Pennsylvania National Mutual Casualty Insurance Company v. Watts Builders, L.L.C. et al
Filing
57
OPINION. Signed by Honorable Judge Myron H. Thompson on 3/13/14. (scn, )
IN THE DISTRICT COURT OF THE UNITED STATES FOR THE
MIDDLE DISTRICT OF ALABAMA, NORTHERN DIVISION
PENNSYLVANIA NATIONAL
MUTUAL CASUALTY INSURANCE
COMPANY,
Plaintiff,
v.
WATTS BUILDERS, L.L.C.;
et al.,
Defendants.
)
)
)
)
)
)
)
)
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)
)
)
CIVIL ACTION NO.
2:12cv994-MHT
(WO)
OPINION
Relying on the Declaratory Judgment Act of 1934, 28
U.S.C. § 2201, plaintiff Pennsylvania National Mutual
Casualty Insurance Company brought this federal lawsuit
against defendants Watts Development Company, Inc., Watts
Builders,
L.L.C.,
Watts
Homes,
L.L.C.,
and
numerous
individual homeowners. Penn National seeks a declaration
that it owes no duty to defend or indemnify the the Watts
entities with regard to the state lawsuit brought against
them by the homeowners.
Jurisdiction is proper pursuant
to 28 U.S.C. § 1332 (diversity).
This matter is now
before the court on Penn National’s motion for summary
judgment.
The court is confronted with the following
issue: whether Penn National is entitled to a finding
that the three Watts entities breached their insurance by
failing to give to the insurance company timely notice of
a
state-court
lawsuit
filed
against
them
by
the
homeowners and, thus, to a declaration that the insurance
company owes no duty to defend or indemnify the Watts
entities with regard to the state lawsuit.
The court
holds that Penn National is entitled to such a finding
and declaration.
I. BACKGROUND
This case arises out of the construction and sale of
houses.
Ted Watts was president of Watts Development
Company, Inc., which in turn was the sole member of two
limited liability companies, Watts Builders and Watts
Homes.
These three Watts entities sold houses in a
2
subdivision in Montgomery, Alabama, to the individual
homeowners between 2006 and 2009.1
Apparently there were problems with the homes.
A
group of homeowners, including but not limited to the
homeowners in this case, sued Mr. Watts and the Watts
entities in state court.2
The essence of the state
complaint appears to be that faulty construction has led
to moisture damage and the need for other repairs.
of
the
homeowners
filed
the
initial
state
Some
suit
on
1. The individual homeowner-defendants are: Dedric J.
Belcher, Jim D. Windes, Elizabeth J. Windes, Evonne M.
Jackson, John N. Drosyk, Jessica M. Drosyk, Jeffrey L.
Smyth, Eva L. Randolph, Robert S. Genin, Carla B. Genin,
Clifford Jennings, Veronica Jennings, Tangy Y. Brantley,
Geneva Lyons, Peter Colberg, Kathy Colberg, Idalia
Williams, Jermel D. Miller, Juandolyn B. Stringer,
Ameaila R. Cunningham, Timothy Cunningham, Bertha
Cunningham, Joyce Ridgeway, Jessica Weber, and Aaryn
Urell. Penn National argues that some of the homes were
sold before this period, but the record does not support
that contention.
2. The state complaint also names other defendants,
but not Penn National. It makes claims of negligence in
construction; negligence in hiring, supervision, and
training; misrepresentation; suppression; breach of
implied warranty of habitability; breach of contract;
breach of express warranty; negligence in repairs;
negligence; and fraudulent inducement.
3
December 29, 2010.
The state complaint was amended on
three occasions, the last of which was October 29, 2012,
and other plaintiffs were added.
On March 10, 2011, an attorney representing Mr. Watts
in his bankruptcy proceedings filed a notice with the
state court on his behalf; neither Mr. Watts nor the
Watts entities had appeared in the state proceedings at
this point.
The notice indicated that Mr. Watts had
filed for personal bankruptcy and suggested the case be
stayed.
Mr. Watts was dismissed from the state case, and
the Watts entities later appeared.
The case is currently
pending in state court.
On April 14, 2011, Mr. Watts’s attorney filed in the
bankruptcy proceedings a list of creditors with claims
against Mr. Watts.
All of the homeowners in this case
were listed as creditors, as were the attorneys who
represent the homeowners in both the state suit and the
instant
federal
action.
