Metropolitan Property and Casualty Insurance Company v. Cossey et al

Filing 32

MEMORANDUM DECISION AND ORDER. IT IS ORDERED: Plaintiff's Motion for Summary Judgment 27 is GRANTED. Defendants' Motion for Summary Judgment 26 is DENIED. Signed by Judge David C. Nye. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (st)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
METROPOLITAN PROPERTY AND
CASUALTY INSURANCE COMPANY,

Case No. 2:16-cv-00560-DCN
MEMORANDUM DECISION AND
ORDER

Plaintiff,
v.
ROBERT R. COSSEY, STACY N.
COSSEY, TYLER COSSEY, and
JOSHUA BAILEY,
Defendants.

I. INTRODUCTION
This matter comes before the Court on the parties’ cross-motions for summary
judgment. Dkts. 26, 27. Having reviewed the record and briefs, the Court finds that the
facts and legal arguments are adequately presented. Accordingly, in the interest of avoiding
further delay, and because the Court finds that the decisional process would not be
significantly aided by oral argument, the Court will decide the motion without oral
argument. Dist. Idaho Loc. Civ. R. 7.1(d)(2)(ii). For the reasons set forth below, the Court
enters summary judgment in favor of Plaintiff.

MEMORANDUM DECISION AND ORDER– PAGE 1

II. BACKGROUND1
Plaintiff Metropolitan Property and Casualty Insurance Company (“Met P&C”) is
an insurance company organized and existing under the laws of Rhode Island with its
principal place of business in Warwick, Rhode Island. At all relevant times, Met P&C
was duly authorized to issue policies of insurance covering certain risks within the State
of Idaho. Defendant Robert Cossey maintains a primary residence in Spokane County,
Washington. At times material to this matter, Defendant Robert R. Cossey also
maintained a second home in Priest River, Bonner County, Idaho. Defendant Stacy N.
Cossey maintains a primary residence in Spokane County, Washington. At times material
to this matter, Defendant Stacy N. Cossey also maintained a second home in Priest River,
Bonner County, Idaho.2 Defendant Tyler Cossey maintains a residence in Spokane
County, Washington. Defendant Tyler Cossey is the son of Defendants Robert R. Cossey
and Stacy N. Cossey. Defendant Joshua Bailey maintains a residence in Spokane County,
Washington.
Robert and Stacy Cossey had in effect a policy of insurance, entitled
Homeowner’s Insurance Policy (hereinafter the “Policy”), issued by Met P&C with a
policy term commencing November 09, 2015, and continuing until November 09, 2016,
for a vacation home owned by Robert and Stacy Cossey located at Rte. 1, Box 51E, Priest

1

The Court took the following facts from the Joint Statement of Undisputed Facts the parties
submitted to the Court. Dkt. 25.
2
At the time the Policy was issued, the Cosseys were married. The Cosseys have since divorced.

