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Metropolitan Property and Casualty Insurance Co. v. Cossey

United States District Court, D. Idaho

October 17, 2017

METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY, Plaintiff,
v.
ROBERT R. COSSEY, STACY N. COSSEY, TYLER COSSEY, and JOSHUA BAILEY, Defendants.

          MEMORANDUM DECISION AND ORDER

          David C. Nye, U.S. District Court Judge

         I. INTRODUCTION

         This matter comes before the Court on the parties' cross-motions for summary judgment. Dkts. 26, 27. Having reviewed the record and briefs, the Court finds that the facts and legal arguments are adequately presented. Accordingly, in the interest of avoiding further delay, and because the Court finds that the decisional process would not be significantly aided by oral argument, the Court will decide the motion without oral argument. Dist. Idaho Loc. Civ. R. 7.1(d)(2)(ii). For the reasons set forth below, the Court enters summary judgment in favor of Plaintiff.

         II. BACKGROUND[1]

         Plaintiff Metropolitan Property and Casualty Insurance Company (“Met P&C”) is an insurance company organized and existing under the laws of Rhode Island with its principal place of business in Warwick, Rhode Island. At all relevant times, Met P&C was duly authorized to issue policies of insurance covering certain risks within the State of Idaho. Defendant Robert Cossey maintains a primary residence in Spokane County, Washington. At times material to this matter, Defendant Robert R. Cossey also maintained a second home in Priest River, Bonner County, Idaho. Defendant Stacy N. Cossey maintains a primary residence in Spokane County, Washington. At times material to this matter, Defendant Stacy N. Cossey also maintained a second home in Priest River, Bonner County, Idaho.[2] Defendant Tyler Cossey maintains a residence in Spokane County, Washington. Defendant Tyler Cossey is the son of Defendants Robert R. Cossey and Stacy N. Cossey. Defendant Joshua Bailey maintains a residence in Spokane County, Washington.

         Robert and Stacy Cossey had in effect a policy of insurance, entitled Homeowner's Insurance Policy (hereinafter the “Policy”), issued by Met P&C with a policy term commencing November 09, 2015, and continuing until November 09, 2016, for a vacation home owned by Robert and Stacy Cossey located at Rte. 1, Box 51E, Priest River, Idaho, 83856. The Policy provides coverage in the amount of $300, 000.00 for bodily injury and property damage.

         The Cosseys also owned a 2006 Sea Ray Model 195 Sport boat which was 20 feet in length and had a 190 horsepower motor (the “Boat”). At all times material to this matter, the Boat was moored at or near the vacation home. The Cosseys purchased a watercraft policy of insurance, issued by Safeco Insurance, with a policy term commencing January 18, 2016, and continuing until January 18, 2017, specifically covering the Boat (the “Boat Policy”). The Boat Policy provides coverage in the amount of $300, 000.00 for bodily injury and property damage. In addition to the Boat Policy, the Cosseys purchased an umbrella policy of insurance covering their automobiles and watercraft (the Boat), also issued by Safeco Insurance, with a policy term commencing January 18, 2016, and continuing until January 18, 2017 (the “Umbrella Policy”). The Umbrella Policy provided coverage in the amount of $1, 000, 000.00.

         Sometime prior to July 2, 2016, Tyler Cossey, with the permission of the Cosseys, invited several friends to the vacation home to celebrate the 4th of July weekend. Among the invitees were William “Riley” Devine, Joshua Bailey, Lauren Devine, Jeff Groat, and Lisa Groat. Tyler and some of his friends arrived at the vacation house on July 2, 2016. The Groat's arrived on July 3, 2016. Jeff Groat had recently purchased a Jet Ski that he brought with him to the vacation home.

         On the afternoon of July 3, 2016, Tyler Cossey and his friends took the Boat and the Jet Ski out on the Pend Oreille River. With the permission of Tyler Cossey, Joshua Bailey was driving the Boat. Tyler Cossey, Abigail Lentz, and Danielle Grams were on an inner tube being pulled by the Boat. Riley Devine was on the Jet Ski and was trying to jump the wake behind the Boat and the inner tube. At some point, he crashed into the inner tube, the Jet Ski striking Abigail Lentz in the face. Danielle Grams was also injured, having sustained a cracked rib and a partially collapsed lung. As a result of the above-described incident, Abigail Lentz underwent surgery, facial reconstruction with plates and wires in her mouth, and therapy.

