Prime Ins. Syndicate, Inc. v. Damaso

• Decision Date: 19 January 2007
• Docket Number: No. 2:06-CV-00503-PMP-GWF.,2:06-CV-00503-PMP-GWF.
• Citation: 471 F.Supp.2d 1087
• Parties: PRIME INSURANCE SYNDICATE, INC., Plaintiff, v. Herbert DAMASO; Emilie Damaso; and Cleveland Rest Home, Defendants.
• Court: U.S. District Court — District of Nevada

471 F.Supp.2d 1087

PRIME INSURANCE SYNDICATE, INC., Plaintiff, v. Herbert DAMASO; Emilie Damaso; and Cleveland Rest Home, Defendants.

No. 2:06-CV-00503-PMP-GWF.

United States District Court, D. Nevada.

January 19, 2007.

COPYRIGHT MATERIAL OMITTED

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David J. Mortensen, Alverson Taylor Mortensen, et al, Las Vegas, NV, for Plaintiff.

Lori N. Nacht, Harmon & Davies, P.C., Las Vegas, NV, for Defendants.

Nathan Reinmiller, Alverson Taylor Mortensen, et al, Las Vegas, NV, for Plaintiff and Defendant.

ORDER

PHILIP M. PRO, Chief United States District Judge.

Presently before the Court is Plaintiff Prime Insurance Syndicate, Inc.'s ("Prime") Motion for Summary Judgment (Doc. # 17) filed on October 3, 2006. On October 23, 2006, Defendants filed an Opposition to Prime's Motion for Summary Judgment (Doc. # 22). Prime filed a Reply (Doc. # 24) on November 6, 2006. On November 9, 2006, Defendants filed a Supplement to their Opposition (Doc. # 25). Prime filed a Supplement to its Reply in Support of Motion for Summary Judgment (Doc. # 32) on December 7, 2006. On December 15, 2006, Defendants filed an Opposition to Prime's Supplement to its Reply (Doc. # 34). Finally, on December 28, 2006, Prime filed a Reply (Doc. # 39) in support of its supplement.

I. BACKGROUND

Defendants Herbert and Emilie Damaso, owners of Defendant Cleveland Rest Home, procured a professional liability insurance policy from Prime for the period of September 19, 2003 to September 19, 2004. (Defs.' Opp'n to Prime's Mot. for Summ. J, Ex. 10 ["First Policy"].) At the top of the first page of the policy it states:

THIS POLICY. . . DIFFERS SIGNIFICANTLY FROM THE LIABILITY COVERAGE OFFERED BY OTHER INSURANCE COMPANIES. IT IS WRITTEN ON A CLAIMS MADE BASIS. COVERAGE IS PROVIDED ONLY FOR OTHERWISE COVERED CLAIMS:

(1) WHICH ARE FIRST MADE AGAINST YOU DURING THE POLICY PERIOD; and

(2) WHICH RESULT FROM WRONGFUL ACTS DURING THE POLICY PERIOD[.]

(Id.) On October 27, 2004, Prime issued a new insurance policy to Defendants ("Second Policy") to cover the period of October 27, 2004 to October 27, 2005. (Defs.' Opp'n to Prime's Mot. for Summ. J., Ex. 12.) The Second Policy contains restrictive language similar to the First Policy. The Second Policy states:

THIS HEALTHCARE SERVICES PROFESSIONAL LIABILITY INSURANCE POLICY ("Policy") differs significantly from claims made or occurrence-type general liability policies offered by other insurance companies. It is a manuscript policy with very strict reporting requirements. . . . Coverage is provided only for otherwise covered Claims:

(1) Which are first made against an Insured during the Policy Period, and

(2) Which result from a Wrongful Act occurring during the Policy Period, and

(3) For which written notice is given to the Insurer during the Policy Period.

(Id.) Prime cancelled the Second Policy on February 18, 2005. (Prime's Reply to Defs.' Opp'n to Prime's Mot. for Summ. J., Ex. 6.)

On March 14, 2004, Mary Jane Stewart ("Stewart") died while in the care of Defendants' facility. (Prime's Mot. for Summ. J. at 3; Defs.' Opp'n to Prime's Mot. for Summ. J. at 2.) Stewart's estate filed a complaint against Defendants in State Court on July 19, 2005, alleging negligence and gross negligence.¹ (Prime's Mot. for Summ. J., Ex. B; Defs.' Opp'n to Prime's Mot. for Summ. J., Ex. 2.)

On July 27, 2005, Defendants reported the claim relating to Stewart's death to Prime. (Prime's Mot. for Summ. J. at 5; Defs.' Opp'n to Prime's Mot. for Summ. J. at 2.) The following day, Prime notified Defendants it was denying coverage for the claim. (Prime's Mot. for Summ. J. at 5; Defs.' Opp'n to Prime's Mot. for Summ. J. at 2.) On February 21, 2006, Defendants' attorney advised Prime that Defendants would hold Prime responsible for any liability arising from the claim and would pursue legal action against Prime if Prime failed to provide a defense or coverage for the claim. (Defs.' Opp'n to Prime's Mot. for Summ. J., Ex. 5.) On March 6, 2006, Prime's counsel notified Defendants' counsel that it was representing. Prime with respect to the claim at issue. (Defs.' Opp'n to Prime's Mot. for Summ. J., Ex. 6.) In response, on March 9, 2006, Defendants' counsel sent correspondence to Prime's counsel requesting another review of Prime's denial of coverage. (Defs.' Opp'n to Prime's Mot. for Summ. J., Ex. 7.)

