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Atlantic Cas. Ins. Co. v. GTL, Inc.

United States District Court, D. Montana, Missoula Division

January 14, 2013

GTL, INC., John P. Greytak, and Tanglewood Investors Limited Partnership, Defendants.

Order Denying Motion for Relief from Judgment Feb. 12, 2013.

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[Copyrighted Material Omitted]

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Matthew K. Hutchison, Kaufman Vidal Hileman & Ramlow, Kalispell, MT, for Plaintiff.

Liesel D. Shoquist, Quentin M. Rhoades, Sullivan Tabaracci & Rhoades, Missoula, MT, for Defendants.


DONALD W. MOLLOY, District Judge.

This is a declaratory judgment action. Atlantic Casualty Insurance Company (Atlantic Casualty) issued GTL, Inc. (GTL) a

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commercial general liability insurance policy. It now seeks a declaration under that policy that it has no duty to indemnify, defend, or cover claims asserted bye John P. Greytak (Greytak) and Tanglewood Investors Limited Partnership (Tanglewood) against GTL in an underlying lawsuit proceeding in Montana's Third Judicial District. ( See doc. 1.) Atlantic Casualty's motion as to its claim for declaratory relief is well taken for the reasons set forth below. Atlantic's motion for summary judgment is granted. (Doc. 31.) Defendants' motion is denied. (Doc. 35.)

Defendants moved to strike affidavits supporting Atlantic Casualty's motion for summary judgment. (Docs. 38, 66.) These motions are denied. Defendants motion in limine to exclude Plaintiff's expert witnesses is also pending. (Doc. 27.) This motion is denied as moot.


In December 2008, GTL purchased a Commercial General Liability Policy from Atlantic Casualty, effective December 29, 2008 to December 29, 2009. (Doc. 34-10.)

In July 2009, GTL contracted with Tanglewood and Greytak to improve real property in Granite County. (Doc. 01-02 at 2.) Work included construction of a road. (Id.) Greytak and Tanglewood did not tender payment, and on March 16, 2010, GTL filed the underlying lawsuit to foreclose its construction lien. (Id.) Greytak and Tanglewood hired a lawyer and sent a demand letter to GTL on April 30, 2010, contesting the lien and alleging material construction defects. (Doc. 34-01.) On November 5, 2010, Tanglewood and Greytak pled the claims from their April 30 demand as counterclaims in the underlying lawsuit. [1]

Atlantic Casualty was not party to the state lawsuit. (Doc. 31 at 3.) That case was settled on April 13, 2011. (Doc. 34-04.) Atlantic Casualty was first notified of the claims in the underlying lawsuit on May 23, 2011. (Doc. 34-05 at 1.) Once provided with notice, Atlantic Casualty hired an adjuster to investigate Defendants' allegations and claims. (Id.)

While Atlantic Casualty was investigating the counterclaims, Tanglewood and Greytak moved for entry of judgment in the state suit, pursuant to the settlement agreement. (Doc. 34-09.) Judgment was entered on June 21, 2012 and Atlantic Casualty then moved to intervene and set aside the judgment August 6, 2012. GTL, Inc. v. Greytak, et al., Mont. Dist. Cause No. DV-10-3, Doc. 43. Judge Dayton granted Atlantic Casualty's motion to intervene and he set aside the judgment September 18, 2012. Id., doc. 50. Pursuant to stipulation of the parties, Judge Dayton vacated a hearing regarding a stay of the proceedings and ordered the lawsuit stayed September 28, 2012. Id., doc. 55.

A central issue in this case is the sufficiency of notice given to Atlantic Casualty by its insured, GTL. The carrier claims notice of Greytak and Tanglewood's claims brought against GTL was insufficient and, as a result, there is no policy coverage for Greytak and Tanglewood's claims.

This declaratory judgment action was filed on January 23, 2012. (Doc. 1.) Tanglewood and Greytak answered and counterclaimed. (Doc. 19.) GTL was served

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as a party to the case but did not appear. (Doc. 23.) Default was entered against GTL July 9, 2012. (Doc. 24.) In August 2012, the parties filed cross-motions for summary judgment. (Docs. 31, 35.)

Atlantic Casualty unsuccessfully sought cooperation of GTL's representative and counsel for production of files related to the counterclaims. (Doc. 34 at 5.) On October 17, 2012, the protective order sought by GTL's counsel asserting attorney-client privilege in response to a subpoena by Defendants was denied. (Doc. 74.)


A party is entitled to summary judgment if it can show " there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). Summary judgment is warranted where the evidence produced by the parties permits only one conclusion. Anderson v. Liberty Lobby, Inc.,477 U.S. 242, 251, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Only disputes over facts that might affect the outcome of the lawsuit preclude entry of summary ...

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