Penn Nat'l Mut. Cas. Ins. Co. v. Viking Pizza, Inc.
| Decision Date | 27 July 2020 |
| Docket Number | 1:17CV1155 |
| Court | U.S. District Court — Middle District of North Carolina |
| Parties | PENN NATIONAL MUTUAL CASUALTY INSURANCE COMPANY, Plaintiff, v. VIKING PIZZA, INC., MARCUS ALFONSO KEARSE, JUWAN CHRISTOPHER HARRINGTON, and YOLANA IRVING, Defendants. |
Before the court are cross-motions for summary judgment filed by Plaintiff/Counter-Defendant Penn National Mutual Casualty Insurance Company ("Penn National") and Defendants/Counter-Plaintiffs Yolanda Irving ("Irving") and Juwan Christopher Harrington ("Harrington"). (Docs. 54, 62.) Defendants Viking Pizza, Inc. ("Viking") and Marcus Alfonso Kearse ("Kearse") have not appeared in this action in any way. Penn National filed this declaratory judgment action seeking relief from any duty to indemnify Defendant Viking or Kearse due to Viking's alleged failure to cooperate or provide notice about a vehicle accident that occurred on September 14, 2014, while Kearse was working as a Domino's delivery driver for Viking; Kearse struck Harrington, a minor at the time. Irving and Harrington answered and counterclaimed, seeking their own declaratory judgment that they, as judgment creditors against Viking, are entitled to recover under Viking's insurance policies with Penn National. (Answer to Am. Compl. and Counterclaim of Defs. Harrington and Irving ("Answer") (Doc. 23).) For the reasons stated herein, the court will deny both motions.
The court addresses the relevant facts here but will address other facts as necessary throughout this Opinion.
Plaintiff Penn National is a multi-line insurance company that is incorporated under the laws of Pennsylvania, where it also has its principal place of business. (Am. Compl. (Doc. 22) ¶ 2.) Defendant Viking is a North Carolina Corporation with its principal place of business there as well. (Id. ¶ 3; Answer (Doc. 23) ¶ 3.) Viking's president is Steven Kuone ("Kuone"); Kuone is not personally a party to this action. (Am. Compl. (Doc. 22) ¶ 3.) Kuone is the sole officer of Viking. (Deposition of Steven Kuone ("Kuone Dep.") (Doc. 56) at 64-65.) Kearse is a North Carolina resident and a former employee of Viking. (Am. Compl. (Doc. 22) ¶ 4; Pl.'s Brief in Supp. of Mot. for SummaryJudgment ("Pl.'s Br.") (Doc. 63) Ex. D, Deposition of Marcus Kearse ("Kearse Dep.") (Doc. 63-4) at 5-6.)1 Harrington is a North Carolina resident; he was seriously injured when Kearse struck him with his vehicle on September 14, 2014. (Am. Compl. (Doc. 22) ¶ 5; Pl.'s Br. (Doc. 63) Ex. F, Raleigh Police Department Crash Reconstruction Report ("RPD Report") (Doc. 63-6) at 2.) Irving is a resident of North Carolina and is Harrington's mother. (Am. Compl. (Doc. 22) ¶ 6; Ex. C, Harrington v. Kearse Complaint (Doc. 22-3) ¶ 2.)
Steven Kuone founded Viking in 2012 to become a Domino's Pizza franchise owner. (Kuone Dep. (Doc. 56) at 11-12; Pl.'s Br. (Doc. 63) Ex. B, Viking Pizza Business Registration ("Viking Info") (Doc. 63-2).) Kuone has always been the sole owner and officer of Viking. (Kuone Dep. (Doc. 56) at 65; Viking Info (Doc. 63-2).) Viking operated four Domino's franchises in and around Wake County, North Carolina. (Kuone Dep. (Doc. 56) at 11-12.) Viking purchased insurance coverage through the Upton Group, an insurance agency in Alabama that worked frequently with Domino's franchises and sold Viking two Penn Nationalpolicies, both of which contained notice and cooperation clauses. (Id. at 60-63; Am. Compl. (Doc. 22) Ex. A, Policy AU9 0695624 ("Auto Policy") (Doc. 22-1) at 5, 24; Am. Compl. (Doc. 22) Ex. B, Policy UL90695624 ("Umbrella Policy") (Doc. 22-2) at 5, 37-38.)
Kearse was an employee at Viking's Domino location on New Bern Avenue in Raleigh, North Carolina. (Kearse Dep. (Doc. 63-4) at 3.) In the early afternoon of September 14, 2014, Kearse was returning to the New Bern Avenue store after delivering a pizza. (Id. at 9.) While Kearse was on his way back to the store, he struck Harrington with his car. (Id.; RPD Report (Doc. 63-6) at 2.)
