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Penn Star Insurance Co. v. Real Estate Consulting Specialists, Inc.

United States District Court, D. Montana, Missoula Division

February 19, 2014

PENN STAR INSURANCE COMPANY, Plaintiff,
v.
REAL ESTATE CONSULTING SPECIALISTS, INC., Defendant. and CORRINE DEGOLIER, TRUST PROTECTOR of the LEANNE HART TRUST, on behalf of her natural sister, LEANNE HART, Defendant-Intervenor

For Penn Star Insurance Company, a corporation, Plaintiff: Jared S. Dahle, Randall G. Nelson, Ryan J. Gustafson, LEAD ATTORNEYS, NELSON & DAHLE, Billings, MT.

For Real Estate Consulting Specialists, Inc., Defendant: Marcel A. Quinn, LEAD ATTORNEY, HAMMER HEWITT JACOBS & QUINN PLLC, Kalispell, MT.

For Corrine DeGolier, Trust Protector of the Leanna Hart Trust, Intervenor Defendant: Lee C. Henning, LEAD ATTORNEY, HENNING & KEEDY, Kalispell, MT; Rebecca J. Henning-Rutz, LEAD ATTORNEY, HENNING KEEDY & LEE, Kalispell, MT.

OPINION

Page 1169

ORDER

Dana L. Christensen, Chief District Judge.

Before the Court are the parties cross-motions for summary judgment. Jurisdiction is based on diversity. For the reasons explained, the Court grants Defendant's motion and denies Plaintiff's motion.

Factual and Procedural Background

I. Introduction

This declaratory action stems from a complaint filed by Defendant-Intervenor Corrine Degolier, trust protector of the Leanne Hart Trust, (" Hart" ) in Montana state district court against Defendant Real Estate Consulting Specialists, Inc. (" RECSI" ). The state court complaint alleges

Page 1170

that Hart, a resident of an apartment managed by RECSI, suffered injuries as a result of RECSI's " negligence in failing to perform routine maintenance duties at the apartments." (Doc. 7-2 at 3.) Plaintiff Penn Star Insurance Company (" Penn" ) insured RECSI under a commercial general liability policy. Penn filed the instant action seeking a judicial declaration that it has no duty to defend or indemnify RECSI for the claims alleged by Hart.

II. The Underlying Complaint

Hart's complaint in state court alleges that Leanne Hart, a resident of an apartment managed by RECSI, was injured when, while taking a shower at the apartment, she suffered a seizure, struck the temperature control lever, and was scalded by the hot water that sprayed from the showerhead. Hart's complaint alleges that RECSI was responsible for " all day-to-day details associated with the apartment complex" and that RECSI was " responsible for all day-to-day maintenance and other duties concerning the property." (Doc. 7-2 at 1-2.) Hart's complaint alleges that " had [RECSI] been properly performing its routine maintenance duties regarding the apartment, it would have ensured that the temperature of the water was 120° F or less. Id. Ultimately, the complaint alleges that Hart's injuries resulted from RECSI's " negligence in failing to perform routine maintenance duties at the apartment." Id., at 3.

III. The Commercial General Liability Insurance Policy

At the time of Hart's injuries, RECSI was a Named Insured under a Commercial General Liability Policy issued by Penn (" the Policy" ). The Policy's " Insuring Agreement" provided:

We will pay those sums that the Insured becomes legally obligated to pay as damages because of " bodily injury" or " property damage" to which this insurance applies. We will have the right and duty to defend the insured against any " suit" seeking those damages.

(Doc. 7-1 at 26.) The Insuring Agreement further provided that insurance is applicable if " [t]he 'bodily injury' or 'property damage' is caused by an 'occurrence' that takes place in the 'coverage territory'." The Policy defined the " coverage territory" as " the United States of America (including its territories and possessions), Puerto Rico and Canada." (Doc. 7-1 at 38.) The Declarations page and the Supplemental Location Schedule, under the remark " Locations of all premises you Own, Rent, or Occupy", lists several addresses in Kalispell, none of which is the address where Hart's injuries are alleged to have occurred.[1]

The Policy contains an endorsement that limits coverage to designated operations. This endorsement states that " [t]his insurance applies only to 'bodily injury' . . . arising out of only those operations designated, listed and described in the Declarations . . ." (Doc. 7-1 at 59.) The operations designated in the Declarations are described as " Real Estate Property managed." (Doc. 7-1 at 4.) The Policy also contains an endorsement entitled " Real Estate Property Managed", which provides that " [w]ith respect to your liability arising out of your management of property for which you are acting as real estate ...


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