United States District Court, E.D. California
PREMIER POOLS MANAGEMENT CORP., a Nevada corporation, Plaintiff,
COLONY INSURANCE COMPANY, a Virginia corporation, Defendant.
ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT
JOHN A. MENDEZ, District Judge.
This matter is before the Court on Plaintiff Premier Pools Management Corp.'s ("Premier Pools") Motion for Partial Summary Judgment (Doc. #12) and Defendant Colony Insurance Company's ("Colony") Motion for Summary Judgment (Doc. #14). Colony filed an opposition to Premier Pools' motion (Doc. #13). Premier Pools filed an opposition to Colony's motion and a Reply to its opposition (Doc. #16). Colony replied (Doc. #17) to Premier Pools' opposition. Both parties correctly agree that California law applies to determine whether a duty to defend exists. Cal. Civ. Code § 1646; Frontier Oil Corp. v. RLI Ins. Co. , 153 Cal.App.4th 1436, 1448 (2007).
I. FACTUAL AND PROCEDURAL BACKGROUND
The First Amended Complaint (Doc. #8) ("FAC") states a sole cause of action against Colony for declaratory relief regarding Colony's alleged breach of its duty to defend Premier Pools. In the FAC, Premier Pools states that it was sued by Premier Pools, Inc. ("PPI") in another action, Premier Pools, Inc. v. Premier Pools Management Corp., dba Premier Pools and Spas, Inc., et al. ("PPI Action"), and, after being notified, Colony refused to observe its duty to defend Premier Pools in the PPI Action.
Premier Pools is a corporation organized under the laws of the State of Nevada. Colony Resp. to Premier Pools' Statement of Undisputed Facts (Doc. #13-1) #1. Colony is a Virginia corporation. Id . #2. Colony issued an insurance policy effective November 8, 2010; the policy was later renewed with all relevant terms identical in both policies (collectively "the Policies"), thereby extending the continuous coverage under the Policies through November 8, 2012. Id . 3-4. The Declarations Certificate lists "DP Aquatics Inc. dba Premier Pools Spas & Patio" ("DP Aquatics") as the insured entity under the Policies. Porter Decl. (Doc. #12-3) ¶¶ 3-4, Exh. 1-2. (Doc. #12-4 & 12-5). The application submitted for the Policies listed DP Aquatics as the applicant. Porter Decl. ¶ 5, Exh. 9 (Doc. #12-12). It is undisputed that DP Aquatics is a corporation organized under the laws of the State of California. Premier Pools' Response to Colony's Statement of Facts (Doc. #16-1) #24.
Colony had previously defended Premier Pools in another matter, Davis v. Premier Pool and Spas, Gregg Gray, and Premier Pools Management Inc. ("Davis Suit"), even though DP Aquatics was not named as a defendant. Colony's Resp. to Premier Pools' Statement of Undisputed Facts (Doc. #13-1) #7-8. In the PPI Action, PPI accuses Premier Pools of improperly using its trademark and name among other claims. Resp. to SUF (Doc. #16-1) #2. On March 1, 2013, about eight months after the PPI Action was filed and four months prior to the commencement of trial, Premier Pools provided notice to Colony of the suit and requested defense under the terms of the Policies. Id . #26. By letter dated March 28, 2013, Colony notified Premier Pools that it was denying coverage and defense of the PPI Action. Id . #27. After submitting proof of a name change request, on September 19, 2013, the named insured in the Policies was changed to "DP Aquatics Inc./Premier Pools Management Company dba: Premier Pools and Spas." Id . #30-33.
Plaintiff brings the present motion seeking a declaratory judgment that Colony owed Premier Pools a defense in the PPI Action and is required to pay all reasonable defense expenses. Premier Pools MSJ at p. 25. Colony brings its own motion seeking judgment as a matter of law in its favor on the grounds that Premier Pools is not an insured under the Policies, and that even if it was, the claims in the PPI Action do not fall within the Policies' coverage for "personal and advertising injury" as alleged by Premier Pools and that any alleged coverage is specifically excluded by the terms of the Policies. Colony MSJ at p. 1.
A. Legal Standard
"An insurer has a very broad duty to defend its insured under California law." Anthem Electronics, Inc. v. P. Employers Ins. Co. , 302 F.3d 1049, 1054-55 (9th Cir. 2002). The California Supreme Court has stated that an insurer must defend an insured if the underlying suit even " potentially " seeks damages within the coverage of the policy at issue. Horace Mann Ins. Co. v. Barbara B. , 4 Cal.4th 1076, 1081 (1993) (citing Gray v. Zurich Ins. Co. , 65 Cal.2d 263 (1966)). "The determination whether the insurer owes a duty to defend usually is made in the first instance by comparing the allegations of the complaint with the terms of the policy." Id.
B. Judicial Notice
Colony requests judicial notice (Doc. #14-2) of two facts, and Premier Pools opposes the request (Doc. #16-4). Colony desires the Court to take notice that Premier Pools is a Nevada corporation and DP Aquatics is a California corporation. Because these facts are undisputed in this case, the Court need not and does not grant the formal request for judicial notice presented by Colony. Premier Pools' Resp. to Colony's Statement of Facts (Doc. #16-1) #1, #24.
C. Evidentiary Objections
Colony filed Objections (Doc. #13-2) to the declaration of Paul Porter (Doc. #12-3), and Premier Pools responded (Doc. #16-3). The Court hereby sustains the first two objections insofar as they relate to Porter's interpretation of the Policies. The Court relies on the Policies themselves to determine whether Premier Pools was an insured under them, rather than conclusory statements made in a declaration. The Court overrules the third objection. The payment ...