Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Starr Indemnity & Liability Co. v. Young

United States District Court, D. Nevada

March 31, 2019

STARR INDEMNITY & LIABILITY COMPANY, Plaintiff,
v.
LIMMIE YOUNG, III, et al., Defendants.

          ORDER

          RICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         Before the Court are cross-motions for summary judgment by Plaintiff Starr Indemnity & Liability Company (“Starr”) and Defendant Limmie Young, III. ECF Nos. 86, 88. The Court has previously provided its oral ruling on these motions. This order codifies the Court's reasoning as to these motions. For the reasons stated below, the Court grants Young's partial motion for summary judgment and finds that Starr is liable for breach of contract, with damages to be determined at trial. The Court denies Starr's motion for summary judgment as to claims for breach of contract and breach of the covenant of good faith and fair dealing, and declaratory relief, and grants Starr's motion as to claims for fraudulent, intentional, and/or negligent misrepresentation and unfair trade practices.

         II. BACKGROUND

         A. Undisputed Facts

         The Court finds the following facts to be undisputed.

         At all times relevant to this case, Young was employed by Massage Envy as a massage therapist and insured under a General Liability Policy issued by Starr. In Nevada state court, Defendants Audra Duvall and Michael Duvall filed suit against Young and Massage Envy, alleging that Young engaged in inappropriate sexual acts while performing a massage on Audra Duvall.

         Under Young's General Liability Policy, damages from “bodily injury” were covered only if caused by an “occurrence, ” defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” The Policy also contains three relevant exclusions from coverage: (1) an “Expected or Intended Injury” exclusion, which states that there is no coverage for bodily injury that is “expected or intended from the standpoint of the insured”; (2) an “Abuse or Molestation” exclusion, which states that there is no coverage for bodily injury arising out of “actual or threatened abuse or molestation by anyone of any person while in the care, custody, or control of any insured”; and (3) an “Assault and Battery” exclusion, which states that the Policy does not apply to bodily injury arising out of “(1) assault and battery or any act or omission in connection with the prevention or suppression of such acts; or (2) harmful or offensive contact between or among two or more persons; or (3) apprehension of harmful or offensive contact between or among two or more persons; or (4) threats by words or deeds.” The assault and battery exclusion also excludes from coverage claims for emotional distress, loss of society, loss of services, loss of consortium, loss of income, and reimbursement for medical expenses and wages incurred by any person or organization asserting rights derived from a claim of assault or battery.

         During the Duvall litigation, Starr undertook Young's defense under a reservation of rights, including its right to file a declaratory judgment action seeking an order that it owes no coverage under the policy for the claims asserted against Young. Starr's insurance defense retained counsel, Marsha Stephenson, represented both Starr and Young. Starr also had separate coverage counsel. Starr did not obtain written consent from Young to be represented by the same counsel.

         On February 18, 2016, Massage Envy made a $105, 000 settlement offer to the Duvalls to resolve the case on behalf of both Massage Envy and Young. The Duvalls rejected this offer and submitted a counter-offer seeking $105, 000 to settle the case as to Young alone. This offer was not accepted, though it is disputed whether Young was advised of this offer. No. other settlement offers were made by any party.

         On February 22, 2017, judgment was entered against Young and Massage Envy jointly and severally in the amount of $59, 675.50 as to Audra Duvall and $750.00 as to Michael Duvall for a total judgment of $60, 425.50. Punitive damages were also awarded in the amount of $25, 000 against Young and $75, 000 against Massage Envy. United National Insurance Company paid the $64, 425.50 judgment on or about July 13, 2017.

         On September 8, 2017, Young entered into a settlement agreement with the Duvalls. The Duvalls agreed to waive any right to recover the $25, 000 punitive damages award against Young and Young agreed that the Duvalls would receive 15% of any award against Starr in the present lawsuit.

         It is undisputed that Starr offered to pay the settlement funds representing the punitive damages that were awarded to the Duvalls. However, Starr alleges that Young's defense counsel communicated this offer to Young via his wife on September 7, 2017, the day before the September 8 agreement, while Young alleges this offer occurred after Young entered the settlement agreement but does not specify a date.

         On September 21, 2017, Starr paid the Duvalls' attorney $27, 172.81 to cover the punitive damages award against Young.

         B. Disputed Facts

         The parties dispute whether Starr informed Young of a right to independent counsel at Starr's expense. Starr alleges it sent a reservation of rights letter with this information on October 28, 2013. Though the letter was allegedly sent by certified mail, there is no receipt in the record. Young contests receiving this letter. The letter states in relevant part: “[T]here is a conflict of interest between your interests and those of Starr. . . . You have the right to be defended in the Ackermann and Duvall suits by counsel of your own choice under which Starr will pay for the reasonable costs incurred in your defense in the Ackermann and Duvall Suits. Please contact the undersigned as soon as possible, to advise as to your selected defense ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.