Dhanaraj et al v. Markel Insurance Company
MEMORANDUM OPINION. Signed by Judge Paula Xinis on 11/18/2020. (ybs, Deputy Clerk)
Case 8:20-cv-00970-PX Document 27 Filed 11/18/20 Page 1 of 7
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
CHRISTINA DHANARAJ, et al.,
JANE DOE, et al.
Civil Action No. 8:20-cv-00970-PX
MARKEL INSURANCE COMPANY,
Pending before the Court are Jane and John Does’ Motion to Intervene in this action.
ECF No. 14. Plaintiffs Christina Dhanaraj (“Dhanaraj”) and Christina Dhanaraj Daycare (“the
Daycare”) filed suit in Montgomery County Circuit Court against Defendant Markel Insurance
Company (“Markel”) for breach of contract and a declaratory judgment pursuant to Md. Code
Ann. Cts. & Jud. Proc. § 3-406. Markel has removed the case to this Court. The Does’ motion
to intervene has been fully briefed and no hearing is necessary. See Loc. R. 105.6. For the
following reasons, the motion is granted. 1
According to the Amended Complaint, Dhanaraj owned and operated an in-home daycare
in Montgomery County, Maryland. ECF No. 10 at ¶ 3. Markel Insurance Company (“Markel”)
The Clerk shall amend the caption of this case to include Jane and John Doe as Intervenor-Plaintiffs.
Case 8:20-cv-00970-PX Document 27 Filed 11/18/20 Page 2 of 7
provided the general liability insurance for the business. Id. at ¶ 8; ECF No. 10-2 at 1-4. In
January 2017, Dhanaraj was charged and subsequently pleaded guilty to second degree child
abuse arising from Dhanaraj having repeatedly hit the Does’ two-year old child, H.E., who was
enrolled in the Daycare. ECF No. 10 at ¶¶ 12-15. 2 In December 2018, the Does filed a tort
action against Dhanaraj and the Daycare in Montgomery County Circuit Court, seeking
compensatory and punitive damages for injuries relating to Dhanaraj’s abuse of H.E. See Doe v.
Dhanaraj, No. 461250-V (Montgomery Cnty Cir. Ct. Dec. 31, 2018).
Dhanaraj sought indemnification and defense coverage from Markel under the general
liability policy. See ECF No. 22-6 at 2. In response, Markel asserted that the policy did not
trigger any duty to defend or indemnify Dhanaraj in the Does’ suit. ECF No. 22-7. Markel
specifically maintained that the policy did not cover an “intentional act” such as the assault
Dhanaraj had committed on H.E. Id. at 3; see also ECF No. 22-15 at 32 (defining an
“occurrence” covered by the policy as “an accident, including continuous or repeated exposure to
substantially the same general harmful conditions.”). Additionally, Markel contends that the
policy excludes coverage for any “insured who takes part in the abuse, molestation or
exploitation.” ECF No. 22-7 at 3,4; see also ECF No. 22-15 at 19 (Section I.2(a) - excluding
from coverage “bodily injury . . . intended from the standpoint of the insured.”), 57 (Section
B.2.b. excluding from coverage “any insured who takes part in the abuse, molestation, or
Upon receiving Markel’s coverage disclaimer, Dhanaraj and the Daycare filed a third-
The Court grants the unopposed motion to proceed under pseudonyms (ECF No. 18) to protect the identity
of the Does’ young child. See, e.g., Doe v. N. Carolina Cent. Univ., No. 1:98-cv-1095, 1999 WL 1939248, at *4
(M.D.N.C. Apr. 15, 1999) (“Courts are often more willing to allow parties to proceed anonymously in order to
protect the privacy rights of children.”) (citing James v. Jacobson, 6 F.3d 233, 241 (4th Cir. 1993)); Doe v. Stegall,
653 F.2d 180, 186 (5th Cir. 1981) (Finding “especially persuasive . . . the fact that plaintiffs are children.”). For the
same reasons, the Court also grants the unopposed motion to seal ECF Nos. 19 and 20 (ECF No. 21).
Case 8:20-cv-00970-PX Document 27 Filed 11/18/20 Page 3 of 7
party complaint against Markel in the Circuit Court tort action, seeking coverage under the
policy. ECF No. 22-4 at 7. The Circuit Court dismissed the third-party complaint but permitted
Dhanaraj and the Daycare to file a separate action against Markel. In that action, Dhanaraj and
the Daycare sought declaratory judgment to establish that Markel, pursuant to the general
liability policy, must defend and indemnify them in the underlying tort action. ECF No. 10.
Specifically, Dhanaraj and the Daycare aver that the incident involving H.E. constitutes an
“occurrence” committed by an “employee” of the insured and is thus not subject to the policy
exclusions. Id. ¶¶ 24-39. Markel removed the declaratory judgment action to this Court and the
Does now seek to intervene. ECF Nos. 1, 14.
