Maxum Indemnity Company v. Blue 3 Productions, Inc. et al

Filing 22

ORDER - The Court, having considered the Parties' # 21 Stipulation and good cause appearing, the Proposed Request for Entry of Summary Judgment in favor of Plaintiff Maxum Indemnity Company on its declaratory relief cause of action is hereby adopted as provided above. (Motion # 20 terminated.) Signed by Judge Robert C. Jones on 1/10/2014. (Copies have been distributed pursuant to the NEF - DRM)

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Ramiro Morales
State Bar No. 7101
MORALES FIERRO & REEVES
600 S. Tonopah Drive, Suite 300
Las Vegas, NV 89106
Tel: [phone]
Fax: [phone]
[e-mail]

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Attorneys for Plaintiff
MAXUM INDEMNITY COMPANY

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA, NORTHERN DIVISION

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MAXUM INDEMNITY COMPANY, a
Delaware corporation,

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Plaintiff,
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vs.
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BLUE 3 PRODUCTIONS, INC., a Nevada
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Corporation, CHRISTOPHER CHAPMAN, an )
individual,
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Defendants.
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CASE NO.: 3:13-cv-00218-RCJ-VPC
JOINT REQUEST FOR ENTRY OF
SUMMARY JUDGMENT ON
PLAINTIFF MAXUM INDEMNITY
COMPANY’S MOTION FOR
SUMMARY JUDGMENT PURSUANT
TO STIPULATED FINDINGS OF FACT
AND CONCLUSIONS OF LAW

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Plaintiff MAXUM INDEMNITY COMPANY (“Maxum”) and Defendant CHRISTOPHER

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CHAPMAN (“Chapman”) (hereafter collectively the “Stipulating Parties”) do hereby jointly

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request that this Court enter Summary Judgment in favor of Maxum, consistent with the following

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stipulated findings of fact and conclusions of law.

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As grounds for this Joint Request for Entry of Summary Judgment, the Stipulating Parties
hereby stipulate and agree to the following findings of fact and conclusions of law:

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STIPULATED FINDINGS OF FACT
1.

Maxum filed a Complaint for Declaratory Relief and Reformation (Doc. 1) on April

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26, 2013 against defendants, including Chapman. In the Complaint for Declaratory Relief and

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Reformation, Maxum sought a judicial declaration that Policy No. BDG 0016390-04 (attached to
-1JOINT REQUEST FOR ENTRY OF SUMMARY JUDGMENT
CASE NO.: 3:13-CV-00218-RCJ-VPC
IN FAVOR OF MAXUM BASED ON STIPULATED FINDINGS OF FACT AND CONCLUSIONS OF LAW

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Maxum’s Complaint as Exhibit D (Doc. 1-4)), issued by Maxum to Blue 3 for the period August 30,

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2009 to August 30, 2010 contained a typographical error, resulting in an incorrect statement of the

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products-completed operations aggregate limit as one million dollars ($1,000,000) and two million

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dollars ($2,000,000) for the each occurrence limit. The mutual intent of both Maxum and Blue 3

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was for that policy to provide a products-completed operations aggregate limit of two million

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dollars ($2,000,000) and a limit of one million dollars ($1,000,000) for each occurrence.

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2.

Maxum and Blue 3 entered into a Stipulation wherein they both agreed that the

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mistake in the Maxum Policy No. BDG 0016390-04 was mutual and that they both intended for that

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policy to provide a products-completed operations aggregate limit of two million dollars

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($2,000,000) and a limit of one million dollars ($1,000,000) for each occurrence. Maxum and Blue

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3 further agreed to voluntarily reform the Maxum Policy to reflect their mutual intent in this regard.

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3.

On July 10, 2013, this Court entered an Order confirming the Stipulation entered into

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between Maxum and Blue 3 to reform the Maxum Policy No. BDG 0016390-04 to correct the

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mutual mistake contained therein so that the Maxum Policy would provide a products-completed

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operations aggregate limit of two million dollars ($2,000,000) and a limit of one million dollars

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($1,000,000) for each occurrence. As part of that Stipulation, defendant Blue 3 was dismissed from

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the present action.

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4.

Maxum Policy No. BDG 0016390-04 was subsequently reformed so that it now

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provides a products-completed operations aggregate limit of two million dollars ($2,000,000) and a

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limit of one million dollars ($1,000,000) for each occurrence.

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5.

