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Kerns v. National Union Fire Insurance Co. of Pittsburgh, PA

United States District Court, D. Colorado

September 13, 2017

TAMARA A. KERNS, and DOROTHY J. CZAJKOWSKI, as co-guardians for John M. Czajkowski and Dorothy J. Czajkowski, Plaintiffs,


          Marcia S. Krieger, Chief United States District Judge.

         THIS MATTER comes before the Court pursuant to the Defendant's (“National”) Motion for Summary Judgment (# 29), the Plaintiffs' (“the Czajkowskis”) response (# 32), and National's reply (# 35).


         This action is for recovery of insurance benefits following an automobile accident. The Court exercises jurisdiction pursuant to 28 U.S.C. 1332.


         The Court briefly reviews the salient facts here and elaborates as necessary in its analysis.

         On October 20, 2013, John and Dorothy Czajkowski's vehicle was rear-ended by a 2006 Jeep Liberty driven by 17-year old, intoxicated Thomas Huntley. The accident caused both of the Czajkowskis to suffer severe and permanent physical injuries. The Czajkowskis commenced suit against Mr. Huntley in state court, and ultimately obtained a jury verdict in their favor of approximately $4.84 million. It is unclear whether and to what extent Mr. Huntley was insured, but it is fair to assume that his coverage encompassed only a fraction of the judgment against him.

         The Czajkowskis then turned to a new party, the Larry H. Miller Group (“Miller”), in an attempt to recover on the judgment. Miller, an auto dealer, purchased the 2006 Jeep Liberty from a private seller on or about October 12, 2013, approximately a week before the accident. Although the particulars of the subsequent transaction are somewhat disputed, it appears that on October 15, 2013, Miller sold the Jeep to David Huntley, Thomas Huntley's father. Contending that the sale to David Huntley was never fully completed, the Czajkowskis contend that Miller remained the legal owner of the vehicle at the time of the accident. Thus, they sought payment of the judgment from Miller's insurers. Zurich, Miller's primary insurer, tendered its full policy limits of $50, 000. The Czajkowskis then turned to Defendant National, Miller's excess insurer. Proceeding by Writ of Garnishment (# 1-3), the Czajkowskis sought to execute the judgment against Miller's excess policy with National. National answered the writ by denying that the Miller policy constitutes property belonging to Mr. Huntley.

         National now moves for summary judgment, seeking a finding that the policy issued to Miller does not insure losses caused by Mr. Huntley or the accident at issue. National raises three primary arguments in support of its motion: (i) its policy insures only those drivers who operate the vehicle with Miller's permission, and Miller's sale of the vehicle to David Huntley terminated Miller's ability to grant permission to anyone to use the vehicle; (ii) the judgment amount does not satisfy the $5 million threshold for triggering National's coverage; and (iii) even if the accident was otherwise covered by National's policy, Mr. Huntley's criminal conduct in driving while intoxicated triggers a policy exclusion that negates any coverage.


         A. Standard of review

         This case is in a slightly unorthodox procedural posture, as the Czajkowskis are proceeding by Writ of Garnishment against National, rather than through the more traditional process of filing a Complaint asserting claims. Enforcement of a money judgment is governed by the procedure of the state where the enforcing court is located. Fed.R.Civ.P. 69 (a)(1). Because this action is brought in the District of Colorado, Colorado law applies. According to Colorado law, summary judgment is an appropriate means for determining whether there is a colorable basis for the garnishor to reach assets in the possession of the garnishee. See e.g. Mountain States Mut. Cas. Co. v. Roinestad, 296 P.3d 1020, 1023 (Colo. 2013).

         Treating this action as an independent action, the Court applies the Federal Rules of Civil Procedure in its resolution. Rule 56 facilitates the entry of a final determination there is not genuine dispute of material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P 56(a); White v. York Intern. Corp., 45 F.3d 357, 360 (10th Cir. 1995). Substantive law governs which facts are material and what issues must be determined. As noted below, there are no material facts in dispute and the parties present only an issue of law.

         B. ...

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