United States District Court, D. Montana, Billings Division
KELLY D. PORCH and MICHELLE R. PORCH, Plaintiffs,
PREFERRED CONTRACTORS INSURANCE COMPANY, RRG; GOLDEN STATE CLAIMS ADJUSTERS INC.; SAFEBUILT INSURANCE SERVICES, INC. d/b/a SIS WHOLESALE INSURANCE SERVICES, Defendants.
TIMOTHY J. CAVAN, UNITED STATES MAGISTRATE JUDGE
Kelly D. Porch and Michelle R. Porch filed this action
against Defendants Preferred Contractors Insurance Company
(“PCIC”), RGG, Golden State Claims Adjusters Inc.
(“Golden State”), and Safebuilt Insurance
Services, Inc. doing business as SIS Wholesale Insurance
Services (“SIS”), arising out of PCIC and Golden
States' failure to defend an underlying lawsuit the
Porch's brought against Ochoa's Construction, Inc.
(“Ochoa's”). (Doc. 29.) Plaintiffs assert
claims for declaratory relief, breach of contract, breach of
the implied covenant of good faith and fair dealing,
violation of Montana's Unfair Trade Practices Act
(“UTPA”), common law bad faith, breach of
fiduciary duty, negligence, and punitive damages.
before the Court is Plaintiffs' Motion for Partial
Summary Judgment. (Doc. 13.) Defendants have filed an
opposition, and Plaintiffs have replied. (Docs. 26, 34.) The
motion is fully briefed and ripe for the Court's review.
considered the parties' submissions, the Court finds
Plaintiffs' Motion for Partial Summary Judgment should be
2014, Roofing & Restoration Services of America, LLC
(“RRSA”) and Rambur Construction, Inc.
(“Rambur”) entered into a Joint Marketing
Agreement, pursuant to which RSSA and Rambur acted together
to solicit sales of roofing jobs in the Billings, Montana
area following a significant hail storm. (Doc. 29 at ¶
2014, RRSA contracted with Plaintiff Kelly Porch to sell
roofing contracts on several residential buildings in
Billings. (Docs. 27 at ¶ 4; 29 at ¶ 9.) RRSA chose
to treat Mr. Porch as a direct seller as defined by 26 U.S.C.
§ 3508, and did not elect Workers' Compensation
coverage for him. (Doc. 27 at ¶¶ 4-5.)
and Rambur hired Ochoa's Construction, Inc.
(“Ochoa's”) to tear off and reapply materials
to a residential roof in Billings. (Id. at ¶
3.) On July 10, 2014, Mr. Porch arrived at the Ochoa's
job site with a project manager from RSSA. (Doc. 29 at ¶
12.) While at the job site, Mr. Porch and the project manager
went up onto the roof to physically show Ochoa's foreman
how they wanted the materials applied. (Id.) Mr.
Porch used a ladder provided by Ochoa's to get onto the
roof. (Id. at ¶ 13.) While Mr. Porch was on the
roof, one of the employees from Ochoa's moved the ladder
and placed it against the rain gutter of the house.
(Id.; Doc. 27 at ¶ 2.) When Mr. Porch was
climbing down the ladder, the rain gutter broke, causing the
ladder and Mr. Porch to fall approximately 10-15
feet.(Docs. 27 at ¶ 6; 29 at ¶ 13.)
Mr. Porch was knocked unconscious and severely injured.
(Id.) Mr. Porch alleges he injured his right foot,
both kidneys, his lungs, nose, back, right elbow, and right
leg. (Doc. 29 at ¶ 11.)
time of Mr. Porch's accident, PCIC insured Ochoa's
under a Commercial General Liability Policy, policy number
PC95125, effective June 6, 2014 to June 6, 2015 (the
“Policy”). (Doc. 27 at ¶ 7.)
filed a Complaint and Demand for Jury Trial
(“Complaint”) on November 24, 2014, in the
Montana Thirteenth Judicial District Court, Yellowstone
County against Ochoa's and RRSA (the “underlying
Complaint”). (Doc. 27-1.) The underlying Complaint
alleged Mr. Kelly sustained damages “from a fall
resulting from a negligently placed ladder on the job
site.” (Id. at ¶ 4.) Neither PCIC, Golden
State, nor SIS were named as defendants.
April 23, 2015, PCIC was notified of the underlying
Complaint. (Doc. 27 at ¶ 8.) Golden State responded on
behalf of PCIC, and informed Ochoa's by letter dated May
21, 2015, that no coverage existed for the allegations in
Plaintiffs' Complaint, and that PCIC would be denying
coverage for defense and indemnity. (Docs. 16-5 at 11-16; 27
at ¶ 10.)
February 24, 2016, Ochoa's entered into a stipulated
consent judgment and covenant not to execute, and assigned to
Plaintiffs all of its rights against Defendants. (Docs. 16-5
at 1-10; 27 at ¶ 13.) Plaintiffs thereafter dismissed
all defendants except Ochoa's. (Doc 27 at ¶ 14,
March 28, 2017, Judge Ingrid Gustafson of the Montana
Thirteenth Judicial District Court held a reasonableness
hearing with respect to Plaintiffs and Ochoa's stipulated
consent judgment. (Id. at ¶ 14.) Plaintiffs
were present at the hearing and presented evidence in support
of the reasonableness of the judgment; Ochoa's did not
appear. (Docs. 16-6; 27 at ¶ 23.) On March 30, 2017,
Judge Gustafson entered judgment in the amount of $4, 700,
000.00 in favor of Plaintiffs and against
now move for partial summary judgment. Plaintiffs ask the
Court to find Defendants breached their duty to defend
Ochoa's, and are therefore liable for the Judgment
entered by Judge Gustafson. Plaintiffs argue their claim
against Ochoa's fell within the insurance Policy's
coverage, and that Defendants cannot unequivocally
demonstrate that there was no coverage under the Policy.
Defendants counter that Plaintiffs' claims are clearly
and explicitly excluded from coverage under the plain terms
of the Policy, and thus, they had no duty to defend.
Summary Judgment Standard
will grant summary judgment if the movant 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
when the evidence presented is so conclusive that one party
must prevail. Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 252 (1986). The moving party has the initial burden
to submit evidence demonstrating the absence of a genuine
issue of material fact. Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986). Material facts are those which may
affect the outcome of the case. Anderson, 477 U.S.
242, 248 (1986). A dispute as to a material fact is genuine
if there is sufficient evidence for a reasonable fact-finder
to return a verdict for the nonmoving party. Id. If
the movant meets its initial responsibility, the burden
shifts to the nonmoving party to establish a genuine issue of
material fact exists. Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 586 (1986).