Starr Indemnity & Liability v. Monavie, Inc. et al

Filing 102

MEMORANDUM DECISION AND ORDER granting 90 Motion for Summary Judgment; Plaintiff is also awarded its Defense Costs incurred in Parker and Pontrelli against MonaVie in an amount to be determined by subsequent motion. Signed by Judge David Nuffer on 3/15/19 (alt)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH

STARR INDEMNITY & LIABILITY
COMPANY,

MEMORANDUM DECISION AND
ORDER GRANTING MOTION FOR
SUMMARY JUDGMENT

Plaintiff,
Case No. 2:14-cv-00395-DN
v.
District Judge David Nuffer
MONAVIE, INC. and MONAVIE, LLC,
Defendants.

Plaintiff Starr Indemnity & Liability Company (“Starr”) initiated this action for
declaratory judgment against Defendants MonaVie, Inc. and MonaVie, LLC (collectively
“MonaVie”), alleging that MonaVie’s liability insurance policies with Starr exclude recovery for
two pending class action lawsuits against MonaVie. 1 Starr moved for summary judgment on the
grounds that coverage is barred under its policies by the (1) Prior Notice Exclusion; (2) Specific
Event Exclusion; and (3) Anti-Trust Exclusion.2 Starr further argues that punitive damages and
other relief sought in the pending lawsuits is uninsurable by law and if any coverage is
recoverable, it is limited to $1,000,000 under the prior litigation exclusions. 3 Finally, Starr
asserts that any defense costs incurred should be repaid by MonaVie. 4 Andrew Harbut and Lisa

1

Complaint for Declaratory Judgment (“Complaint”), docket no. 2, filed May 23, 2014.

2

Motion and Memorandum of Law in Support of Plaintiff/Counterclaim Defendant’s Motion for Summary
Judgment (“Motion for Summary Judgment”), docket no. 90, filed May 25, 2018.

3

Id.

4

Id.

Pontrelli (“Plaintiff Intervenors”) filed an opposition, 5 and Starr replied. 6 Based upon the Prior
Notice Exclusion, the Motion for Summary Judgment is granted.
Contents
Background ..................................................................................................................................... 2
Undisputed Facts ............................................................................................................................. 4
The Policies ......................................................................................................................... 5
Quixtar and Oliver Lawsuits............................................................................................... 9
Parker and Pontrelli Lawsuits .......................................................................................... 12
Summary Judgement Standard ..................................................................................................... 17
Discussion ..................................................................................................................................... 18
The plain language of the Policies’ Prior Notice Exclusion allows Starr to exclude
coverage for Parker and Pontrelli based on related Wrongful Acts in Oliver ..... 19
MonaVie is required to pay Starr for its defense costs ..................................................... 21
Order…. ........................................................................................................................................ 22
BACKGROUND 7
Starr issued two successive liability policies—Resolute Portfolio for Private Companies
Policy No. SISIFNL20071412 (“2012 Policy”) and Resolute Portfolio for Private Companies
Policy No. SISIFNL20071413 (“2013 Policy”) (collectively, “Policies”)—to MonaVie. 8 The
Policies each provide $10,000,000 in liability coverage, subject to the terms, conditions, and
exclusions contained in the Policies. 9
Under the 2012 Policy, MonaVie reported Parker, et al. v. MonaVie, Inc., et al.
(“Parker”) to Starr. 10 Parker is a putative class action brought by consumers of MonaVie’s juice
products, alleging that MonaVie and its distributors made false and misleading representations

5

Memorandum in Opposition to Motion for Summary Judgment (“Opposition”), docket no. 92, filed Aug. 2, 2018.

6

Memorandum of Law in Reply and in Further Support of Plaintiff/Counterclaim Defendant’s Motion for Summary
Judgment (“Reply”), docket no. 101, filed Aug. 23, 2018.

7
For additional background of the procedural filings for this case, see Memorandum Decision and Order at 1-3,
docket no. 74, filed Nov. 17, 2017.
8

Motion for Summary Judgment at 1.

9

Id.

10
Parker et al. v. MonaVie, Inc., et al. (“Parker”), No. 12-cv-1983 TJH, (C.D. Cal. Feb. 26, 2013). Parker was
transferred to the District of Utah on July 10, 2017. See No. 2:17-cv-764-DN (D. Utah).

2

by falsely promoting the health benefits of its juices. 11 Under the 2013 Policy, MonaVie reported
Pontrelli v. MonaVie, Inc., et al. (“Pontrelli”), 12 which is another putative class action complaint
brought by consumers, alleging false advertising in connection with MonaVie’s multilevel
marketing scheme and false claims related to the health benefits of the juices and the benefits of
becoming a MonaVie distributor. 13
Parker and Pontrelli were not the first lawsuits to be brought against MonaVie. Prior
to the inception of the Policies, in 2008 and 2010 MonaVie was named as a defendant in two
other cases. In Quixtar Inc. v. MonaVie, Inc., et al. (“Quixtar”), a competitor alleged false
advertising and unfair trade practices against MonaVie based on the promotion of false medical
benefits of its juice products. 14 In Oliver v. MonaVie, Inc., et al. (“Oliver”), consumers brought a
class action against MonaVie alleging false and misleading advertising in connection with
MonaVie’s multilevel marketing scheme of its juices and claims that its juices prevent and treat
illnesses. 15
Starr initiated this case when it filed its Complaint against MonaVie, alleging that
coverage is not available under the Policies for the Parker and Pontrelli lawsuits. 16 Although
MonaVie answered the Complaint, 17 it ultimately defaulted by failing to participate and defend

11

Complaint ¶ 3 at 2, docket no. 2.

12

Pontrelli v. MonaVie, Inc., et al. (“Pontrelli”), No. 2:13-cv-04649-WJF-MF, (D.N.J. Dec. 9, 2013). Pontrelli was
transferred to the District of Utah on October 27, 2017. See No. 2:17-cv-1215-DN (D. Utah).
13

Complaint ¶ 4 at 2–3.

