Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Evanston Insurance Co. v. Bosski, Inc.

United States District Court, D. Idaho

March 28, 2017

EVANSTON INSURANCE COMPANY, Plaintiff,
v.
BOSSKI, INC., an Idaho Corporation; and COLUMBIA RIVER MOTO-SPORTS, INC., an Oregon Corporation, Defendants. BOSSKI, INC., an Idaho Corporation; and Counterclaimant,
v.
EVANSTON INSURANCE COMPANY, an Illinois Corporation, Counterdefendant.

          MEMORANDUM DECISION AND ORDER

          Edward J. Lodge United States District Judge

         INTRODUCTION

         Pending before the Court in the above-entitled matter are the Defendants' Motion for Partial Judgment on the Pleadings (Dkt. 19) and Plaintiff's Motion for Summary Judgment. (Dkt. 20.) The parties have filed their responsive briefing and the matters are now ripe for the Court's consideration.

         Having fully reviewed the record, the Court finds that the facts and legal arguments are adequately presented in the briefs and record. Accordingly, in the interest of avoiding further delay, and because the Court conclusively finds that the decisional process would not be significantly aided by oral argument, the Motions shall be decided on the record before this Court without oral argument.

         PROCEDURAL HISTORY

         On June 6, 2014, Evanston Insurance Company (“Evanston”) initiated these proceedings by filing a Complaint and Demand for Jury Trial asserting two claims against the Defendants/Counterclaimants, Bosski, Inc. and Columbia River Moto-Sports, Inc. (Dkt. 1.)[1] Evanston's claims against Bosski included requests for a declaratory judgment and recoupment. As alleged in Evanston's Complaint, Evanston seeks a declaration of the parties' rights and responsibilities with respect to an insurance policy Evanston issued to Defendant/Counterclaimant Bosski, Inc. in relation to a lawsuit filed against Bosski, Inc. in Oregon state court (the “Underlying Action”). Attached to the Complaint are four exhibits: (1) the Summons and Complaint in the Underlying Action (Dkt. 1-1), (2) the insurance policies at issue (Dkt. 1-2), (3) a series of email messages (Dkt. 1-3); and (4) a November 11, 2013 demand letter from an Oregon law firm representing the plaintiff in the Underlying Action, Paul Macy, directed to the Defendants (Dkt. 1-4).

         Evanston seeks a declaration that it has no duty to defend or indemnify Defendant Bosski in the Underlying Action because Bosski failed to comply with the insurance policy's Claims Reporting Provision. (Complaint, ¶¶ 29-30, Dkt. 1.) The recoupment claim is for the costs Evanston has covered by providing Bosski with a defense in the Underlying Action. (Complaint at ¶¶ 33-34).

         On July 30, 2014, Bosski, Inc. filed an Answer, Counterclaim, and Demand for Jury Trial. (Dkt. 6.) Bosski's counterclaim includes two requests for declaratory judgment, an estoppel claim, and a request for attorneys fees pursuant to Idaho Code Sections 41-1839, 12-120, 12-121, and Rule 54 of the Federal Rules of Civil Procedure. (Answer, Dkt. 6.) In the first claim for declaratory relief, Bosski seeks a judgment stating that it is entitled to coverage in the Underlying Action including both defense and indemnity costs. (Answer at ¶¶ 22-23.) In the second claim for declaratory relief, Bosski seeks a judgment that Evanston's conduct in denying the claims, asserting late notice, asserting a right to recoupment, and proceeding with litigation constitutes insurance bad faith. (Answer at ¶¶ 33-36.) Bosski's estoppel claim states that Evanston should be precluded from denying coverage because it took Evanston four months to notify Bosski that Evanston was denying coverage. (Answer at ¶¶ 44-47.)

         In the instant motions, Bosski seeks partial judgment on the pleadings solely with regard to Evanston's claim for recoupment. (Dkt. 19.) Evanston seeks summary judgment on: (1) its declaratory judgment claim on the basis that there is no insurance coverage because Bosski failed to comply with a timely notice provision in the insurance policy and (2) Bosski's claim for insurance bad faith on the basis that Evanston provided Bosski with a defense in the Underlying Action even though there is no coverage under the policy. (Dkt. 20.)

