Owners Insurance Company v. Keeton

CourtDistrict Court, D. Colorado
DecidedDecember 20, 2021
Docket1:20-cv-02950
StatusUnknown

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

Bluebook
Owners Insurance Company v. Keeton, (D. Colo. 2021).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Civil Action No. 1:20-cv-02950-KLM

OWNERS INSURANCE COMPANY,

Plaintiff,

v.

JOHN A. KEETON, individually; DAVISON M. BOWMAN, individually; and MARGARET M. WALLACE, individually,

Defendants. ______________________________________________________________________

ORDER ______________________________________________________________________ ENTERED BY MAGISTRATE JUDGE KRISTEN L. MIX

This matter is before the Court on Defendant John A. Keeton’s Renewed Motion to Dismiss or to Stay Declaratory Action [#43]1 (the “Motion”). Defendant Keeton seeks to dismiss this Declaratory Judgment Action (“DJA”) without prejudice or stay it pending (1) final resolution of any claims that may be filed against him by Defendants Bowman or Wallace, or (2) the running of the statute of limitations as to such claims. Id. at 2-3. Defendant Keeton asserts that the DJA is premature or that he would be unfairly prejudiced if it goes forward before any claims by Bowman and Wallace are resolved. Id.

1 “[#43]]” is an example of the convention the Court uses to identify the docket number assigned to a specific paper by the Court’s case management and electronic case filing system (CM/ECF). This convention is used throughout this Order.

- 1 - The Court has reviewed the Motion [#54], the Response [#52], the Reply [#52], the case file, and the applicable law, and is sufficiently advised in the premises. For the reasons set forth below, the Motion [#43] is DENIED. I. Background A. Insurance Policies

Owners Insurance Company. (“Plaintiff”) is a Michigan corporation licensed to issue insurance policies in Colorado. Compl. [#1] at 1. Defendant Keeton is a Colorado resident. Id. Plaintiff issued policy numbers 44-459-998-00 (the “Auto Policy”) and 46- 428-911-01 (the “Umbrella Policy,” collectively with the Auto Policy, the “Policies”) to Keeton with effective dates of May 20, 2020, through November 20, 2020, and November 29, 2019, through November 29, 2020, respectively. Id. at 2. Both Policies covered Keeton’s 2017 Ford Escape Titanium (the “Vehicle”). Id. The Auto Policy provided liability coverage for “damages for bodily injury . . . for which [the insured] become[s] legally responsibly because of or arising out of the

ownership, maintenance or use of [the insured’s] automobile,” but did not apply “to any person for bodily injury . . . arising out of or resulting from an intentional act of that person.” Compl. [#1] at 2 (quoting Auto Policy [#1-1] at 19-20). The Auto Policy also provided collision coverage for “direct physical damage to [the insured’s] automobile and its equipment caused by accidental collision with another object or by accidental upset,” but did not apply to “loss of or damage to [the insured’s] automobile because of or arising out of [the insured’s] intentional act or an intentional act committed at [the insured’s] direction or with [the insured’s] knowledge.” Compl. [#1] at 2 (quoting Auto Policy [#1-1] at 33-34, 35-37). In addition, the Umbrella Policy provided personal liability coverage and included - 2 - the following language: “We will pay on behalf of the insured the ultimate net loss in excess of the retained limit which the insured becomes legally obligated to pay as damages because of personal injury or property damage which occurs anywhere in the world.” Compl. [#1] at 3 (quoting Umbrella Policy [#1-2] at 12). B. The Incident

According to the Complaint [#1], on June 26, 2020, Defendant Keeton and three other individuals were socializing and drinking alcohol at Wicked Tequila Room in Downtown Loveland (the “Incident”). Compl. [#1] at 6. One of the individuals in the group was Defendant Bowman. Prior to the Incident, Defendant Keeton maintained a romantic relationship with Defendant Bowman; at the time of the Incident, however, Defendant Bowman had become romantically involved with another individual in the drinking group. Id. The Complaint [#1] alleges that, at some point during the evening, “an argument occurred between [Defendant] Keeton and [Defendant] Bowman, which led to [Defendant]

