Williamsburg National Insurance Company v. New York Marine and General Insurance Company

CourtDistrict Court, C.D. California
DecidedSeptember 29, 2021
Docket2:21-cv-04377
StatusUnknown

This text of Williamsburg National Insurance Company v. New York Marine and General Insurance Company (Williamsburg National Insurance Company v. New York Marine and General Insurance Company) is published on Counsel Stack Legal Research, covering District Court, C.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Williamsburg National Insurance Company v. New York Marine and General Insurance Company, (C.D. Cal. 2021).

Opinion

1 'O' 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 CV 21-4377-RSWL-JDEx 12 WILLIAMSBURG NATIONAL INSURANCE COMPANY, ORDER re: Defendant’s 13 Motion to Dismiss [12] Plaintiff, 14 v. 15 16 NEW YORK MARINE AND GENERAL INSURANCE COMPANY, 17 Defendant. 18 19 20 Currently before the Court is Defendant New York 21 Marine and General Insurance Company’s (“Defendant”) 22 Motion to Dismiss (the “Motion”) [12]. Having reviewed 23 all papers submitted pertaining to this Motion, the 24 Court NOW FINDS AND RULES AS FOLLOWS: the Court GRANTS 25 in part and DENIES in part the Motion. 26 27 28 1 I. BACKGROUND 2 A. Factual Background

3 Plaintiff Williamsburg National Insurance Company 4 (“Plaintiff”), a Michigan-based insurance corporation, 5 issued a motor carrier liability policy to DLR Express, 6 Inc. (“DLR”) that provides a $1,000,000 combined single 7 limit for covered accidents. Compl. ¶¶ 3, 5, ECF No. 1. 8 Attached to the policy is the MCS-90 endorsement, which 9 is a standardized form that requires an insurer to pay 10 up to its policy limit to members of the public for 11 liability arising from its insured’s operations even 12 where the policy itself provides no coverage. Id. ¶ 5. 13 Defendant, a New York-based insurance corporation, 14 issued a motor carrier liability policy (“Defendant 15 Policy”) to Intermodal Contractor’s Association of North 16 America. Id. ¶¶ 4,6. Arthur Trimble, Jr. (“Trimble”) 17 was later added as a certificate holder under this 18 policy. Id. ¶ 6. Defendant Policy similarly provides a 19 $1,000,000 combined single limit and includes the MCS-90 20 endorsement. Id. ¶¶ 6, 31. 21 DLR leased a tractor with an attached trailer to 22 Trimble pursuant to an Equipment Lease Agreement and a 23 sub-haul agreement (collectively, “Agreement”). Id. 24 ¶ 8. Under the Agreement, Trimble agreed to indemnify 25 and release DLR against all liability arising out of 26 Trimble’s use of the tractor as follows: 27 Lessee hereby releases and agrees to indemnify 28 lessor, its officers, agents and employees 1 afgianienss,t feaelsl, lpeevniaelst,i efso,r fteaixteusr,e s,l elgoasls , edxapmeangsee,,

2 expense and liability arising directly or indirectly out of the existence, condition, 3 use, custody or operation of the Equipment 4 . . . received by the Lessee until it is returned by the Lessor. 5

6 Id. ¶ 9. 7 Pursuant to the Agreement, Trimble also added DLR 8 to Defendant Policy as an additional insured with 9 respect to the tractor. Id. ¶ 11. The Policy obligates 10 Defendant to pay all sums Trimble is liable for related 11 to any accident involving the tractor. Id. ¶ 29. 12 On March 5, 2015, Trimble was driving the tractor 13 pulling a loaded trailer when he rear-ended a truck 14 being driven by Ronald Foster, Jr. Id. ¶ 7. On March 15 3, 2017, Foster, along with a passenger and the truck’s 16 owner, filed a complaint against Trimble in Los Angeles 17 Superior Court, alleging injuries and damages related to 18 the accident. Id. ¶ 12. DLR was later named as a Doe 19 defendant. Id. ¶ 15. Defendant defended and 20 indemnified Trimble in the Foster litigation, and all 21 claims against Trimble were settled for $155,000. Id. 22 ¶ 13. Plaintiff alleges that Defendant “was aware, via 23 its retained defense counsel for Trimble, that its 24 additional insured DLR was named as a defendant in the 25 Foster litigation.” Id. ¶ 14. However, neither 26 Plaintiff nor Defendant provided a defense for DLR in 27 the Foster litigation initially, and consequently DLR 28 1 never appeared in the case. Id. ¶¶ 17, 18. 2 A default judgment of $6,085,702 was entered

