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American Reliable Insurance Co. v. Lockard

United States District Court, D. Montana, Missoula Division

December 7, 2018

AMERICAN RELIABLE INSURANCE COMPANY, Plaintiff,
v.
LAWRENCE LOCKARD, and KAREN JANE NELSON, Defendants.

          ORDER

          Dana L. Christensen, Chief Judge

         Before the Court are Defendant Karen Jane Nelson's ("Nelson") Motion for Attorney Fees and Motion to Enforce Judgment (Doc. 45). The Court denies both motions.

         Factual Background On September 8, 2015, Lawrence Lockard ("Lockard") and Nelson, both employees of the United States Fish and Wildlife Service ("USFWS"), traveled to Quartz Lake in Glacier National Park to conduct work-related research. (Doc. 43 at ¶¶ 10-11.) Nelson and Lockard stayed overnight in a USFWS cabin, sleeping in adjacent beds in the same room. (Id. at ¶ 12.) Lockard knew that Nelson had taken sleep medication, waited for her to fall asleep, and then sexually assaulted her. (Id. at ¶ ¶ 16-17.) The assault caused Nelson damages, including anxiety, embarrassment, humiliation, insomnia, nightmares, and emotional trauma. (Id. at ¶ 27.)

         Relevant Procedural Background

         I. United States v. Lockard, 15-CR-37-DLC (Federal Criminal Action)

         On November 20, 2015, Lockard was indicted for abusive sexual contact in violation of 18 U.S.C. § 2244(b). Following a superseding information, Lockard pled guilty to abusive sexual contact in violation of 18 U.S.C. § 2244(b) on February 5, 2016. This Court sentenced him to six months custody followed by five years of supervised release and restitution in the amount of $21, 872.49.

         II. Nelson v. Zinke, et al., 16-CV-135-DWM (Underlying Action)

         On October 8, 2016, Nelson filed a federal civil complaint against Lockard and the Secretary of the Interior ("Underlying Action"). See Nelson v. Zinke, et al, 16-CV-135-DWM (D. Mont.). In that complaint, Nelson alleged that Lockard negligently made a sexual advance without her permission. During the relevant period of his employment with the USFWS, Lockard was insured by American Reliable Insurance Company ("American Reliable"), through a standard "occurrence"-based homeowner's policy which provides coverage for bodily injury and property damage. Therefore, Lockard tendered the complaint in the Underlying Action to American Reliable and requested a defense and indemnification. As described in further detail below, American Reliable filed this declaratory action on January 12, 2017, seeking judgment that it has no obligation to defend or indemnify Lockard in the Underlying Action.

         Meanwhile, in the Underlying Action, Nelson stipulated to the dismissal of all claims against Lockard, which the court granted. The court then granted summary judgment for the remaining defendant, the Department of the Interior, on April 5, 2018. Nelson appealed. The Ninth Circuit has stayed appellate proceedings pending final disposition of the subject action by this Court.

         III. Nelson v. Lockard, DV-18-117 (State Court Action)

         It appears that Nelson separately filed a civil complaint against Lockard in the Montana State District Court for the Second Judicial District. (Doc. 45-1.) In that case, the state district court entered judgment on April 2, 2018. On its face, the judgment indicates that: Lockard and Nelson entered into a stipulated settlement agreement for $500, 000, an amount above the $300, 000 American Reliable policy limit; Lockard assigned his claims to Nelson; and Nelson released her right to execute against Lockard. The undersigned is not familiar with the details of the State Court Action.

         IV. American Reliable Insurance Company v. Lockard and Nelson, 17-C V-00004-DLC (Federal Declaratory Action)

         American Reliable filed its complaint in this matter on January 12, 2017. American Reliable contended that, pursuant to the Montana Declaratory Judgment Act, it has no obligation to provide Lockard a defense or coverage for the allegations set forth by Nelson in the Underlying Action. After a bench trial, this Court entered its Findings of Facts and Conclusions of Law (Doc. 43) on August 23, 2018, finding that American Reliable must afford Lockard a defense and indemnification in relation to one of five acts alleged in the Underlying Action. This Court additionally determined that American Reliable is not required to defend or indemnify Lockard against the other four acts alleged by Nelson in the Underlying Action. American Reliable appealed to the Ninth Circuit, and Nelson filed a cross-appeal. The cross appeals in this matter and the appeal in Lockard v. Zinke are pending as of the date of this Order.

         On September 5, 2018, Nelson filed a Motion for Attorney Fees and a Motion to Enforce Judgment (Doc. 45). Nelson asserts that an award of attorney fees is necessary and proper where, as here, litigation is required in order for the insured to obtain coverage. Because the equities do not support an award ...


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