Chartis Prop. Cas. Co. v. Huguely

Decision Date20 March 2017
Docket NumberCivil Action No. DKC 13–1479
CourtU.S. District Court — District of Maryland

Richard J. Berwanger, Jr., Stacey Ann Moffet, Eccleston and Wolf PC, Hanover, MD, for Chartis Property Casualty Co.

Peter C. Grenier, Grenier Law Group PLLC, Washington, DC, for George W. Huguely, V, et al.


DEBORAH K. CHASANOW, United States District Judge

Presently pending and ready for resolution in this declaratory judgment action is a motion for summary judgment filed by Plaintiff Chartis Property Casualty Company ("Plaintiff"). (ECF No. 64). The issues have been briefed and a hearing was held on January 10, 2017. For the following reasons, the motion for summary judgment will be granted.

I. Background1

This case involves the intersection of three actions in which George W. Huguely, V ("Defendant") is the defendant: a criminal case, a civil case, and this insurance coverage case.

A. Criminal Case

Early on the morning of May 3, 2010, one of Yeardley Love's roommates found her dead in her bedroom. Huguely v. Commonwealth , 63 Va.App. 92, 99–100, 754 S.E.2d 557 (2014). Defendant, who had dated Yeardley Love "on and off" for years, had been drinking alcohol heavily on May 2 and went to her house late that night. Id. at 99, 101, 754 S.E.2d 557. He admitted to police that he kicked a hole in her bedroom door to gain access to her room, had a physical altercation with her during an argument, and left her bleeding on her bed. Id. at 102 n.4, 754 S.E.2d 557. In a 2012 trial, a jury in the Circuit Court for the City of Charlottesville, Virginia found Defendant responsible for her death and guilty of second degree murder. Id. at 105, 754 S.E.2d 557.

After his trial, Defendant petitioned for appeal of his conviction to the Court of Appeals of Virginia on numerous grounds, and the Court of Appeals granted Defendant's petition on several procedural issues. (ECF Nos. 24–2; 24–3). The Court of Appeals later affirmed Defendant's conviction, Huguely , 63 Va.App. at 131, 754 S.E.2d 557, and, subsequently, the Supreme Court of Virginia and the Supreme Court of the United States each denied Defendant's petitions for review. (ECF No. 64–6); Huguely v. Virginia , –––U.S. ––––, 136 S.Ct. 119, 193 L.Ed.2d 39 (2015) (mem.). Defendant has since filed a Petition for Writ of Habeas Corpus in the Charlottesville court where his trial was originally held. (ECF No. 73–2). The post-conviction proceedings are ongoing.

B. Civil Case

On April 26, 2012, interested party Sharon D. Love ("Ms. Love"), as administrator of the estate of Yeardley Love, brought a civil suit against Defendant in the Circuit Court for the City of Charlottesville. (ECF No. 1–1). Her amended complaint alleges that Defendant was the proximate cause of Yeardley Love's injuries and death. (ECF No. 1–2, at 4). The alternative counts of the complaint include ordinary negligence, "gross negligence—indifference and acting with utter disregard of caution," "willful and wanton negligence—acting with conscious disregard and reckless indifference," "assault and/or battery," and punitive damages. (Id. at 4–9). Based on section 8.01–419 of the Virginia Code, the suit alleges Yeardley Love had a life expectancy of another 58.9 years and seeks nearly thirty million dollars in compensatory damages and an additional one million dollars in punitive damages. (Id. at 10–11). In November 2015, the circuit court stayed its proceedings to allow this court to act in the instant insurance coverage case, but some discovery between those parties has continued. (ECF No. 73–4, at 2–3). Trial is now set for July 2018. (See Case No. DKC–13–3088, ECF No. 25, at 6).

C. Insurance Case

The case in this court concerns whether Plaintiff, an insurance company, is contractually obligated to defend and to indemnify Defendant in the Civil Case. Interested parties Marta Murphy and Andrew Murphy, III, Defendant's mother and step-father (together with Defendant, "Respondents"), purchased a homeowners' insurance policy and an excess insurance policy (together, "the Policies") from Plaintiff. (ECF No. 1 ¶ 24).2 The Policies include broad indemnification provisions that state that Plaintiff "will pay damages an insured person is legally obligated to pay for personal injury ... caused by an occurrence covered by this policy ... unless stated otherwise or an exclusion applies." (ECF No. 64–8, at 15). In addition to indemnity, the Policies agree to "pay the costs to defend an insured person against any suit seeking covered damages ... even if the suit is false, fraudulent or groundless." (Id. ). After Ms. Love filed her complaint in the Civil Case, Plaintiff acknowledged Defendant's claim for coverage in that case and told Defendant that it would provide coverage pursuant to a reservation of its rights under the Policies. (ECF No. 59 ¶ 54).

