Philadelphia Indemnity Insurance Co. v. Sealfit, Inc.

          ORDER GRANTING DEFENDANT SEALFIT'S MOTION TO STAY, [ECF No. 15]

          Hon. Gonzalo P. Curiel United States District Judge

         Before the Court is Defendant SEALFIT, Inc.'s (“Defendant” or “Sealfit”) motion to stay proceedings. ECF No. 15. Plaintiff Philadelphia Insurance Company (“Plaintiff” or “Philadelphia”) filed an opposition on November 15, 2019. ECF No. 20. Sealfit filed a reply on November 27, 2019. ECF No. 21.

         FACTUAL BACKGROUND

         Philadelphia issued an insurance policy to Sealfit effective July 1, 2016 to July 1, 2017 (the “Policy”). ECF No. 1 (“Compl.”) ¶ 11. On September 25, 2018, a complaint was filed in San Diego Superior Court (“Wrongful Death Action”) against Sealfit alleging that Kirk Deligiannis died on September 25, 2016 as a result of Sealfit's negligence. Deligiannis participated in a multi-day, 50-hour strenuous fitness event, which was organized and promoted by Sealfit. The plaintiffs in the Wrongful Death Action allege the following:

Towards the end of the event, Defendants recognized that the decedent was suffering and had become pale. They then removed him from the training. For some inexplicable reason, Defendants were grossly negligent in allowing decedent to return to the strenuous training after recognizing he was in a perilous medical condition. Additionally, Defendants had promised to monitor his nutrition and intake and grossly failed to do so resulting in a major decline in his blood sugar levels. Shortly thereafter, decedent collapsed, and without an AED or emergency medical care for at least 16 minutes, died.”

ECF No. 20 at 18.^[1] Philadelphia agreed to defend Sealfit against the Wrongful Death Action under reservation of rights on June 13, 2019. Compl. ¶ 10. On July 25, 2019, Philadelphia filed a complaint in this Court seeking entry of a judicial declaration that Philadelphia has no duty to either defend or indemnify Sealfit in the Wrongful Death Action since there was no actual coverage under the Policy for all or part of the Wrongful Death Action.^[2]

         A. The Policy

         The Policy provides Sealfit commercial general liability coverage, under which Philadelphia agrees to pay damages because of “bodily injury” caused by an “occurrence” which occurs during the policy period. ECF No. 20 at 5. The Policy also contains a Participant Legal Liability - Accident Medical Warranty Endorsement (“Endorsement”), which states:

Catastrophic Medical Insurance

Limits no less than: $25, 000

Specified Athletic Activity: All

A. In order for there to be coverage for “bodily injury” to “player participants, ” hereafter referred to as “Participant Legal Liability” coverage under this policy, Catastrophic Medical Insurance for the specified athletic activity and at no less than the limit shown in the Schedule above must be in full force and effect at the time of the “occurrence” giving rise to a claim under this policy. Failure to maintain coverage on all “player participants” in the Specified Athletic Activity shown in the Schedule above will fully void “participant legal liability” coverage with respect to any “player participants.”

B. For purposes of this endorsement, it is understood and agreed that “player participant” means any individual while practicing for or participating in a ...