         For the reasons set forth below, the Court will grant Bosski's motion and deny Evanston's. The Court can determine, as a matter of law, that the recoupment claim is not permitted under Idaho law. However, the coverage issues require interpretation of an ambiguous insurance policy provision, the Claims Reporting Provision, and disputes of fact concerning substantial compliance with that provision that must be reserved for the trier of fact.

         BACKGROUND

         Bosski is owned by Ryan Zelinsky and John Boguslawski, exclusively. (John Boguslawski Declaration ¶ 2, Dkt. 26-2.) Bosski's primary business is the development and sale of a line of ATV wagons and aluminum ATV/UTV/snowmobile ramps. (Boguslawski Dec. at ¶ 1.)

         On July 29, 2011, Boguslawski submitted an application for general liability insurance to Bosski's local insurance agent, the Leavitt Group of Boise (“Leavitt Group”).[2](Boguslawski Dec. at ¶ 3.) Boguslawski understood that the Leavitt Group approved the application. (Boguslawski Dec. at ¶ 4.) On September 20, 2011, Boguslawski, on behalf of Bosski, wrote a check to the Leavitt Group in the amount of $4, 000 to cover portions of the annual insurance premium for the general liability insurance policy. (Boguslawski Dec. at ¶ 4, Ex. 2.)

         As a result of these interactions with the Leavitt Group, Bosski obtained General Liability Insurance Policy No. SP-853897 effective from September 2011 to September 20, 2012 (the “2011/2012 Policy”). (Boguslawski Dec. at ¶ 5, Ex. 2.) Before the 2011/2012 Policy expired, Bosski renewed its insurance through the Leavitt Group and obtained General Liability Insurance Policy No. 858306 for claims made between September 11, 2012 and September 20, 2013 (the “2012/2013 Policy”). (Boguslawski Dec. at ¶ 6, Ex. 4.) In addition, before the 2012/2013 policy had expired, Bosski purchased one-year tail coverage through the Leavitt Group. (Boguslawski Dec. at ¶ 7.)

         It is undisputed that the 2011/2012 Policy, 2012/2013 Policy and tail coverage were all issued by Plaintiff Evanston. (Dkt. 20-2, ¶ 1.)[3] Nevertheless, all of Bosski's policy premiums were sent to the Leavitt Group in Boise. Id. at ¶ 4. In fact, the Leavitt Group of Boise handled all applications, issued the primary policies, issued tail coverage, collected premiums, and otherwise responded to Bosski's coverage questions. (Boguslawski Dec. at ¶ 15.) Boguslawski has submitted a sworn declaration that, based on this contact, he believed the Leavitt Group was Evanston's agent. (Boguslawski Dec. at ¶ 15).

         On April 5, 2012, Zelinski received a call from Paul Macy. (Ryan Zelinsky Declaration, ¶ 3, Dkt. 26-4.) Macy informed Zelinski that he had broken his back while using one of Bosski's ramps. (Zelinsky Dec. at ¶ 3.)

         Immediately after speaking with Macy, Zelinsky drafted an email to Boguslawski informing him of the interaction. (Zelinsky Dec. at ¶ 4.) Also on April 5, 2012 Zelinsky received an email from Macy with pictures of the ramp at issue. (Zelinsky Dec. at ¶ 5.)

         The next day, Macy called Zelinsky's cell phone 13 times in a 12-minute period. (Zelinsky Dec. at ¶ 10.) Zelinsky then called Boguslawski and they decided that Boguslawski would return Macy's call. (Zelinsky Dec. at ¶ 7, Boguslawski Dec. at ¶ 9.)

         After speaking with Macy, both Boguslawski and Zelinsky reached the conclusion that Macy was acting strange and erratic, was not credible, and was trying to perpetuate some kind of scam. (Zelinsky Dec. at ¶¶ 3, 6-7; Boguslawski Dec. at ¶¶ 9-10). Nonetheless, Bosski, through Boguslawski, contacted the Leavitt Group that same day and notified the Leavitt Group of the contact with Macy. (Boguslawski Dec. at ¶ 11). An agent of the Leavitt Group informed Bosski that there was nothing further required unless and until Bosski received a demand letter or something more formal. (Boguslawski Dec. at ¶ 11).

