United States District Court, E.D. California
ORDER REGARDING DEFENDANT'S MOTION TO TRANSFER
ACTION TO CENTRAL DISTRICT OF CALIFORNIA PURSUANT TO 28
U.S.C. § 1404 (DOC. 5)
BARBARA A. MCAULIFFE, UNITED STATES MAGISTRATE JUDGE.
before the Court is Defendant Maxum Casualty Insurance
Company's (“Maxum” or
“Defendant”) motion to transfer this action to
the Central District of California pursuant to 28 U.S.C.
§ 1404. (Doc. 5). Plaintiff Lexington Insurance Company
(“Lexington” or “Plaintiff”) opposed
the motion on May 26, 2017 (Doc. 9-11), and Maxum replied on
June 2, 2017. (Doc. 12). The Court took the matter under
submission without oral argument pursuant to Local Rule
230(g), and vacated the hearing set for June 9, 2017. Having
considered the moving, opposition and reply papers,
Maxum's motion to transfer this action to the Central
District of California shall be GRANTED.
Lexington Insurance Company (“Plaintiff”) filed
this action on February 14, 2017, in the Fresno County
Superior Court against Defendant Maxum. On March 22, 2017,
Maxum filed an answer in the Fresno County Superior Court.
Thereafter, on March 23, 2017, Maxum removed the action to
this Court on the basis of diversity. (Doc. 1).
Lexington, an excess liability insurer, is incorporated in
Delaware with its principal place of business in Boston,
Massachusetts. Defendant Maxum Casualty Insurance Company, a
primary insurer, is a Connecticut Corporation with its
principal place of business in Atlanta, Georgia. (Doc. 1).
This insurance coverage case claims that primary insurer
Maxum unreasonably failed to settle an underlying wrongful
death case-Clark v. Castillo (“Clark
Case”)-which involved a fatal motor vehicle collision
occurring in Riverside County, California. Plaintiff
Lexington alleges that Defendant's failure to settle that
case within its policy limits resulted in a jury award in
excess of the primary policy limits.
parties do not dispute that, based on the current allegations
of Plaintiff's Complaint, no party or fact witness
resides in the Eastern District of California, and no
relevant events occurred in this district.
complaint, Plaintiff alleges that Maxum accepted the defense
of its insured Omar Castillo (“Castillo”) in the
Clark v. Castillo action in Riverside County
Superior Court, case no. INC 1204305. Plaintiff's
Complaint (“Compl.”), ¶ 9, 13. The
underlying action was brought by the family and heirs of
Ernest Clark who was struck and killed by a tractor trailer
operated by Castillo on March 13, 2012 while Castillo was
hauling a trailer owned by Gardner Trucking, Inc. Compl.
was insured under a Commercial Auto Policy issued by Maxum to
Omar Castillo DBA Omar Castillo Trucking, policy no. TRK
60177898-01, with a $1, 000, 000 per occurrence policy limit.
Compl. ¶ 6. Castillo was also insured under a Commercial
Auto Policy issued by National Interstate Insurance Company
(“National Interstate”) to Gardner Trucking, with
a per occurrence limit of $1, 000, 000. Compl. ¶ 7.
National Interstate was notified of the underlying action and
took a position as an excess insurer to Castillo above
Maxum's position and monitored that action on an ongoing
basis. Compl. ¶ 15.
Lexington also insured Castillo under a Follow Form Excess
Liability policy issued to Gardner Trucking, policy no.
048883243, with a per occurrence limit of $10, 000, 000.
Lexington was not notified of the underlying action until
after a judgment was entered against Castillo. Compl. ¶
to Plaintiff Lexington, as primary insurer, Defendant Maxum
controlled the defense of and responded to settlement demands
from the plaintiffs in the underlying action. Compl. ¶
15. Initial reports from Maxum's selected defense counsel
indicated a potentially favorable outcome; however as the
action proceeded several adverse factual discoveries were
made about the veracity of Castillo's statements. Compl.
¶ 16. During discovery, the underlying Plaintiffs
learned that Castillo had falsified logbook entries regarding
rest or sleep breaks which were contradicted by the black box
of the truck Castillo was driving. Compl. ¶ 17. It was
also discovered that Castillo made untruthful statements
about talking on the phone with his mistress at the time of
the accident. Compl. ¶ 19.
three occasions during the underlying action, Maxum was
offered an opportunity to settle the Clark case for its
policy limits. Compl. ¶¶ 34-36. However, each time,
Maxum refused to do so. Compl. ¶ 37. The matter
ultimately proceeded to trial and a judgment of $4, 440,
000.00 was entered against Castillo. Compl. ¶ 32.
Lexington paid $2, 440, 000.00 to the underlying plaintiffs
to protect Castillo and reserved rights to seek reimbursement
from Maxum for improper handling of the underlying action.
Compl. ¶ 42. Lexington alleges that Maxum's refusal
to settle the underlying action within its policy limits
resulted in damage to Plaintiff Lexington of $2, 440, 000.00
which would not have been paid but for Maxum's failures
to accept reasonable settlement offers and other improper
handling. Compl. ¶ 46-47.
Lexington brings a single claim for equitable subrogation
against Defendant Maxum for relief including: damages
according to proof, reasonable attorney fees, prejudgment
interest according to proof, costs of this suit, and other
relief as the Court deems just and proper.