MEMORANDUM DECISION AND ORDER– PAGE 2

River, Idaho, 83856. The Policy provides coverage in the amount of $300,000.00 for
bodily injury and property damage.
The Cosseys also owned a 2006 Sea Ray Model 195 Sport boat which was 20 feet
in length and had a 190 horsepower motor (the “Boat”). At all times material to this
matter, the Boat was moored at or near the vacation home. The Cosseys purchased a
watercraft policy of insurance, issued by Safeco Insurance, with a policy term
commencing January 18, 2016, and continuing until January 18, 2017, specifically
covering the Boat (the “Boat Policy”). The Boat Policy provides coverage in the amount
of $300,000.00 for bodily injury and property damage. In addition to the Boat Policy, the
Cosseys purchased an umbrella policy of insurance covering their automobiles and
watercraft (the Boat), also issued by Safeco Insurance, with a policy term commencing
January 18, 2016, and continuing until January 18, 2017 (the “Umbrella Policy”). The
Umbrella Policy provided coverage in the amount of $1,000,000.00.
Sometime prior to July 2, 2016, Tyler Cossey, with the permission of the Cosseys,
invited several friends to the vacation home to celebrate the 4th of July weekend. Among
the invitees were William “Riley” Devine, Joshua Bailey, Lauren Devine, Jeff Groat, and
Lisa Groat. Tyler and some of his friends arrived at the vacation house on July 2, 2016.
The Groat’s arrived on July 3, 2016. Jeff Groat had recently purchased a Jet Ski that he
brought with him to the vacation home.
On the afternoon of July 3, 2016, Tyler Cossey and his friends took the Boat and
the Jet Ski out on the Pend Oreille River. With the permission of Tyler Cossey, Joshua
Bailey was driving the Boat. Tyler Cossey, Abigail Lentz, and Danielle Grams were on
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an inner tube being pulled by the Boat. Riley Devine was on the Jet Ski and was trying to
jump the wake behind the Boat and the inner tube. At some point, he crashed into the
inner tube, the Jet Ski striking Abigail Lentz in the face. Danielle Grams was also injured,
having sustained a cracked rib and a partially collapsed lung. As a result of the abovedescribed incident, Abigail Lentz underwent surgery, facial reconstruction with plates
and wires in her mouth, and therapy.
On or about November 28, 2016, counsel for Abigail Lentz made a demand to Met
P&C and its insureds, Robert and Stacy Cossey, as well as their son, Tyler Cossey, and
the operator of the boat, Joshua Bailey, for payment of $1.7 million dollars, which
exceeds the total amount of coverage under all of the insurance policies of the Cossey’s,
to settle Ms. Lentz’s damage claims. On or about December 12, 2016, Met P&C sent a
letter to the Cosseys denying coverage for liability arising out of the July 3, 2016,
watercraft incident.
On December 30, 2016, Met P&C filed a Complaint in this Court asserting one
claim for relief: a declaratory judgment proclaiming “that Met P&C owes no duty,
contractual or otherwise, to” (1) “pay sums that the Defendants may become obligated to
pay as damages for ‘bodily injury’ as a result of the allegations pled in or otherwise
connected with the July 3, 2016 incident,” or (2) “defend, or otherwise pay for the cost of
defending, the Defendants in any matter involving the July 3, 2016 incident.” Dkt. 1, at
6.
On May 4, 2017, the parties filed a Joint Statement of Undisputed Facts. Dkt. 25.
Then, on June 7, 2017, the parties filed cross-motions for summary judgment. Dkts. 26,
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27. After these motions were fully briefed, Magistrate Judge Ronald E. Bush reassigned
this case to the undersigned. Dkt. 31.
III. LEGAL STANDARD
Summary judgment is proper “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). This Court’s role at summary judgment is not “to weigh the evidence and
determine the truth of the matter but to determine whether there is a genuine issue for
trial.” Zetwick v. Cty. of Yolo, 850 F.3d 436, 441 (9th Cir. 2017) (citation omitted).
However, “the mere existence of some alleged factual dispute between the parties will
not defeat an otherwise properly supported motion for summary judgment.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986). There must be a genuine dispute as to
any material fact—a fact “that may affect the outcome of the case.” Id. at 248.
When cross-motions for summary judgment are filed, the Court must
independently search the record for factual disputes. Fair Housing Council of Riverside
County, Inc. v. Riverside Two, 249 F.3d 1132, 1136 (9th Cir.2001). The filing of crossmotions for summary judgment—where both parties essentially assert that there are no
material factual disputes—does not vitiate the court’s responsibility to determine whether
disputes as to material facts are present. Id.
IV. ANALYSIS
A. The Applicable Law
The Idaho Supreme Court has instructed that, “[w]hen interpreting insurance
policies” under Idaho law, courts should apply “the general rules of contract law subject
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to certain special canons of construction.” Clark v. Prudential Prop. & Cas. Ins. Co., 66
P.3d 242, 244 (Idaho 2003). Under these general rules, the Court must determine whether
or not there is an ambiguity in the policy, “[b]eginning with the plain language of the
insurance policy.” Id. “Determining whether a contract is ambiguous is a question of law
upon which this Court exercises free review.” Id. at 245. “Where the policy is reasonably
subject to differing interpretations, the language is ambiguous and its meaning is a
question of fact.” Id. In resolving this question of law, the Court must construe the
policy “as a whole, not by an isolated phrase.” Selkirk Seed Co. v. State Ins. Fund, 18
P.3d 956, 959 (Idaho 2000). Generally, “because insurance contracts are adhesion
contracts, typically not subject to negotiation between the parties, any ambiguity that
exists in the contract ‘must be construed most strongly against the insurer.’” Farmers Ins.
Co. of Idaho v. Talbot, 987 P.2d 1043, 1047 (Idaho 1999) (quoting Mut. of Enumclaw
Ins. Co. v. Roberts, 912 P.2d 119, 122 (Idaho 1996)). “The burden is on the insurer to use
clear and precise language if it wishes to restrict the scope of coverage and exclusions not
stated with specificity will not be presumed or inferred.” Clark, 66 P.3d at 245.
“Under Idaho law and consistent with other states, an insurer’s duties to defend
and indemnify are separate duties.” Hoyle v. Utica Mut. Ins. Co., 48 P.3d 1256, 1264
(2002). “The duty to defend is broader than the duty to indemnify.” Id. A “third-party’s
complaint [that] reveals a potential for liability that would be covered by the insured’s
policy” triggers the duty to defend. Id.

