United States District Court, N.D. California, San Jose Division
ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY
JUDGMENT RE: DKT. NO. 49
H. KOH United States District Judge.
Evanston Insurance Company (formerly, Markel Service
Incorporated) (“Plaintiff) brings this insurance
coverage action against Defendant Atain Specialty Insurance
Company (“Defendant”) seeking declaratory relief.
ECF No. 55 (Second Amended Complaint, or “SAC”).
Before the Court is Defendant's Motion for Summary
Judgment. ECF No. 49 (“Mot.”). Having considered
the parties' submissions, the relevant law, and the
record in this case, the Court GRANTS Defendant's Motion
for Summary Judgment.
and Defendant agree that the facts in the instant suit are
undisputed. Plaintiff and Defendant both insure Norcal Motor
Escort, LLC (“Norcal”), a motorcycle escort
business. SAC ¶ 7. Specifically, Norcal has an
Automobile Insurance Policy with Plaintiff, ECF No. 49-2 at
20-64 (“Pl. Auto Policy”), and Norcal has a
Commercial General Liability Coverage Policy with Defendant
(“Defendant's CGL policy”), ECF No. 49-1 (Def
instant dispute arises out of an automobile collision that
involved Norcal's employees. SAC ¶ 3. On November 2,
2012, Norcal employees Mario Hernandez
(“Hernandez”) and Robert Keyarts
(“Keyarts”) were serving as motorcycle escorts
for a funeral procession in San Jose, California.
Id. ¶¶ 2-3. Hernandez and Keyarts were
both acting within the scope of their employment for Norcal.
ECF No. 49-2 at 5-13 (“Pl. Admissions”).
Hernandez approached an intersection and began directing
traffic and pedestrians through the intersection. SAC ¶
3. A pedestrian, Brittany Cohen (“Cohen”),
entered the intersection on a bicycle. Id. Keyarts,
rode a motorcycle from the back of the funeral procession
towards the intersection and attempted to brake, but
“fell and slid into Cohen and Hernandez.”
October 31, 2014, Cohen sued Norcal, Hernandez, and Keyarts
for negligence in the Superior Court of Santa Clara County
(the “underlying action”). ECF No. 49-3 Ex. A
(“State Court Compl.”). In the underlying action,
Cohen's State Court Complaint asserted causes of action
for motor vehicle negligence and general negligence. With
respect to Hernandez, Cohen alleged the following facts:
[Hernandez] was directing traffic and pedestrians as an
escort for a funeral procession. He directed pedestrians,
including [Cohen], to cross 10th Street from west to east,
while the funeral procession was stopped facing southbound.
The procession was negligently allowed to stop with vehicles
in the intersection. After [Hernandez] initially directed
pedestrians to stop and wait on the west side of 10th Street,
he then directed them to proceed to cross eastbound in the
marked crosswalk, while the funeral procession remained
stopped. The pedestrians, including [Cohen], were crossing
following the instruction of Defendant, who appeared to be a
police officer. Plaintiff was walking her bicycle and had
cleared the closest southbound lane of traffic. The next lane
had no vehicles in it. As she crossed, she was struck by a
motorcycle that was part of the funeral escort, driven by
Defendant Robert Keyarts. Unbeknownst to Plaintiff, Keyarts
had left the rear of the procession and was driving
southbound in the next lane. He approached the intersection
without warning. Defendant Hernandez did not warn [Cohen] or
other pedestrians of the approaching motorcycle driven by
Robert Keyarts. He did not warn Robert Keyarts of the
pedestrians he had directed to cross 10th Street.
Court Compl. at 8. With respect to Keyarts, Cohen alleged the
[Keyarts] was working as an escort for a funeral procession.
He negligently operated the motorcycle he was riding,
negligently failed to communicate with Defendant Hernandez as
to pedestrians in the area, and failed to warn [Cohen] and
other pedestrians that [Keyarts] was approaching the
intersection, while the funeral procession vehicles were
Id. at 9.
24, 2015, pursuant to Defendant's CGL policy, Plaintiff
tendered to Defendant the defense and indemnity of Norcal and
Hernandez. SAC ¶ 7. On August 25, 2015, Defendant
declined Plaintiffs tender, refused to provide a defense or
indemnity to Norcal, and argued that the funeral procession
collision was excluded from Defendant's CGL policy under
an “Auto Exclusion.” Id. ¶ 8.
Defendant's denial of the tender of defense and
indemnity, Plaintiff “provided a defense and
indemnified [Norcal] by paying $105, 000.00 to Cohen for
bodily injury damages” under the terms of Norcal's
Automobile Insurance Policy with Plaintiff. Id.
¶ 10. Plaintiff asserts in its opposition to the instant
motion that it spent $28, 531.77 on the defense of the
underlying action. ECF No. 50 (Opposition to the instant
13, 2016, Plaintiff sued Defendant in the Superior Court for
Santa Clara County. Plaintiffs original complaint alleged
causes of action for subrogation and indebtedness and
demanded monetary damages in the sum of $105, 000.
See ECF No. 1 at 7-8.
29, 2016, Defendant filed a notice of removal and removed
this action to the United States District Court for the
Northern District of California on the basis of diversity
jurisdiction. ECF No. 1 at 1.
August 25, 2016, Plaintiff filed a motion to remand this
action to state court. ECF No. 15. On September 8, 2016,
Defendant filed an opposition to Plaintiffs motion to remand.
