Scottsdale Ins. Co. v. Horowitz
| Decision Date | 21 September 2017 |
| Docket Number | Civ. No. 1:17-cv-00381-AA |
| Parties | SCOTTSDALE INSURANCE COMPANY, Plaintiff, v. JAY HOROWITZ; KIM HOROWITZ; ELITE MOVING SYSTEMS, INC., Defendants. |
| Court | U.S. District Court — District of Oregon |
This matter comes before the Court on Defendants Jay and Kim Horowitz's Motion for Summary Judgment. ECF No. 10. For the reasons set forth below, the motion is DENIED.
This is an action for declaratory relief. Plaintiff Scottsdale Insurance Company ("Scottsdale") is an Arizona-based corporation. Compl. 2. Scottsdale issued a general liability insurance policy (the "Policy") to Elite Moving Systems, Inc. ("EMS"), a now-inactive California corporation. The Policy was to be effective from March 4, 2014, through March 4, 2015 and would provide one million dollars in coverage for bodily injury and property damage. Jones Decl. Ex. 2, at 9. The Policy obliged Scottsdale to defend and indemnify EMS for qualifying bodily injury and property damage which "occurs during the policy period." Jones Decl. Ex. 2, at 11.
EMS financed the premium for the policy through IPFS Corporation, a premium finance company. Second Jones Decl. Ex. 1. EMS executed a Premium Finance Agreement (the "Agreement") with IPFS. Second Jones Decl. Ex. 1. The Agreement included the following term:
Insured [EMS] irrevocably appoints Lender [IPFS] attorney-in-fact with full power of substitution and full authority upon default to cancel all policies above identified, receive all sums assigned to its Lender or in which it has granted Lender a security interest and to execute and deliver on behalf of the insured documents, Instruments, forms and notices related to the listed insurance policies in furtherance of this Agreement.
EMS failed to pay IPFS for the premiums and, on April 28, 2014, IPFS mailed a Notice of Cancellation to EMS, effective May 1, 2014. Jones Decl. Ex. 3. Pursuant to its authority under the Agreement, IPFS notified Scottsdale on April 28, 2014, that the Policy was cancelled, effective May 1, 2014, Second Jones Decl. Ex. 2, at 1.
Another California corporation, known as Elite Moving Solutions, Inc. ("Solutions"), was incorporated on March 19, 2015, and may be the successor entity to the now-defunct EMS. Jones Decl. Ex. 1.
On July 25, 2013, Jay and Kim Horowitz contracted with EMS and Lile International Companies ("Lile") to move the Horowitzes' possessions from California to Talent, Oregon. Lile and/or EMS hired Curtis Wiles and Jason Morgan to assist in moving the Horowitzes' property. The Horowitzes allege that Wiles and Morgan had extensive criminal backgrounds and that EMS and/or Lile failed to perform criminal background checks before hiring them.
The Horowitzes allege that Wiles and Morgan used information learned during the move to plan a robbery of the Horowitzes' home. On May 3, 2014, Morgan and a man named James Turner broke into the home and assaulted the Horowitzes. Morgan and Turner then stole approximately $83,000 worth of personal property, which they planned to divide with Wiles.
The Horowitzes filed suit against EMS and Solutions, among other defendants, in Jackson County Circuit Court on March 18, 2016, with an amended complaint filed on March 30, 2016 (the "Underlying Lawsuit"). Andersen Decl. Ex. 1, 2. Scottsdale initially undertook to defend EMS and Solutions in the Underlying Lawsuit and Portland attorney Michael Hallinan was retained to represent EMS and Solutions. Andersen Decl. Ex. 3, 4. Solutions filed a motion to dismiss based on lack of personal jurisdiction. Second Jones Decl. Counsel for the Horowitzes and Mr. Hallinan discussed dismissing Solutions from the action based on the understanding that EMS had liability coverage of up to one million dollars. Andersen Decl. Ex. 5. On June 6, 2016, Mr. Hallinan replied that EMS had one million dollars in coverage "and the adjuster has confirmed no reservation of rights has been asserted." Andersen Decl. Ex. 6. The parties stipulated to the dismissal of Solutions from the Underlying Lawsuit on June 20, 2016. Andersen Decl. Ex. 7, at 3-4.
Scottsdale subsequently issued a reservation of rights letter on January 12, 2017. Second Jones Decl. Ex. 2. In the reservation of rights letter, Scottsdale asserted that the Policy was properly terminated by IPFS on May 1, 2014. Second Jones Decl. Ex. 2, at 1. As the assault and robbery of the Horowitzes' home occurred on May 3, 2014, Scottsdale claims that the loss is not covered by the Policy and Scottsdale has no duty to defend or indemnify EMS in the Underlying Lawsuit. Second Jones Decl. Ex. 2, at 1. This action for declaratory relief followed.
