Landmark American Insurance v. VO Remarketing Corp.

619 F. App'x 705
Court of Appeals for the Tenth Circuit·Decided July 30, 2015·No. 14-1270·Unpublished·Cited by 15 cases

Opinions

ORDER AND JUDGMENT *

PAUL KELLY, JR., Circuit Judge.

Plaintiff-Appellee Landmark American Insurance Company brought this declaratory judgment action seeking a determination that it had no duty to defend or indemnify its insured, Defendant-Appellant VO Remarketing Corp (VO), in a lawsuit brought in Colorado state court. The district court granted Landmark’s motion for judgment on the pleadings, Fed. R.Civ.P. 12(c), and VO, along with Defendant-Appellant Kaye Laura Tibbe, appeals.1 Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.

Background

A. The Injury and Underlying Lawsuit

This case arises out of an accident that occurred on November 2, 2012, as two VO employees attempted to maneuver a Stair-master exercise machine to the second-story loft of Kaye Laura Tibbe’s home. Ms. Tibbe had purchased the Stairmaster from VO and arranged for its delivery. As the two VO employees were maneuvering the Stairmaster up the stairs to the loft, they lost control of the machine, causing it to tumble down the stairs. Ms. Tibbe, who was standing at a lower point along the stairway, was crushed by the Stairmaster and sustained serious injuries as a result.

At the time of the accident, VO held a Commercial General Liability (CGL) policy through Landmark (the Policy). The Policy obligates Landmark to indemnify VO for “sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies.” 1 ApltApp. 198. Landmark must also defend VO in “suits” seeking such damages. Id.

The Policy contains various exclusions, one of which is at the center of this ease. In pertinent part, coverage under the Policy does not apply to bodily injury or property damage “arising out of the ownership, maintenance, use or entrustment to others of any aircraft, ‘auto’ or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and ‘loading or unloading.’ Id. at 201 (emphasis added) (hereinafter, the Auto Exclusion). “Loading or unloading” means:

[T]he handling of property:
[707] (c) While it is being moved from an aircraft, watercraft or “auto” to the place where it is finally delivered; but “loading or unloading” does not include the movement of property by means of a mechanical device, other than a hand truck, that is not attached to the aircraft, watercraft or “auto”.

Id. at 211.

Following the accident, Landmark received notice of a claim made by Ms. Tibbe against VO. Landmark hired a third party to investigate the claim and, based on the results of that investigation, determined that the Policy’s Auto Exclusion precluded coverage for Ms. Tibbe’s injuries. In short, Landmark determined that the Stairmaster had not reached its place of final delivery when the accident occurred and therefore the process of “unloading” was ongoing. Landmark notified VO. by letter on March 8, 2013 that there was no coverage or potential coverage under the Policy and that it would not be providing a defense. 2 ApltApp. 396-97.

About a month later, on April 10, 2013, Ms. Tibbe filed a lawsuit against VO in Colorado state court. 1 ApltApp. 175-82 (hereinafter, the Underlying Lawsuit). Ms. Tibbe sought damages resulting from VO’s alleged negligence. As relevant here, her complaint alleged:

1. This action against VO arises out of the personal injury and property damage sustained by Tibbe, on or about November 2, 2012, at her residence in Greeley, Colorado. After VO delivered a “Step Mill 7000 PT Stairmaster” and the equipment was inside of Tibbe’s residence, VO attempted to maneuver the equipment up the stairs of the residence. The equipment crashed down the stairs of the residence and crushed Tibbe.
8. After the [Stairmaster] was delivered and inside of Tibbe’s Residence, two employees of VO attempted to maneuver the [Stairmaster] to the second story loft of Tibbe’s Residence. At the crest of the stairs VO’s employees and/or agents lost control of the [Stair-master] and it cascaded down the flight of stairs and crushed Tibbe against the exterior wall of the vestibule of the Residence.
17. On or about November 2, 2012, after the [Stairmaster] was delivered and inside of Tibbe’s Residence, the Defendant negligently attempted to maneuver the [Stairmaster] to the second story loft of Tibbe’s Residence, causing property damage and the Plaintiffs injuries.

Id. at 175-77.

After examining the complaint, Landmark again notified VO that it would not be providing a defense. Subsequently, Ms. Tibbe and VO entered into a settlement agreement pursuant to which a neutral arbiter would decide the issue of damages. An Arbitration Decision and Award was entered against VO and in favor of Ms. Tibbe for approximately $1.2 million,' and a state court later entered judgment against VO pursuant to the settlement agreement. Also as part of the settlement agreement, Ms. Tibbe agreed not to execute on the judgment against VO and, in return, VO assigned Ms. Tibbe its claims for breach of contract and bad faith breach of an insurance contract against Landmark.

B. The Declaratory Judgment Action

On May 29, 2013, Landmark filed the instant action seeking a declaration that it has no duty to defend or indemnify VO in the Underlying Lawsuit. 1 ApltApp. Ills.

[708] Landmark’s complaint contained a number of factual allegations not contained in Ms. Tibbe’s complaint. Among other things, Landmark alleged (1) VO used a vehicle to transport the Stairmaster to Ms. Tibbe’s residence and (2) Ms. Tibbe “requested that VO REMARKETING deliver the Stairmaster to the second story loft of her residence.” Id. at 14. VO admitted the first of these allegations and, as to the second, admitted only that “its employees delivered the Stairmaster into Tibbe’s residence and that after the Stairmaster was inside of the residence, two employees of VO attempted to maneuver .the Stairmas-ter to the second story loft of Tibbe’s residence.” Id. at 21-22. Aong with its answer, VO asserted counterclaims against Landmark for breach of contract, bad faith breach of an insurance contract, and statutory violations under Colorado law.

Landmark later filed its Rule 12(c) motion for judgment on the pleadings, arguing .that the Auto Exclusion barred coverage for the claims asserted by Ms. Tibbe. Id. at 54-55. Specifically, Landmark contended that the Stairmaster had not reached its place of final delivery under both the plain language of the Policy and Colorado’s “complete operation” doctrine; thus, the process of “unloading” was not yet complete when the accident occurred. VO opposed the motion and later; in May 2014, filed a motion to amend its counterclaims.

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Landmark American Insurance v. VO Remarketing Corp., 619 F. App'x 705 (10th Cir. 2015).

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