During
an
on-the-record
telephone conference in this matter held on February 18,
4
2014, counsel for the homeowners acknowledged that Mr.
Watts’s bankruptcy attorney knew of the existence of the
state lawsuit as of the April 14 filing.
The final page of the list filed in the bankruptcy
court contains a declaration by Mr. Watts himself, under
penalty of perjury, that the list was true and correct to
the best of his knowledge.3
At the February 18, 2014,
telephone conference, counsel for the homeowners agreed
that this declaration was not fraudulent and that Mr.
Watts’s attorney was authorized to file it on Mr. Watts’s
behalf.
Penn National insured all three Watts entities.
It
issued consecutive Commercial General Liability polices
to Watts Development Company, Inc., from 2001 to 2010.
The other two entities were added to those policies as
3. Mr. Watts’s declaration was signed electronically.
Pursuant to Rule 9011-1(b) of the local rules of the
United States Bankruptcy Court for the Middle District of
Alabama, this electronic signature indicated that Mr.
Watts’ attorney had certified that he maintained a hard
copy of that document with Mr. Watts’s conventional
signature.
5
named insureds.
Penn National also issued Commercial
Umbrella Liability policies to Watts Development from
2002 to 2008, again adding the other entities as named
insureds.
Those policies provide for the duties to
defend and indemnify the Watts entities at issue in this
case.
Each
of
those
policies
also
imposed
timely
notification requirements on the Watts entities.
Under the Commercial General Liability policies, the
Watts entities were required to notify Penn National “as
soon as practicable” of an “occurrence,” defined as “an
accident, including continuous or repeated exposure to
substantially the same harmful conditions”; to notify
Penn National “as soon as practicable” of any claim or
suit
against
them;
and
to
“[i]mmediately”
send
Penn
National legal papers received in connection with a claim
or suit against them.4
4. Defendant’s Motion for Summary Judgment, Exh. A
(Doc. No. 35-1) at 110, 114; Exh. B (Doc. No. 35-2) at
19, 23; Exh. C (Doc. No. 35-3) at 93, 97; Exh. D (Doc.
No. 35-5) at 28, 32; Exh. E (Doc. No. 35-7) at 88, 92;
Exh. F (Doc. No. 36-2) at 20, 24; Exh. G (Doc. No. 36-4)
(continued...)
6
The Commercial Umbrella Liability policies from 2002
to
2006
similarly
require
the
insured
entities
to
“promptly” notify Penn National of any occurrence, to
give “prompt written notice” of any claim or suit against
the
insureds,
and
to
comply
with
the
terms
of
the
underlying insurance, in this case the Commercial General
Liability policies.5
The Commercial Umbrella Liability
policies from 2006 to 2008 mirrored the notification
requirements
policies.
in
the
Commercial
General
Liability
Under each of the policies, it is undisputed
that notice to Mr. Watts would constitute notice to each
of the entities.
The Watts entities first notified Penn National of
this claim on March 22, 2012.
Penn National has been
defending the Watts entities in the state proceedings,
4(...continued)
at 130, 134; Exh. H (Doc. No. 36-6) at 25, 29; Exh. I
(Doc. No. 36-7) at 112, 116; Exh. J. (Doc. No. 36-10) at
23-4, 27.
5. Defendant’s Motion for Summary Judgment, Exh. K
(Doc. No. 37-1) at 20; Exh. L (Doc. No. 37-2) at 20; Exh.
M (Doc. No. 37-3) at 36; Exh. N (Doc. No. 37-4) at 34.
7
pursuant to a reservation of the right to contest its
duties under the insurance policies.
In short, the critical chronology of this case is as
The state lawsuit was filed.
follows: December 29, 2010:
March 10, 2011:
Mr. Watts’s attorney filed a notice of
bankruptcy in the state lawsuit.
April 14, 2011: Mr.
Watts’s attorney filed a document listing the homeowners
and
their
attorneys
as
creditors
in
the
bankruptcy
proceedings, along with a declaration from Mr. Watts
attesting to the correctness of that list.
March 22,
2012: The Watts entities notified Penn National of the
state suit.
Penn National filed this lawsuit for a declaratory
judgment that it has no duty to defend or indemnify the
Watts entities.
and
some,
but
It named as defendants those entities
not
all,
of
the
homeowners
who
are
plaintiffs in the state suit.
The homeowners have oppose
Penn National’s declaration.
The Watts defendants have
not appeared.
