State Farm Fire & Cas. Co. v. Hansen
| Decision Date | 07 February 2022 |
| Docket Number | 20-cv-2439 (ECT/LIB) |
| Parties | State Farm Fire and Casualty Company, Plaintiff, v. Jeffrey Hansen and Carol Hansen, Defendants. |
| Court | U.S. District Court — District of Minnesota |
Lehoan T. Pham and C. Todd Koebele, HAWS-KM, P.A., St. Paul, MN, for Plaintiff State Farm Fire and Casualty Company.
Marshall H. Tanick and Stephen M. Harris, Meyer Njus Tanick P.A., Minneapolis, MN, for Defendant Jeffrey Hansen and Carol Hansen.
State Farm Fire and Casualty Company brought this suit seeking a declaratory judgment that it has no duty to defend or indemnify its insureds, Defendants Jeffrey and Carol Hansen in connection with sexual-assault claims brought against Jeffrey in a case pending in the United States District Court for the Eastern District of Missouri. State Farm seeks judgment on the pleadings under Federal Rule of Civil Procedure 12(c). Contending that applicable Minnesota law is unsettled, the Hansens oppose State Farm's motion and seek certification of a question of law to the Minnesota Supreme Court that they say would clarify things. State Farm's motion will be granted, and the Hansens' motion will be denied. Relevant Minnesota law is settled, and applied here, it requires concluding that State Farm has no duty to defend or indemnify the Hansens in the sexual assault case.
There is subject-matter (diversity) jurisdiction over this case under 28 U.S.C. § 1332(a). The Hansens are Minnesota citizens. Compl. ¶¶ 3, 4 [ECF No. 3]; Answer [ECF No. 9] ¶¶ 3, 4. State Farm is incorporated under Illinois law and maintains its principal place of business there. Compl. ¶ 2; Answer ¶ 2. Whether the jurisdictional amount-in-controversy threshold is met in a declaratory judgment case like this depends on “the value of the object of the litigation.” Hunt v. Wash State Apple Advert. Comm'n, 432 U.S. 333, 347 (1977). Here, the value of the object of this litigation unquestionably “exceeds the sum or value of $75, 000, exclusive of interest and costs.” 28 U.S.C. § 1332(a). The complaint in the underlying case (which was filed in federal district court on the basis of diversity jurisdiction) includes the assertion that “each Plaintiff is seeking damages exceeding $75, 000, exclusive of fees and costs.” Compl. Ex. A [ECF No. 3-1 at 1] ¶ 7. And the at-issue insurance policies have coverage limits above that amount. Id. Ex. B [ECF No. 3-1 at 20]; Id. Ex. C [ECF No. 3-1 at 64].
The underlying Eastern District of Missouri case is based entirely on the allegation that Jeffrey drugged and raped Katherine Anderson. Jeffrey is the lone defendant in the case. Compl. Ex. A at 1 (Complaint in Anderson v. Hansen, No. 4:20-cv-991-JAR (E.D. Mo.)). The plaintiffs are Katherine and Jason Anderson, a married couple who are citizens of Colorado. Id. ¶¶ 4-5. Relevant here, the Andersons allege that Katherine was a Regional Sales Coordinator and independent contractor with American Family Life Assurance Company of Columbus (“Aflac”). Id. ¶¶ 4, 13, 14. Jeffrey was employed by Aflac as a Business Development Manager. Id. ¶¶ 17, 18. From August 29 to 30, 2018, Katherine and Jeffrey were in St. Louis, Missouri to attend an Aflac business meeting. Id. ¶ 20; see also Id. ¶¶ 25, 28. On the evening of August 29, Katherine accompanied a group of meeting attendees to dinner and then to a bar. Id. ¶¶ 26-27. At the bar, Jeffrey ordered Katherine a drink though “she did not want any more alcohol.” Id. ¶ 28. Jeffrey subsequently replaced Katherine's unfinished drink with a new cocktail. Id. ¶ 30. Katherine-who by this point had difficulty walking and felt sick and dizzy-returned to her hotel, accompanied by other attendees, including Jeffrey. Id. ¶¶ 33, 34. Two colleagues helped Katherine to her hotel room, where she passed out alone on the bed. Id. ¶ 36. At some point after midnight (on August 30), Katherine woke to the sound of someone knocking on her hotel room door. Id. ¶ 38. When she opened the door, Jeffrey pushed past her into the room. Id. ¶ 39. Jeffrey then raped Katherine. Id. ¶¶ 43-52. Katherine sought medical attention later that morning. Id. ¶ 51. “The hospital performed a rape kit on [Katherine], which confirmed that she had sexual intercourse.” Id. ¶ 52. Katherine received treatment. Id. ¶ 53. She “continued to feel symptoms of illness that were inconsistent with an alcohol-induced hangover.” Id. ¶ 54. Katherine believed that Jeffrey had drugged her drink the night before. Id. ¶ 55. Jeffrey has admitted having sexual intercourse with Katherine; he claims the encounter was consensual. Id. ¶ 57.[1] Katherine and her husband, Jason, assert damages claims in the underlying case arising only from the alleged drugging and rape. Katherine and Jason assert claims for battery, assault, and false imprisonment under Missouri law. Id. ¶¶ 71-77 (); id. ¶¶ 88-95 (); id. ¶¶ 78-82 (assault); id. ¶¶ 83-87 (false imprisonment). They assert claims under Colorado law for tortious interference with contract, ongoing business relationship, and prospective business relations, and for loss of consortium. Id. ¶¶ 96-115 (tortious interference); id. ¶¶ 116-17 (loss of consortium). Katherine alleges that she has suffered “trauma-related symptoms, including night terrors, panic attacks, anxiety, depression, insomnia, and suicidal ideations.” Id. ¶ 59. She alleges that these “symptoms have had a profound and lasting impact on her career, daily activities, and personal and professional relationships.” Id. ¶ 60; see also Id. ¶¶ 61-70. Katherine and Jason seek economic and non-economic compensatory damages and punitive damages, among other remedies. Id. at 16-17, ¶¶ A-F.