Rule 24 of the Federal Rules of Civil Procedure governs whether parties may intervene as
a matter of right, or alternatively, upon permission of the Court. See Fed. R. Civ. P. 24(a)-(b).
The Does maintain that they are entitled to intervene as of right only as to the declaratory
judgment claim (Count II). Intervention as of right must be granted where the putative
intervenor demonstrates “(1) an interest in the subject matter of the action; (2) that the protection
of this interest would be impaired because of the action; and (3) that the applicant’s interest is
not adequately represented by existing parties to the litigation.” Teague v. Bakker, 931 F.2d 259,
260–61 (4th Cir. 1991). The interest in question must be “a significantly protectable interest.”
Id. at 261 (quoting Donaldson v. United States, 400 U.S. 517, 580 (1971)). “[L]iberal
intervention is desirable to dispose of as much of a controversy ‘involving as many apparently
concerned persons as is compatible with efficiency and due process.’” Feller v. Brock, 802 F.2d
722, 729 (4th Cir. 1986) (quoting Nuesse v. Camp, 385 F.2d 694, 700 (D.C. Cir. 1967)).
As to the first prong, Markel argues that the Does maintain no interest in whether the
Case 8:20-cv-00970-PX Document 27 Filed 11/18/20 Page 4 of 7
insurance policy covers the claims triggered by Dhanaraj’s tortious conduct. The Court
disagrees. The Amended Complaint makes plain that the declaratory action will resolve whether
Markel must “defend and indemnify” Dhanaraj and the Daycare for “any acts that may have
caused the injuries to the Doe[s.]” ECF No. 10 ¶ 2; see also id. ¶ 37. Thus, the Does stand “to
gain or lose by the direct legal operation of the district court’s judgment.” Teague, 931 F.2d at
259. Clearly, the Does have keen interest in whether the declaratory relief is obtained.
Second, the outcome of the litigation will affect the Does. To the extent this Court
decides that the incident falls outside allowable coverage, the Does may have no means of
recovery in the underlying tort suit. This is so because, as the Does amply demonstrate, the
insureds are near judgment proof. See, e.g., ECF No. 23-1 at Tr. 15-18, 19, 34, 37-38. For this
reason, the Does have demonstrated that their sufficiently protectable interest would be impaired
because of this action. See Teague, 931 F.2d at 261.
Markel suggests, however, that the Court must look past the plain language of the
Amended Complaint and find that it can “only be read as a claim for defense costs,” under the
policy’s employee coverage provisions and for which the Does have no real interest. ECF No.
22-1 at 9 (emphasis in original) (citing Kamaki Skiathos, Inc. v. Essex Ins. Co., 396 F. Supp. 2d
624, 628 (D. Md. 2005). In support of its position, Markel cites Kamaki Skiathos, Inc., 396 F.
Supp. 2d at 628, for the narrow point that the nature of a claim does not turn on how it is labeled,
but the facts and legal violations averred. Putting to the side that Kamaki Skiathos had nothing to
do with propriety of intervention, the Amended Complaint here clearly avers more than a claim
for defense costs. The Amended Complaint seeks “tender of coverage and indemnification.”
ECF No. 10 ¶ 21; see also id. ¶¶ 30-31 (“The general policy of insurance obligates [Markel] to
pay for bodily injury, property damage or personal and advertising injury arising out of the actual
Case 8:20-cv-00970-PX Document 27 Filed 11/18/20 Page 5 of 7
or threatened abuse by anyone… In violation and breach of its contractual obligations [Markel]
denied claims to defend and indemnify Dhanaraj for losses.”). Indeed, Dhanaraj avers that
Markel must indemnify “all claims and costs arising from the occurrence alleged in the Original
Action are covered. .” Id. ¶ 37 (emphasis added). Thus, the Court concludes that the Does’
interests in triggering indemnity, not just paying defense costs, are front and center as averred in
the Amended Complaint.
As to the third prong, Markel maintains that the Does have failed to rebut a “presumption
of adequate representation” that extends to the Does’ interests via Dhanaraj and the Daycare
pursuing the coverage claims. Because Dhanaraj, the Daycare, and the Does all seek the same
outcome – coverage for the tort claims – Markel maintains that the Does cannot demonstrate
adversity of interests. ECF No. 22-1 at 13 (quoting Metro. Prop. & Cas. Ins. Co. v. McKaughan,
Civ. No. WMN-10-690, 2011 WL 977870, at *2 (D. Md. Mar. 17, 2011)). The Court, once
again, cannot agree with Markel.