Keeton striking [Defendant] Bowman in the chest.” Compl. [#1] at 6. Thereafter, Defendant Bowman and the rest of the drinking group left Defendant Keeton at Wicked Tequila Room. Id. Defendant Keeton then “entered his [Vehicle], sat in the driver’s seat, started the engine, and drove the Vehicle onto the public roadway.” Id. at 7. Plaintiff alleges that when Defendant Keeton entered the roadway, (1) “he was under the influence of alcohol[;]” (2) “his blood alcohol content was in excess of .10[;]” (3) “his driving skills were impaired[;]” (4) “he was emotional [sic] agitated[;]” and (5) “he should not have been driving.” Compl. [#1] at 7. Plaintiff also alleges that “[Defendant] Keeton “intentionally hit [Defendant] Bowman with the Vehicle,” and that “[w]itnesses to - 3 - the Incident confirmed that a blue Ford SUV accelerated and swerved into [Defendant] Bowman” and another individual. Id. at 8. Following the Incident, Defendant Keeton drove to his home, located approximately seven minutes from Wicked Tequila Room. Id. at 9. C. Proceedings Subsequent to the Incident

Following the Incident, Defendant Keeton was charged with multiple felonies and a misdemeanor. See Compl. [#1] at 10. On July 1, 2020, Defendant Keeton tendered an insurance claim to Plaintiff relating to the Incident, and, on July 27, 2020, Plaintiff “mistakenly and erroneously issued payment in the amount of $2,970.65.” Compl. [#1] at 3. Later, however, upon realizing its error, Plaintiff issued a letter to Defendant Keeton requesting that he return the $2,970.65 because it had been issued by mistake. Id.; see also Letter [#1-3]. Plaintiff stated:: This letter is putting [Defendant Keeton] on notice that [Plaintiff is] reserving [its] rights to disclaim at a later date, any obligation of Owners Insurance Company under the policy identified above, and to assert the defense of non-coverage, file a declaratory action, intervene in a law suit if filed and withdraw our defense under the policy if assigned.

Letter [#1-3] at 1. On August 13, 2020, Keeton issued correspondence to Plaintiff conveying his refusal to return the erroneous payment. Compl. [#1] at 11. On September 30, 2020, Plaintiff filed a Complaint for Declaratory Action [#1] “seek[ing] a judicial declaration as to whether it has a duty to indemnify Defendant Keeton . . . .” Compl. [#1] at 5. Essentially, Plaintiff relies on the text of its Policies to support its position that coverage, and, subsequently, a duty to defend, do not exist. More specifically, Plaintiff argues: - 4 - a. The Incident was not caused by an “accidental collision” as required by the Policies. b. [Defendant] Keeton expected and/or intended to cause bodily injury to [Defendant] Bowman and [another individual] when [Defendant] Keeton intentionally struck [Defendant] Bowman and [another individual] with the Vehicle. c. [Defendant] Keeton was not so intoxicated that he lacked the capacity to form the intent to cause bodily injury to [Defendant Bowman] and [another individual]. d. [Plaintiff] did not waive its right to disclaim coverage under the applicable policy exclusions when it erroneously issued payment to [Defendant] Keeton for damage sustained to the Vehicle and is entitled to a return of the mistaken payment. e. In the event that [Defendant] Bowman and/or [another individual] alleges claims for punitive damages against [Defendant] Keeton, [Plaintiff] has no duty to defend or indemnify [Defendant] Keeton against those claims. f. [Defendant] Bowman and [the other injured individual] are bound to the adjudication of this action. g.

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Owners Insurance Company v. Keeton, Counsel Stack Legal Research, https://law.counselstack.com/opinion/owners-insurance-company-v-keeton-cod-2021.