Following reformation of the Maxum Policy No. BDG 0016390-04 and dismissal of

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defendant Blue 3, the only remaining cause of action between Maxum and defendant Chapman was

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Maxum’s declaratory relief cause of action. Maxum’s declaratory relief cause of action specifically

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sought a declaration from this Court that the Maxum Policy, as reformed, was binding as to all

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third-party claimants including defendant Chapman in the underlying action.

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6.

On December 18, 2013, Maxum filed a Motion for Summary Judgment which

included the following undisputed facts:

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-2JOINT REQUEST FOR ENTRY OF SUMMARY JUDGMENT
CASE NO.: 3:13-CV-00218-RCJ-VPC
IN FAVOR OF MAXUM BASED ON STIPULATED FINDINGS OF FACT AND CONCLUSIONS OF LAW

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a.

Maxum Indemnity Company issued policy no. BDG 0016390-04, effective

8/30/09 to 8/30/10, to its named insured is Blue 3 Productions, Inc.
b.

The limits of insurance listed in the declarations are stated as $2,000,000

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general aggregate (other than products-completed operations), $1,000,000 products-

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completed operations aggregate, and $2,000,000 each occurrence.

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c.

The application for insurance submitted by Blue 3 requested limits for the 09-

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10 policy of $2,000,000 general aggregate, $2,000,000 products-completed operations

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aggregate and $1,000,000 each occurrence.

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d.

On August 12, 2009, in response to the application, Western Special Risks

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(“Western”) faxed Blue 3 a quote for the general liability insurance wherein the limits of

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insurance were mistakenly stated as $2,000,000 general aggregate, $1,000,000 products

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completed operations aggregate, and $2,000,000 each occurrence.

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e.

Maxum inadvertently incorporated the mistake in the Western Quote into the

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09-10 policy it issued to Blue 3 on or around August 30, 2009 so that the limits of insurance

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listed in that policy are mistakenly stated as $2,000,000 general aggregate, $1,000,000

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products-completed operations aggregate, and $2,000,000 for each occurrence.

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f.

On February 8, 2013, Western contacted Maxum and confirmed that the

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policy was mistakenly issued with the wrong limits, and that the each occurrence limit

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should have been $1,000,000 and the products-completed operations aggregate limit

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$2,000,000, rather than the other way around as they appear in the policy as written.

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g.

The American Alternative Insurance Corporation (“AAIC”) Excess Policy

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issued to Blue 3 for the policy year 2009-2010 identifies the underlying Maxum policy as

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providing $1,000,000 for each occurrence, a $2,000,000 general aggregate and $2 million

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for the products-completed operations aggregate.

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h.

On or about February 17, 2012, Defendant Chapman filed a complaint

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seeking to recover for personal injuries he suffered at the “Reno Run Amuck Race” in Reno,

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Nevada. That complaint is entitled Christopher Chapman vs. The City of Reno, Reno River

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Festival, LLC, Signature Landscapes, LLC; Signature Landscapes Sierra, The Bauserman
-3JOINT REQUEST FOR ENTRY OF SUMMARY JUDGMENT
CASE NO.: 3:13-CV-00218-RCJ-VPC
IN FAVOR OF MAXUM BASED ON STIPULATED FINDINGS OF FACT AND CONCLUSIONS OF LAW

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Group, LLC; Reno River Foundation, Inc.; Blue 3 Productions, Inc.; et al, Washoe County

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District Court Case No. CV12-00410 (the “Suit”) and names Blue 3 as a defendant. That

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complaint alleges that on or about May 8, 2010 Chapman was injured while running the

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race.

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i.

On or around February 5, 2013, while Maxum was in the process of

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investigating Chapman’s claims against Blue 3, Maxum received a copy of the excess policy

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issued to Blue 3 for the 2009-2010 policy period.

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j.

Upon review of that excess policy, Maxum noted a discrepancy between the

limits shown in the Maxum policy and the underlying limits stated in the excess policy.

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k.

Maxum contacted Western to inquire about that discrepancy. On or around

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February 8, 2013, Western contacted Maxum and confirmed the mistake in the 09-10

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Maxum policy. Maxum further confirmed that the policy should have provided limits of

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$1,000,000 for each occurrence and $2,000,000 for the products-completed operations

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aggregate, rather than the other way around as they appear in the original policy.

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l.

The present action was filed on April 26, 2013.

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m.

The Maxum policy was subsequently reformed.

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n.

Defendant Chapman does not dispute that a mutual mistake occurred and that

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the parties to the contract, Maxum and Blue 3, agreed to correct the mistake by voluntarily

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reforming the policy.