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B. Application
The provision at issue in this case is paragraph nine of SECTION II – LOSSES
WE DO NOT COVER of a larger section entitled, “LIABILITY, MEDICAL
EXPENSES AND OPTIONAL COVERAGES.” Dkt. 25, at 34-36. Paragraph nine
provides as follows:
9. Watercraft. We do not cover bodily injury or property damage arising
out of:
A. the ownership, maintenance, occupancy, operation, use, loading or
unloading of watercraft of any type owned or operated by or rented
or loaned to you;
B. the entrustment by you of a watercraft of any type to any person;
C. the failure to supervise or negligent supervision by you of any
person involving a watercraft of any type; or
D. vicarious liability, whether or not imposed by law, for the actions
of a child or minor involving a watercraft of any type.
Coverage is extended for bodily injury and property damage arising
out of:
a. any watercraft on the insured premises;
b. any watercraft while stored;
c. watercraft, owned or furnished or available for your regular use:
1) that is powered by one or more motors with 50 total
horsepower or less. This includes watercraft propelled by a
water jet pump engine or motor; or
2) that is a sailing vessel 31 feet and under in length with or
without auxiliary power;
d. rented watercraft:
1) powered by one or more outboard motors;
2) with an inboard or inboard-outdrive motor with 50
horsepower or less. This includes watercraft propelled by a
water jet pump engine or motor; or
3) that is a sailing vessel 31 feet and under in length with or
without auxiliary power; or
e. watercraft not owned by you, not rented to you nor furnished or
available for your regular use.
This coverage is excess coverage over and above any other collectible
insurance.
MEMORANDUM DECISION AND ORDER– PAGE 7

Id. at 36-37 (emphasis in original).
The parties assert that the definition of “you” and “your,” provided for in the
“GENERAL DEFINITIONS” section of the Policy, impacts the Court’s interpretation.
This definition provides:
“You” and “your” mean:
1. the person or persons named in the Declarations and if a resident of the
same household:
A. the spouse of such person or persons;
B. the relatives of either; or
C. any other person under the age of twenty-one in the care of any
of the above; and
2. under SECTION II only:
A. any other person or organization legally responsible for loss
caused by animals or watercraft owned by you. We will not
cover any such person or organization using or having custody of
animals or watercraft in any business or without your
permission; and
B. with respect to the use of any vehicle, with your consent, to
which this policy applies:
1. any person while engaged in employment by you; or
2. other persons using the vehicle on the insured premises.
Id. at 13-14.
Because paragraph nine falls under SECTION II, both the first and the second
definition of “you” and “your” applies. This second definition has four requirements: (1)
a person or organization; (2) legally responsible for loss; (3) caused by animals or
watercraft owned by [the Cosseys]; (4) who had the permission of the Cosseys to use or
have custody of the animals or watercraft.
The parties agree that Joshua Bailey was a permissive driver of the Boat— Joshua
Bailey was driving the Boat with the permission of Tyler Cossey. The Court assumes,