8
II. PENN NATIONAL’S MOTION FOR SUMMARY JUDGMENT
Penn
National
has
filed
a
motion
for
summary
judgment, arguing that it is entitled to a declaration of
no obligation to defend or indemnify the Watts entities
because they failed to give timely notification of the
underlying occurrences and state suit, in violation of
the requirements of the insurance policies.
“A party may move for summary judgment, identifying
each claim or defense--or the part of each claim or
defense--on which summary judgment is sought.
The court
shall grant summary judgment if the movant shows that
there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law.”
Fed.
R.
Civ.
P.
56(a).
The
court
must
view
the
admissible evidence in the light most favorable to the
non-moving party and draw all reasonable inferences in
favor of that party.
Matsushita Elec. Indus. Co. Ltd. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986).
although
the
Watts
entities
9
have
not
Moreover,
opposed
Penn
National’s summary-judgment motion, this court is still
obligated to determine independently whether the motion
is due to be granted.6 See Livernois v. Med. Disposables,
Inc., 837 F.2d 1018, 1022 (11th Cir. 1988).
“‘[T]he failure of an insured to comply within a
reasonable
time
with
...
conditions
precedent
in
an
insurance policy requiring the insureds to give notice of
an accident or occurrence [or suit] releases the insurer
from obligations imposed by the insurance contract.’”
Travelers Indem. Co. of Connecticut v. Miller, 86 So. 3d
338, 342 (Ala. 2011) (quoting Reeves v. State Farm Fire
& Cas. Co., 539 So.2d 252, 254 (Ala. 1989)).
Thus, if
Penn National can establish an unreasonable delay, it is
released
from
its
obligation
under
the
insurance
contracts.
“Only two factors are to be considered in determining
the reasonableness of a delay in giving notice to the
6. Although the Watts entities have not entered an
appearance in this federal lawsuit, Penn National has not
sought a default judgment against the Watts entities.
10
insurer: the length of the delay and the reasons for the
delay.”
Id. (citing United States Fid. & Guar. Co. v.
Baldwin County Home Builders Ass’n, 770 So.2d 72, 75
(Ala. 2000)).
The first factor is the length of the delay.
86 So. 3d at 342.
Miller,
There is no dispute about the date on
which the Watts entities gave notice to Penn National:
March
22,
National
2012.
had
Nor
actual
is
there
notice
any
before
claim
that
that
Penn
time.
The
critical question is the date on which the Watts entities
themselves received notice.
The court concludes that Mr. Watts, and through him
the Watts entities, had notice as of April 14, 2011.7
On
7. Penn National argues that the Watts entities had
notice of the suit and the “occurrence” even earlier, but
that conclusion is not supported by the record (except
perhaps as discussed above regarding the March 2011
filing in the state court). Indeed, it is not even clear
what Penn National believes the relevant “occurrence” to
be. See Town & Country Prop., L.L.C. v. Amerisure Ins.
Co., 111 So. 3d 699, 706 (Ala. 2011). In any event, the
court has concluded that the delay, even starting April
14, 2011, was unreasonable. Therefore, whether the Watts
entities had earlier notice is not material to the
(continued...)
11
that date, Mr. Watts’s bankruptcy attorney submitted the
list
of
creditors,
defendants
in
this
including
case
as
all
well
of
as
the
homeowner
their
counsel.
Attached to that list was a declaration from Mr. Watts
himself that the list was true and correct.
Counsel for
the homeowners has conceded that the bankruptcy attorney
was aware of the state lawsuit at this point and was
authorized to file Mr. Watts’s declaration, which was not
fraudulent.
Thus there is no genuine dispute: Mr. Watts
knew of the existence of the state lawsuit as of April
14.
Indeed, this conclusion is bolstered by the fact
that,
even
before
April
14,
the
same
attorney
representing Mr. Watts submitted a notice to the state
court
that
Mr.
Watts
was
in
bankruptcy
proceedings,
establishing that the attorney knew of the state suit at
that time.
notice
on
It is not disputed in this litigation that
Mr.
Watts
would
7(...continued)
outcome of this case.
12
constitute
notice
on
the
entities.
Therefore, the Watts entities had notice of
the state suit as of April 14, 2011.
The homeowners argue that the Watts entities did not
have notice of the suit until a later date.
They note
that the Watts entities filed a motion to set aside the
default in the state court because of improper service on
them in those proceedings.