14

Quixtar Inc. v. MonaVie, Inc., et al., No. 2:08-cv-209-BSJ (D. Utah 2008); Motion for Summary Judgment, Ex. E,
Quixtar Complaint ¶ 5 at 3.
15

Oliver v. MonaVie, Inc., et al., No. CV-2010-644-1 (Ark. Cir. Ct., Miller Cnty. 2010); Motion for Summary
Judgment, Ex. F, Oliver Complaint ¶ 6 at 3.
16

See Complaint. The complaint initially addressed 3 lawsuits—Parker, Pontrelli, and Gonzalez. However, the
Gonzalez lawsuit was subsequently dismissed with prejudice. Gonzalez v. MonaVie, Inc., et al., No. CIVDS1309111
(Cal. Super. Ct. 2013).

17

Defendant’s Answer and Counterclaim, docket no. 14, filed July 7, 2014.

3

itself in the proceedings. 18 Starr moved for default judgment against MonaVie. 19 Meanwhile,
Plaintiff Intervenors, claimants in Parker and Pontrelli, sought to intervene to protect their
interests in the potential insurance proceeds. 20 The motion to intervene was granted and the
motion for default judgment was denied. 21 Starr now seeks summary judgment.
UNDISPUTED FACTS 22
1.

On or about May 23, 2014, Starr initiated this case when it filed the Complaint

against MonaVie. 23
2.

Starr seeks declaratory judgment that coverage is not available for two related

lawsuits submitted to Starr for coverage by MonaVie. 24
3.

The particular lawsuits Starr seeks to disclaim are Parker and Pontrelli. 25

4.

Parker and Pontrelli arise out of claims that MonaVie engaged in a multilevel

marketing scheme which made misrepresentations as to, inter alia, the purported health benefits
of MonaVie beverages. 26

18

Motion for Entry of Default Against Defendants MonaVie, Inc. and MonaVie, LLC, docket no. 44, filed Dec. 22,
2016; Order Granting Entry of Default Against Defendants MonaVie, Inc. and MonaVie, LLC, docket no. 65,
entered July 12, 2017.
19

Motion for Default Judgment Against Defendants MonaVie, Inc. and MonaVie, LLC, docket no. 67, filed Aug. 1,
2017.
20

Motion by Andrew Harbut and Lisa Pontrelli to Intervene as of Right or, In the Alternative, for Permissive
Intervention, docket no. 45, filed Dec. 30, 2016.
21

Memorandum Decision and Order, docket no. 74, filed Nov. 17, 2017.

22
The following Undisputed Facts is taken from the facts asserted in the parties’ briefing. All material facts asserted
by the parties for which no dispute was raised or supported are considered undisputed for purposes of summary
judgment. FED. R. CIV. P. 56(e)(2).
23

Motion for Summary Judgment ¶ 1 at 2; Opposition at 3–4. See also Complaint, docket no. 2, filed May 23, 2014.

24

Motion for Summary Judgment ¶ 2 at 2; Opposition at 3–4. See also Complaint, docket no. 2, filed May 23, 2014.

25

Motion for Summary Judgment ¶ 3 at 2; Opposition at 3–4. See also Parker, supra note 10 and Pontrelli, supra
note 12.

26

Motion for Summary Judgment ¶ 4 at 2; Opposition at 4–6; Reply at 3; See also Parker, supra note 10 and
Pontrelli, supra note 12.

4

5.

Parker and Pontrelli were not the first lawsuits against MonaVie. Quixtar and

Oliver also involved similar claims. 27
The Policies
6.

On or about May 1, 2012, MonaVie executed a contract with Starr for liability

insurance coverage for certain categories of claims (“2012 Policy”). 28
7.

The covered “Policy Period” for the 2012 Policy was May 1, 2012, through May

1, 2013. 29
8.

Under the 2012 Policy:
“Insurer” refers to Starr; 30
“Insured” refers to MonaVie; 31 and
“Company” refers to MonaVie. 32

9.

The 2012 Policy provides, in pertinent part, that:

[Starr] shall pay on behalf of the [MonaVie] the Loss (“Loss”) arising from a
Claim (“Claim”) first made during [May 1, 2012 – May 1, 2013] (or Discovery
Period, if applicable) against [MonaVie] for any Wrongful Act (“Wrongful Act”),
and reported to [Starr] in accordance with the terms of this policy. 33
10.

The 2012 Policy defines Claim as any:

(1) written demand for monetary, non-monetary or injunctive relief made against
[MonaVie]; (2) judicial administrative or regulatory proceeding, whether civil or
criminal, for any monetary, nonmonetary or injunctive relief commenced against

27

Motion for Summary Judgment ¶ 5 at 2–3; Opposition at 6–10; Reply at 5–6; See also Quixtar, supra note 14
¶¶ 12–20, 23, 27, 41–61 at 8 and Oliver, supra note 15 ¶¶ 1–3 at 1–2.

28

Motion for Summary Judgment ¶ 6 at 3; Opposition at 6–10. See also Motion for Summary Judgment, Exhibit I,
Policy No. SISIFNL20071412 (“2012 Policy”).
29

Motion for Summary Judgment ¶ 11 at 3; Opposition at 6–10. See also 2012 Policy at 3.

30

2012 Policy at 12.

31

2012 Policy ¶ 2(f) at 25.

32

Motion for Summary Judgment ¶¶ 8–10 at 3; Opposition at 6–10. See also 2012 Policy at 3, 13.

33

Motion for Summary Judgment ¶ 14 at 3; Opposition at 6–10; 2012 Policy ¶ 1(C) at 24.

5

[MonaVie], including any appeal therefore, which is commenced by: (i) service of
a complaint or similar pleading . . . .” 34
11.

