plaintiff. |
| Court | U.S. District Court — Western District of Kentucky |
C.A. Jones Management Group, LLC filed this action against Scottsdale Indemnity Company, disputing Scottsdale's denial of coverage under two claims-made-and-reported policies. In response, Scottsdale counterclaimed for declaratory judgment. Now, Scottsdale seeks summary judgment on C.A. Jones Management Group's three-count complaint and on its counterclaim. For the reasons that follow, Scottsdale Indemnity Company's Motion for Summary Judgment, R. 53, is GRANTED.
The facts of this insurance coverage dispute are undisputed. In 2011, Scottsdale Indemnity Company issued Business and Management Indemnity Policy No. EKI3042564 to C.A. Jones Management Group, LLC. See R. 17-1 at 5-7 (Policy No. EKI3042564: Declarations). The "Policy Period" spanned from July 1, 2011 to July 1, 2012. See id. at 10, § B.9 (Policy No. EKI3042564: General Terms and Conditions); id. at 5. C.A. Jones Management Group renewed Policy No. EKI3042564 with Scottsdale on July 1, 2012, through Business and Management Indemnity Policy No. EKI3069673. See R. 17-2 at 5 (Policy No. EKI3069673: Declarations). Originally, the "Policy Period" spanned from July 1, 2012 to July 1, 2013. Id. at 10, § B.9 (Policy No. EKI3069673: General Terms and Conditions); id. at 5. Due to nonpayment of the contracted-for premium, however, Scottsdale ceased providing coverage under Policy No. EKI3069673 on November 27, 2012. See id. at 100 (Policy No. EKI3069673: Endorsement No. 47); R. 13-3 at 2, ¶ 3 (Charles Jones' Affidavit).
In all other material respects, though, Policy Nos. EKI3042564 and EKI3069673's provisions are identical. Generally speaking, each obligates Scottsdale to defend and indemnify C.A. Jones Management Group, other associated entities, and their directors, officers, and employees for claims made against them. The pertinent insuring clauses read:
R. 17-1 at 22, § A.1, .3 (Policy No. EKI3042564: Directors and Officers and Company Coverage Section); R. 17-2 at 22, § A.1, .3 (Policy No. EKI3069673: Directors and Officers and Company Coverage Section).
As a condition precedent to any right to payment under the insuring clauses, the "Insureds" must "give Insurer written notice of any Claim as soon as practicable, but in no event later than sixty (60) days after the end of the Policy Period." R. 17-1 at 28, §E.1; R. 17-2 at 28, § E.1. A "Claim" means, among other things, "a civil proceeding against any Insured seeking monetary damages or non-monetary or injunctive relief, commenced by the service of a complaint or similar pleading." R. 17-1 at 22, § B.1.c; R. 17-2 at 22, § B.1.c. Such a "Claim" is "deemed to have been first made against the Insured on the date an Insured who is an executive officer, director or general counsel becomes aware" of it. R. 17-1 at 60 (Policy No. EKI3042564: Endorsement No. 15); R. 17-2 at 61 (Policy No. EKI3069673: Endorsement No. 16). Multiple "Claims arising out of the same Wrongful Act and all Interrelated Wrongful Acts" are "deemed to constitute a single Claim . . . made at . . . the time at which the earliest Claim involving the same Wrongful Act or Interrelated Wrongful Act is first made." R. 17-1 at 27, § D.3.a; R. 17-2 at 27, § D.3.a. An "Interrelated Wrongful Act" means "all Wrongful Acts that have as a common nexus any fact, circumstance, situation, event, transaction, cause or series of facts, circumstances, situations, events, transactions or causes." R. 17-1 at 23, § B.6; R. 17-2 at 23, § B.6.
Between 2012 and 2013, C.A. Jones Management sought coverage under Policy No. EKI3069673 for defense costs associated with three legal actions: Griffin v. Jones, No. 5:12-CV-00033-TBR (W.D. Ky. Feb. 28, 2012) (Griffin I); Griffin v. Jones, No. 5:12-CV-00163-TBR-LLK (W.D. Ky. Nov. 2, 2012) (Griffin II); and Waldschmidt v. C.A. Jones Mgmt. Grp., LLC (In re Coll. Book Rental Co.), Nos. 3:12-BK-09130, 3:13-AP-90101 (Bankr. M.D. Tenn. Mar. 4, 2013). C.A. Jones Management Group provided Scottsdale with notice of Griffin I on September 25, 2012; of Griffin II on November 9, 2012; and of Waldschmidt on June 19, 2013. See R. 17-5 at 3-4, ¶¶ 4-6, 9, 11(Zartman's Affidavit).1 Claiming it had no contractual duty to defend or indemnify C.A. Jones Management Group, however, Scottsdale denied the requests for coverage. See R. 13-3 at 2, ¶ 7.