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(3) year statute of limitations provided in N.R.S. §11.190(3)(d).

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Defendant Chapman asserted a single affirmative defense based on the three

STIPULATED CONCLUSIONS OF LAW
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An insurance policy can be voluntarily reformed by the parties thereto where the

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mistake contained therein is mutual. Maland v. Houston Fire & Cas. Ins. Co. of Fort Worth, Texas,

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274 F.2d 299, 303 (9th Cir. 1960).

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2.

Where an insurance policy is voluntarily reformed based on the mutual mistake of

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the parties, that reformed policy is binding and enforceable against all third-party claimants,

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including claims which were pending before the mistake was discovered. Great Atlantic Ins. Co. v.
-4JOINT REQUEST FOR ENTRY OF SUMMARY JUDGMENT
CASE NO.: 3:13-CV-00218-RCJ-VPC
IN FAVOR OF MAXUM BASED ON STIPULATED FINDINGS OF FACT AND CONCLUSIONS OF LAW

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Liberty Mut. Ins. Co., 773 F.2d 976, 980 (8th Cir. 1985); L.E. Myers Co. v. Harbor Ins. Co., 67

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Ill.App.3d 496, 503 (1978); Truck Ins. Exch. v. Wilshire Ins. Co., 8 Cal.App.3d 553, 559 (1970).

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3.

§11.190(3)(d) does not apply to Maxum’s declaratory relief cause of action.

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The three (3) year statute of limitations provided in Nevada Revised Statute

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The present action was timely filed because Maxum discovered the mistake in the

Maxum Policy in February 2013 and the present action was filed in April 2013.

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5.

Because Maxum and Blue 3 agreed to voluntarily reform the Maxum Policy No.

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BDG 0016390-04 based on their mutual mistake, that reformed policy is now binding and

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enforceable against all third-party claimants, including the claims asserted by defendant Chapman

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in the underlying Chapman Action.

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6.

Because Maxum and Blue 3 agreed to voluntarily reform the Maxum Policy No.

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BDG 0016390-04 based on their mutual mistake, that policy now provides a products-completed

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operations aggregate limit of $2,000,000 and a $1,000,000 limit for each occurrence for all third-

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party claims, including those asserted by defendant Chapman against Blue 3 in the underlying

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Chapman Action.

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Therefore, the Stipulating Parties, by their respective attorneys, hereby stipulate, agree, and

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jointly request that this Court enter Summary Judgment in favor of Plaintiff Maxum on its Motion

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for Summary Judgment regarding its declaratory relief cause of action. The Stipulating Parties base

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this joint request on the above stipulated findings of fact and conclusions of law.

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The Stipulating Parties have agreed to this Joint Request for Entry of Judgment in favor of

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Maxum and do so freely and voluntarily after consulting with adequate legal counsel of their

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choice.

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The Stipulating Parties have agreed that each party shall assume and bear their own

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attorneys’ fees, costs and expenses in connection with this case.

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-5JOINT REQUEST FOR ENTRY OF SUMMARY JUDGMENT
CASE NO.: 3:13-CV-00218-RCJ-VPC
IN FAVOR OF MAXUM BASED ON STIPULATED FINDINGS OF FACT AND CONCLUSIONS OF LAW

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WHEREFORE, the Parties respectfully request that the Court grant this Joint Request for
Entry of Summary Judgment in favor of Plaintiff Maxum.
IT IS SO STIPULATED.

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DATED: January 3, 2014

MORALES FIERRO & REEVES

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By:
/s/ Ramiro Morales
RAMIRO MORALES
Attorneys for Plaintiff
MAXUM INDEMNITY COMPANY

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DATED: January 3, 2014

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THE LAW OFFICE OF STEVEN P. BRAZELTON
By:
/s/ Steven P. Brazelton
STEVEN P. BRAZELTON
Attorneys for Defendant
CHRISTOPHER CHAPMAN

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JUDGMENT

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The Court, having considered the Parties’ stipulation and good cause appearing, the

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Proposed Request for Entry of Summary Judgment in favor of Plaintiff Maxum Indemnity

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Company on its declaratory relief cause of action is hereby adopted as provided above.

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IT IS SO ORDERED.

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DATED: January 10, 2014

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United States District Judge

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-6JOINT REQUEST FOR ENTRY OF SUMMARY JUDGMENT
CASE NO.: 3:13-CV-00218-RCJ-VPC
IN FAVOR OF MAXUM BASED ON STIPULATED FINDINGS OF FACT AND CONCLUSIONS OF LAW