To begin, Markel gives short shrift to the Does’ relatively minimal burden as to this
prong; they need only show that representation of their interest “may be inadequate” absent
intervention. Trbovich v. United Mine Workers, 404 U.S. 528, 538 n. 10 (1972) (internal
quotation marks omitted). On this question, the Court is guided by Harrison v. Fireman’s Fund
Insurance Company. Civ. No. ELH-11-1258, 2011 WL 3241452 (D. Md. July 28, 2011). There,
as here, the parents of a child who had been harmed by the insureds sought to intervene in a
declaratory coverage action between the insureds and insurer. Granting intervention, the Court
rejected the same argument that Markel makes here, reasoning that the insured’s sexual assault
of the intervenors’ child undercut any notion that the insureds could be “a fair and adequate
representative of their interest.” Id. at *2. Accordingly, the Court found that even though the
Case 8:20-cv-00970-PX Document 27 Filed 11/18/20 Page 6 of 7
intervenors and insured were unified in seeking the same outcome in the declaratory judgment
suit, they were diametrically opposed as to their positions in the underlying tort suit. Id. at *3-4
(citing 7C Charles Alan Wright & Arthur Miller, Federal Practice and Procedure § 1909, at
396-98 (3d. ed.)).
This same divergence of interests on the underlying tort action cuts in favor of
intervention here. The dispute as to scope of coverage centers on the nature of the underlying
action. How the parties frame the tort claim could be outcome determinative as to whether
coverage is triggered. Accordingly, evidence of intentional misconduct may prove powerful on
the merits of the underlying tort suit but devastating to the coverage claim. Dhanaraj already
pleaded guilty to assault, and is therefore, locked in as to her admissions in the criminal case.
She simply cannot defend the question on scope of coverage in the same way as the Does. Thus,
although both the insureds and parents of the victim want coverage, they may likely disagree as
to the path to success. On this basis alone, the Does have met their minimal burden of showing
that their interests may not be adequately represented without intervention.
In sum, the Does have established that mandatory intervention is warranted and the Court
grants the motion pursuant to Rule 24(a)(2). Alternatively, even if mandatory intervention were
not justified, the Court would grant permissive intervention.
Under Rule 24(b) where the intervenor “has a claim or defense that shares with the main
action a common question of law or fact,” the Court may permit intervention even if the
intervenor has not demonstrated its place in the litigation as a matter of right. Fed. R. Civ. P.
24(b)(1)(B). Whether to grant intervention “lies within the sound discretion of the trial court,”
See Hill v. W. Elec. Co., 672 F.2d 381, 386 (4th Cir. 1982). “In exercising its discretion, the
Case 8:20-cv-00970-PX Document 27 Filed 11/18/20 Page 7 of 7
[C]ourt must consider whether the intervention will unduly delay or prejudice the adjudication of
the original parties’ rights.” Fed. R. Civ. P. 24(b)(3); see also Hill, 672 F.2d at 386.
Markel principally maintains that this Court should decline permissive intervention
because the insureds and Does claims are not sufficiently common and because intervention
would “de facto complicate logistics, pleadings, discovery, and legal arguments…” ECF No. 221 at 21. That the Does and insureds take different positions on the merits of coverage is
precisely the reason why the Does should be a party to this action. The Court has fully addressed
this point and will not belabor it here.
As for prejudice, this matter is in its infancy. A scheduling order has not yet issued, and
so discovery has yet to begin. Thus, this Court retains maximum flexibility and control to ensure
that discovery remains efficient and streamlined. The Court discerns no prejudice that cannot
otherwise be addressed as part of the routine discovery process. The Does’ motion is therefore
A separate Order follows.
United States District Judge
Markel separately sought leave to file a sur-reply to address whether the Does negligence claim “goes to
the merits” of the coverage action. ECF No. 24-1. “Sur-replies are disfavored in this District.” Chubb & Son v. C &
C Complete Servs., LLC, 919 F. Supp. 2d 666, 679 (D. Md. 2013), but “may be permitted when the moving party
would be unable to contest matters presented to the court for the first time in the opposing party’s reply.” Khoury v.
Meserve, 268 F.Supp.2d 600, 605 (D. Md. 2003). This is not that situation. Markel raised initially that the Does
amended the tort action to include a negligence claim. See ECF No. 22-13 (Motion to Amend and Amended
Complaint attached as exhibits to the motion in opposition); ECF No. 22-1 at 7 (“On May 11, 2020, the Does filed a
motion . . . seeking to amend their tort complaint to add a common law negligence claim against the Dhanaraj
Plaintiffs.”); id. at 17 (“Finally, there is the Does’ curious decision to seek to amend their tort claims to add the new
count of negligence …”); id. at 18 n.2 (the Does “seek only to add a nominal negligence count”). That the Does
responded to this matter does not constitute a new argument warranting a sur-reply. See ECF No. 23 at 3-4.
However, even if the Court granted the motion to file a sur-reply, Markel’s additional arguments would not change
the outcome of the intervention motion.
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?