Century Surety Company v. Mo Foods, LLC et al

Filing 70

ORDER signed by Judge Garland E. Burrell, Jr. on 4/23/14 GRANTING 31 Motion for Summary Judgment. Plaintiff shall file a proposed judgment and a separate document explaining recoupment calculations and conclusions within 7 days. (Manzer, C)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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CENTURY SURETY COMPANY, an
Ohio Corporation,
Plaintiff,

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2:13-cv-01387-GEB-EFB

ORDER GRANTING PLAINTIFF’S
MOTION FOR SUMMARY JUDGMENT

v.

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No.

MO FOODS, LLC, a limited
liability company; MANISH
PATEL, an individual; TMPM,
LLC, a limited liability
company; PRADIP PATEL, an
individual, NEHA PATEL, an
individual; SEAN CANILOA, an
individual; RUBEN MORALES; an
individual; WAYNE PERARANDA;
an individual; DEBORAH
PENARANDA; an individual; and
PATRICK PENARANDA; an
individual,
Defendants.

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Plaintiff moves for summary judgment on all claims in

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its

Complaint.

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relief

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insurance policy to defend or indemnify any Defendant for claims

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alleged

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California, County of El Dorado, entitled Wayne Penaranda, et al.

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v. Mo’s Place, Inc., et al. (hereinafter referenced as “Penaranda

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v. Mo’s Place”); and 2) recoupment of defense costs hitherto paid

that

in

Specifically,

Plaintiff

the

owes

lawsuit

Plaintiff
no

pending

1

seeks:

obligation

in

the

1)

under

declaratory
a

Superior

liability

Court

of

1

in defending that lawsuit.1 Defendants Mo Foods, LLC and Manish

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Patel

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Wayne, Deborah, and Patrick Penaranda (hereinafter referenced as

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“the Penaranda Defendants”), and TMPM, LLC, Pradip Patel, and

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Neha Patel each oppose the motion. The pending motion was argued

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on March 10, 2014.

(hereinafter

referenced

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“the

Mo

Foods

Defendants”),

I. LEGAL STANDARD

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9

as

A party seeking summary judgment under Federal Rule of
Civil

Procedure

(“Rule”)

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bears

the

initial

burden

of

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demonstrating the absence of a genuine issue of material fact for

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trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). “A

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fact is ‘material’ when, under the governing substantive law, it

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could affect the outcome of the case.” Thrifty Oil Co. v. Bank of

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Am. Nat’l Trust & Sav. Ass’n, 322 F.3d 1039, 1046 (9th Cir. 2003)

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(quoting

Anderson

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(1986)).

An

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evidence is such that a reasonable jury could return a verdict

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for the nonmoving party.’” Id. (quoting Anderson, 477 U.S. at

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248).

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If

v.

issue

the

of

Liberty

Lobby,

material

movant

fact

satisfies

Inc.,
is

its

477

U.S.

“genuine”

“initial

242,

when

burden,”

248

“‘the

“the

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nonmoving party must set forth, by affidavit or as otherwise

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provided in Rule 56, ‘specific facts showing that there is a

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genuine issue for trial.’” T.W. Elec. Serv., Inc. v. Pac. Elec.

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Contractors Ass’n, 809 F.2d 626, 630 (9th Cir. 1987) (quoting

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former Fed. R. Civ. P. 56(e)). “A party asserting that a fact

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cannot be or is genuinely disputed must support the assertion by

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Plaintiff’s unopposed request that judicial notice be taken of the first
amended complaint (“FAC”) in Penaranda v. Mo’s Place is granted. (Req. for
Judicial Notice Ex. 1, First Amend. Compl. (“FAC”), ECF No. 31-3.)

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citing to particular parts of material in the record . . . or

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showing that the materials cited do not establish the absence or

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presence of a genuine dispute, or that an adverse party cannot

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produce admissible evidence to support the fact.” Fed. R. Civ. P.

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56(c)(1). Summary judgment “evidence must be viewed in the light

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most

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inferences must be drawn in favor of that party.” Sec. & Exch.

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Comm’n v. Todd, 642 F.3d 1207, 1215 (9th Cir. 2011) (citing

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Johnson v. Paradise Valley Unified Sch. Dist., 251 F.3d 1222,

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favorable

to

the

nonmoving

party,

and

all

reasonable

1227 (9th Cir. 2001)).

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Further, Local Rule 260(b) prescribes:

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Any party opposing a motion for summary
judgment
or
summary
adjudication
[must]
reproduce the itemized facts in the [moving
party’s] Statement of Undisputed Facts and
admit those facts that are undisputed and
deny those that are disputed, including with
each denial a citation to the particular
portions
of
any
pleading,
affidavit,
deposition, interrogatory answer, admission,
or other document relied upon in support of
that denial.

