Homesite Ins. Co. of Midwest v. Frost
| Decision Date | 08 September 2020 |
| Docket Number | CV 20-00024-M-DLC |
| Parties | HOMESITE INSURANCE COMPANY OF THE MIDWEST, Plaintiff, v. KEVIN R. FROST and SHERRI FROST, Defendants. |
| Court | U.S. District Court — District of Montana |
Before the Court is Plaintiff Homesite Insurance Company of the Midwest's ("Homesite") Motion for Summary Judgment. (Doc. 18.) Homesite moves for summary judgment on its claim against Defendant Kevin R. Frost ("Mr. Frost") seeking declarations that: (1) the insurance policy at issue does not provide for a defense or coverage for the claims asserted by Sherri Frost ("Ms. Frost") against Mr. Frost in a civil lawsuit filed on February 2, 2018 ("the Underlying Lawsuit"); and (2) Homesite is entitled to recoup its fees and costs incurred in the defense of Mr. Frost in the Underlying Lawsuit. (Id. at 2.) For the reasons stated herein, Homesite's motion is granted. Additionally, because this Order resolves Homesite's claims against Mr. Frost, the Court grants Homesite's Motion for Entry of Default Judgment against Ms. Frost. (Docs. 10, 15.)
BACKGROUND
The following facts are undisputed.1 Prior to the events giving rise to this proceeding, Mr. Frost and Ms. Frost were involved in a contested dissolution of marriage proceeding. (Doc. 20-5 at 1.) On the morning of February 9, 2016, while these dissolution proceedings remained ongoing, Mr. Frost engaged in a series of acts against Ms. Frost that formed the basis of several criminal charges. (Id. at 1-2.) During these criminal proceedings, Mr. Frost pled guilty to one count of Aggravated Kidnapping in violation of Montana Code Annotated § 45-5-303 and one count of Partner Family Member Assault in violation of Montana Code Annotated § 45-5-206. (Doc. 20-4 at 3-4.)
At the plea hearing, Mr. Frost admitted on the record that on February 9, 2016, he "purposely and knowingly" restrained Ms. Frost "by holding her in a place of isolation and forcing her into [his] vehicle, causing her great apprehension of serious bodily injury and an extreme amount of stress." (Id. at 5-6.) Mr. Frost further admitted that "during this process [he] actually physically grabbed [Ms. Frost]" and twisted her arm in the process of placing her in his vehicle. (Id. at 6.) For these offenses, Mr. Frost was sentenced to, inter alia, a term of 30 years withthe Montana Department of Corrections with 25 years suspended. (Doc. 20-5 at 3.) As of the date of this order, Mr. Frost remains incarcerated.
In the wake of Mr. Frost's criminal proceeding, Ms. Frost initiated the Underlying Lawsuit against him and others stemming from the February 9, 2016 incident. (See generally Doc. 20-1.) In the Underlying Lawsuit, Ms. Frost asserts nine claims against Mr. Frost, including: (1) negligence; (2) false imprisonment; (3) assault; (4) battery; (5) negligent infliction of emotional distress; (6) intentional infliction of emotional distress; (7) actual malice; (8) gross negligence; and (9) destruction of or tampering with a communication device. (Doc. 20-1 at 28-33.)2 In addition, Ms. Frost seeks an award of punitive damages. (Id. at 33.)
Notably, these claims are entirely based on Mr. Frost's actions on February 9, 2016. (Id. at 4-8, 28-33.) Specifically, Ms. Frost contends that, on February 9, 2016, Mr. Frost took control of her vehicle and "transported her against her will", before physically removing her and transferring her to another vehicle. (Id. at 4.) Ms. Frost alleges that Mr. Frost intentionally restrained, kidnapped, and imprisoned her, while also "damaging, destroying, and/or withholding" her cell phone in order to prevent her from contacting "emergency officials." (Id. at 29,31-33.)
After being made aware of, but prior to formal service of the Underlying Lawsuit, Mr. Frost tendered a claim to his insurer, Homesite, seeking defense and indemnity under a homeowner's policy issued by 21st Century Insurance and underwritten by Homesite ("the Policy"). (Doc. 20-6 at 2; see also Doc. 20-8.) On October 11, 2018, Homesite sent Mr. Frost a letter notifying him that it was tendering a defense as to the Underlying Lawsuit subject to a complete reservation of rights. (Doc. 20-7 at 2.) This included explicit reservation of the right "to recoup defense fees and costs incurred . . . should a court determine that no coverage exists under the policy." (Id.). Additionally, Homesite explained its position that coverage was not available under the Policy because: (1) the actions giving rise to a claim did not fall within the meaning of an "occurrence" as defined by the Policy; and (2) coverage was precluded under applicable law and several of the Policy's exclusionary provisions. (Id. at 2-6.)