In response, C.A. Jones Management Group, LLC filed this action, alleging breach of contract, bad-faith settlement practices, and unjust enrichment. See R. 1 at 4-5, ¶¶ 14-25 (Complaint). Scottsdale Indemnity Company counterclaimed for declaratory judgment. See R. 6 at 18-21, ¶¶ 32-33 (Answer and Counterclaim).
On December 27, 2013, C.A. Jones Management Group sought to enjoin Scottsdale to defend and indemnify it from any resultant losses. See R. 13 at 1 (Motion for Preliminary Injunction). Finding C.A. Jones Management Group could not demonstrate a likelihood of success on the merits, or irreparable harm, however, the Court denied that request. See C.A. Jones Mgmt. Grp., LLC v. Scottsdale Indem. Co. (C.A. Jones I), No. 5:13-CV-00173-TBR-LLK, 2014 WL 811654, at *13-14 (W.D. Ky. Feb. 28, 2014), amended in part on reconsideration by No. 5:13-CV-000173-TBR-LLK, 2015 WL 1393261 (W.D. Ky. Mar. 25, 2015). The Court held, in relevant part, that various exclusions and limitations barred coverage for C.A. Jones Management Group's claim. Id. at *7-13.2
Scottsdale asked the Court to reconsider a portion of that opinion on March 11, 2014. See R. 30 at 1 (Motion to Reconsider). The Court erred as a matter of law, Scottsdale said, in finding C.A. Jones Management Group's claim to be covered under the insuring clauses at all. See id. at 4. Looking to Policy No. EKI3069673's clear and unambiguous language, the Court agreed and amended its earlier opinion accordingly. See C.A. Jones Mgmt. Grp., LLC v. Scottsdale Indem. Co. (C.A. Jones III), No. 5:13-CV-00173-TBR-LLK, 2015 WL 1393261, at *6 (W.D. Ky. Mar. 25, 2015).3 Now, Scottsdale moves for summary judgment on C.A. Jones Management Group's three-count complaint and on its declaratory judgment counterclaim. See R. 53 at 1 (Motion for Summary Judgment).
Summary judgment is appropriate when the record, viewed in the light most favorable to the nonmoving party, reveals "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). A genuine dispute of material fact exists where "there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). The Court "may not make credibility determinations nor weigh the evidence when determining whether an issue of fact remains for trial." Laster v. City of Kalamazoo, 746 F.3d 714, 726 (6th Cir. 2014) (citingLogan v. Denny's, Inc., 259 F.3d 558, 566 (6th Cir. 2001); Ahlers v. Schebil, 188 F.3d 365, 369 (6th Cir. 1999)). "The ultimate question is 'whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'" Back v. Nestlé USA, Inc., 694 F.3d 571, 575 (6th Cir. 2012) (quoting Anderson, 477 U.S. at 251-52).
As the party moving for summary judgment, Scottsdale must shoulder the burden of showing the absence of a genuine dispute of material fact as to at least one essential element of C.A. Jones Management Group's claim. Fed. R. Civ. P. 56(c); see Laster, 746 F.3d at 726 (citing Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986)). Assuming Scottsdale satisfies its burden of production, C.A. Jones Management Group "must—by deposition, answers to interrogatories, affidavits, and admissions on file—show specific facts that reveal a genuine issue for trial." Laster, 746 F.3d at 726 (citing Celotex Corp., 477 U.S. at 324).
Scottsdale seeks summary judgment on C.A. Jones Management Group's breach of contract, bad-faith settlement practices, and unjust enrichment claims. According to Scottsdale, the breach-of-contract claim falters because C.A. Jones Management Group failed to provide timely notice as required under either Policy Nos. EKI3042564 and EKI3069673. See R. 53-1 at 7-8 (Memorandum in Support). In the absence of such coverage, Scottsdale submits, no claim will lie against it for bad-faith settlement practices. See id. at 8-9. Lastly, because a valid and enforceable insurance contract existed between Scottsdale and C.A. Jones Management Group, Scottsdale argues thatunjust enrichment is unavailable as a theory of recovery too. See id. at 9. For the reasons that follow, the Court agrees on all scores.
Scottsdale maintains that the plain and unambiguous language of Policy No. EKI3042564 and Policy No. EKI3069673 demonstrates the lack of coverage for C.A. Jones Management Group's claim. See id. at 8-9. Accordingly, Scottsdale asks for judgment as a matter of law as to C.A. Jones Management Group's...
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