On March 20, 2006, Defendants' counsel sent correspondence to Prime's counsel enclosing a billing ledger for costs and attorneys' fees totaling $5,226.56 that Defendants had incurred as a result of defending against the claim in state court. (Defs.' Opp'n to Prime's Mot. for Summ. J., Ex. 8.) On April 24, 2006, Prime filed the instant action seeking declaratory judgment regarding Prime's non-coverage of the claim under the First and Second Policies. The next day, Prime sent a check in the amount of $5,226.56 to Defendants' counsel representing payment of Defendants' invoice. (Defs.' Opp'n to Prime's Mot. for Summ. J., Ex. 9.)

Prime moves for summary judgment arguing there is no genuine issue of material fact and it is entitled to judgment as a matter of law because the insurance policies are unambiguous and enforceable. In response, Defendants urge the Court to deny Prime's motion for summary judgment contending Prime has not properly authenticated its exhibits, genuine issues of material fact still remain, further discovery is needed, the insurance policies are void as against public policy under Nevada law, and Prime's payment of Defendants' fees and costs show that Prime changed its mind and decided to provide coverage for the claim.

II. LEGAL STANDARD

Summary judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any" demonstrate "there is no genuine issue as to any material fact and... the moving party, is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The substantive law defines which facts are material. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). All justifiable inferences must be viewed in the light most favorable to the non-moving party. County of Tuolumne v. Sonora Cmty. Hosp., 236 F.3d 1148, 1154 (9th Cir.2001).

The party moving for summary judgment bears the initial burden of showing the absence of a genuine issue of material fact. Fairbank v. Wunderman Cato Johnson, 212 F.3d 528, 531 (9th Cir.2000). The burden then shifts to the non-moving party to go beyond the pleadings and set forth specific facts demonstrating there is a genuine issue for trial. Id.; Far Out Prods., Inc. v. Oskar, 247 F.3d 986, 997 (9th Cir. 2001).

III. DISCUSSION

A. Authentication of Exhibits

Defendants argue this Court should deny Prime's motion for summary judgment because Prime failed to attach an affidavit to its motion supporting the factual allegations set forth therein. In response, Prime attached an affidavit to its Reply asserting that the exhibits attached thereto are true and correct.

Documents which are not properly authenticated cannot support a summary judgment motion. See Cristobal v. Siegel, 26 F.3d 1488, 1494 (9th Cir.1994) (citing Canada v. Blain's Helicopters, Inc., 831 F.2d 920, 925 (9th Cir.1987)). "Authentication is a condition precedent to admissibility, and this condition is satisfied by evidence sufficient to support a finding that the matter in question is what its proponent claims." Orr v. Bank of Am., NT & SA, 285 F.3d 764, 773 (9th Cfr.2002) citing Fed.R.Evid. 901(a) (quotation and footnote omitted). The decision to exclude evidence lies within the district court's discretion. Id.

The proponent of evidence must make a prima facie showing of authenticity such that a reasonable juror could find in favor of authenticity. U.S. v. Chu Kong Yin, 935 F.2d 990, 996 (9th Cir.1991). Pursuant to Federal Rule of Civil Procedure 56(e), documents authenticated through personal knowledge must be "attached to an affidavit that meets the requirements of [Fed.R.Civ.P.] 56(e) and the affiant must be a person through whom the exhibits could be admitted into evidence." Orr, 285 F.3d at 774 (quotation omitted). Accordingly, an affiant who authenticates documents through personal knowledge must be a person "who wrote it, signed it, used it, or saw others do so." Id. n. 8 (quotation omitted). In addition, documents produced by a party in discovery are considered authentic when a party-opponent offers them. See id. at 777 n. 20. Moreover, "when a document has been authenticated by a party, the requirement of authenticity is satisfied as to that document with regards to all parties...." Id. at 776.

A court also may review a document's contents together with the circumstances of its discovery and make its own determination regarding the evidence's authenticity. Alexander Dawson, Inc. v. N.L.R.B., 586 F.2d 1300, 1302 (9th Cir. 1978); see also Fed.R.Evid. 901(b)(4) (permitting authentication based upon the exhibit's "[a]ppearance, contents, substance, internal patterns, or other distinctive characteristics, taken in conjunction with circumstances"). Additionally, a party may authenticate an exhibit by any means listed in Federal Rules of Evidence 901(b) and 902. See Fed.R.Evid. 901(b) (providing ten approaches to authentication such as voice identification, public records, data compilations, and nonexpert opinions on handwriting); Fed.R.Evid. 902 (self-authenticating evidence such as public documents under seal, certified copies of public records, newspapers, and acknowledged documents). While evidence must be authenticated before the court considers it, it does not have to be authenticated with the motion for which it is being used. See Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1550-51 (9th Cir.1989) (holding that the district, court's improper admission of an unauthenticated registration statement was harmless because the proponent of the...