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If

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the

nonmovant

does

not

“specifically

.

.

.

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[controvert duly supported] facts identified in the [movant’s]

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statement of undisputed facts,” the nonmovant “is deemed to have

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admitted the validity of the facts contained in the [movant’s]

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statement.” Beard v. Banks, 548 U.S. 521, 527 (2006).

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Because a district court has no independent
duty “to scour the record in search of a
genuine issue of triable fact,” and may “rely
on the nonmoving party to identify with
reasonable particularity the evidence that
precludes
summary
judgment,”
. . .
the
district court . . . [is] under no obligation
to undertake a cumbersome review of the
record on the [nonmoving party’s] behalf.

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Simmons v. Navajo Cnty., Ariz., 609 F.3d 1011, 1017 (9th Cir.

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2010) (quoting Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir.

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1996));

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consider only the cited materials, but it may consider other

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materials in the record.”).

see

also

Fed.

5

R.

Civ.

P.

56(c)(3)

(“The

court

need

II. BACKGROUND

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The following allegations in the Penaranda Defendants’

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FAC in Penaranda v. Mo’s Place are germane to decision on the

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motion:

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29. . . . MANISH [Patel] and/or one or more
BOUNCERS told DEREK [Penaranda] to leave the
bar on or around 12:30 a.m., on May 20, 2012.
. . . DEREK [Penaranda] said that he needed
to pay his tab at the bar first. . . . MANISH
[Patel] agreed, and insisted that one or more
BOUNCERS escort DEREK to the bar to pay his
tab.

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30. . . . MANISH [Patel] was yelling at DEREK
[Penaranda] as the two walked toward the bar,
with
PATRICK
[Penaranda]
. . . .
DEREK
[Penaranda] punched MANISH [Patel] and the
two fell to the ground.

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31. . . . [A bouncer]
PATRICK [Penaranda].

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immediately

grabbed

32.
. . .
[A
bouncer]
pulled
DEREK
[Penaranda] away from MANISH [Patel], with
one
arm
around
DEREK’s
neck,
applying
pressure thereto. . . . DEREK’s body went
limp while [the bouncer] held DEREK around
the neck.

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. . . .

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49. . . . DEREK
proximate
result
bouncers].

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[Penaranda] died as a
of
the
acts
of
[the

50.
. . .
PATRICK
[physical injuries].

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¶¶ 29-32,

49-50.)

(FAC

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surveillance

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above referenced physical interactions. (Not. of Lodging Video

showing

Mo

Foods

suffered

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video

The

[Penaranda]

Defendants

approximately

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five

submitted

minutes

of

a

the

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Disc,

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following claims in Penaranda v. Mo’s Place: assault, battery,

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negligence,

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intentional infliction of emotional distress, negligent hiring

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and supervision, and wrongful death. (FAC ¶¶ 62-83, 109-10.)

ECF

6

No.

43-5.)

negligent

During

the

The

Penaranda

infliction

time

of

the

Defendants

of

above

allege

emotional

referenced

the

distress,

physical

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interactions, Mo Foods, LLC was insured under a general liability

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insurance policy (hereinafter referenced as “Insurance Policy”)

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issued by Plaintiff. (Mo Foods’ Resp. to Pl.’s Sep. Statement of

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Undisputed Facts (“Mo Foods’ Resp.”) ¶ 7, ECF No. 43-1; TMPM’s

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Resp.

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Resp.”) ¶ 7, ECF No. 31-1.) The Insurance Policy includes an

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exclusion, stating in pertinent part:

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to

Pl.’s

Sep.

Statement

of

Undisputed

Facts

(“TMPM’s

[Plaintiff] shall have no duty to defend or
indemnify any claim . . . [or] suit . . .
seeking damages . . . where . . . any actual
or alleged injury arises out of a chain of
events which includes assault or battery,
regardless of whether the assault or battery
is the initial precipitating event or a
substantial cause of injury.

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(Mo Foods’ Resp. ¶ 10; TMPM’s Resp. ¶ 10 (hereinafter referenced

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as “Assault and Battery Exclusion”).)

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“Mo Foods, LLC, Manish Patel, TMPM, LLC, Pradip Patel,

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Neha Patel, Sean Caniloa and Ruben Morales all tendered” their

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defense of Penaranda v. Mo’s Place to Plaintiff. (Mo Foods’ Resp.

