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American Alternative Insurance Corporation v. Goodwill of The Olympics and Rainier Region

United States District Court, W.D. Washington, Tacoma

January 15, 2020

AMERICAN ALTERNATIVE INSURANCE CORPORATION, Plaintiff,
v.
GOODWILL OF THE OLYMPICS AND RAINIER REGION, et al., Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

          BENJAMIN H. SETTLE UNITED STATES DISTRICT JUDGE.

         This matter comes before the Court on Plaintiff American Alternative Insurance Corporation's (“American”) motion for summary judgment, Dkt. 49, and Defendants Sun Theresa Choe (“Choe”) and Goodwill of the Olympics and Rainier Region's (“Goodwill”) motion for leave to file overlength brief, Dkt. 56. The Court has considered the pleadings filed in support of and in opposition to the motions and the remainder of the file and hereby rules as follows:

         I. PROCEDURAL HISTORY

         On November 22, 2017, American filed a declaratory judgment action against Defendants Goodwill, Choe, Enrique Hernandez Franco (“Franco”), Jane Doe Hernandez Franco, and Non Profit Insurance Program (“Risk Pool”) seeking a declaration that there is no duty to defend, indemnify, or reimburse Goodwill or the Risk Pool based on allegations in an underlying complaint. Dkt. 1.

         On July 18, 2019 American filed the instant motion for summary judgment seeking a declaration that its policy does not obligate American to defend or indemnify. Dkt. 49. On September 5, 2019, Choe and Goodwill filed a motion for leave to file an overlength brief. Dkt. 56.[1] On September 9, 2019, Choe, Goodwill, and the Risk Pool responded. Dkts. 57, 59. On September 13, 2019, American replied. Dkt. 62.

         II. FACTUAL BACKGROUND

         On September 20, 2014, Choe and Franco were customers at Goodwill. Franco had purchased furniture at the store, and Goodwill employees instructed him to back his truck up a loading ramp so that the furniture could be loaded into the vehicle. While backing up the ramp, Franco ran over Choe causing severe injuries. On January 6, 2016, Choe filed suit against Goodwill in state court.

         On June 26, 2017, Choe moved for entry of default judgment because Goodwill had failed to appear or defend. Goodwill immediately moved to set aside the default arguing that it had not been served with the complaint. Ultimately, the court granted the motion with conditions. Goodwill also notified the Risk Pool of the suit, which notified American. The Risk Pool does not issue insurance itself. Instead, the Risk Pool negotiates and obtains insurance of behalf of its non-profit members such as Goodwill. Relevant to the instant matter, Goodwill obtained insurance with American through the Risk Pool. The relevant policy covered (1) commercial general liability (“CGL”), which included an automobile injury exclusion, (2) separate automobile coverage, and (3) a prompt notice of claim provision.

         In September 2017, Choe moved to reinstate the default based on evidence that Goodwill had been timely served in early 2016. The court denied the request to reinstate the default and instead imposed sanctions of 1% liability for Goodwill's failure to timely submit the evidence in question.

         In December 2017, Choe and Goodwill entered into a settlement agreement. Goodwill agreed to pay $300, 000 of a stipulated judgment of $1, 750, 000 and assigned its claims against the Risk Pool and American over to Choe. In March 2018, the state court concluded that the settlement was reasonable.

         III. DISCUSSION

         American moves for judgment seeking a declaration that it had no duty to defend or indemnify Goodwill or the Risk Pool.

         A. Summary Judgment Standard

         Summary judgment is proper only if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The moving party is entitled to judgment as a matter of law when the nonmoving party fails to make a sufficient showing on an essential element of a claim in the case on which the nonmoving party has the burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). There is no genuine issue of fact for trial where the record, taken as a whole, could not lead a rational trier of fact to find for the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (nonmoving party must present specific, significant probative evidence, not simply “some metaphysical doubt”). See also Fed. R. Civ. P. 56(e). Conversely, a genuine dispute over a material fact exists if there is sufficient evidence ...


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