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without decided or commenting, for the purpose of these Motions that Bailey, as the
driver of the Boat when the incident occurred, is “legally responsible for loss caused by”
the Boat, which is a “watercraft owned by [the Cosseys].” Based on this assumption,
Bailey falls under the definition of “you,” applied to SECTION II, because (1) he is a
person; (2) legally responsible for the loss; (3) cause by the Boat, a watercraft owned by
the Cosseys, during the July 3, 2016 incident; and (4) he had the permission of the
Cosseys to use the Boat when the loss occurred.
The Court now turns to paragraph nine with the conclusion that Bailey is included
in the definition of “you” and “your.” Paragraph nine first sets forth what is excluded
from coverage. Significantly, this paragraph states that the Policy does “not cover bodily
injury or property damage arising out of . . . [the] use . . . of watercraft of any type owned
or operated by or rented or loaned to you; [or] the entrustment by you of a watercraft of
any type to any person . . . .” Notwithstanding these exclusions, the Policy extends
coverage “for bodily injury and property damage arising out of” certain uses of certain
watercrafts.
Defendants assert that section “e.” of paragraph nine extends coverage to bodily
injury and property damages arising out of Joshua Bailey’s use of the Boat during the
July 3, 2016 incident. Section “e.” extends coverage “for bodily injury and property
damage arising out of . . . watercraft not owned by you, not rented to you nor furnished or
available for your regular use.” Defendants argue that, because Bailey is included in the
definition of “you” for the purposes of this section, the Policy extends coverage to bodily

MEMORANDUM DECISION AND ORDER– PAGE 9

injury arising out of the Boat, because the Boat was not “owned by [Bailey],” “rented to
[Bailey],” or “furnished or available for [Bailey’s] regular use.”
Met P&C argues only that “if Bailey is included within the defined term ‘you’ for
purposes of the coverage ‘extension’ in subjection ‘e.,’ he must also necessarily be
included within the defined term ‘you’ for purposes of the unambiguous exclusion under
the Met P&C policy for operation, use, etc. of watercraft in section 9.A.” Dkt. 27-1, at 7.
In other words, Met P&C argues this section excludes coverage for “bodily injury or
property damage arising out of . . . the . . . use . . . of watercraft of any type . . . operated
by . . . [Bailey].” The Court agrees with this reading of the exclusion clause; however, the
Court must construe this coverage exclusion narrowly and construe the coverage
extension broadly. See Farm Bureau Ins. Co. of Idaho v. Kinsey, 234 P.3d 739, 743
(2010) (“Following the general tenets of insurance contract interpretation, these terms are
given their broad meaning in cases involving the extension of liability coverage and are
construed narrowly in those cases involving exclusion from coverage.” 9A Steven Plitt, et
al., Couch on Insurance § 128:6 (3d ed. 2009)). The Court must also read the Policy as a
whole and give meaning to all of its terms. See Twin Lakes Vill. Prop. Ass’n, Inc. v.
Crowley, 857 P.2d 611, 617 (1993). Following these canons of construction, the Court
finds the exclusions from coverage in section “A.” are subject to the extension of
coverage in section “e.”
Nevertheless, the Court finds it necessary to examine section “e.” closer to
determine whether it really extends coverage to the July 3, 2016 incident. Again, the
definition of “you” in this section includes Bailey; however, it also includes the named
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insured party—the Cosseys. Accordingly, section “e.” extends coverage “for bodily
injury and property damage arising out of . . . watercraft not owned by” anyone falling
under the definition of “you,” which includes Bailey and the Cosseys. Because the Boat
is a watercraft owned by the Cosseys, section “e.” does not extend coverage for injury or
damage caused by the Boat.
In sum, section “A.” of paragraph nine excludes from coverage bodily injury or
property damage arising out of Bailey’s use of watercraft of any type. Injury or damages
arising from Bailey’s operation of the Boat during the July 3, 2016 incident is thus
excluded from coverage under this section. Section “e.,” in turn, does not extend
coverage to Bailey’s operation of the Boat during this incident. Therefore, the Court must
conclude that the Policy does not cover any damages for bodily injury arising from
Bailey’s operation of the Boat during the July 3, 2016 incident.
Because the Court finds the Policy unambiguously does not cover damages for
bodily injury connected with the July 3, 2016 incident, the Court also finds Abigail
Lentz’s demand for payment did not trigger the duty to defend.
For all of these reasons, the Court finds there is no dispute of material fact in this
case and Met P&C is entitled to judgment as a matter of law. Accordingly, the Court will
enter summary judgment in favor of Met P&C.
ORDER
IT IS ORDERED:
1. Plaintiff’s Motion for Summary Judgment (Dkt. 27) is GRANTED.
2. Defendants’ Motion for Summary Judgment (Dkt. 26) is DENIED.
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3. The Court will enter a separate Judgment in accordance with Fed. R. Civ. P. 58.
DATED: October 17, 2017
_________________________
David C. Nye
U.S. District Court Judge

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