Summary judgment is appropriate when "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Wash. Mut. Inc. v. United States, 636 F.3d 1207, 1216 (9th Cir. 2011); Fed. R. Civ. P. 56(a). The moving party must show the absence of a dispute as to a material fact. Rivera v. Philip Morris, Inc., 395 F.3d 1142, 1146 (9th Cir. 2005). In response to a properly supported motion for summary judgment, the nonmoving party must go beyond the pleadings and show there is a genuine dispute as to a material fact for trial. Id. In re Oracle Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir. 2010) (citations omitted).
A dispute as to a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Villiarmo v. Aloha Island Air, Inc., 281 F.3d 1054, 1061 (9th Cir. 2002) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The court must draw all reasonable inferences in favor of the non-moving party. Sluimer v. Verity, Inc., 606 F.3d 584, 587 (9th Cir. 2010). "Summary judgment cannot be granted where contrary inferences may be drawn from the evidence as to material issues." Easter v. Am. W. Fin., 381 F.3d 948, 957 (9th Cir. 2004). A "mere disagreement or the bald assertion that a genuine issue of material fact exists" is not sufficient to preclude the grant of summary judgment. Harper v. Wallingford, 877 F.2d 728, 731 (9th Cir. 1989). When the non-moving party's claims are factually implausible, that party must "come forward with more persuasive evidence than otherwise would be necessary[.]" LVRC Holdings, LLC v. Brekka, 581 F.3d 1127, 1137 (9th Cir. 2009) (quotation marks and citation omitted).
The substantive law governing a claim or defense determines whether a fact is material. Miller v. Glenn Miller Prod., Inc., 454 F.3d 975, 987 (9th Cir. 2006). If the resolution of a factual dispute would not affect the outcome of the claim, the court may grant summary judgment. Id.
The Horowitzes move for summary judgment on the basis that Scottsdale has either waived its right to refuse to defend or indemnify EMS under the Policy, or that it is estopped from asserting that right. The parties agree that the Policy should be interpreted under the laws of California.
As a preliminary matter, the Court notes that the Memorandum in Support of the Horowitzes' Motion contains little in the way of substantive legal argument, much of which is abandoned in the Horowitzes' Reply in favor of new legal theories and new factual allegations. "To the extent that [a reply] presents new information, it is improper." Tovar v. U.S. Postal Serv. 3 F.3d 1271, 1273 n.3 (9th Cir. 1993). However, a court may consider new information in a reply when the non-moving party has an opportunity to respond. See Provenz v. Miller, 102 F.3d 1478, 1483 (9th Cir. 1996).
In this case, the Horowitzes' Reply was improper. The Court has determined, however, that the most equitable and efficient remedy is allow Scottsdale to file its requested Sur-Reply.
As a further preliminary matter, the Court is dismayed to find that it must discuss the necessity of compliance with this District's Local Rules. "District courts have broad discretion in interpreting and applying their local rules." Miranda v. S. Pac. Transp. Co., 710 F.2d 516,521 (9th Cir. 1983). Local Rule 7-1(a) requires that, with certain limited and presently inapplicable exceptions, "every motion must certify that . . . the parties made a good faith effort through personal or telephonic conferences to resolve the dispute and have been unable to do so." LR 7-1(a)(1)(A). "When conferring about a dispositive motion, the parties must discuss each claim, defense, or issue that is the subject of the proposed motion." LR 7-1(a)(2). "The Court may deny any motion that fails to meet this certification requirement." LR 7-1(a)(3).
In this case, the Motion for Summary Judgment does not contain the required certification. The Horowitzes' counsel admits that he failed to confer with Scottsdale's counsel before filing his motion. In the Reply, the Horowtizes' counsel offers two explanations for this failure:
First, counsel submits that Oregon state law does not require conferral before filing a motion pursuant to Ore. R. Civ. P. 47 and that he "failed to realize this distinction between state and federal practice." The Court is unimpressed by this explanation. The Horowitzes' counsel has been in practice for many years and a survey of ECF reveals that this is far from counsel's first case in federal court.
Second, counsel offers that "conferring would not have saved either side the expense of a motion for summary judgment." The Court is even less impressed with this excuse, especially in light of the fact that counsel goes on to concede that he cited to inapplicable provisions of California law in his original motion and that his request for attorney fees and sanctions are without merit.1 These issues might have been clarified, if not...
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