United States District Court, D. Oregon, Medford Division
OPINION & ORDER
Aiken United States District Judge.
matter comes before the Court on a Motion for Summary
Judgment, ECF No. 38, filed by Plaintiff Scottsdale Insurance
Company ("Scottsdale") and a Motion to Strike and
to Supplement the Record, ECF No. 41, filed by Defendants Jay
Horowitz and Kim Horowitz (collectively, the
"Horowitzes"). Defendant Elite Moving Systems, Inc.
("EMS") has not appeared in this case or responded
to the motions. Oral argument was held on the motion on July
10, 2019. ECF No. 49. For the reasons set forth below, the
Horowitzes' Motion to Strike is DENIED and
Scottsdale's Motion for Summary Judgment is GRANTED.
Scottsdale is an insurance coiporation organized under the
laws of Ohio, with its principal place of business in
Arizona. Defendant EMS is a now-inactive corporation
organized under the laws of California with its principal
place of business in California. Defendants Jay and Kim
Horowitz are residents of Oregon, I. The
2014, Scottsdale issued a general liability insurance policy
to EMS, policy number CPS1851193, which was to run from March
4, 2014, to March 4, 2015 (the "Policy"). First Am.
Compl. ("FAC") Ex. B. ECF No. 34-2. The Policy
covered "bodily injury" and "property
damage" occurring "during the policy period."
FAC Ex. B, at 10.
financed the premium for the Policy through IPFS Corporation
("IPFS"), a premium finance company. EMS executed a
Premium Finance Agreement (the "Agreement"), which
set forth the terms of the premium financing relationship
between EMS and IPFS, including terms granting power of
attorney to IPFS with respect to the Policy and establishing
IPFS's right to cancel the Policy if EMS defaulted on its
obligations to IPFS. Second Jones Decl.Ex. 1. ECF No. 22.
subsequently failed to pay installments to IPFS as required
by the Agreement. Pursuant to the terms of the Agreement,
IPFS mailed a Notice of Cancellation to EMS on April 28,
2014. FAC Ex. C. In the Notice of Cancellation, IPFS
exercised its authority under the Agreement and notified
Scottsdale that the Policy was cancelled, effective May 1,
The Underlying Action
25, 2013, the Horowitzes contracted with EMS to move their
belongings from West Hills, California, to Talent, Oregon,
FAC Ex. A., at 1. In August or September 2013, EMS hired
Curtis Wiles and Jason Morgan to unload the Horowitzes'
belongings in Talent and paid Wiles and Morgan "under
the table in cash." Id. EMS did not perform
background checks and so did not discover that Morgan and
Wiles had criminal histories or were otherwise unsuited for
their positions. Id. at 2. While unloading the
Horowitzes' property, Morgan and Wiles learned about the
layout of the Horowitzes' home and the value of the
Horowitzes' property. Id.
3, 2014, Morgan and an accomplice named James Turner entered
the Horowitzes' home and stole property worth $83,
Id. at 2-3. During the robbery, Morgan and Turner
brutally assaulted Jay Horowitz, leaving him with severe
physical and psychological injuries and considerable medical
March 18, 2016, the Horowitzes filed a complaint in Jackson
County Circuit Court against EMS, Case Number 16CV08738 (the
"Underlying Action"). In an amended state court
complaint, filed March 30, 2016, the Horowitzes alleged a
claim against Elite Moving Solutions, Inc.
("Solutions"), a successor entity to the
now-defunct EMS. Compl. Ex. A. ECF No. 1.
5, 2016, the Horowitzes' counsel was contacted by
attorney Michael B. Hallinan, who identified himself as
counsel for EMS. Am. Ans. Ex. 3. ECF No. 35-3. HalHnan
informed the Horowitzes that he had "not yet received a
file from our client's insurer, and we have not reviewed
any investigation in this matter." Id. A
follow-up letter on May 16, 2016, indicated that Hallinan was
also counsel for Solutions. Am. Ans. Ex. 4.
6, 2016, Hallinan and the Horowitzes' counsel agreed to
dismiss Solutions in favor of retaining EMS as a defendant in
the Underlying Action on the understanding that EMS had
liability insurance coverage. Am. Ans. Ex. 5. In reply,
Hallinan wrote "I can confirm $1 million in coverage,
and will send the dec page/policy [sic], and the adjuster has
confirmed no reservation of rights has been asserted."
Am, Ans. Ex. 6.
20, 2016, the Horowitzes entered into a stipulated motion to
dismiss Solutions from the Underlying Action and substitute
EMS as the defendant, which was accepted by the state court.
Am Ans. Exs. 7, 8, On January 12, 2017, Scottsdale's
coverage counsel sent a letter to EMS notifying it that
Scottsdale was asserting a reservation of rights on the basis
that the robbery of the Horowitzes' home occurred on May
3, 2014, which was two days after IPFS cancelled the Policy.
Second Jones Decl. Ex. 2. In that letter, Scottsdale reserved
its right to deny coverage and to withdraw from EMS's
defense in the Underlying Action. Id. Scottsdale
also reserved the right to file a declaratory judgment action
to determine its rights and obligations under the Policy.
Id. The Horowitzes learned of the reservation of
rights on January 19, 2017. Anderson Decl. ECF No. 39-3.
present action followed on March 7, 2017. ECF No. 1. On May
17, 2017, the Horowitzes moved for summary judgment, which
was denied in an Opinion and Order issued on September 21,
2017. ECF Nos. 10, 25. The present Motion for Summary
Judgment, this time filed by Scottsdale, followed.