United States District Court, D. Utah
MEMORANDUM DECISION AND ORDER GRANTING
DEFENDANT'S OF ACTION
N. PARRISH UNITED STATES DISTRICT COURT JUDGE.
Jill N. Parrish Magistrate Judge Paul M. Warner Before the
Court is Defendant's Motion to Dismiss Third Cause of
Action (ECF No. 64). For the reasons set forth below, the
motion is GRANTED. Plaintiffs' third cause of action is
dismissed without prejudice. Plaintiffs have fourteen days
from the date of this Order to amend their complaint.
an insurance case. Plaintiffs City of Orem and James Lauret
(collectively, “Orem”) were sued when two minor
children were injured at the 2014 City of Orem Summerfest
Parade. Orem sought indemnifications from its insurer,
Evanston Insurance Company (formerly known as Essex Insurance
Company). Evanston refused to indemnify Orem, citing an
endorsement that Evanston claims is part of Orem's
policy. Orem claims that the endorsement is not part of the
policy and brought claims against Evanston for declaratory
relief, breach of contract, and breach of the implied
covenant of good faith and fair dealing. Evanston has now
moved to dismiss Orem's third cause of action, breach of
the implied covenant of good faith and fair dealing, on the
grounds that Orem has failed to allege that Evanston denied
coverage in bad faith. The Court agrees and therefore
dismisses Orem's third cause of action without prejudice.
issued a general liability insurance policy (the
“Policy”) to Orem for the purpose of providing
various coverages for the 2014 Summerfest Parade.
See Compl. ¶ 8. The Policy requires that
Evanston defend lawsuits and indemnify Orem from liability
for occurrences within the scope of the Policy. See
Compl. ¶ 10.
the 2014 Summerfest Parade, two children were injured. Compl.
¶ 7. The children's parents sued Orem based on the
injuries. Compl. ¶ 6. Orem tendered the lawsuit to
Evanston. Compl. ¶ 11. But Evanston denied coverage.
Compl. ¶ 12.
denied coverage based on an exclusion that Orem claims
“was not part of the [P]olicy.” Compl. ¶ 24.
The endorsement is titled the Special Event and Spectator
Liability Exclusions (the “Endorsement”). ECF No.
73-5 at 3. The Endorsement provides, in relevant part:
This insurance does not apply to “bodily injury,
” “property damage, ” or “personal
and advertising injury”: . . .
b. Arising out of any charges or allegations of negligent
hiring, training, placement or supervision;
c. Arising out of participating, in any capacity, in a
demonstration, exhibition, contest, competition, show, race,
performance, game or other special event . . . .
ECF No. 73-5 at 3.
support of the third cause of action, Orem alleges that
“[Evanston] has breached the covenant of good faith and
fair dealing by, among other things, denying coverage based
upon an endorsement which was not part of the
[P]olicy.” Compl. ¶ 24. Orem fails to allege any
facts relevant to the determination of whether Evanston
breached the covenant of good faith and fair dealing. See
generally Compl. For example, Orem does not allege that
Evanston (1) did not diligently investigate the claim, (2)
did not fairly evaluate the claim, or (3) did not act
promptly and reasonably after evaluation of the claim.
See generally Compl.