They claim (without citation
to evidence) that service was finally perfected only on
March 19, 2012, just three days before the Watts entities
notified Penn National.
But the issue here is not proper
service under Alabama civil procedure, but actual notice
under the terms of the insurance policies.
The homeowners argue that Mr. Watts did not know the
details of the lawsuit, including any allegations in it,
and had not seen a copy of the complaint until he was
served on March 19, 2012.
the
insurance
notification
insured
knows
complaint.
policies
obligations
the
But, even if this were true,
do
not
to
details
of
limit
instances
a
case
the
in
or
insureds’
which
has
the
seen
a
Rather, the policies all require the insureds
13
to notify Penn National either “as soon as practicable”
or “prompt[ly]” when a suit is brought against them.
See, supra, notes 4, 5.
policies
required
the
In other words, the insurance
Watts
entities
to
notify
Penn
National once they had actual knowledge of the existence
of a lawsuit against them.
There is no genuine dispute: Mr. Watts had actual
knowledge of the state lawsuit at the time the list of
creditors was filed in his bankruptcy proceedings.
And,
therefore, it is undisputed that the Watts entities had
notice at the same time.
Therefore, the period of delay established by the
record is April 14, 2011, when Mr. Watts filed a notice
in the state-court case, to March 22, 2012, when the
Watts entities notified Penn National of the suit.
This
length of delay, just under one year, is sufficient to
require some reasonable explanation. See Nationwide Mut.
Fire Ins. Co. v. Estate of Files, 10 So. 3d 533, 536
(Ala. 2008) (five-month delay necessitated explanation);
Pharr v. Cont’l Cas. Co., 429 So. 2d 1018, 1019 (Ala.
14
1983) (same, eight-month delay);
S. Guar. Ins. Co. v.
Thomas, 334 So. 2d 879, 883 (Ala. 1976) (same, six-month
delay).
excuse
Where the insured fails to offer a reasonable
for
such
a
protracted
delay,
the
entitled to judgment as a matter of law.
insurer
is
Pharr, 429 So.
2d at 1020; Thomas, 334 So. 2d at 885.
Here, the Watts entities have offered no excuse or
explanation at all.
This is unsurprising, as they have
not entered an appearance or made any filings in this
case.
This circumstance does give the court some pause:
for the Watts entities have appeared in the state court
proceedings, and might well have a reasonable explanation
for their failure to notify Penn National.
However, they
had the opportunity to appear in this case, and declined
to
do
so.
Furthermore,
the
homeowners
had
opportunity to seek discovery on this question.
the
They
could have presented evidence of some explanation for the
delay to this court.
They did not do so.
On the record
presented, the court has no choice but to find the Watts
entities’ delay unreasonable as a matter of law.
15
Penn National is therefore entitled, first, to a
finding
that the Watts entities breached the insurance
policies by failing to give timely notice of the statecourt lawsuit and, thus, second, to a declaration that
the insurance company owes no duty to defend or indemnify
the Watts entities with regard to that lawsuit.
To be sure, in an opinion entered on May 7, 2013,
this court found that a declaratory determination of Penn
National’s
duty
to
indemnify
was
not
yet
ripe.
Pennsylvania Nat. Mut. Cas. Ins. Co. v. Watts Builders,
L.L.C., 2013 WL 1908358 (M.D. Ala. 2013) (Thompson, J.).
The court was incorrect.
As this court has explained, “‘Because this lawsuit
has been brought under the Declaratory Judgment Act and
because it has been brought in federal court, an issue of
ripeness
raised.’”
that
may
be
peculiar
to
federal
courts
is
Auto-Owners Ins. Co. v. Toole, 947 F. Supp.
1557, 1565-66 (M.D. Ala. 1996) (Thompson, J.) (quoting
Guaranty National Insurance Company v. Beeline Stores,
Inc., 945 F. Supp. 1510, 1514 (M.D. Ala. 1996) (Thompson,
16
J.)).
The
Constitution
restricts
the
exercise
judicial power to “cases” and “controversies.”
of
U.S.
Const. art. III, § 2. As the court noted in Auto-Owners,
“The Declaratory Judgment Act, ‘in its limitation to
“cases of actual controversy,” manifestly has regard to
the
constitutional
operative only
provision,’”
and
therefore
“‘is
in respect to controversies which are
such in the constitutional sense.’”
Id. (quoting Aetna
Life Ins. Co. v. Haworth, 300 U.S. 227, 240–41 (1937)).