Plaintiff then began an investigation of the matter to determine its contractual obligations under the Policies. (Id. ¶¶ 55–64). Plaintiff sought to examine Defendant under oath, but he has refused to submit to such an examination, asserting his Fifth Amendment right against self-incrimination. (Id. ¶¶ 80–87). After Defendant's counsel in the Criminal Case told Plaintiff that Defendant would "decline any visit or contact with representatives" from Plaintiff, it initiated this suit, naming Respondents and Sharon Love as interested parties and seeking a declaratory judgment that it was not required to defend or to indemnify Defendant in the Civil Case under either of the Policies. (ECF No. 1). Plaintiff alleged that Defendant's refusal to cooperate with its investigation violated a provision of the Policies setting out the insured's duties after a loss. The homeowners' insurance policy requires an insured to "[s]ubmit to a separate examination under oath" "as often as [Plaintiff] reasonably require[s]," and both the homeowners' and excess insurance policies require an insured to "[a]ssist and cooperate with [Plaintiff] in the conduct of the defense by helping [it] ... [t]o secure and give evidence and obtain the attendance of witnesses." (Id. ¶¶ 36, 49). Plaintiff has claimed that Defendant's refusal to submit to an examination constituted a material breach of the Policies and resulted in actual prejudice to its ability to identify defenses to its coverage obligations, which included issues over Defendant's residency and provisions in the Policies that exclude coverage for intentional or criminal acts. (Id. ¶¶ 54–60).

Plaintiff moved for summary judgment on its original complaint on July 3, 2013. (ECF No. 8). Respondents moved to deny or defer consideration of that summary judgment motion (ECF No. 25), and, at the same time, moved to stay the case pending the outcome of Defendant's appeal in the Criminal Case (ECF No. 24). Respondents' motion to stay was joined by Ms. Love. (ECF No. 28). The court granted Respondents' motion to stay proceedings pending his criminal appeal because: (1) the Virginia Court of Appeals had accepted multiple issues for appellate review in the Criminal Case, (2) the Insurance Case could benefit from the factual development in the Criminal Case, and (3) the court in the Civil Case appeared likely to stay that case. (ECF No. 36, at 7–10). Among the reasons favoring the stay, the court noted that "resolution of the Criminal Case may clarify the issues for which [Plaintiff] is claiming relief: [Defendant's] criminal acts could become a reason for denying coverage." (Id. at 10).

On January 5, 2016, after Defendant had exhausted all direct appeals in his criminal proceedings, this case was reopened. (ECF No. 56). Plaintiff's unopposed motion for leave to amend its complaint was granted. Plaintiff added two new counts seeking a declaratory judgment that it was not required to defend or to indemnify Defendant under either policy because the Civil Case resulted from his commission of a criminal act. (ECF No. 59). Under the homeowners' insurance policy, coverage does not extend to personal injuries "resulting from any criminal, willful, intentional or malicious act," and, under the excess insurance policy, coverage does not extend to injuries "[a]rising out of any criminal, willful, fraudulent, dishonest, intentional, or malicious act" (together, "the Exclusions"). (Id. ¶¶ 39, 52).3 Plaintiff then filed the instant motion for summary judgment, arguing that the Exclusions and Defendant's failure to cooperate each provide an independent basis to deny coverage. (ECF No. 64).4 Respondents and Ms. Love responded in opposition, and Plaintiff replied. (ECF Nos. 73; 75; 76). After reviewing the motion papers, the court provided the parties with some tentative conclusions and requested supplemental briefing on several issues.

(ECF No. 79). On January 10, 2017, the court held a joint hearing on the instant motion and a motion for summary judgment in case DKC–13–3088 by State Farm Fire and Casualty Company, which provided another insurance policy to Mr. Murphy under which Defendant has claimed coverage as an insured. (See Case No. DKC–13–3088, ECF No. 1).

II. Standard of Review

A motion for summary judgment will be granted only if there exists no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(a) ; Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; Emmett v. Johnson , 532 F.3d 291, 297 (4th Cir. 2008). To prevail on a motion for summary judgment, the moving party generally bears the burden of showing that there is no genuine dispute as to any material fact. Liberty Lobby , 477 U.S. at 248–50, 106 S.Ct. 2505. A dispute about a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 249, 106 S.Ct. 2505. In undertaking this inquiry, a...

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