Jeffrey tendered defense, and requested indemnification, under two State Farm policies, and State Farm filed this case. State Farm issued both policies to the Hansens. The first is a homeowners' policy in effect from November 9, 2017, through November 8, 2018. Compl. Ex. B. The second is a personal liability umbrella policy in effect from January 3, 2018, to January 3, 2019. Compl. Ex. C. Evidently since receiving Jeffrey's tender, State Farm has defended him in the underlying case, paying the legal fees of Jeffrey's chosen counsel under a reservation of rights. Pl.'s Mem. in Supp. [ECF No. 32] at 3; Defs.' Mem. in Opp'n [ECF No. 35] at 4 n.3. State Farm filed this suit under the Declaratory Judgments Act, 28 U.S.C. § 2201, seeking a declaration that it “has no duty defend and no duty to indemnify [Jeffrey] in the underlying lawsuit[]” under either the homeowners' policy or the umbrella policy. Compl. ¶¶ 1, 41, 43.[2]
“Judgment on the pleadings is appropriate where no material issue of fact remains to be resolved and the movant is entitled to judgment as a matter of law.” Lansing v. Wells Fargo Bank, N.A., 894 F.3d 967, 971 (8th Cir. 2018). A motion for judgment on the pleadings is assessed under the same standard as a Rule 12(b)(6) motion. Ashley Cnty. v. Pfizer, Inc., 552 F.3d 659, 665 (8th Cir. 2009). Under that standard, a court must accept as true all well-pleaded factual allegations in the relevant pleadings and draw all reasonable inferences in the non-moving party's favor. Gorog v. Best Buy Co., 760 F.3d 787, 792 (8th Cir. 2014) (citation omitted). Although the factual allegations need not be detailed, they must be sufficient “to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citation omitted). A pleading's allegations must “state a claim to relief that is plausible on its face.” Id. at 570. Considering “matters outside the pleadings” generally transforms a Rule 12(b)(6) motion into one for summary judgment, but not when the relevant documents are “necessarily embraced” by the pleadings. Zean v. Fairview Health Servs., 858 F.3d 520, 526 (8th Cir. 2017) (citation omitted). Among the categories of documents necessarily embraced by the pleadings are “exhibits attached to the complaint whose authenticity is unquestioned.” Id. (cleaned up). Here, the Parties cite exhibits attached to pleadings, and no party has questioned the exhibits' authenticity. See Compl. Exs. A-C [ECF No. 3-1]; Hansen Decl. Exs. 1-3 [ECF No. 40-1]. Therefore, consideration of these materials does not require transforming State Farm's Rule 12(c) motion into one for summary judgment.
Based on the Parties' agreement, Minnesota law will be applied to interpret and apply the policies. This case turns on the construction of insurance policies issued in Minnesota to Minnesota citizens, and one of the policies insured property in Minnesota. See Compl. ¶¶ 3, 4; id. Ex. B [ECF No. 3-1 at 19] at 1; id. Ex. C [ECF No. 3-1 at 64]. The Parties agree that Minnesota law governs the policies' interpretation. See Pl.'s Mem. in Supp. at 11-12; Defs.' Mem. in Opp'n at 5-7. Therefore, Minnesota law will be applied here. See Neth. Ins. Co. v. Main Street Ingredients, LLC, 745 F.3d 909, 913 (8th Cir. 2014) (); see also Progressive N. Ins. Co. v. McDonough, 608 F.3d 388, 390 (8th Cir. 2010).
Minnesota law establishes several relevant rules for interpreting the at-issue policies. Pl.'s Mem. in Supp. at 11; Defs.' Mem. in Opp'n at 5. “Interpretation of an insurance policy and application of the policy to the facts in a case are questions of law . . . .” Am Fam. Ins. Co. v. Walser, 628 N.W.2d 605, 609 (Minn. 2001). Unambiguous terms are given their “plain and ordinary meaning, ” while ambiguous language is construed liberally in favor of coverage. Travelers Indem. Co. v. Bloomington Steel & Supply Co...
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