As the Supreme Court has observed, “the question in
each case is whether the facts alleged, under all the
circumstances,
controversy,
show
that
between
there
parties
is
having
a
substantial
adverse
legal
interests, of sufficient immediacy and reality to warrant
the
issuance
of
a
declaratory
judgment.”
Maryland
Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273
(1941).
“It
is
immaterial
that
frequently,
in
the
declaratory judgment suit, the positions of the parties
in the conventional suit are reversed; the inquiry is the
same in either case.”
Id.
17
This case is controlled by Maryland Cas. Co.
There,
the Supreme Court found a sufficient controversy where an
insurance company sought a declaration that it had no
duty not only to defend but also to indemnify its insured
with regard to an accident with a third party.
stated
that
controversy
insured.”
“It
is
between
clear
that
petitioner
there
is
The Court
an
[insurer]
actual
and
the
Maryland Cas. Co., 312 U.S. at 274.
Admittedly, this court has on occasions found that a
request for a declaration as to a duty to indemnify in an
underlying state-court case was not ripe absent a final
judgment
in
that
underlying
case.
For
example,
in
Beeline, the court stated that, “the question of whether
Guaranty National might ultimately be responsible for
indemnifying Beeline against any losses accruing in that
lawsuit is not timely before brought before this court.”
Beeline Stores, Inc., 945 F. Supp. at 1516.
In Beeline,
the court stated that, “Although the existence of a duty
to defend may be established by the allegations in the
injured party's complaint, the insurer's liability to the
18
insured is ultimately established by what is developed at
trial.”
Id. at 1514.
As a result, the court explained,
“a determination of the duty to indemnify cannot be made
at a preliminary stage in the proceedings, when it is
still
possible
for
the
plaintiff
in
the
underlying
lawsuit to change the theory of liability and assert a
claim that is covered by the policy at issue.”
Id.
No similar circumstances are presented with regard to
Penn National’s declaratory request here: there is no
concern that the facts underlying the duty to indemnify
may change.
This court is not confronted by situation in
which subsequent discovery or litigation in the statecourt proceeding the homeowners have against the Watts
entities could yield a substantially different claim and
thus alter the basis for the insurance company’s duty to
indemnify.
Rather, Penn National’s argument with regard
to its duty to indemnify has nothing to do with the
substance of the homeowners’ claim in state court and
instead relies only on the entities’ failure to notify.
19
Any
potential
future
alterations
in
the
homeowners’
state-court claims are irrelevant to this argument.
The court has not overlooked that Penn National’s
request for a declaration as to its duty to indemnify is
brought pursuant to the Declaratory Judgment Act, which
states that a court “may declare the rights and other
legal relations of any interested party seeking such
declaration.”
Supreme
Court
Declaratory
confers
a
28 U.S.C. § 2201 (emphasis added).
has
Judgment
discretion
“repeatedly
Act
on
as
the
‘an
The
characterized
enabling
courts
absolute right upon the litigant.’”
Act,
rather
the
which
than
an
Wilton v. Seven
Falls Co., 515 U.S. 277, 287 (1995) (quoting Public Serv.
Comm'n v. Wycoff Co., 344 U.S. 237, 241 (1952)).
“‘[T]here is ... nothing automatic or
obligatory about the assumption of
“jurisdiction” by a federal court’ to
hear a declaratory judgment action. ...
Consistent with the nonobligatory nature
of the remedy, a district court is
authorized, in the sound exercise of its
discretion, to stay or to dismiss an
action seeking a declaratory judgment
before trial or after all arguments have
drawn to a close. In the declaratory
20
judgment context, the normal principle
that federal courts should adjudicate
claims within their jurisdiction yields
to considerations of practicality and
wise judicial administration.”
Wilton, 515 U.S. at 288 (quoting E. Borchard, Declaratory
Judgments 313 (2d ed. 1941)) (footnote omitted).
Here,
because Penn National’s duty to defend and its duty to
indemnify turn on the same question--whether the Watts
entities satisfied the notice requirements under the
insurance
contracts--the
court
sees
no
reason
why
a
declaration is warranted in the first instance but not in
the second.
judicial
“[C]onsiderations of practicality and wise
administration”
do
not
warrant
otherwise.
Wilton, 515 U.S. at 288.
