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Travelers Indemnity Co. v. Arena Group 2000

November 20, 2007

THE TRAVELERS INDEMNITY COMPANY, SUCCESSOR IN INTEREST BY MERGER TO GULF INSURANCE COMPANY AND GULF UNDERWRITERS INSURANCE COMPANY, PLAINTIFFS,
v.
ARENA GROUP 2000, L.P., D/B/A SAN DIEGO SPORTS ARENA CO., D/B/A SAN DIEGO ENTERTAINMENT, INC., AND THE CITY OF SAN DIEGO, DEFENDANTS.



The opinion of the court was delivered by: Honorable Janis L. Sammartino United States District Judge

ORDER (1) DENYING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT, (2) GRANTING DEFENDANT ARENA GROUP'S MOTION FOR SUMMARY JUDGMENT, and (3) GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION TO STRIKE (Doc. Nos. 189, 195, 220)

Presently before the Court are cross-motions for summary judgment.*fn1 Arena Group 2000, L.P. ("Arena Group" or "defendant") moves for summary judgment as to Count IV of the complaint, i.e., that Gulf Underwriters Insurance Company has no obligation to defend or indemnify under its commercial excess liability policy ("umbrella policy"), based on the "Designated Premises or Project Limitation of Coverage Endorsement" ("DPPE"). (Doc. No. 189.) Plaintiffs The Travelers Indemnity Company, successor in interest by merger to Gulf Insurance Company ("Gulf Insurance") and Gulf Underwriters Insurance Company ("Gulf Underwriters") (collectively, "Gulf" or "plaintiffs") move for summary judgment on their complaint, i.e., that they are entitled to a declaration that their commercial general liability policy ("primary policy"), as well as their umbrella policy, does not cover certain claims asserted against Arena Group, and, therefore, that plaintiffs are entitled to reimbursement of sums paid for those claims. (Doc. No. 195.) Plaintiffs subsequently moved to strike three declarations that defendant submitted with its opposition to plaintiffs' motion for summary judgment. (Doc. No. 220.)

FACTUAL BACKGROUND

Since 1993, Arena Group has operated the San Diego Sports Arena at 3500 Sports Arena Boulevard by a lease agreement with the City of San Diego. (Ventrell Decla., Exhibit 2, at 00043-66.) Beginning in 1996, Arena Group applied for and purchased primary and umbrella (a/k/a "excess") insurance policies from Gulf.*fn2 (Id., Exhibit 3, at 00073.) In December 1999, Arena Group acquired the leasing rights to operate and maintain the Sports Arena Square ("Shopping Center") on the 3340-60 blocks of Sports Arena Boulevard. (McKenna Decla. ISO Pls. Motion, Exhibit 2, at 00039.) The Shopping Center is east of the Sports Arena. (Hilding Decla. ISO Motion, Exhibit 8, at 00221.) Arena Group applied for general liability coverage, but not excess liability coverage, for the Shopping Center. (Ventrell Decla., Exhibit 31, at 00405.) Gulf provided general liability coverage for the Shopping Center from October 1, 2001 to February 21, 2002; at all other times, Arena Group obtained coverage from the Shopping Center from other carriers. (Id., Exhibits 35-36.)

On February 22, 2003, Mr. Daniel Doll and Ms. Shelby Olerich-Snow were walking from the Black Angus Restaurant in the Shopping Center along a walkway toward the Sports Arena. (Hilding Decla. ISO Motion, Exhibit 7, at 00202-03.) As Mr. Doll and Ms. Snow walked under a marquee sign on the Shopping Center property, the two-ton sign collapsed, rendering Mr. Doll a paraplegic. (Id. at 00203.)

At the time of the underlying accident, Gulf's 2002-03 policies were in effect. Arena Group used the same application for both policies. (Ventrell Decla., Exhibit 17, at 00144.) In the Applicant Information section, the name of the insured is "San Diego Sports Arena" and the first line of its mailing address is "DBA: San Diego Sports Arena, 3500 Sports Arena Blvd." (Id.) The primary policy's schedule of named insureds lists "Arena Group 2000, LLC, DBA: San Diego Sports Arena; DBA: San Diego Entertainment, LLC." (Id., Exhibit 25, at 00206.) The policy lists "Sports Arena" in the business description. (Id. at 00205, 00207, 00218.) On the declaration list of all premises owned, rented, or occupied by the insured, the only premises identified is "3500 Sports Arena Boulevard, San Diego, CA 92110-000." (Id. at 00208.) Endorsements with exclusions for particular bodily injuries contain "Sports Arena" in the description of operations. (Id. at 00210-11.)