The 2012 Policy defines Loss as:

(1) damages, settlements or judgments; (2) pre-judgment or post-judgment
interest; (3) costs or fees awarded in favor of the claimant; (4) punitive,
exemplary or the multiplied portion of any multiple damages awards, but only to
the extent that such damages are insurable under the applicable law most
favorable to the insurability of such damages; . . . and (6) Defense Costs. 35
12.

The 2012 Policy excludes from the definition of Loss:

(i) any amounts for which [MonaVie] is not legally liable; (ii) any amounts which
are without legal recourse to [MonaVie]; . . . (iv) fines and penalties except as
provided for in [the definition of Loss above]; (v) matters which may be deemed
uninsurable under applicable law; or (vi) any amounts paid or incurred in
complying with a judgment or settlement for non-monetary or injunctive relief,
but solely as respects [MonaVie]. 36
13.

Wrongful Acts are defined (in pertinent part) as “any actual or alleged breach of

duty, neglect, error, misstatement, misleading statement, omission, or act by [MonaVie].” 37
14.

Defense Costs are defined as:

(1) reasonable and necessary fees, costs, charges or expenses resulting from the
investigation, defense or appeal of a Claim;
(2) premium for an appeal, attachment or similar bond, but without any obligation
to apply for and obtain such bond;
(3) reasonable and necessary fees, costs, charges or expenses incurred in response
to any extradition or similar proceeding brought against [MonaVie] in connection
with a Claim; and,
(4) any fees, costs, charges or expenses incurred by [MonaVie] at the specific
request of [Starr] to assist [Starr] in the investigation, defense or appeal of a
Claim. 38

34

Motion for Summary Judgment ¶ 22 at 4; Opposition at 10; 2012 Policy ¶¶ 2(a)(1)–2(a)(2)(i) at 24–25.

35

Motion for Summary Judgment ¶ 23 at 4–5; Opposition at 10; 2012 Policy ¶ 2(h) at 26.

36

Motion for Summary Judgment ¶ 24 at 5; Opposition at 10; 2012 Policy ¶ 2(h) at 26.

37

Motion for Summary Judgment ¶ 28 at 6; Opposition at 10. Compare 2012 Policy ¶ 2(l)(3) at 27–28 with 2013
Policy ¶ 2(l)(3) at 23.

38

Motion for Summary Judgment ¶ 29 at 6; Opposition at 10. Compare 2012 Policy ¶ 2(d) at 14 with 2013 Policy
¶ 2(d) at 9.

6

15.

On or about May 1, 2013, MonaVie executed a second contract with Starr for

liability insurance coverage for certain categories of claims (“2013 Policy”). 39
16.

The Policy Period for the 2013 Policy was May 1, 2013, through June 30, 2014. 40

17.

The terms Insurer, Insured, Company, Loss, Claim, Wrongful Acts, and Defense

Costs are defined identically in the 2012 and 2013 Policies, notwithstanding their different
Policy Periods. 41
18.

The Policies provide that “[i]n the event and to the extent that [MonaVie] shall

not be entitled to a payment of Defense Costs under the terms and conditions of this policy, such
payments by [Starr] shall be repaid to [Starr] by [MonaVie], severally according to their
respective interests.” 42
19.

Both Policies also exclude from coverage any Loss in connection with any Claim

fitting certain exclusions. 43
20.

Specifically, the Policies include a Prior Litigation Exclusion, which excludes any

Losses in connection with any Claim:
alleging, arising out of, based upon or attributable to, as of the Pending or Prior
Date set forth in Item 6 of the Declarations as respects this Coverage Section, any
pending or prior: (1) litigation; or (2) administrative or regulatory proceeding or
investigation of which [MonaVie] had notice, including any Claim alleging or
derived from the same or essentially the same facts, or the same or related

39

Motion for Summary Judgment ¶ 15 at 4; Opposition at 6–10. See Motion for Summary Judgment, Exhibit J,
Policy No. SISIFNL20071413 (“2013 Policy”) at 3, 19-33.

40

Reply at 2, docket no. 101, filed Aug. 23, 2018. See also 2013 Policy at 2, Endorsement 11 at 49.

41

Motion for Summary Judgment ¶ 18 at 4; Opposition at 10. Compare 2013 Policy at 3, 8, 19–33 with 2012 Policy
at 3, 24–38.

42

Motion for Summary Judgment ¶ 30 at 6; Opposition at 10. Compare 2012 Policy ¶ 6 at 18 with 2013 Policy ¶ 6
at 13.

43

Motion for Summary Judgment ¶ 25 at 5; Opposition at 10; 2012 Policy ¶ 3 at 28–31.

7

Wrongful Act(s), as alleged in such pending or prior litigation or administrative or
regulatory proceeding or investigation[.] 44
21.

The Policies also include a Prior Notice Exclusion, that excludes any Losses in

connection with any Claim:
alleging, arising out of, based upon, or attributable to the same or essentially the
same facts alleged, or to the same or related Wrongful Act(s) alleged or contained
in any Claim which has been reported, or in any circumstances of which notice
has been given, before the inception date of this policy as set forth in Item 2 of the
Declarations, under any policy, whether excess or underlying, of which this policy
is a renewal or replacement or which it may succeed in time[.] 45
22.

The Prior Notice and Prior Litigation Exclusions in the 2012 Policy are set forth

identically in the 2013 Policy, notwithstanding their different Policy Periods. 46
23.

The 2013 Policy also contains two additional exclusions: (1) Anti-Trust

Exclusion; and (2) Specific Event Exclusion. 47
24.

