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Secura Insurance v. Salls

United States District Court, D. Colorado

October 22, 2018

SECURA INSURANCE, Plaintiff,
v.
JAMES SALLS, and CODY SLAUGH, Defendants. and JAMES SALLS, Plaintiff,
v.
SECURA INSURANCE, Third-Party Defendant

          OPINION AND ORDER DENYING MOTION TO REMAND AND GRANTING MOTION TO DISMISS

          MARCIA S. KRIEGER, CHIEF UNITED STATES DISTRICT JUDGE

         THESE MATTERS come before the Court pursuant to Mr. Salls' Motion to Remand (#36) in the -370 case, Secura Insurance's (“Secura”) response (# 37), and Mr. Salls' reply (#39); Mr. Salls' Motion to Dismiss (# 20) in the -1825 case, Secura's response (# 30), and Mr. Salls' reply (# 33); Secura's Motion for Summary Judgment (# 21) in the -1825 case, Mr. Salls' response (# 32), and Secura's reply (# 36); and Secura's Motion to Amend the Complaint (# 34) in the -1825 case, Mr. Salls' response (# 37), and Secura's reply (# 38).

         FACTS

         A. Procedural History

         Both captioned cases arise from the same underlying event. On May 6, 2016, Mr. Slaugh was a spectator at the Western Slope Motor Sports Festival (“the Festival”) in Grand Junction, Colorado. During a “mud racing event, ” a piece of a competitor James Salls' vehicle became dislodged and airborne. It struck Mr. Slaugh in the arm, causing injury. Thereafter, Mr. Slaugh commenced an action in the Colorado District Court for Mesa County, asserting claims sounding in statutory premises liability against the Festival and common-law negligence against Mr. Salls. The Festival cross-claimed against Mr. Salls, invoking a contractual agreement by which Mr. Salls promised to indemnify the Festival against losses that resulted from Mr. Salls' participation in the event.

         Mr. Salls contacted Secura, the Festival's insurer, claiming that he should be treated as an additional insured under the Festival's policy and demanding that Secura provide him a defense and indemnification in Mr. Slaugh's suit against him. Secura refused. Mr. Salls then moved in the Mesa County action to add Secura as a third-party defendant to assert claims for breach of insurance contract, among others.

         In the meantime, Secura commenced Civil Action 17-cv-1825 in this Court, seeking a declaration that its policy with the Festival did not cover claims against Mr. Salls (“the declaratory judgment action”).

         The Mesa County court eventually granted Ms. Salls' motion to assert third-party claims against Secura. Secura then moved in the Mesa County case to sever Mr. Salls' claims against it - i.e. the claims seeking coverage under the Festival's policy - from Mr. Slaugh's negligence claims. On January 30, 2018, the Mesa County court granted the motion, severing the third-party claims. Because severance of the third-party claim removed the non-diverse parties (Mr. Slaugh and the Festival) from the action, Secura then removed the claims against it to this Court, citing subject-matter jurisdiction premised upon diversity. That case became Civil Action 18-cv-370 (“the removed action”) in this Court.

         B. The Instant Motions

         In the removed action, Mr. Salls promptly moved (# 36) to remand the claims back to the Mesa County court, arguing: (i) the Notice of Removal was untimely, as it was the commencement of the third-party claims against Secura, and not their severance, that triggered the 30-day deadline to remove; and (ii) that both the removed action and the declaratory action involve issues that were being considered by the Mesa County court and that this Court “should not entertain” the actions in deference to the Mesa County action.

         Simultaneously, in the declaratory judgment action, Mr. Salls moved (# 20) to dismiss Secura's claim, arguing: (i) that the claims regarding coverage would be resolved in the Mesa County action, (ii) that the Court should exercise its discretion to decline to hear Secura's declaratory judgment claim in deference to the Mesa County proceeding; and (iii) in the alternative, the Court should compel Secura to tender a defense to Mr. Salls and stay the declaratory proceeding until the Mesa County action concluded.

         Also in the declaratory judgment action, Secura moves (# 21) for summary judgment, seeking a determination that, as a matter of law, Mr. Salls is not an insured under the Festival's policy. Secura has also moved (# 34) in the declaratory judgment action to amend its Complaint to clarify an alternative basis upon which Secura disputed coverage as to Mr. Salls.

         ANALYSIS

         A. ...


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