Boyne USA, Inc. v. Federal Insurance Company

CourtDistrict Court, D. Montana
DecidedAugust 25, 2025
Docket6:24-cv-00070
StatusUnknown

This text of Boyne USA, Inc. v. Federal Insurance Company (Boyne USA, Inc. v. Federal Insurance Company) is published on Counsel Stack Legal Research, covering District Court, D. Montana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Boyne USA, Inc. v. Federal Insurance Company, (D. Mont. 2025).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MONTANA HELENA DIVISION BOYNE USA, INC., CV 24-70-H-TJC

Plaintiff, ORDER

vs.

FEDERAL INSURANCE COMPANY,

Defendant.

Plaintiff Boyne USA, Inc. (“Boyne”) brings this action against Defendant Federal Insurance Company (“Federal”) relative to insurance coverage for two underlying class actions brought against Boyne in Montana and Michigan. (Doc. 5.) Boyne seeks declaratory judgment as to the applicable limit of insurance available for the underlying actions. Presently before the Court are Federal’s Motion for Judgment on the Pleadings (Doc. 9), and Boyne’s Motion for Summary Judgment (Doc. 17.) The motions are fully briefed and ripe for the Court’s review. For the following reasons, the Court finds Federal’s motion should be GRANTED, and Boyne’s motion DENIED. The issue before the Court is whether the “Related Claims” provision in Federal’s policies applies to the two class action lawsuits filed against Boyne. If the two class actions are related, then Boyne is entitled to only one limit of liability, in the amount of $5 million. If the class actions are not related, however, Boyne would be entitled to a second limit of liability.

I. BACKGROUND A. Underlying Actions On December 30, 2021, Boyne was named as a defendant in a lawsuit

entitled Lawrence Anderson, et al. v. Boyne USA, Inc., et al. in the United States District Court for the District of Montana, Butte Division, Case No. 2:21-cv-95- BMM (the “Montana Action”). (Doc. 5-1.) The Montana Action was brought as a class action on behalf of owners of

residential units at several condominium-hotels that were developed by Boyne at the Big Sky Resort in Madison County, Montana. (Id.) The Montana Action was based on a mandatory rental management program established by Boyne. The

Montana plaintiffs alleged generally that Boyne required unit owners to solely use Boyne as rental manager, and required owners to sign a non-negotiable rental management agreement that could be unilaterally changed by Boyne. The Montana plaintiffs alleged that as a result of the rental management program,

Boyne had exclusive control over the rental of units, and used that control to improperly extract revenue from unit owners, conceal its conduct from owners, and impose unreasonable costs on owners. The Montana plaintiffs asserted the

contractual arrangement created by Boyne constituted an investment contract under the Montana Securities Act and the Securities Exchange Act of 1934. The Montana complaint included claims for breach of fiduciary duty, constructive

fraud, breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment/constructive trust, unfair trade practices/antitrust, and declaratory judgment.

Approximately three years later, on December 3, 2024, Boyne was sued in the United States District Court for the Western District of Michigan, in a case entitled Barbara Hornbeck, et al. v. Boyne USA, Inc. et al., Case No. 1:24-cv-682- HYJ-PJG (the “Michigan Action”). (Doc. 5-4.)

The complaint in the Michigan Action alleged similar class claims as those raised in the Montana Action. The Michigan Action was brought on behalf of owners of realty in three Michigan resorts developed by Boyne, and is based on an

exclusive rental management program operated by Boyne. Like the Montana plaintiffs, the Michigan plaintiffs allege owners are required to use Boyne as their exclusive rental agent, and must sign a rental management agreement that is non- negotiable and subject to unilateral change by Boyne. The Michigan plaintiffs

assert Boyne uses the control it granted itself through the mandatory rental management program to siphon revenue that should be shared with realty owners, and to impose excessive fees and costs on owners. The Michigan plaintiffs further

allege Boyne’s contractual arrangement constitutes an investment contract under the Michigan Securities Act and the Securities Exchange Act of 1934. The Michigan complaint alleges claims for constructive fraud, breach of contract,

unjust enrichment/constructive trust, violation of section 2 of the Sherman Act: abuse of monopoly power, sale of unregistered securities under federal law, sale of unregistered securities under Michigan law, and declaratory judgment.

B. Coverage Provisions At the time the Montana Action was filed, Boyne was insured under a claims-made ForeFront Portfolio 3.0 Policy issued by Federal, Policy No. 8248- 4348, with a policy period of November 15, 2021 to November 15, 2022 (the

“Policy”). The Policy contained a Directors & Officers and Entity Liability Coverage Part, that provided a limit of liability of $5 million dollars subject to a $100,000 retention.

When the Michigan Action was filed, Boyne was insured under Federal Renewal Policy No. 8248-4348, with a term of November 15, 2023 to November 15, 2024 (the “Renewal Policy”). The Renewal Policy also had a $5 million dollar policy limit and $100,000 retention.

The general Terms and Conditions of the Policy and the Renewal Policy (collectively the “Policies”) contain identical “Related Claims” sections. The Policies state in relevant part:

/ / / RELATED CLAIMS With respect to the Liability Coverage Parts:

(A) All Related Claims shall be deemed a single Claim made in the Policy Year in which the earliest of such Related Claims was first made or first deemed to have been made in accordance with the Reporting section of the applicable Liability Coverage Part (the “Earliest Related Claim”).

(B) All Related Claims shall be subject to the same Retention and Limits of Liability applicable to the Earliest Related Claim.

(Doc. 5-2 at 12; Doc. 5-3 at 12.) The Policies define “Related Claims” as follows: Related Claims means all Claims for Wrongful Acts based upon, arising from, or in consequence of the same or related facts, circumstances, situations, transactions or events or the same or related series of facts, circumstances, situations, transactions or events.

(Id. at 11.) II. DISCUSSION Federal now moves for judgment on the pleading on grounds that the Montana Action and Michigan Action are “Related Claims,” and therefore, Boyne is entitled to only one $5 million limit of liability under the Policies. Federal contends the lawsuits are related because they are both based on Boyne’s rental management program. Boyne has filed a cross motion for summary judgment, arguing the underling lawsuits are not related. Boyne argues the language of the Polices is ambiguous, and should be construed against Federal and in favor of extending coverage. Boyne further argues that even if the Policies are not ambiguous, the

underlying lawsuits are unrelated, and therefore, Boyne is entitled to the full benefits of both Policies. A. Legal Standards

1. Judgment on the Pleadings Federal Rule of Civil Procedure 12(c) provides that “[a]fter the pleadings are closed – but early enough not to delay trial – a party may move for judgment on the pleadings.” Fed. R. Civ. P. 12(c). A Rule 12(c) motion is “functionally

identical” to a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted. Cafasso, United States ex rel. v. General Dynamics C4 Systems, Inc., 637 F.3d 1047, 1054 n.4 (9th Cir. 2011). Thus, the same legal

standard “applies to motions brought under either rule.” Id.

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Boyne USA, Inc. v. Federal Insurance Company, Counsel Stack Legal Research, https://law.counselstack.com/opinion/boyne-usa-inc-v-federal-insurance-company-mtd-2025.