The Anti-Trust Exclusion provides, in pertinent part:

This policy shall not cover any Loss in connection with any Claim alleging,
arising out of, based upon or attributable to any violation of any law, whether
statutory, regulatory or common, as respects any of the following: . . . unfair trade
practices . . . provided, however, that this exclusion shall apply only to
[MonaVie]. 48

44

Motion for Summary Judgment ¶ 26 at 5; Opposition at 10. Compare 2012 Policy ¶ 3(f) at 28 with 2013 Policy
¶ 3(f) at 23.

45

Motion for Summary Judgment ¶ 27 at 5; Opposition at 10. Compare 2012 Policy ¶ 3(g) at 29 with 2013 Policy
¶ 3(g) at 24.

46

Motion for Summary Judgment ¶ 21 at 4; Opposition at 10. Compare 2012 Policy at 28–29 with 2013 Policy at
23–24.

47

Motion for Summary Judgment ¶ 31 at 6; Opposition at 10; 2013 Policy, Endorsement 5 at 44, and Endorsement 9
at 48.
48

Motion for Summary Judgment ¶ 32 at 6–7; Opposition at 10; 2013 Policy, Endorsement 5 at 44.

8

25.

The Specific Event Exclusion provides, in relevant part:

This policy shall not cover any Loss in connection with . . . any Claim alleging,
arising out of, based upon, or attributable to any act, circumstance, or situation
that is the same or substantially similar to those alleged or set forth in any
Event. 49
26.

The Specific Event Exclusion defines Event as:

Matters referenced in Note K.4., K.5., K.6., K.6. of the Consolidated Financial
Statements and Report of Independent Certified Public Accountants Mona Vie,
Inc. and Subsidiaries for Fiscal Year End December 31, 2011 and December 31,
2010 (dated June 27, 2012). 50
27.

Note K.6. of the Financial Statements and Report refers to Oliver. 51
Quixtar and Oliver Lawsuits

28.

Quixtar was filed on or about March 18, 2008 – far in advance of the Policies. 52

29.

MonaVie reported Quixtar to its then insurance carrier, Zurich. 53

30.

The Quixtar plaintiffs alleged that “MonaVie and its distributors, among other

things, falsely advertise the health benefits of its products . . . .” 54
31.

The Quixtar plaintiffs further alleged that “MonaVie’s products are sold through a

multilevel marketing distribution system . . . .” 55
32.

Oliver was filed on December 16, 2010. 56

49

Motion for Summary Judgment ¶ 33 at 7; Opposition at 10; 2013 Policy, Endorsement 9 at 48.

50

Motion for Summary Judgment ¶ 34 at 7; Opposition at 10; 2013 Policy, Endorsement 9 at 48.

51

Motion for Summary Judgment ¶ 35 at 7; Opposition at 10. See also Motion for Summary Judgment, Ex. K,
Consolidated Financial Statements and Report of Independent Certified Public Accountants MonaVie, Inc. and
Subsidiaries for Fiscal Year End December 31, 2011 and December 31, 2010 (dated June 27, 2012) at 24, K(6)
(describing a class action lawsuit filed against MonaVie on December 16, 2010 in the Circuit Court of Miller
County, Arkansas).

52

Motion for Summary Judgment ¶ 36 at 7; Opposition at 10. See also Motion for Summary Judgment, Ex. E,
Quixtar Complaint, generally.

53

Motion for Summary Judgment ¶ 38 at 7; Opposition at 10–11; Defendant’s Answer and Counterclaim ¶ 61 at 8,
docket no. 14, filed July 7, 2014.

54

Motion for Summary Judgment ¶ 37 at 7; Opposition at 10–11; Reply at 3–5; Quixtar Complaint ¶ 1 at 2.

55

Motion for Summary Judgment ¶ 39 at 7; Opposition at 11; Reply at 3–5; Quixtar Complaint ¶ 25 at 8.

9

33.

MonaVie tendered Oliver to its insurance carrier at the time, Allied World. 57

34.

The Oliver Class Action Complaint (“Oliver Complaint”) identified its

prospective class as follows:
All individual residents of the state of Arkansas who purchased MonaVie
Products before January 1, 2011. Excluded from the Class are: (1) Individuals
who, at any point, have served as a Distributor for [MonaVie]; (2) [MonaVie] and
all directors, officers, employees, partners, principals, shareholders and agents of
[MonaVie]; (3) Persons or entities who timely opt-out of this proceeding using the
correct protocol for “opting-out” that will be formally established by this Court;
(4) Any and all Federal, State and/or Local Governments, including, but not
limited to their Departments, Agencies, Divisions, Bureaus, Boards, Sections,
Groups, Councils and/or any other subdivision, and any claim that such
governmental entities may have directly or indirectly; (5) Any currently-sitting
Arkansas State Court Judge or Justice, and the current spouse and all other
persons within the third-degree of consanguinity to such judge/justice. 58
35.

The Oliver Complaint identified 16 questions of law and fact common to the class

as follows: 59
a.

“Have Defendants engaged in an overarching scheme between themselves
and their Distributors to wrongfully profit by creating or tacitly approving
false and/or misleading advertisements and statements about the health
benefits of Mona[Vie] Products?”

b.

“Was the purpose of the Mona[Vie] Scheme to increase sales of
Mona[Vie] Products and thus the profits of the Scheme members?”

c.

“Ha[s] [MonaVie] created false or misleading advertisements and/or
statements about Mona[Vie] Products which were made public?”

d.

“Ha[s] Mona[Vies’] Distributors created false or misleading
advertisements and/or statements about Mona[Vie] Products which were
made public?”

56

Oliver, supra note 15; Reply at 2.

57

Motion for Summary Judgment ¶ 52 at 9; Opposition at 16; Defendant’s Answer and Counterclaim ¶ 62 at 9.

58

Motion for Summary Judgment ¶ 53 at 9–10; Opposition at 16. Motion for Summary Judgment, Ex. F, Oliver
Complaint ¶ 43at 19.

59

Motion for Summary Judgment ¶ 54 at 10–11; Opposition at 16. Oliver Complaint at 19–21.