         On or about November 28, 2016, counsel for Abigail Lentz made a demand to Met P&C and its insureds, Robert and Stacy Cossey, as well as their son, Tyler Cossey, and the operator of the boat, Joshua Bailey, for payment of $1.7 million dollars, which exceeds the total amount of coverage under all of the insurance policies of the Cossey's, to settle Ms. Lentz's damage claims. On or about December 12, 2016, Met P&C sent a letter to the Cosseys denying coverage for liability arising out of the July 3, 2016, watercraft incident.

         On December 30, 2016, Met P&C filed a Complaint in this Court asserting one claim for relief: a declaratory judgment proclaiming “that Met P&C owes no duty, contractual or otherwise, to” (1) “pay sums that the Defendants may become obligated to pay as damages for ‘bodily injury' as a result of the allegations pled in or otherwise connected with the July 3, 2016 incident, ” or (2) “defend, or otherwise pay for the cost of defending, the Defendants in any matter involving the July 3, 2016 incident.” Dkt. 1, at 6.

         On May 4, 2017, the parties filed a Joint Statement of Undisputed Facts. Dkt. 25. Then, on June 7, 2017, the parties filed cross-motions for summary judgment. Dkts. 26, 27. After these motions were fully briefed, Magistrate Judge Ronald E. Bush reassigned this case to the undersigned. Dkt. 31.

         III. LEGAL STANDARD

         Summary judgment is proper “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). This Court's role at summary judgment is not “to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Zetwick v. Cty. of Yolo, 850 F.3d 436, 441 (9th Cir. 2017) (citation omitted). However, “the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). There must be a genuine dispute as to any material fact-a fact “that may affect the outcome of the case.” Id. at 248.

         When cross-motions for summary judgment are filed, the Court must independently search the record for factual disputes. Fair Housing Council of Riverside County, Inc. v. Riverside Two, 249 F.3d 1132, 1136 (9th Cir.2001). The filing of cross-motions for summary judgment-where both parties essentially assert that there are no material factual disputes-does not vitiate the court's responsibility to determine whether disputes as to material facts are present. Id.

         IV. ANALYSIS

         A. The Applicable Law

         The Idaho Supreme Court has instructed that, “[w]hen interpreting insurance policies” under Idaho law, courts should apply “the general rules of contract law subject to certain special canons of construction.” Clark v. Prudential Prop. & Cas. Ins. Co., 66 P.3d 242, 244 (Idaho 2003). Under these general rules, the Court must determine whether or not there is an ambiguity in the policy, “[b]eginning with the plain language of the insurance policy.” Id. “Determining whether a contract is ambiguous is a question of law upon which this Court exercises free review.” Id. at 245. “Where the policy is reasonably subject to differing interpretations, the language is ambiguous and its meaning is a question of fact.” Id. In resolving this question of law, the Court must construe the policy “as a whole, not by an isolated phrase.” Selkirk Seed Co. v. State Ins. Fund, 18 P.3d 956, 959 (Idaho 2000). Generally, “because insurance contracts are adhesion contracts, typically not subject to negotiation between the parties, any ambiguity that exists in the contract ‘must be construed most strongly against the insurer.'” Farmers Ins. Co. of Idaho v. Talbot, 987 P.2d 1043, 1047 (Idaho 1999) (quoting Mut. of Enumclaw Ins. Co. v. Roberts, 912 P.2d 119, 122 (Idaho 1996)). “The burden is on the insurer to use clear and precise language if it wishes to restrict the scope of coverage and exclusions not stated with specificity will not be presumed or inferred.” Clark, 66 P.3d at 245.

         “Under Idaho law and consistent with other states, an insurer's duties to defend and indemnify are separate duties.” Hoyle v. Utica Mut. Ins. Co., 48 P.3d 1256, 1264 (2002). “The duty to defend is broader than the duty to indemnify.” Id. A “third-party's complaint [that] reveals a potential for liability that would be covered by the insured's policy” triggers the duty to defend. Id.

         B. ...


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