3 against DLR. Id. ¶ 18. DLR moved to set aside the 4 default judgment, and subsequently filed an appeal when 5 that motion was denied. Id. DLR then tendered its 6 defense to Plaintiff, and Plaintiff agreed to defend DLR 7 in the Foster litigation under a reservation of rights.1 8 Id. ¶ 19. A month later, DLR tendered its defense and 9 request for indemnity to Defendant as an additional 10 insured under Defendant Policy. Id. ¶ 21. 11 Foster and the other plaintiffs then agreed to 12 settle all claims against DLR for $1,000,000. Id. ¶ 22. 13 Both DLR and Plaintiff demanded that Defendant 14 contribute its remaining policy limit to settle the 15 claim, but Defendant refused. Id. ¶¶ 23-25. 16 Ultimately, Plaintiff paid the entire settlement amount 17 on behalf of DLR. Id. ¶¶ 22, 26. Plaintiff alleges 18 that Defendant had the primary duty to defend and 19 indemnify DLR in the Foster litigation because DLR 20 qualifies as an additional insured under Defendant 21 Policy. Id. ¶ 34. 22 B. Procedural Background 23 On May 26, 2021, Plaintiff filed its Complaint [1] 24 25 1 Though not mentioned in the Complaint, Plaintiff explains in its Opposition to the Motion that it was required to provide 26 coverage for DLR’s claim despite DLR’s lack of timely notice of the Foster litigation under the MCS-90 included in its own 27 policy. Pl.’s Opp. to Mot. to Dismiss (“Opp.”) 16:27-17:3, ECF 28 No. 15. 1 alleging six causes of action: (1) declaratory relief

2 re: Defendant’s duty to indemnify, (2) declaratory

3 relief re: Defendant’s duty to defend, (3) equitable 4 contribution for sums paid to indemnify, (4) equitable 5 contribution for sums paid to defend, (5) equitable 6 subrogation for sums paid to indemnify, and 7 (6) equitable subrogation for sums paid to defend. 8 Defendant filed this Motion [12] on July 16, 2021. 9 Plaintiff then filed its Opposition [15] on August 3, 10 2021. Defendant replied [16] on August 10, 2021. 11 II. DISCUSSION 12 A. Legal Standard 13 Federal Rule of Civil Procedure (“Rule”) 12(b)(6) 14 allows a party to move for dismissal of one or more 15 claims if the pleading fails to state a claim upon which 16 relief can be granted. A complaint must “contain 17 sufficient factual matter, accepted as true, to state a 18 claim to relief that is plausible on its face.” 19 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quotation 20 omitted). Dismissal is warranted for a “lack of a 21 cognizable legal theory or the absence of sufficient 22 facts alleged under a cognizable legal theory.” 23 Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 24 (9th Cir. 1988) (citation omitted). 25 In ruling on a 12(b)(6) motion, a court may 26 generally consider only allegations contained in the 27 pleadings, exhibits attached to the complaint, and 28 matters properly subject to judicial notice. Swartz v. 1 KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007). A court

2 must presume all factual allegations of the complaint to

3 be true and draw all reasonable inferences in favor of 4 the non-moving party. Klarfeld v. United States, 944 5 F.2d 583, 585 (9th Cir. 1991). The question is not 6 whether the plaintiff will ultimately prevail, but 7 whether the plaintiff is entitled to present evidence to 8 support its claims. Jackson v. Birmingham Bd. of Educ., 9 544 U.S. 167, 184 (2005) (quoting Scheuer v. Rhodes, 416 10 U.S. 232, 236 (1974)). While a complaint need not 11 contain detailed factual allegations, a plaintiff must 12 provide more than “labels and conclusions” or “a 13 formulaic recitation of the elements of a cause of 14 action.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 15 (2007).

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Williamsburg National Insurance Company v. New York Marine and General Insurance Company, Counsel Stack Legal Research, https://law.counselstack.com/opinion/williamsburg-national-insurance-company-v-new-york-marine-and-general-cacd-2021.