         In September 2013, Bosski purchased tail coverage from the Leavitt Group for the 2012/2013 policy. (Zelinsky Dec. at ¶ 8.) When purchasing tail coverage, Bosski again mentioned the Macy communications with the Leavitt Group and made certain to purchase tail coverage in the event Macy made a more formal claim. (Zelinsky Dec. at ¶¶ 8-9.)

         On November 11, 2013, Bosski received a demand letter from Macy's counsel. (Boguslawski Dec. at ¶ 13.) Bosski forwarded that letter via email to the Leavitt Group. (Boguslawski Dec. at ¶ 15).

         Evanston does not dispute that it received notice of the Macy claim on November 14, 2013. “Bosski . . . provided notice of the Macy matter to Evanston by email dated November 14, 2013, when it forwarded the attorney's letter.” (Dkt. 20-2, 14.) Evanston received such notice through the Leavitt Group. (Boguslawski Dec. at ¶ 17, Ex. 7.) The email message from the Leavitt Group to Evanston states, “Please see the attached from our insured, we need to open a claim... [sic].” (Boguslawski Dec. at Ex. 7.)

         On November 26, 2013, a senior claims examiner from the Markel Group, apparently acting on behalf of Evanston, contacted Boguslawski. (Boguslawski Dec. at 17.) This was the first direct contact Bosski had with either the Markel Corp. or Evanston Insurance. (Boguslawski Dec. at ¶¶ 16-17.)

         On February 28, 2014, Macy filed a lawsuit against Bosski in Oregon state court, thus initiating the Underlying Action. (Boguslawski Dec. at ¶ 26, Ex. 14.) Evanston hired and paid for Bosski's defense counsel in the Underlying Action. (Boguslawski Dec. at ¶¶ 23-26.)

         On March 26, 2014, Evanston sent Bosski a letter stating that it would provide Bosski with a defense in the Underlying Lawsuit but was also taking the position that there was no coverage. (Complaint, Ex. F, Dkt. 1-6.) Evanston advised Bosski that it was denying coverage under the 2012/2013 Policy because the claim was not first made during the policy period and under the 2011/2012 Policy based on late notice. Id. at p. 5.

         STANDARDS OF REVIEW

         1. Motion for Judgment on the Pleadings

         Rule 12(c) provides that “[a]fter the pleadings are closed-but early enough not to delay trial-a party may move for judgment on the pleadings.” Fed.R.Civ.P. 12(c). A motion for judgment on the pleadings pursuant to Rule 12(c) challenges the legal sufficiency of the opposing party's pleadings. See, e.g., Westlands Water Dist. v. Bureau of Rec., 805 F.Supp. 1503, 1506 (E.D. Cal. 1992).

         A motion for judgment on the pleadings should only be granted if “the moving party clearly establishes on the face of the pleadings that no material issue of fact remains to be resolved and that it is entitled to judgment as a matter of law.'” Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1550 (9th Cir. 1989). Judgment on the pleadings is also proper when there is either a “lack of cognizable legal theory” or the “absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1988).

         In reviewing a Rule 12(c) motion, “all factual allegations in the complaint [must be accepted] as true and construe[d] ... in the light most favorable to the non-moving party.” Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009). Judgment on the pleadings under Rule 12(c) is warranted “only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations.” Deveraturda v. Globe Aviation Sec. Servs., 454 F.3d 1043, 1046 (9th Cir. 2006) (internal citations omitted).

         2. Motion for Summary Judgment

         Motions for summary judgment are governed by Rule 56 of the Federal Rules of Civil Procedure. Rule 56 provides, in relevant part, that “[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a).

         The Supreme Court has made it clear that under Rule 56 summary judgment is mandated if the non-moving party fails to make a showing sufficient to establish the existence of an element which is essential to the non-moving party's case and upon which the non-moving party will bear the burden of proof at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). If the non-moving party fails to make such a showing on any essential element, “there can be no ‘genuine issue of material fact, ' since a completely failure ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.