10

e.

“Ha[s] [MonaVie] ever been aware of the production and/or publication of
false or misleading advertisements or statements about Mona[Vie]
Products?”

f.

“Ha[s] Mona[Vie] affirmatively approved false or misleading
advertisements and/or statements about Mona[Vie] Products?”

g.

“Ha[s] Mona[Vie] tacitly approved what they knew to be false or
misleading advertisements and/or statements about Mona[Vie] Products?”

h.

“If [MonaVie was] aware of false or misleading advertisements or
statements being created and publicized by their Distributors about
Mona[Vie] Products, did [MonaVie] take appropriate action based on that
knowledge?”

i.

“Did [MonaVie] intend for customers to rely on false or misleading
advertisements or statements when considering the purchase of Mona[Vie]
Products?”

j.

“Did [MonaVie] conceal, suppress or omit material information about the
proven medical benefits of Mona[Vie] Products?”

k.

“Did [MonaVie] have a duty to be honest and forthright about the proven
benefits of Mona[Vie] Products with consumers?”

l.

“Did [MonaVie] allow their trademark or corporate identity to be used on
false or misleading advertisements or statements about Mona[Vie]
Products?”

m.

“Are the representations by [MonaVie] and the Distributors about the
content of Mona[Vie] Products accurate?”

n.

“Are the representations by [MonaVie] and the Distributors about the
nutritional contents of the Mona[Vie] Products accurate?”

o.

“Are the representations by [MonaVie] and the Distributors about the
nutritional content of the Mona[Vie] Products provable by generally
accepted, laboratory-based scientific analysis?”

p.

“Are [MonaVie’s] sales tactics deceptive or unconscionable?”

11

36.

Oliver centered on allegations that MonaVie utilized a multilevel marketing

scheme to make false and misleading claims about the health benefits of its products. 60
Parker and Pontrelli Lawsuits
37.

Parker was filed on November 13, 2012, 61 during the 2012 Policy. 62

38.

The Parker plaintiffs are not and have never been parties to the 2012 policy. 63

39.

Parker was a class action suit filed “on behalf of [Parker] and all others similarly

situated,” 64 and also “on behalf of a sub-class of Missouri residents who purchased MonaVie
Products for the purpose of personal consumption . . . .” 65
40.

The Parker plaintiffs alleged that MonaVie utilized “a multilevel marketing

scheme that disseminate[d] false and misleading representations that the Products provide[d]
certain clinically-proven health benefits . . . .” 66
41.

The First Amended Class Action Complaint in Parker (“Parker Amended

Complaint”) included a section entitled Common Factual Allegations. 67
42.

The first portion of the Common Factual Allegations in the Parker Amended

Complaint, entitled “False Immune System Claims,” sets forth allegations of false and

60

Motion for Summary Judgment ¶ 55 at 11; Opposition at 16–17; Reply at 6, 9–12. Oliver Complaint ¶¶ 1–6 at 1–

4.
61

Motion for Summary Judgment ¶ 56 at 11; Opposition at 17; Reply at 2. Motion for Summary Judgment, Ex. G,
Parker Complaint. An amended complaint was filed on February 26, 2013, see Motion for Summary Judgment, Ex.
B, Parker First Amended Class Action Complaint (“Parker Amended Complaint”).

62

Motion for Summary Judgment ¶ 12 at 3; Opposition at 6–10.

63

Motion for Summary Judgment ¶ 13 at 3; Opposition at 6–10; see also 2012 Policy, generally.

64

Parker Complaint ¶ 52 at 18.

65

Parker Complaint ¶ 53 at 19.

66

Motion for Summary Judgment ¶ 57 at 11; Opposition at 17–18; Reply at 6, 9–12. Parker Complaint ¶ 1 at 2.

67

Motion for Summary Judgment ¶ 58 at 11; Opposition at 17–18. Motion for Summary Judgment, Ex. B, Parker
Amended Complaint ¶¶ 17–50 at 8–18.

12

misleading representations made by MonaVie regarding the health benefits their products
purportedly provide to customers’ immune systems. 68
43.

The second portion of the Common Factual Allegations in the Parker Amended

Complaint, entitled “False and Deceptive Use of the Oxygen Radical Absorbance Capacity
Scale,” sets forth allegations of false and misleading representations made by MonaVie
regarding the health benefits their products purportedly provide to customers as a source of
antioxidants.69
44.

The third portion of the Common Factual Allegations in the Parker Amended

Complaint, entitled “Misleading Claims Based on Polyphenol Content,” sets forth allegations of
false and misleading representations made by MonaVie regarding the health benefits their
products purportedly provide to customers as a source of antioxidants, specifically with regards
to the polyphenol content therein. 70
45.

In sum, the Common Factual Allegations set forth in the Parker Amended

Complaint, and underlying the claims asserted therein, are based on allegations that MonaVie,
through its marketing, made false and/or misleading claims as to the health benefits of its
products. 71

68

Motion for Summary Judgment ¶ 59 at 11; Opposition at 17–18. Parker Amended Complaint ¶¶ 17–33 at 8–13,
and ¶¶ 17–50 at 8–18.

69

Motion for Summary Judgment ¶ 60 at 11–12; Opposition at 17–18. Parker Amended Complaint ¶¶ 34–46 at 13–
16, and ¶¶ 17–50 at 8–18.

70

Motion for Summary Judgment ¶ 61 at 12; Opposition at 17–18. Parker Amended Complaint ¶¶ 47–50 at 17–18,
and ¶¶ 17–50 at 8–18.

71

Motion for Summary Judgment ¶ 62 at 12; Opposition at 18; Reply at 6, 9–12. Parker Amended Complaint
¶¶ 57–61.

13

46.