ECF No. 18. Plaintiff did not file a reply.
August 29, 2016, Defendant filed a motion to dismiss
Plaintiffs Complaint under Federal Rule of Civil Procedure
12(b)(6). ECF No. 17. On October 4, 2016, Plaintiff filed an
opposition to Defendant's motion to dismiss, ECF No. 23,
and on October 11, 2016, Defendant filed a reply, ECF No. 31.
filed a First Amended Complaint (“FAC”) on
October 12, 2016. ECF No. 34. Plaintiffs FAC stated that
“[t]his is an action for declaratory judgment pursuant
to the Federal Declaratory Judgment Act, 28 U.S.C. §
2201.” Id. at 1. Plaintiff alleged four causes
of action: (1) duty to defend, (2) duty to indemnify, (3)
declaratory judgment that defendant owed Norcal a duty to
defend, and (4) declaratory judgment that Defendant owed
Norcal a duty to indemnify. Id. at ¶¶
October 12, 2016, in light of Plaintiff s FAC, the Court
denied Defendant's motion to dismiss the original
complaint as moot. ECF No. 33. On October 25, 2016, Defendant
answered the FAC. ECF No. 36.
November 10, 2016, the Court denied Plaintiffs motion to
remand. ECF No. 37.
February 22, 2017, Defendant filed the instant motion for
summary judgment. ECF No. 49 (“Mot.”). On March
8, 2017, Plaintiffs filed an opposition in which Plaintiff
requested summary judgment pursuant to Federal Rule of Civil
Procedure 56(f)(1). ECF No. 50 (“Opp'n”). On
March 15, 2017, Defendant filed a reply. ECF No. 53
March 20, 2017, the Court granted the parties'
stipulation to file a second amended complaint
(“SAC”) that changed the name of Markel Service
Incorporated to Evanston Insurance Company because of a
recent merger. ECF No. 54. On March 21, 2017, Plaintiff filed
an SAC with Plaintiffs name changed to Evanston Insurance
Company. See SAC.
March 21, 2017, Plaintiff filed a Supplemental Brief in Reply
to Defendant's Opposition to Plaintiffs F.R.C.P. 56(f)(1)
Request for Summary Judgment. ECF No. 56 (“Pl. Supp.
Brief). On March 24, 2017, Defendant filed an Administrative
Motion to Strike Plaintiffs Supplemental Brief. ECF No. 57
(“Strike Mot.”). On March 29, 2017, Plaintiff
filed an opposition to the administrative motion to strike.
ECF No. 60 (“Strike Opp'n”).
judgment is proper where the pleadings, discovery and
affidavits demonstrate that there is “no genuine issue
as to any material fact and that the moving party is entitled
to judgment as a matter of law.” Fed.R.Civ.P. 56(c).
Material facts are those which may affect the outcome of the
case. Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986). A dispute as to a material fact is
genuine if there is sufficient evidence for a reasonable jury
to return a verdict for the nonmoving party. Id.
party moving for summary judgment bears the initial burden of
identifying those portions of the pleadings, discovery and
affidavits which demonstrate the absence of a genuine issue
of material fact. Celotex Corp. v. Cattrett, 477
U.S. 317, 323 (1986). Where the moving party will have the
burden of proof on an issue at trial, it must affirmatively
demonstrate that no reasonable trier of fact could find other
than for the moving party. However, on an issue for which the
opposing party will have the burden of proof at trial, the
moving party need only point out “that there is an
absence of evidence to support the nonmoving party's
case.” Id. at 325.
the moving party meets its initial burden, the nonmoving
party must go beyond the pleadings and, by its own affidavits
or discovery, “set forth specific facts showing that
there is a genuine issue for trial.” Fed.R.Civ.P.
56(e). The court is only concerned with disputes over
material facts and “factual disputes that are
irrelevant or unnecessary will not be counted.”
Anderson, 477 U.S. at 248. It is not the task of the
court to scour the record in search of a genuine issue of
triable fact. Keenan v. Allen, 91 F.3d 1275, 1279
(9th Cir. 1996). The nonmoving party has the burden of
identifying, with reasonable particularity, the evidence that
precludes summary judgment. Id. If the nonmoving
party fails to make this showing, “the moving party is
entitled to judgment as a matter of law.” Celotex
Corp., 477 U.S. at 323.
summary judgment stage, the court must view the evidence in
the light most favorable to the nonmoving party: if evidence
produced by the moving party conflicts with evidence produced
by the nonmoving party, the judge must assume the truth of
the evidence set forth by the nonmoving party with respect to
that fact. See Leslie v. Grupo ICA, 198 F.3d 1152,
1158 (9th Cir. 1999).
State Law in Diversity Cases
determining the law of the state for purposes of diversity, a
federal court is bound by the decisions of the highest state
court.” Albano v. Shea Homes Ltd. P'ship,634 F.3d 524, 530 (9th Cir. 2011). If the state's highest
court has not decided an issue, it is the responsibility of
the federal courts sitting in diversity to predict “how
the state high court would resolve it.” Id; Air-Sea
Forwarders, Inc. v. Air Asia Co., Ltd.,880 F.2d 176,
186 (9th Cir. 1989) (internal quotation marks omitted). In
the absence of clear authority, the Court looks for guidance
from decisions of the state appellate courts and other