III. HOMEOWNERS’ STANDING
Finally,
the
court
turns
to
Penn
National’s
contention that, although it has sued the homeowners in
this
federal
challenge
the
lawsuit,
they
declaratory
21
still
relief
lack
standing
requested
by
to
the
insurance
company.
The
court
now
offers
these
observations with regard to Penn National’s contention.
First, Maryland Cas. Co., would seem to suggest that
the homeowners do have standing.
There, the Supreme
Court found a case or controversy between the insurer and
the alleged victim, despite the fact that the underlying
suit between the insured and the alleged victim had not
yet proceeded to judgment.
at 271-4.
Maryland Cas. Co., 312 U.S.
The Court noted at least two reasons.
First,
it explained that, where the issue is notice to the
insurer, the alleged victim in the underlying lawsuit
“may perform the conditions of the policy issued to the
insured requiring notice of the accident, notice of suit,
etc., in order to prevent lapse of the policy through
failure of the insured to perform such conditions.”
Id.
at 273; cf. Miller, 86 So. 3d at 342-347 (reviewing
Alabama law regarding the ability of alleged victims to
provide notice under insurance contracts).
Thus, as a
general proposition the interests of the alleged victim
22
in
the
insurance
policy
cannot
be
absolutely
and
unconditionally written off.
In any event, the Court raised a concern arguably
more applicable here: conflicting outcomes in federal and
state proceedings.
clear
that
petitioner
there
The Court explained that:
is
[insurer]
an
actual
and
the
controversy
insured.
If
“It is
between
we
held
contrariwise as to [alleged victim] Orteca because, as to
him, the controversy were yet too remote, it is possible
that opposite interpretations of the policy might be
announced by the federal and state courts.
For the
federal court, in a judgment not binding on Orteca, might
determine that petitioner was not obligated under the
policy,
while
the
state
court,
in
a
supplemental
proceeding by Orteca against petitioner, might conclude
otherwise.”
Id.
at 274.
The Court then concluded that:
”Thus we hold that there is an actual controversy between
petitioner
and
Orteca,
and
hence,
that
petitioner’s
complaint states a cause of action against the latter.”
Id.
23
It could be argued that the above concern and holding
obtain here.
Alabama law, 1975 Ala. Code §§ 27-23-1 and
27-23-2, allow a victim, under some circumstances, to
recover directly from an insurance company for the acts
of its insured.
See Melco Sys. v. Receivers of Trans-Am.
Ins. Co., 268 Ala. 152, 161 (1958).
The Alabama Supreme
Court has held that “defenses to liability available to
the insurer in an action brought by the insured would
also be available to the insurer in an action” under
those provisions.
Files, 10 So. 3d at 534-35.
Thus,
should the homeowners prevail in the state court, the
same defenses enjoyed by Penn National in this federal
declaratory
judgment
action
could
be
enjoyed
by
the
insurance company in a post-judgment action brought by
the
homeowners
against
the
insurance
company,
and
“opposite interpretations ... by the federal and state
courts,” Maryland Cas. Co., 312 U.S. at 274, of the
policies at issue should be avoided.
Moreover, now that the court has found that Penn
National should prevail in all respects, it is not clear
24
that the insurance company would still want to question
the homeowners’ standing.
After all, if the homeowners
lack standing to challenge the relief sought in this
case, it could be argued that they are not bound by this
court’s holding in favor of Penn National in all respects
and thus, if they prevail in state court, could later
pursue an action against the insurance company as to
whether it has a duty to indemnify that state-court
judgment.
However, resolution of the homeowners’ standing is
unnecessary in this case.
As this court has already
explained, although the Watts entities have not opposed
Penn National’s summary-judgment motion, this court is
still obligated to determine independently whether the
motion is due to be granted against them.
837
F.2d
at
1022.
Thus
regardless
See Livernois,
of
whether
the
homeowners have standing, the court would still have to
engage in the above analysis as to whether Penn National
is entitled to summary judgment in its favor as to both
its duty to defend and its duty to indemnify, and the
25
outcome would be the same.
As such, the court need not
reach the homeowner’s standing to oppose that relief.
***
In
accordance
with
this
opinion,
an
appropriate
judgment will be entered granting summary judgment in
favor of Penn National and declaring that the insurance
company has no duty to defend or indemnify the Watts
entities with regard to the state lawsuit.
DONE, this the 13th day of March, 2014.
/s/ Myron H. Thompson
UNITED STATES DISTRICT JUDGE
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