United States District Court, D. Oregon, Medford Division
OPINION & ORDER
AIKEN UNITED STATES DISTRICT JUDGE.
matter comes before the Court on Defendants Jay and Kim
Horowitz's Motion for Summary Judgment. ECF No. 10. For
the reasons set forth below, the motion is DENIED.
an action for declaratory relief. Plaintiff Scottsdale
Insurance Company ("Scottsdale") is an
Arizona-based corporation. Compl. 2. Scottsdale issued a
general liability insurance policy (the "Policy")
to Elite Moving Systems, Inc. ("EMS"), a
now-inactive California corporation. The Policy was to be
effective from March 4, 2014, through March 4, 2015 and would
provide one million dollars in coverage for bodily injury and
property damage. Jones Decl. Ex. 2, at 9. The Policy obliged
Scottsdale to defend and indemnify EMS for qualifying bodily
injury and property damage which "occurs during the
policy period." Jones Decl. Ex. 2, at 11.
financed the premium for the policy through IPFS Corporation,
a premium finance company. Second Jones Decl. Ex. 1. EMS
executed a Premium Finance Agreement (the
"Agreement") with IPFS. Second Jones Decl. Ex. 1.
The Agreement included the following term:
Insured [EMS] irrevocably appoints Lender [IPFS]
attorney-in-fact with full power of substitution and full
authority upon default to cancel all policies above
identified, receive all sums assigned to its Lender or in
which it has granted Lender a security interest and to
execute and deliver on behalf of the insured documents,
Instruments, forms and notices related to the listed
insurance policies in furtherance of this Agreement.
Second Jones Decl. Ex. 1.
failed to pay IPFS for the premiums and, on April 28, 2014,
IPFS mailed a Notice of Cancellation to EMS, effective May 1,
2014. Jones Decl. Ex. 3. Pursuant to its authority under the
Agreement, IPFS notified Scottsdale on April 28, 2014, that
the Policy was cancelled, effective May 1, 2014, Second Jones
Decl. Ex, 2, at 1.
California corporation, known as Elite Moving Solutions, Inc.
("Solutions"), was incorporated on March 19, 2015,
and may be the successor entity to the now-defunct EMS. Jones
Decl. Ex, 1.
The Underlying Lawsuit
25, 2013, Jay and Kim Horowitz contracted with EMS and Lile
International Companies ("Lile") to move the
Horowitzes' possessions from California to Talent,
Oregon. Lile and/or EMS hired Curtis Wiles and Jason Morgan
to assist in moving the Horowitzes' property. The
Horowitzes allege that Wiles and Morgan had extensive
criminal backgrounds and that EMS and/or Lile failed to
perform criminal background checks before hiring them.
Horowitzes allege that Wiles and Morgan used information
learned during the move to plan a robbery of the
Horowitzes' home. On May 3, 2014, Morgan and a man named
James Turner broke into the home and assaulted the
Horowitzes. Morgan and Turner then stole approximately $83,
000 worth of personal property, which they planned to divide
Horowitzes filed suit against EMS and Solutions, among other
defendants, in Jackson County Circuit Court on March 18,
2016, with an amended complaint filed on March 30, 2016 (the
"Underlying Lawsuit"). Andersen Decl. Ex. 1, 2.
Scottsdale initially undertook to defend EMS and Solutions in
the Underlying Lawsuit and Portland attorney Michael Hallinan
was retained to represent EMS and Solutions. Andersen Decl.
Ex. 3, 4. Solutions filed a motion to dismiss based on lack
of personal jurisdiction. Second Jones Decl. Counsel for the
Horowitzes and Mr. Hallinan discussed dismissing Solutions
from the action based on the understanding that EMS had
liability coverage of up to one million dollars. Andersen
Decl. Ex. 5. On June 6, 2016, Mr. Hallinan replied that EMS
had one million dollars in coverage "and the adjuster
has confirmed no reservation of rights has been
asserted." Andersen Decl. Ex. 6. The parties stipulated
to the dismissal of Solutions from the Underlying Lawsuit on
June 20, 2016. Andersen Decl. Ex. 7, at 3-4.
subsequently issued a reservation of rights letter on January
12, 2017. Second Jones Decl. Ex. 2, In the reservation of
rights letter, Scottsdale asserted that the Policy was
properly terminated by IPFS on May 1, 2014, Second Jones
Decl. Ex, 2, at 1, As the assault and robbery of the
Horowitzes' home occurred on May 3, 2014, Scottsdale
claims that the loss is not covered by the Policy and
Scottsdale has no duty to defend ...