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Fickett Towers, A California Nonprofit Corporation v. Philadelphia Indemnity Insurance Company

September 24, 2012


The opinion of the court was delivered by: Otis D. Wright, II United States District Judge




This action involves an insurance-coverage dispute arising out of Fickett Towers's termination of an employee, Julia Rodriguez, and Rodriguez's subsequent wrongful-termination suit against Fickett. Fickett had an Employment Practices Liability Insurance Policy with Philadelphia Indemnity Insurance Company for two consecutive Policy periods. Under the Policies, Philadelphia would provide coverage for claims both made by an employee and reported to Philadelphia within a particular Policy period.

Julia Rodriguez filed a complaint for wrongful termination during Fickett's second Policy period with Philadelphia, and Fickett immediately reported this claim to Fickett. Philadelphia refused coverage of this claim, contending that Fickett's failure to report a demand letter Rodriguez sent to Fickett during the first Policy period bars coverage for the complaint filed in the second Policy period.

Fickett and Philadelphia both move for summary judgment on the issue whether the demand letter constituted a claim under the Policies that Fickett was required to report during the first Policy period as a precondition to receipt of defense-cost coverage in the wrongful-termination action filed in the second Policy period. For the reasons discussed below, the Court finds that the demand letter was not a claim under the Policy.*fn1


A.The Philadelphia Policies

Fickett Towers is a California non-profit public-benefit corporation in Van Nuys, California.*fn2 Philadelphia issued two successive commercial insurance policies to Fickett containing coverage for (among other things) Employment Practices Liability. The first Policy was effective from April 12, 2010, to April 12, 2011, and the second Policy was effective from April 12, 2011, to April 12, 2012.*fn3 Aside from the Policies' effective dates, the material terms of both are identical.*fn4

Both Policies' Employment Practices Liability Insurance provided coverage for defense costs related to "Claims made against the Insured during the Policy Period (or, if applicable, during the Extension Period) and reported to the Underwriter . . . for an Employment Practices Act."*fn5 The Policies defined a "claim" as "any written demand for monetary or non-monetary relief" or "any judicial, civil, administrative, regulatory, or arbitration proceeding . . . [that] subjects an Insured to a binding adjudication of liability for monetary or non-monetary relief for" an Employment Practices Act.*fn6 An "Employment Practices Act" is defined as (among other things) any actual or alleged wrongful dismissal, discharge, or termination of employment; breach of written or oral employment contract or implied employment contract; violation of employment discrimination laws (including harassment); sexual or workplace harassment of any kind; or employment-related retaliation.*fn7

As a condition precedent to coverage, Fickett was required to give Philadelphia written notice of any "claim" made against Fickett "as soon as practicable" during the Policy period in which the claim was made or, "if applicable, during any Extension Period, but, not later than 60 days after expiration of this Policy or any Extension Period."*fn8 Thus, if an employee made a claim against Fickett during a Policy term, Fickett was required to report that claim to Philadelphia as soon as practicable, but in no event later than 60 days following the expiration of the Policy term in which the claim was made. If Fickett did not report the claim within this time frame, Philadelphia was not required to provide coverage for the claim.

B.The Rodriguez Action

On September 30, 2009, Fickett terminated Julia Rodriguez from her position as a waitress at Fickett Towers.*fn9 On September 21, 2010, Rodriguez filed discrimination complaints with the California Department of Fair Employment and Housing ("DFEH") against Fickett, Hans Mock (Fickett's kitchen manager), Mitch Green (an administrator), and F.E. Dickinson (Fickett's owner).*fn10 Each DFEH complaint indicated that Rodriguez "was sexually harassed, discriminated against and terminated after [she] protested."*fn11 The DFEH closed the case and issued a Notice of Case Closure and Right-To-Sue Notice the same day Rodriguez filed the DFEH complaints.*fn12

On March 9, 2011-one month prior to the expiration of the first Philadelphia Policy period-Rodriguez's attorney, Suzanne Rand-Lewis, sent a demand letter to Fickett regarding Rodriguez. The letter initially identified Julia Rodriguez as Rand-Lewis's client and listed an October 9, 2009 ...

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