The Policy lists Mr. Frost as a named insured and provides property damage coverage for a property located in Corvallis, Montana. (Doc. 20-8 at 4.) Additionally, the Policy provides Mr. Frost with $500,000 in personal liability coverage for claims made or suits brought against himself "because of a 'bodily injury' . . . caused by an 'occurrence' to which this coverage applies." (Doc. 20-8 at 1, 4, 33.) Additionally, the Policy obligates Homesite to provide Mr. Frost witha defense against such claims. (Id. at 33.) The Policy defines "occurrence" as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions which results, during the policy period, in" bodily injury. (Id. at 23.) The Policy specifically excludes from personal liability coverage "bodily injury . . . [w]hich is expected or intended by the insured" or that arises out of the use of a motor vehicle. (Id. at 34.) The Policy does not provide for coverage in the event of an award of punitive damages.
Mr. Frost subsequently accepted the defense offered by Homesite. (Doc. 20-6 at 2.) After Homesite procured defense counsel for Mr. Frost, an answer to Ms. Frost's complaint was filed. (Id. at 3; see generally Doc. 20-3.) In his answer, Mr. Frost admits that on February 9, 2016 he "took control of [Ms. Frost's] vehicle and transported her against her will" to another vehicle. (Doc. 20-3 at 4.) Additionally, Mr. Frost admits he "detained and/or restrained [Ms. Frost] in a motor vehicle." (Id. at 21.) Homesite subsequently filed this lawsuit against Mr. Frost and Ms. Frost, seeking declarations from this Court that: (1) the Policy afforded Mr. Frost no coverage for the claims asserted by Ms. Frost; and (2) Homesite is entitled to recoup the fees and costs incurred in defending Mr. Frost against Ms. Frost's lawsuit. (Doc. 1.)
STANDARD
Homesite is entitled to summary judgment if it can demonstrate "that there isno genuine issue as to any material fact and [it] is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Material facts are those which may affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable fact-finder to return a verdict for the nonmoving party. Id. If the moving party meets its initial responsibility, the burden then shifts to the opposing party to establish that a genuine issue of fact exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). In meeting this burden, conclusory assertions are insufficient, and "non-speculative evidence of specific facts" is required. Cafasso v. General Dynamics C4 Sys., Inc., 637 F.3d 1047, 1061 (9th Cir. 2011).
DISCUSSION
Because this Court is exercising diversity jurisdiction, the law of Montana applies. Stanford Ranch, Inc. v. Maryland Cas. Co., 89 F.3d 618, 624 (9th Cir. 1996). This renders Montana's choice of law rules binding on the Court. Johnson v. Wells Fargo Home Mortg., Inc., 635 F.3d 401, 420 n.16 (9th Cir. 2011). In the absence of a choice of law provision within an insurance contract, this Court applies Montana Code Annotated § 28-3-102 to determine what law governs the contract's interpretation. Tidyman's Mgmt. Servs. Inc. v. Davis, 330 P.3d 1139,1149 (Mont. 2014). Under this statute, an insurance contract is "to be interpreted according to the law and usage of the place it is to be performed or, if it does not indicate a place of performance, according to the law and usage of the place where it is made." Mont. Code Ann. § 28-3-102. Thus, which state's law governs the interpretation of the Policy depends on its anticipated places of performance, and, if none, the state in which the Policy was made.
The Parties seemingly presume that Montana's substantive law governs the interpretation of the Policy. Homesite asserts that because the Policy was "issued for delivery" in Montana and the underlying torts complained of by Ms. Frost occurred in this State, Montana substantive law governs this dispute. (Doc. 19 at 10.) Mr. Frost provides no contrary argument. (Doc. 22.) But, as noted above, the law governing the interpretation of the Policy depends not on the place of its issuance or the locality of any underlying torts, but rather on its anticipated place of performance or, as a last resort, the place in which it was made.
The Policy provides a variety of coverages, including: (1) $355,000 in coverage for damages sustained to a dwelling located in Corvallis, Montana; (2) $35,500 in coverage for damages to "other structures" contained on the real property located in Corvallis, Montana; (3) $177,500 in coverage for damages caused to Mr. Frost's personal property while he is "anywhere in the world"; (4) $71,000 in coverage for loss of use of the dwelling located in Corvallis, Montana;and (5) $500,000 in personal liability coverage for covered suits brought against Mr. Frost. (Doc. 20-8 at 4.) The Policy contains no choice of law provision, nor does its terms purport to limit the geographical scope of coverage.
Indeed, the Policy insures real property located within Montana and provides Mr. Frost with property damage and personal liability coverage for claims arising...
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