No charges were filed against Kearse, and several witnesses told police that Harrington "darted in front of" Kearse. (RPD Report (Doc. 63-6) at 7.) Raleigh Police took statements from several witnesses, some of whom claimed that Kearse was driving too fast. (Id. at 11, 16.) Other witnesses disagreed. (Id. at 11.) The report included some contact information for all witnesses interviewed by Raleigh Police. (Id. at 11-13, 16.) One of the witnesses was Xavier Harrington, Harrington's brother who was one of the three crossing the street when Kearse struck; his contact information was also included in the report. (Id. at12.) Some witnesses were not included in the accident report. (Deposition of Ronald C. Dilthey ("Dilthey Dep.") (Doc. 58) at 23.)
Kuone learned about Kearse's accident on the same day it occurred, September 14, 2014, when the general manager of the New Bern Avenue store, Rebecca Dixon, called Kuone to inform him. (Kuone Dep. (Doc. 56) at 20-21.) The remainder of Kuone's recount of that day and the steps he took was based on his recollection of what were the "typical steps that [Viking] would take" after an accident. (Id. at 21.) Kuone noted that those steps included the following:
(Id. at 21-22.) Kuone did not recall how he notified the insurance agency, but, when asked if he remembered doing it, Kuone responded "yeah, absolutely." (Id. at 22.) Later during his deposition, Kuone also stated he did not have a "specific recollection" of reporting the incident but instead believes he did because it was "part of the process." (Id. at 82, 104.) The parties agree that there is no record of the accident being reported to Upton or Penn National on or around September 14, 2014. (Defs.' Brief in Supp. of Mot. for Summ. Judgment ( ) (Doc. 55) at 22; Pl.'s Br. (Doc. 63) at 4 n.2).
Kuone was also asked, "Do you remember specifically making any decision, 'I'm not going to talk to [Penn National]'?" (Kuone Dep. (Doc. 56) at 105.) Kuone responded, "No." (Id.) At another point, Kuone testified that he did not "intentionally decide to not follow [his] standard practice for [reporting the] accident." (Id. at 104.)
Shortly after the accident, Harrington and Irving contacted Julie L. Bell, an attorney with the law firm Patterson Dilthey, LLP, to discuss pursuing a negligence action against Kearse and Viking (the "Underlying Lawsuit"). (Dilthey Dep. (Doc. 58) at 17.) A formal retainer was signed two years later. (Id. at 18.)
Ronald Dilthey, one of Bell's partners, and Bell began attempting to reach out to Viking via mail. On December 16, 2015, Bell sent a letter to Viking at Viking's registered address, 305 Chastain Court, Jacksonville, North Carolina, 28546. (Pl.'s Br. (Doc. 63) Ex. N, December 16, 2015 Letter from Julie Bell to Viking ("Bell Letter") (Doc. 63-14) at 2; Viking Info (Doc. 63-2).) The letter was sent via regular mail and not returned as undeliverable. (Dilthey Dep. (Doc. 58) at 48-49.) Kuone was "sure" he did not recall seeing the letter before his 2019 deposition. (Kuone Dep. (Doc. 56) at 25.) While Viking owned the Domino's franchises, Kuone, Viking's only officer, was splitting his time between his home in Jacksonville and an apartment he rented in Raleigh. (Id. at 26-27; Deposition of Shonda Kuone ("Shonda Kuone Dep.") (Doc. 59) at 12.) The Bell Letter did not ever use the words "sue," "suit," "lawsuit," or "claim," but it was on law firm letterhead and requested that Viking have their insurance carrier contact the firm directly.(Bell Letter (Doc. 63-14) at 2.) Dilthey and Bell did not receive any response from Viking. (Dilthey Dep. (Doc. 58) at 50.)
Viking sold its four Domino's franchises in fall of 2016 for reasons unrelated to the accident. (Kuone Dep. (Doc. 56) at 52.) Viking did not buy any other franchises or engage in any other business after that sale. (Id. at 52-53.)
Dilthey filed suit against Viking and Kearse in state court on November 30, 2016. (Pl.'s Br. (Doc. 63) Ex. Q, Process in Underlying Lawsuit ("Service") (Doc. 63-17) at 3.) On the same day, Dilthey mailed the summons, complaint, discovery materials, and a cover letter to Viking at the 305 Chastain Court address. (Id. at 2.) The documents were sent via registered mail, return receipt requested. (Id.) Shonda Kuone, Steven Kuone's wife, signed for the documents. (Shonda Kuone Dep. (Doc. 59) at 71.) Shonda Kuone noted that she would regularly sign for Viking mail sent to 305 Chastain Court, and that she would place it in one of two places where Steven Kuone would work. (Id. at 11-12, 16.) Steven Kuone was in the habit of looking at mail left for him in those locations. (Kuone Dep. (Doc. 56) at 89-90.) Shonda Kuone also stated that there was a period of time in 2016 and 2017 where Steven Kuone was not living at 305 Chastain Court and that there were time frames when the two...
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