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Owners Insurance Co. v. Dockstader

United States District Court, D. Utah

October 3, 2019




         This matter is before the court on Plaintiff Owner Insurance Company's Motion for Summary Judgment on Intervenor Thomas Brooks' Third Party Complaint. The motion is fully briefed. The court, however, does not believe that a hearing on the motion would significantly aid in the court's determination of the motion. The court has considered the memoranda and materials submitted by the parties, as well as the law and facts relating to the motion. Now being fully advised, the court issues the following Memorandum Decision and Order.


         The court has provided the factual background of this case in previous orders. On October 14, 2014, Defendant Jacob Taylor Dockstader hit Thomas Brooks in the head with a 15-pound dumbbell at Desert Palms Health & Fitness Club in St. George, Utah. The blow left Brooks unconscious and bleeding from his head. Brooks was transported to the hospital, where he underwent emergency surgery and remained hospitalized for a week. The State of Utah charged Dockstader with felony aggravated assault, Utah Code Ann. §§ 76-5-102, 76-5-103(1). On July 15, 2015, the state criminal case was tried to the bench and the judge found Dockstader guilty of aggravated assault, a second-degree felony.

         On February 6, 2017, Brooks sued Dockstader in Utah state court, alleging negligence and assault and battery and seeking damages in connection with the October 14, 2014 incident. Dockstader demanded that Plaintiff Owners Insurance Company defend and indemnify him from Brooks' civil suit under a homeowners insurance policy Owners issued to Dockstader's parents, Policy No. 48-819-745-00. Owners hired counsel and provided Dockstader with a defense to that suit.

         On February 1, 2018, Owners sent Dockstader a reservation of rights letter raising issues with regard to coverage under the Policy. On February 28, 2018, Owners filed the Complaint in this case, seeking a declaratory judgment that Owners has no duty to defend or indemnify Dockstader from the claims presented in Brooks' civil state court action. The Complaint alleged that Dockstader's assault on Brooks was not an “occurrence” covered by the policy because it was not an accident and that Owners had no duty to defend Dockstader in Brooks' lawsuit because the claims were not covered by the policy. Owners, however, continued to provide Dockstader with a defense under a full reservation of rights.

         On April 10, 2018, the parties in the state civil action stipulated to dismissal of Brooks' assault and battery cause of action. Based on the parties' stipulation to dismiss the intentional tort claim, Dockstader attempted to have Owners' declaratory judgment action in this court dismissed. However, on August 27, 2018, this court denied Dockstader's motion to dismiss. In the state court action, Owners rejected Brooks' three settlement demands for the Policy's $500, 000 limit because this action regarding coverage was still pending. On September 25, 2018, Brooks and Dockstader entered into a stipulated judgment and an assignment of Dockstader's claims against Owners, including a bad faith claim for refusal to settle within the policy limits.

         Brooks intervened in the present case on November 2, 2018, and filed a Third-Party Complaint against Owners on November 5, 2018. At the time, Owners had a pending motion for summary judgment on its declaratory judgment claims. The court granted several extensions of time in the briefing of that motion so that Brooks would have adequate time to oppose the motion.

         On March 14, 2019, the court granted Owners' Motion for Summary Judgment, holding that Owners had no duty to defend or indemnify Dockstader under the Policy for Brooks' civil suit because Dockstader's actions were not an accident under Utah law. Because the parties had briefed and argued issues relating to bad faith and the timing of Owners' reservation of rights letter, the court also addressed those issues. The court found that there was no basis for a bad faith claim for refusal to settle a claim while the declaratory judgment action was pending regarding coverage and that there was no procedural problem with Owners providing a defense of the Brooks' civil action before sending a reservation of rights letter. Based on these findings, Owners filed the present motion for summary judgment on Brooks' Third-Party Complaint.


         Owners' Motion for Summary Judgment

         Owners argues that the court's findings in its March 14, 2019 Memorandum Decision and Order effectively resolves the allegations of Brooks' Third-Party Complaint in favor of Owners. Brooks, however, argues that the court's findings were dicta, the court's ruling on coverage does not determine the bad faith claims, and the evidence Brooks has gathered shows that Owners acted unreasonably and breached its fiduciary duties to Dockstader.

         It is clear in the record of this case that the bad faith claim and issue regarding the timing of the reservation of rights letter were briefed and argued by the parties. In Brooks' opposition to Owners' prior Motion for Summary Judgment, Brooks made the same legal arguments that he makes in opposition to the present motion for summary judgment-the timing of Owners' tender of defense and reservation of rights letter, Owners' failure to investigate and accept the policy limit settlement demands, the fact that bad faith and breach of fiduciary duty claims were independent of coverage. Once a litigant presents an issue for decision, that litigant cannot “persuasively profess surprise that a court would address the issues it presents for decision - or would later decline to consider additional supplemental arguments on those same issues that the litigant could have but failed to present the first time around.” Entek GRB, LLC v. Stull Ranches, 840 F.3d 1239, 1242 (10th Cir. 2016).

         Both parties previously presented legal and factual arguments on the issues again raised by Brooks. It should come as no surprise that the court believes that the briefing, argument, and decision on those issues in relation to the prior motion and memorandum decision and order is ...

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