The Parker Amended Complaint describes eight questions of law and fact

common to the members of its putative class, which are substantively similar to questions a, b, c,
j, k, l, m, and o in Oliver’s Complaint, respectively: 72
a.

b.

whether the purpose of the MonaVie scheme is to increase sales of the
Products and, thus, the profits of all participants in the scheme;

c.

whether Defendants created false or misleading advertisements and/or
statements about the Products that were made public;

d.

whether MonaVie concealed, suppressed, or omitted material information
about the lack of proven benefits of the Products;

e.

whether MonaVie had a duty to be honest and forthright with consumers
about the lack of proven benefits of the Products;

f.

whether MonaVie allowed its trademark or corporate identity to be used
on false and misleading advertisements or statements about the Products;

g.

whether the representations about the content of the Products by
Defendants were accurate; and

h.

47.

whether MonaVie engaged in an overarching scheme between itself and
its distributors to wrongfully profit by creating and approving false and/or
misleading advertisements and statements about the health benefits of the
products;

whether the representations about the nutritional contents of the Products
by Defendants are provable by generally accepted, laboratory-based
scientific analysis.

The factual allegations set forth in Parker arise from the same multilevel

marketing scheme which disseminated false and misleading representations regarding the
purported health benefits of MonaVie that underlay the Oliver claims. 73

72

Motion for Summary Judgment ¶ 54 at 10–11, ¶¶ 64–72 at 12–13; Opposition at 18–21. Compare Parker
Amended Complaint ¶ 55 at 19–20 with Oliver Complaint ¶ 45 at 19–20.

73

Motion for Summary Judgment ¶ 73 at 13; Opposition at 20–21; Reply at 6, 9–12. Compare Parker Complaint
¶¶ 1–10 at 2–4 and ¶¶ 17–50 at 8–18 with Oliver Complaint ¶¶ 1–6 at 1–4 and ¶¶ 23–42 at 10–18.

14

48.

Pontrelli was filed after Parker, on or about August 1, 2013, 74 during the 2013

Policy Period. 75
49.

The Pontrelli plaintiffs are not and have never been parties to the 2013 Policy. 76

50.

Pontrelli is a class action suit filed “on behalf of [Pontrelli] and all other similarly

situated individual residents of the State of New Jersey . . . .” 77
51.

The section of the Pontrelli Amended Complaint entitled “Statement of Facts”

contains 37 paragraphs purporting to assert underlying facts supporting Pontrelli’s claims. 78
52.

Approximately 20 of those paragraphs are substantially similar to portions of the

Oliver Complaint. 79
53.

Of the remaining 17 paragraphs describing the facts underlying the Pontrelli

claims,
a.

6 paragraphs describe, in general terms, the supplement industry and/or
MonaVie products; 80

b.

2 paragraphs primarily refer to prior litigation against MonaVie and the
findings therein; 81

74

Motion for Summary Judgment ¶ 74 at 13; Opposition at 20–21. Motion for Summary Judgment, Ex. H, Pontrelli
Complaint. An amended complaint was filed on December 9, 2013, see Motion for Summary Judgment, Ex. C,
Pontrelli First Amended Class Action Complaint.

75

Motion for Summary Judgment ¶ 19 at 4; Opposition at 10.

76

Motion for Summary Judgment ¶ 20 at 4; Opposition at 10; see also 2013 Policy, generally.

77

Pontrelli Complaint ¶ 6 at 4.

78

Motion for Summary Judgment ¶ 76 at 13; Opposition at 20–21. Motion for Summary Judgment, Ex. C, Pontrelli
Amended Complaint ¶¶ 19–55 at 6–19.

79

Motion for Summary Judgment ¶ 77 at 13; Opposition at 20–21. Compare Pontrelli Amended Complaint, Ex. C
¶¶ 25, 27–36, 38–39 at 7–14, and ¶¶ 47, 49–53 at 16–18 with Oliver Complaint, Ex. F ¶¶ 23, 25–35, 37–42 at 11–18.

80

Motion for Summary Judgment ¶ 79 at 14; Opposition at 20–21. See also Pontrelli Amended Complaint ¶¶ 19–24
at 6–7.
81
Motion for Summary Judgment ¶ 80 at 14; Opposition at 20–21. See also Pontrelli Amended Complaint ¶¶ 40, 43
at 14–15.

15

c.

2 paragraphs describe plaintiff’s individual experiences of, inter alia,
purchasing and using MonaVie products after relying upon MonaVie’s
marketing materials, and thereafter not receiving any of the claimed
benefits purportedly provided by those products; 82 and

d.

3 paragraphs provide further examples of, and/or MonaVie’s knowledge
of, the misleading health claims made by MonaVie’s marketing. 83

54.

None of the 37 paragraphs setting forth the facts underlying the Pontrelli claims

materially distinguishes the underlying acts alleged from those alleged in Oliver. 84
55.

The Proposed Class definition set forth in the Pontrelli Amended Complaint is

substantially similar to that set forth in Oliver’s Complaint, aside from the state in which the
residents reside. 85
56.

The Pontrelli Amended Complaint describes 16 questions of law and fact

common to the members of its putative class. 86
57.

The 16 common questions of law and fact identified in the Pontrelli Amended

Complaint are substantively identical to the 16 common questions of law and fact asserted in
Oliver. 87
82

Motion for Summary Judgment ¶ 81 at 14; Opposition at 21; Reply at 6, 9–12. See also Pontrelli Amended
Complaint ¶¶ 54–55 at 18–19.

83

Motion for Summary Judgment ¶ 82 at 14; Opposition at 21. See also Pontrelli Amended Complaint ¶¶ 37, 46, 48
at 13, 16–17.
84

Motion for Summary Judgment ¶ 83 at 14; Opposition at 21–22; Reply at 6, 9–12. Compare Pontrelli Amended
Complaint, generally, with Oliver Complaint, generally. MonaVie argues that the cases are distinguishable because
Oliver involves Arkansas residents and Pontrelli involves New Jersey residents. However, the factual allegations
regarding MonaVie’s actions are the same.