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¶ 5; TMPM’s Resp. ¶ 5.) “[Plaintiff] accepted the tenders and

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assumed their defense [but] reserve[ed] its rights to establish

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the absence of coverage and to obtain reimbursement of defense

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costs incurred on their behalf.” (Mo Foods’ Resp. ¶ 6; TMPM’s

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Resp. ¶ 6.)
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III. DISCUSSION

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A. Coverage

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Plaintiff argues, inter alia, it is entitled to summary

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judgment

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Penaranda[] [Defendants] allege the incident began when Derek

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Penaranda committed a battery on Manish Patel by striking him,”

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and therefore the claim is not covered by the policy because the

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Assault and Battery Exclusion excludes from coverage “a chain of

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events which includes assault or battery.” (Pl.’s Mot. 11:7-8,

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on

its

declaratory

judgment

claim

since

the

“[t]he

14-15, ECF No. 31.)

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The Insurance Policy’s Assault and Battery Exclusion

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states that Plaintiff “shall have no duty to defend or indemnify

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any claim . . . [or] suit . . . seeking damages . . . where . . .

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any actual or alleged injury arises out of a chain of events

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which includes . . . battery, regardless of whether the . . .

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battery is the initial precipitating event or a substantial cause

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of injury.” (Assault and Battery Exclusion (emphasis added).)

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The Mo Foods Defendants and the Penaranda Defendants

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argue the Assault and Battery Exclusion is ambiguous since it

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does not define the term “battery.” Specifically, the Mo Foods

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Defendants argue “the strictest, criminal definition [of the term

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must] be applied.” (Mo Foods’ Opp’n 4:20-21, No. 43.) The Mo

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Foods Defendants also argue that since the Penaranda Defendants

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allege

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physical contact by agents of the bar,” the agents of the bar

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acted in self-defense, and thus no “claims arise out of any

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assault or battery.” (Id. 5:2-5.)

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“Derek

The

[Penaranda]

Insurance

hit

Policy,
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[Manish

which

Patel]

is

prior

to

incorporated

any

by

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reference into Plaintiff’s Complaint, does not define the term

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“battery.” (See Decl. of Daniel Mayer in Supp. of Pl.’s Mot. for

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Summ. J., Ex. 9, p. 31-35 (hereinafter referenced as “Insurance

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Policy

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California case law,

Definitions

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Section”),

ECF

No.

31-5.)

However,

under

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[i]t has long been established, both in tort
and criminal law, that ‘the least touching’
may constitute battery. In other words[;]
force against the person is enough, it need
not be violent or severe, it need not cause
bodily harm or even pain, and it need not
leave any mark.

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People v. Colantuono, 7 Cal. 4th 206, 214 n.4 (1994) (quoting

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People v. Rocha, 3 Cal. 3d 893, 899 (1971)).

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Insurance Policy’s lack of definition for the term “battery” does

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not render the term ambiguous.

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8

Therefore, the

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Nor does the Insurance Policy define the phrase “arises

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out of.” (See Insurance Policy Definitions Section.) However,

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under California case law,

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“[a]rising out of” is a broad concept
requiring only a “slight connection” or an
“incidental relationship” between the injury
and the excluded risk. Cont’l Cas. Co. v.
City of Richmond, 763 F.2d 1076, 1081 (9th
Cir.
1985)
[(stating
“California
courts
consistently have adopted broad definitions
of . . . ‘arising out of’” and collecting
cases
to
that
effect)].
Such
language
“requires [the court] to examine the conduct
underlying the . . . lawsuit, instead of the
legal theories attached to the conduct.”
Guaranty Nat’l Ins. Co. v. Int’l Ins. Co.,
994 F.2d 1280, 1284 (7th Cir. 1993).

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Century Transit Sys., Inc. v. Am. Empire Surplus Lines Ins. Co.,

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42

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Recreation & Park Dist. v. Cal. Ass’n Park & Recreation Ins., 106

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Cal. App. 4th 293, 301 (2003) (“As this court has noted, the

Cal.

App.

4th

121,

127

n.4

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(1996);

see

also

Southgate

1

‘‘arising

2

exclusionary operative events with the exclusion.” (citing State

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Farm Fire & Cas. Co. v. Salas, 222 Cal. App. 3d 268, 274 n.4

4

(1990))).

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out

of’

connective

. . .

broadly

links’

the

The following allegations in the Penaranda Defendants’

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FAC

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“alleged injur[ies] ar[o]se[] out of a chain of events which

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includes . . . battery.” (Assault and Battery Exclusion.)

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in

Penaranda

v.

