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Pulte Home Corp. v. American Safety Indemnity Co.

United States District Court, S.D. California

July 14, 2017

PULTE HOME CORPORATION, Plaintiff,
v.
AMERICAN SAFETY INDEMNITY COMPANY, Defendant.

          ORDER DENYING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT [DOC. NO. 11.]

          MARILYN L. HUFF, UNITED STATES DISTRICT COURT DISTRICT JUDGE

         On May 26, 2017, Plaintiff Pulte Home Corporation filed a motion for partial summary judgment. (Doc. No. 11.) On June 26, 2017, Defendant American Safety Indemnity Company (“ASIC”) filed an opposition to Plaintiff's motion. (Doc. No. 16.) On June 28, 2017, the Court took the matter under submission. (Doc. No. 17.) On June 30, 2017, Plaintiff filed a reply. (Doc. No. 18.) For the reasons below, the Court denies Plaintiff's motion for summary judgment.

         Background

         This is a motion for summary judgment over choice of law. The present action is an insurance coverage dispute between Plaintiff Pulte and Defendant ASIC, where Plaintiff asserts that it qualifies as an “additional insured” under the relevant insurance policies issued by Defendant. (Doc. No. 1, Compl. ¶ 8.) Each of the relevant policies contains a choice-of-law provision stating: “This policy and all additions to, endorsements to, or modifications of the policy shall be interpreted under the laws of the State of Georgia.” (Doc. No. 16-8, Newton Decl., Ex. 1 at 64, Ex. 2 at 127, Ex. 3 at 197, Ex. 4 at 262, Ex. 5 at 331, Ex. 6 at 397.)

         On October 14, 2016, Plaintiff Pulte filed a complaint against Defendant ASIC, alleging claims for declaratory relief, breach of contract, and breach of the duty of good faith and fair dealing. (Doc. No. 1, Compl. ¶¶ 25-60.) On December 16, 2016, Defendant filed an answer to the complaint. (Doc. No. 5.) In the answer, Defendant alleges as an affirmative defense that the ASIC policies at issue are governed by Georgia law pursuant to the Choice of Law/Consent to Jurisdiction endorsements in the policies. (Id. at 20.) By the present motion, Plaintiff moves for summary judgment as to Defendant's choice-of-law affirmative defense. (Doc. No. 11-1 at 2.) Specifically, Plaintiff argues that the choice-of-law provision contained in the relevant policies is unenforceable and that California law governs the substantive issues in the case. (Id. at 1.)

         Discussion

         I. Legal Standards for Summary Judgment

         Summary judgment is appropriate under Rule 56 of the Federal Rules of Civil Procedure if the moving party demonstrates that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A fact is material when, under the governing substantive law, it could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Fortune Dynamic, Inc. v. Victoria's Secret Stores Brand Mgmt., Inc., 618 F.3d 1025, 1031 (9th Cir. 2010). “A genuine issue of material fact exists when the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Fortune Dynamic, 618 F.3d at 1031 (internal quotation marks and citations omitted); accord Anderson, 477 U.S. at 248. “Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987).

         A party seeking summary judgment always bears the initial burden of establishing the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. The moving party can satisfy this burden in two ways: (1) by presenting evidence that negates an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party failed to establish an essential element of the nonmoving party's case that the nonmoving party bears the burden of proving at trial. Id. at 322-23; Jones v. Williams, 791 F.3d 1023, 1030 (9th Cir. 2015). Once the moving party establishes the absence of a genuine issue of material fact, the burden shifts to the nonmoving party to “set forth, by affidavit or as otherwise provided in Rule 56, ‘specific facts showing that there is a genuine issue for trial.'” T.W. Elec. Serv., 809 F.2d at 630 (quoting former Fed.R.Civ.P. 56(e)); accord Horphag Research Ltd. v. Garcia, 475 F.3d 1029, 1035 (9th Cir. 2007). To carry this burden, the non-moving party “may not rest upon mere allegation or denials of his pleadings.” Anderson, 477 U.S. at 256; see also Behrens v. Pelletier, 516 U.S. 299, 309 (1996) (“On summary judgment, . . . the plaintiff can no longer rest on the pleadings.”). Rather, the nonmoving party “must present affirmative evidence . . . from which a jury might return a verdict in his favor.” Anderson, 477 U.S. at 256. “Choice of law determinations, as well as contract interpretation issues, are pure legal questions well-suited to summary judgment.” Flintkote Co. v. Aviva PLC, 177 F.Supp.3d 1165, 1172 (N.D. Cal. 2016) (citing Shannon-Vail Five Inc. v. Bunch, 270 F.3d 1207, 1210 (9th Cir. 2001); TH&T Int'l Corp. v. Elgin Indus., Inc., 216 F.3d 1084 (9th Cir. 2000)).

         When ruling on a summary judgment motion, the court must view the facts and draw all reasonable inferences in the light most favorable to the non-moving party. Scott v. Harris, 550 U.S. 372, 378 (2007). The court should not weigh the evidence or make credibility determinations. See Anderson, 477 U.S. at 255. “The evidence of the non-movant is to be believed.” Id. Further, the Court may consider other materials in the record not cited to by the parties, but it is not required to do so. See Fed.R.Civ.P. 56(c)(3); Simmons v. Navajo Cnty., 609 F.3d 1011, 1017 (9th Cir. 2010).

         II. Analysis

         Plaintiff moves for summary judgment as to Defendant's choice-of-law affirmative defense. (Doc. No. 11-1 at 1-2.) In its motion, Plaintiff argues: (1) that the choice-of-law provision in the relevant ASIC policies is unenforceable and that California law governs the substantive issues in this case; (2) that Defendant should be estopped from asserting that Georgia law applies in this case; and (3) that even if the choice-of-law provision is enforceable, Georgia law would not apply to Plaintiff's tort claims. (Id. at 3-13.) The Court addresses each of these arguments raised by Plaintiff in turn below.

         A. Enforceability of the Choice-of-Law Provision

         Plaintiff argues that the choice-of-law provision in the ASIC policies is unenforceable and that California law governs the substantive issues in this case. (Id. at 1, 3-9.) In response, Defendant argues that the choice-of-law provision is enforceable and presumptively applies because ASIC was ...


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