85

Motion for Summary Judgment ¶ 84 at 14; Opposition at 22; Reply at 6, 9–12. Compare Pontrelli Amended
Complaint ¶ 57 at 19 with Oliver Complaint ¶ 43 at 19.

86

Motion for Summary Judgment ¶ 85 at 15; Opposition at 22. See also Pontrelli Amended Complaint ¶ 58 at 19–
21.

87

Motion for Summary Judgment ¶ 86 at 15; Opposition at 22; Reply at 6, 9–12. Compare Pontrelli Amended
Complaint ¶¶ 58(a)–(p) at 19–21 with Oliver Complaint ¶¶ 45(a)–(p) at 20–21.

16

58.

The factual allegations set forth in the Pontrelli Amended Complaint arise from

the same multilevel marketing scheme which disseminated false and misleading representations
regarding the purported health benefits of MonaVie that underlay the Oliver claims. 88
SUMMARY JUDGEMENT STANDARD
Summary judgment is appropriate if “there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.” 89 A factual dispute is genuine when
“there is sufficient evidence on each side so that a rational trier of fact could resolve the issue
either way.” 90 In determining whether there is a genuine dispute as to a material fact, the court
should “view the factual record and draw all reasonable inferences therefrom most favorably to
the nonmovant.” 91
The moving party “bears the initial burden of making a prima facie demonstration of the
absence of a genuine issue of material fact and entitlement to judgment as a matter of law.” 92 “A
party asserting that a fact . . . is genuinely disputed must support the assertion by . . . citing to
particular parts of materials in the record.” 93 However, a party cannot “avoid summary judgment
by repeating conclusory opinions, allegations unsupported by specific facts or speculation.” 94

88

Motion for Summary Judgment ¶ 87 at 15; Opposition at 22–23; Reply at 6, 9–12. Compare Pontrelli Amended
Complaint at ¶¶ 1–8 at 2–3 and ¶¶ 19–55 at 6–19 with Oliver Complaint ¶¶ 1–6 at 1–4 and ¶¶ 23–42 at 10–18.

89

FED. R. CIV. P. 56(a).

90

Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998).

91

Id.

92

Id. at 670–71.

93

FED. R. CIV. P. 56(c)(1).

94
Colony Nat'l Ins. Co. v. Omer, No. CIV 07-2123, 2008 WL 2309005, at *1 (D. Kan. June 2, 2008) (citing Argo v.
Blue Cross & Blue Shield of Kan., Inc., 452 F.3d 1193, 1199 (10th Cir. 2006)).

17

DISCUSSION
Starr raises several arguments in support of its Motion for Summary Judgment, 95 all of
which depend on the terms of the Policies. “An insurance policy is merely a contract between the
insured and the insurer.” 96 “[B]ecause an insurance policy is a classic example of an adhesion
contract,” Utah courts have long held that “insurance policies should be construed liberally in
favor of the insured and their beneficiaries so as to promote and not defeat the purposes of
insurance.” 97 However, when “the language within the four corners of the contract is
unambiguous, the parties' intentions are determined from the plain meaning of the contractual
language, and the contract may be interpreted as a matter of law.” 98
Plaintiff Intervenors argue that the Policies’ language is ambiguous because certain terms
are not explicitly defined. 99 However, the “mere failure to provide a definition for a term
involving coverage does not necessarily render the term ambiguous.” 100 “A contractual term or
provision is ambiguous if it is capable of more than one reasonable interpretation because of
‘uncertain meanings of terms, missing terms, or other facial deficiencies.’” 101 Plaintiff
Intervenors have not suggested any reasonable, alternative interpretations of the Policies at issue.
As a result, Plaintiff Intervenors have not established that the Policies’ language is ambiguous.
Therefore, the Policies will be interpreted based upon their plain meaning.
95

Motion for Summary Judgment, 15–27.

96

Alf v. State Farm Fire & Cas. Co., 850 P.2d 1272, 1274 (Utah 1993).

97

Morden v. XL Specialty Ins., 177 F. Supp. 3d 1320, 1327 (D. Utah 2016) (quoting U.S. Fid. & Guar. Co. v.
Sandt, 854 P.2d 519, 521–22 (Utah 1993)) (internal quotation marks omitted).

98

Green River Canal Co. v. Thayn, 2003 UT 50, ¶ 17, 84 P.3d 1134, 1141.

99

Opposition at 32.

100

Cont'l Cas. Co. v. Wendt, 205 F.3d 1258, 1262 (11th Cir. 2000) (quoting Jefferson Ins. Co. v. Sea World, 586
So.2d 95, 97 (Fla. 5th DCA 1991).
101

Daines v. Vincent, 2008 UT 51, ¶ 25, 190 P.3d 1269, 1275 (quoting WebBank v. Am. Gen. Annuity Serv. Corp.,
2002 UT 88, ¶ 20, 54 P.3d 1139 and SME Indus., Inc. v. Thompson, Ventulett, Stainback & Assocs., Inc., 2001 UT
54, ¶ 14, 28 P.3d 669).