Mo’s

Place

are

germane

to

whether

the

29. . . . MANISH [Patel] and/or one or more
BOUNCERS told DEREK [Penaranda] to leave the
bar on or around 12:30 a.m., on May 20, 2012.
. . . DEREK [Penaranda] said that he needed
to pay his tab at the bar first. . . . MANISH
[Patel] agreed, and insisted that one or more
BOUNCERS escort DEREK to the bar to pay his
tab.
30. . . . MANISH [Patel] was yelling at DEREK
[Penaranda] as the two walked toward the bar,
with
PATRICK
[Penaranda]
. . . .
DEREK
[Penaranda] punched MANISH [Patel] and the
two fell to the ground.
31. . . . [A bouncer]
PATRICK [Penaranda].

immediately

grabbed

32.
. . .
[A
bouncer]
pulled
DEREK
[Penaranda] away from MANISH [Patel], with
one
arm
around
DEREK’s
neck,
applying
pressure thereto. . . . DEREK’s body went
limp while [the bouncer] held DEREK around
the neck.
. . . .
49. . . . DEREK
proximate
result
bouncers].

[Penaranda] died as a
of
the
acts
of
[the

50.
. . .
PATRICK
[physical injuries].

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The

suffered

(FAC ¶¶ 29-32, 49-50.)

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[Penaranda]

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Penaranda

Defendants

have

alleged

that

Derek

Penaranda’s battery on Manish Patel precipitated each bouncer’s
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1

respective physical interaction or interactions with Derek and/or

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Patrick Penaranda. Therefore, the “alleged injur[ies]” to Derek

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and Patrick Penaranda

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includes

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Accordingly, the Insurance Policy’s Assault and Battery Exclusion

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prescribes that Plaintiff “ha[s] no duty to defend or indemnify

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any claim” in Penaranda v. Mo’s Place. (Id.) Therefore, this

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portion of the motion is granted.

. . .

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“ar[o]se[] out of a chain of events which

battery.”

(Assault

and

Battery

Exclusion.)

B. Concurrent Cause Doctrine

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Nevertheless,

Defendants

argue

that

Plaintiff

must

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continue defending Penaranda v. Mo’s Place under the concurrent

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cause doctrine since the Penaranda Defendants’ claims include

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negligence, which is a liability theory that the Assault and

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Battery Exclusion does not specifically exclude from coverage.

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Under

the

concurrent

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constitute

concurrent

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injury], the insurer is liable so long as one of the causes is

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covered

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Partridge, 10 Cal. 3d 94, 102 (1973) (emphasis added). Here, the

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concurrent cause doctrine is inapposite since the Assault and

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Battery Exclusion excludes from coverage not just certain causes

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of injury, but certain injuries themselves—specifically, “any

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actual or alleged injury [that] arises out of a chain of events

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which

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Exclusion.) Therefore, the concurrent cause doctrine does not

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provide

27

Homeowners Ass’n v. Century Sur. Co., 407 Fed. App’x 129, 131

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(9th Cir. 2010) (holding that where an insurance policy excluded

by

the

includes

a

basis

cause

proximate

policy.”

assault

for

doctrine,

State

or

“when

causes

Farm

Mut.

battery.”

coverage.

9

See

of

two
an

Auto.

(Assault

also

101

. . .

risks

accident

Ins.

and

Ocean

Co.

[or

v.

Battery

Condo.

1

from coverage “any actual or alleged injury aris[ing] out of a

2

chain of events which includes assault or battery, regardless of

3

whether assault or battery is the initial or precipitating event

4

or a substantial cause of injury,” the insurance company would

5

have no duty to defend an otherwise-covered false imprisonment

6

claim since “that injury would have arisen out of a chain of

7

events that included an assault or battery”).

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C. Recoupment

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Plaintiff

also

argues

it

is

entitled

to

summary

10

judgment on its recoupment claim since it “expressly reserved the

11

right to seek recoupment of defense costs if it were determined

12

that no defense was owed,” and “there [is] no potential for

13

coverage of the Penarandas’ claims.” (Pl.’s Mot. 12:18-20.)

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“California

clearly

attorney’s

17

obligation to defend.’” Scottsdale Ins. Co. v. MV Transp., 36

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Cal. 4th 643, 659-60 (2005) (quoting Buss v. Super. Ct., 16 Cal.

19

4th

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defend any party in Penaranda v. Mo’s Place, this portion of

21

Plaintiff’s motion is also granted.

50-51

(1997)).

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Since

for

Plaintiff

expenses

be

defending

claims

other

to

16

against

and

insurers

reimbursed

insureds

fees’

allows

15

35,

for

law

which

has

no

there

‘paid

in

was

no

obligation

to

IV. CONCLUSION

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For the stated reasons, Plaintiff’s summary judgment

24

motion

is

25

judgment

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recoupment calculations and conclusions no later than seven days

27

after the date on which this order is filed. Objections, if any,

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shall

be

granted.
and

a

filed

Further,

separate

no

later

Plaintiff

document

than
10

in

seven

shall

file

which

it

days

a

proposed

explains

after

its

Plaintiff’s

1

proposed judgment and separate document is filed. Plaintiff may

2

reply to any objection within five days after it is filed.

3

Dated:

April 23, 2014

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