Allstate Insurance Company v. Morgan et al

Filing 61

ORDER: The Court ADOPTS Magistrate Judge Acosta's Findings & Recommendation 56 , and therefore, Plaintiff Allstate's motion for summary judgment 37 is granted. Defendants Debby and Adam Morgan's cross motions 41 and 42 for summary judgment and to stay this proceeding are denied. See 3-page order attached. Signed on 8/18/2015 by Judge Marco A. Hernandez. (mr)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

ALLSTATE INSURANCE COMPANY,
Plaintiff,

v.

No. 3:14-cv-00113-AC

ORDER

DEBBY ANNE MORGAN, et al,
Defendants.

HERNÁNDEZ, District Judge:
Magistrate Judge John V. Acosta issued a Findings & Recommendation [56] on May 11,
2015, recommending that Plaintiff Allstate Insurance Company’s motion for summary judgment
[37] be granted and co-Defendants Debby Morgan and Adam Morgan’s (collectively “the
Morgans”) cross-motions [41] and [42] for summary judgment and to stay this proceeding be
denied. The Morgans jointly filed objections [59] to the Findings & Recommendation, and
Defendant Jonathon Patrick Nicholson separately filed objections [58]. The matter is now before
me pursuant to 28 U.S.C. § 636(b)(1) and Federal Rule of Civil Procedure 72(b).

1 – ORDER

When a party objects to any portion of the Magistrate Judge's Findings &
Recommendation, the district court must make a de novo determination of that portion of the
Magistrate Judge's report. 28 U.S.C. § 636(b)(1); Dawson v. Marshall, 561 F.3d 930, 932 (9th
Cir. 2009); United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc).
I have carefully considered all of the parties’ objections and conclude there is no basis to
modify Judge Acosta’s conclusion that Allstate does not have a duty to defend the Morgans in
this case. The Court finds, however, that reading the so-called “joint obligations” clause in
combination with the criminal acts exclusion upon which Judge Acosta relied further bolsters
that conclusion. The joint obligations clause states:
“The terms of the policy impose joint obligations on the person named on the
Policy Declarations as the insured and on that person’s residence spouse. These
persons are defined as you and your. This means that the responsibilities, acts
and omissions of a person defined as you or your will be binding upon any other
person defined as you or your.
The terms of this policy impose joint obligations on persons defined as an
insured person. This means that the responsibilities, acts and failures to act of a
person defined as an insured person will be binding upon another person
defined as an insured person.”
Foley Declaration, Exhibit 5, ECF No. 38-5, at 26–27 (emphasis in original).
The Court could not find an Oregon case that construes a similar joint obligations clause.
However, numerous other courts have interpreted identical joint obligation clauses and have held
that the language “renders the criminal acts exclusion applicable to claims for negligence against
other insureds.” Allstate Indem. Co. v. Tilmon, No. CIV.A. 1:13-00690-JM, 2014 WL 1154666,
at *7 (D.S.C. Mar. 21, 2014) (collecting cases); see also Allstate Ins. Co. v. Ervin, No. CIV.A.
05-02800, 2006 WL 2372237, at *5 (E.D. Pa. Aug. 14, 2006) (holding that, based on the policy’s
criminal acts exclusion and joint obligations clause, insurer had no duty to defend a negligent
2 – ORDER

supervision claim against parents of an insured who was convicted of assaulting a party-goer at
the parents’ house).
The Court finds that the joint obligations clause and criminal acts exclusion operate to
relieve Allstate from its duty to defend any of the insureds under the policy at issue here from
any claim that arises out of Adam Morgan’s criminal act. Allstate Ins. Co. v. Berge, 522 F. Supp.
2d 1180, 1187 (D.N.D. 2007); Castro v. Allstate Ins. Co., 855 F. Supp. 1152, 1154–55 (S.D. Cal.
1994); Allstate v. Raynor, 143 Wn.2d 469, 480, 21 P.3d 707 (2001).
I have also reviewed the pertinent portions of the record de novo and find no errors in the
Magistrate Judge's Findings & Recommendation.
CONCLUSION
The Court ADOPTS Magistrate Judge Acosta’s Findings & Recommendation [56], and
therefore, Plaintiff Allstate’s motion for summary judgment [37] is granted. Defendants Debby
and Adam Morgan’s cross motions [41] and [42] for summary judgment and to stay this
proceeding are denied.
IT IS SO ORDERED.

DATED this ___________ day of ____________________, 2015.

MARCO A. HERNÁNDEZ
United States District Judge

3 – ORDER