18

The plain language of the Policies’ Prior Notice Exclusion allows Starr to exclude coverage
for Parker and Pontrelli based on related Wrongful Acts in Oliver.
The Policies include a Prior Notice Exclusion that excludes “any Losses in connection
with any Claim alleging, arising out of, based upon, or attributable to the same or essentially the
same facts alleged, or to the same or related Wrongful Act(s) alleged or contained in any Claim
which has been reported, or in any circumstances of which notice has been given . . . .” 102 The
Policies define Loss, Claim, and Wrongful Act identically. 103 The parties agree that Parker and
Pontrelli are “Claims” under the Policies. 104 The parties also do not dispute that Parker,
Pontrelli, and Oliver are “Wrongful Acts” under the Policies. 105 Instead, Plaintiff Intervenors
contend that the three lawsuits are not “related.” 106
Courts, however, have defined the term “related” as encompassing any kind of
connection or relationship. 107 Based upon this definition, Parker, Pontrelli, and Oliver clearly
arise from the same Wrongful Acts and necessarily have a connection or relationship. As a
result, the cases are “related.”
Although both Quixtar and Oliver were reported prior to the Parker and Pontrelli cases,
the Oliver case alone provides sufficient prior notice to trigger the Prior Notice Exclusion and
exclude Parker and Pontrelli from coverage. Oliver was filed in December 2010, before
MonaVie entered into the Policies with Starr. Parker and Pontrelli were filed during the 2012
and 2013 policy periods, respectively. Both the Parker and Pontrelli cases are based on
102

Undisputed facts, supra at ¶ 21.

103

Undisputed facts, supra at ¶ 17.

104

Opposition at 1.

105

Undisputed facts, supra at ¶ 13, 36, 40, 47; see also Opposition at 30 (conceding that Wrongful Acts underlie
Oliver, Parker and Pontrelli).
106

Opposition at 26-32.

107
See discussion about definition of “related,” Morden v. XL Specialty Ins., 177 F. Supp. 3d 1320, 1331 (D. Utah
2016), aff'd in part, rev'd in part and remanded, 903 F.3d 1145 (10th Cir. 2018).

19

allegations against MonaVie for engaging in a multilevel marketing scheme that involved
misrepresentations about the health benefits of its juice products. Both cases contain
substantially similar allegations to Oliver, with some being identical. Oliver is undisputedly a
prior reported Claim, and the Parker and Pontrelli claims arise out of, are based upon, or are
attributable to the same or related Wrongful Acts alleged in Oliver.
Plaintiff Intervenors argue that because Oliver was a class action suit filed only for
Arkansas residents, that this geographic difference makes Parker and Pontrelli different enough
from Oliver, such that they are not “related.” 108 However, Oliver’s location does not make it
unrelated to the Wrongful Acts alleged in the Parker and Pontrelli lawsuits. The Tenth Circuit
Court of Appeal’s recent opinion in Morden v. XL Specialty Insurance 109 supports this
interpretation.
Morden involved a claim for liability insurance coverage. 110 The insurer sought
declaratory judgment that it had no obligation to pay the claim under the plain terms of the
policy. The District Court denied the insurer’s motion for summary judgment to exclude
coverage based on an Interrelated Wrongful Acts provision. 111 The Tenth Circuit reversed,
holding that a prior Securities and Exchange Commission (“SEC”) case and the Morden case
constituted Interrelated Wrongful Acts, and therefore, precluded coverage. Notwithstanding
differences between the SEC and Morden cases, the Tenth Circuit held that they were
sufficiently similar because they shared “common threads” and the Wrongful Acts were

108

Opposition at 32.

109

Morden v. XL Specialty Insurance, 903 F.3d 1145 (10th Cir. 2018).

110

Id. at 1146–47.

111

Id. at 1342–43.

20

committed by the same entity, using the same techniques, and against the same type of
victims. 112
The Interrelated Wrongful Acts provision is Morden is similar to the Prior Notice
Exclusion here—both exclude from coverage claims “based on” or “arising out of” the same or
related facts. 113 As in Morden, sufficient common threads exist between Oliver, Parker, and
Pontrelli to find that they are “related.” MonaVie was the defendant in all three lawsuits and it
allegedly used the same marketing scheme when selling its juice products to consumers. Indeed,
the Oliver Complaint alleged a nationwide marketing scheme, not a scheme based solely in one
geographic location. 114 As a result, the Arkansas class location in Oliver does not create a
difference in victims of the alleged scheme; it simply limited which victims would be class
members. Overall, the three lawsuits contain the common threads of a multilevel marketing
scheme that involved misrepresentations about the health benefits of MonaVie’s juice products,
making them “related” Wrongful Acts. Consequently, the Prior Notice Exclusion applies and
Parker and Pontrelli are excluded from coverage. Because summary judgment is appropriate
based on the Prior Notice Exclusion, the remainder of the arguments raised by Starr need not be
addressed.
MonaVie is required to pay Starr for its defense costs.
The Policies provide that “[i]n the event and to the extent that [MonaVie] shall not be
entitled to a payment of Defense Costs under the terms and conditions of this policy, such
payments by [Starr] shall be repaid to [Starr] by [MonaVie], severally according to their

112

Id. at 1152.

113

Compare Morden, 903 F.3d at 1151 with Undisputed Facts, supra at ¶ 21.

114

Reply at 10–12; Motion for Summary Judgment, Ex. F, Oliver Complaint ¶ 11 at 6.

21

respective interests.” 115 Plaintiff Intervenors oppose Starr’s request for defense costs on the basis
that Starr should be required to provide coverage for Parker or Pontrelli. 116 They do not dispute
that under the terms of the Policies, MonaVie must repay the associated defense costs if coverage
is not required. 117 Because Parker and Pontrelli are excluded for coverage, Starr is entitled to
recoup its defense costs from MonaVie.
ORDER
THEREFORE, IT IS HEREBY ORDERED that Starr’s Motion for Summary
Judgment 118 is GRANTED.
IT IS FURTHER ORDERED that Starr is awarded its Defense Costs incurred in Parker
and Pontrelli against MonaVie in an amount to be determined by subsequent motion.
Dated March 15, 2019.
BY THE COURT:
____________________________
David Nuffer
United States District Judge

115

Motion for Summary Judgment at 27; Opposition at. See also 2012 Policy ¶ 6 at 18; 2013 Policy ¶ 6 at 13.

116

Opposition at 40.

117

Undisputed Facts, supra at ¶ 18.

118

Docket no. 90.

22