The umbrella policy applies "anywhere in the world." (Hilding Decla. ISO Motion, Exhibit 1, at 00044.) "Arena Group 2000 LLC*fn3 " is listed as the named insured, and its mailing address is "3500 Sports Arena Blvd." (Id. at 00001.) The umbrella policy's definition of "advertising injury" is limited to "'offenses' . . . committed in the course of advertising [the insured's] goods or products," and the definition of "personal injury" is limited to "'offenses' [that] arise out of the conduct of [the insured's] business." (Id. at 00052.) The definition of "bodily injury" is not so limited. (Id.) The DPPE restricts coverage to bodily injury et al. "arising out of . . . [t]he project shown in the Schedule," where the only project listed is "San Diego Sports Arena." (Id., at 00038.) Although the DPPE's text lists October 1, 2002 as its effective date (id.), Ms. Pamela Asbury, Gulf's umbrella underwriter, testified that the correct effective date should have been July 31, 2003.*fn4 (Id., Exhibit 6, at 00175.) After Ms. Asbury's deposition, plaintiffs abandoned the DPPE as a grounds for denying coverage under the umbrella policy. (Pls. Memo. ISO Motion, at 6 n.7.)

On February 23, 2004, Mr. Doll filed a complaint for personal injuries and damages against Arena Group, inter alia. (Hilding Decla. ISO Motion, Exhibit 7.) Mr. Doll twice amended the complaint. (Pls. Memo. ISO Motion, at 8-9.) In the second amended complaint ("SAC"), dated June 13, 2005, Mr. Doll alleged a single cause of action against Arena Group for premises liability. The SAC alleged that Arena Group "leased and operated the Sports Arena and the adjacent subject property where the sign structure . . . w[as] located. At all times relevant, [Arena Group] invited and encouraged patrons of the Sports Arena to use, occupy and park at the subject property." (Hilding Decla. ISO Motion, Exhibit 8 ¶ 20.) According to the SAC, Arena Group "had a duty to appropriately maintain and inspect their premises including the sign structure" and negligently breached that duty "by allowing said sign structure to exist in a dangerous and defective condition." (Id. ¶ 23; see also ¶ 29 (alleging that Arena Group and other defendants "as the lessees and operators of the premises as herein above alleged, had a continuing duty to maintain, repair, and/or remove said sign structure[.]") The SAC further alleges that Mr. Doll suffered injury and damages as the "direct and proximate result of [defendants'] negligence[.]" (Id. ¶ 48.)

On December 1, 2005, the Superior Court entered an Order granting certain defendants' (including Arena Group) motion for determination of good faith settlement. (Ventrell Decla., Exhibit 44, at 00488-90.) Gulf contributed $7.218 million of a total settlement of $11.21 million.*fn5

(Pls. Memo. ISO Motion, at 11.) Both by prior letter to Arena Group and in the settlement agreement itself, Gulf reserved its rights to litigate its indemnity obligations and to seek reimbursement of the amounts paid in settlement. (Ventrell Decla. Exhibits 42 & 43, at Recital I.)

PROCEDURAL BACKGROUND

On July 18, 2005, plaintiffs initiated the present action for a declaratory judgment that Gulf has no obligation to defend, pay expenses for, or indemnify Arena Group and the City of San Diego in connection with the lawsuits filed by Mr. Doll and Ms. Snow. (Compl. ¶ 1.) Plaintiffs further sought reimbursement of sums paid under Gulf's policies to settle those lawsuits. (Id.)

Prior to the reassignment of this case, Judge Whelan ruled on several motions for summary judgment. On January 12, 2006, Judge Whelan denied plaintiffs' motion for summary judgment on the duty to indemnify, because of disputes of material fact arising before discovery had commenced. (Doc. No. 71.)

On March 10, 2006, Judge Whelan granted in part and denied in part defendants' motion for summary judgment. (Doc. No. 105.) Judge Whelan held that plaintiffs had a duty to provide defendants with a defense in the underlying Superior Court litigation. (Id. at 12-13.) Because of a factual dispute regarding the parties' intent as to the umbrella policy's scope of coverage, Judge Whelan denied summary judgment on plaintiffs' duty to indemnify. (Id. at 17.)

On December 6, 2006, Judge Whelan denied Arena Group's motion for summary judgment on its third-party complaint against Crum & Forster Specialty Insurance Company. (Doc. No. 142.) Specifically, Judge Whelan denied Arena Group's request for a declaration that, as an additional insured, it was not responsible for paying the "Retained Amount" due under Crum & Forster's policy. (Id. at 8.) Judge Whelan further held that payments by Arena Group's other insurers did not satisfy the "Retained Amount." (Id. at 10.) After further finding that doctrines of waiver and estoppel did not preclude Crum & Forster from enforcing the Retained Amount obligation against Arena Group, Judge Whelan granted Crum & Forster's cross-motion for summary judgment on March 8, 2007. (Doc. No. 164.)

On June 19, 2007, Judge Whelan granted the City of San Diego's motion for summary judgment because plaintiffs failed to comply with the requirements of the Federal Tort Claims Act. (Doc. No. 208.)

Defendant filed its present motion for summary judgment on May 31, 2007. (Doc. No. 189.) Plaintiffs filed their present motion for summary judgment the same day. (Doc. No. 195.) The parties filed timely oppositions and replies. Plaintiffs filed their motion to strike on June 29, 2007. (Doc. Nos. 219-20.) Although the matters were initially taken off calendar and under submission, the ...


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