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Pacific Specialty Insurance Co. v. Poirier

United States District Court, D. Colorado

September 30, 2019

PACIFIC SPECIALTY INSURANCE COMPANY, a California corporation, Plaintiff,
v.
SAVANNA POIRIER and JASON MENDOZA, Defendants.

          ORDER

          PHILIP A. BRIMMER CHIEF UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Plaintiff’s Motion for Summary Judgment on the Duty to Defend [Docket No. 26] and Defendants Poirier’s and Mendoza’s Motion for Partial Summary Judgment on the Issue of Coverage [Docket No. 46]. The Court has jurisdiction pursuant to 28 U.S.C. § 1332.

         I. BACKGROUND

         This case arises out of an ATV accident.[1] On the evening of June 25, 2016, defendant Jason Mendoza (“Mendoza”), defendant Savanna Poirier (“Poirier”), and two other individuals went camping in the Roosevelt National Forest in Bellevue, Colorado. Docket No. 51 at 9, ¶ 5; Docket No. 46 at 1-2. Mendoza’s plan was to camp for just one night. Docket No. 51 at 10, ¶ 10. The campsite was on a short spur off Pingree Park Road and was not in a campground. Id. ¶ 14. At some point between 1:00 a.m. and 2:00 a.m. on June 26, the four campers decided to go on a night ride on an ATV owned by Mendoza. Id. at 11, ¶ 17; Docket No. 46 at 3, ¶ 4. At approximately mile marker 2 on Pingree Park Road, the four campers drove off the edge of the road and fell about twenty yards over a cliff. Docket No. 51 at 9-10, ¶ 2, 6. The accident occurred at least two miles from the campsite. Id. at 11, ¶ 20.

         On March 14, 2017, Poirier filed a civil complaint (the “state court complaint”) against Mendoza in the District Court for Larimer County, Colorado. Docket No. 26 at 5, ¶ 3. As relevant here, the state court complaint alleges the following:

2. Upon information and belief, at all times material hereto, [Mendoza] was a resident of the City of Loveland and County of Larimer, State of Colorado.
5. On June 26, 2016, at approximately 2:08 a.m., [Poirier] was a passenger on a Kawasaki ATV (hereinafter “the ATV”) traveling on Pingree Park Road near mile marker 2, in Bellvue, Colorado.
6. At the time of the crash, [Mendoza] was the owner and operator of the ATV.
7. At the time of the accident, [Mendoza] unlawfully drove the ATV in a careless and imprudent manner, without due regard for the width, grade, curves, corners, traffic, and use of the streets or highways causing him to lose control, leave the road, and roll the ATV and its occupants down a steep hill.

Id.[2] In the state court complaint, Poirier brought claims against Mendoza for negligence and negligence per se. Docket No. 26-2 at 2-3.

         At the time of the accident, plaintiff Pacific Specialty Insurance Company (“Pacific”) had issued a homeowner’s insurance policy (the “Policy”) to Mendoza, insuring the address of 615 Suntrail Drive, Loveland, Colorado. Docket No. 26 at 3, ¶ 1.[3] The Policy has a personal liability limit of $300, 000. Id. As relevant here, the Policy provides, under a section titled “Exclusions, ” that coverage for personal liability and medical payments to others does not apply to “bodily injury or property damage . . . [a]rising out of the ownership, maintenance, use, loading, or unloading of motor vehicles or all other motorized land conveyances.” Id. at 3-4, ¶ 2 (citing Docket No. 26-1 at 13, ¶ II.1.g(1)). The Policy further provides that this exclusion “does not apply to . . . a motorized land conveyance designed for recreational use off public roads not subject to motor vehicle registration and . . . [o]wned by an insured, but only on an insured location.” Id. at 4, ¶ 2 (citing Docket No. 26-1 at 13, ¶ II.1.g(2)(b)). One of the Policy’s definitions for “insured location” is “[a]ny part of a premises not owned by an insured and where an insured is temporarily residing.” Id. at 4-5, ¶ 2 (citing Docket No. 26-1 at 8, ¶ 5(d)).

         On April 13, 2018, Pacific initiated this lawsuit. Docket No. 1. Pacific seeks a declaratory judgment that (1) “the accident location did not occur on an insured location;” (2) Mendoza “was not temporarily residing at the camp site;” (3) “bodily injury arising out of the ownership or use of [] Mendoza’s ATV is excluded” under the Policy; (4) “bodily injury arising out of the violation of a criminal law or local or municipal ordinance, whether or not an insured is charged or convicted, is excluded” under the Policy; (5) “there is no coverage under the Policy for the accident;” (6) Pacific “had no duty to defend” Mendoza against Poirier’s lawsuit, and (7) Mendoza made false statements on his application entitling Pacific to cancel or rescind the Policy and that Pacific has no duty to perform any obligation under the policy. Docket No. 59 at 9-10, ¶ 40. On August 3, 2018, Mendoza and Poirer asserted counterclaims against Pacific for (1) bad faith and (2) breach of contract. Docket No. 19 at 8-9, ¶¶ 19-26. Mendoza and Poirier allege that Pacific “wrongfully denied either providing a defense to or obligating itself to indemnify [Mendoza] for any judgment.” Docket No. 19 at 6, ¶ 8. Mendoza and Poirier further allege that they entered into an agreement (the “Nunn agreement”) based on the Colorado Supreme Court’s decision in Nunn v. Mid-Century Ins. Co., 244 P.3d 116 (Colo. 2010). Id. at 7-8, ¶¶ 13-17. In the Nunn agreement, Mendoza agreed to prosecute claims against Pacific and assign all proceeds recovered to Poirier in exchange for an agreement from Poirier not to execute on the judgment except against Pacific, allowing judgment to be entered against Mendoza in the amount of $950, 000. Id.

         On January 31, 2019, Pacific filed this motion for partial summary judgment on its claim that it had no duty to defend Mendoza under the policy. Docket No. 26. On July 12, 2019, defendants filed a motion for partial summary judgment on the duty to defend. Docket No. 46. On July 17, 2019, Pacific filed a motion for partial summary judgment on the duty to indemnify. Docket No. 49. On August 12, 2019, Pacific filed an amended complaint, adding claims for recission and breach of contract against Mendoza. Docket No. 59 at 10-12, ¶¶ 43-57.

         II. ...


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