Opinion
No. CV 06-2154-PHX-EHC.
September 24, 2007
ORDER
Plaintiff originally sued Defendant Hartford Casualty Insurance Company ("Defendant") in the Superior Court of Maricopa County, Arizona, asserting state law claims for breach of contract (Count I) and bad faith (Count II). The case was removed to this Court based on diversity jurisdiction, 28 U.S.C. § 1332. (Dkt. 1).
On December 8, 2006, Defendant filed a Motion for Summary Judgment on both claims asserted in the Complaint. (Dkt. 23). Plaintiff filed a Response to Defendant's Summary Judgment Motion (Dkt. 25) and a Cross-Motion for Partial Summary Judgment on the breach of contract claim. (Dkt. 25).
Defendant has filed a Motion to Withdraw its argument in its Summary Judgment Motion that, even if there was a breach of contract, Plaintiff cannot prove bad faith. (Dkt. 24). Defendant also has filed a Notice of Errata as to its Summary Judgment Motion withdrawing its argument on Plaintiff's bad faith claim. (Dkt. 32). Defendant's Motion to Withdraw Argument (Dkt. 24) is granted.
The Parties have completed their briefing on Summary Judgment (Dkt. 23, 25, 31 36) and the issues are ready for decision. The Court has determined that oral argument would not materially assist in deciding the Parties' Cross-Motions for Summary Judgment. Defendant's Motion for Oral Argument (Dkt. 43) is denied.
Background
During the evening of September 2, 2002, Jarrod Dorman ("Dorman"), Lance Kwiatkoski ("Kwiatkoski"), and Plaintiff were social guests at a party at an apartment complex in Tempe, Arizona. During the party, Plaintiff spoke to a girl who complained about her toe. While waiting for his friends so they could leave the party, Plaintiff attempted to tell the girl he was sorry about her toe. Dorman, allegedly the girl's boyfriend, confronted Plaintiff and shoved him. Plaintiff and Dorman then engaged in a verbal confrontation. (Dkt. 23, Exhibit [Exh.] 1 — City of Tempe Incident Report (02-143917)).
The record shows this name also spelled as "Kwiatkowski."
Kwiatkoski, who was sitting in a chair in the living room, heard yelling and saw Dorman face-to-face with Plaintiff near a doorway. Kwiatkoski "immediately jumped up" and walked to where Plaintiff and Dorman were standing and stood "kind of to the side" of Dorman. After about 30 seconds to a minute, Kwiatkoski punched Plaintiff in the right side of his face. (Dkt. 23, Exh. 1; Dkt. 27 — Kwiatkoski Deposition, pp. 15-18). Plaintiff went out onto the balcony to spit out blood from inside his mouth. Plaintiff was taken to the hospital and treated for a broken jaw. (Dkt. 23, Exh. 1).
On September 25, 2002, Detective J. McGowan questioned Kwiatkoski about the incident at the party. Kwiatkoski told the officer that he was sitting in a chair in the living room when he heard some yelling and noticed his friend Dorman face-to-face with Plaintiff. Kwiatkoski jumped out of the chair and went to where Dorman was standing in the bedroom doorway arguing with Plaintiff. Kwiatkoski stood next to Dorman as Dorman was telling Plaintiff to "get the hell out of here." Kwiatkoski stated, "he said F.U. or something and I just snapped and I punched him." Kwiatkoski also stated, "I just hit him, I don't know, I should have thought but I didn't." (Dkt. 23, Exh. 2, page 2). Kwiatkoski was charged with one count of aggravated assault under A.R.S. §§ 13-1203(A), 13-1204(A). (Dkt. 23, Exh. 4 Exh. 5).
On March 29, 2005, Kwiatkoski entered into a plea agreement pursuant to which he was sentenced to probation after pleading guilty to one count of "solicitation to commit aggravated assault." (Dkt. 23, Exh. 5). Under A.R.S. § 13-1002, a person commits solicitation if,
with the intent to promote or facilitate the commission of a felony or misdemeanor, such person commands, encourages, requests or solicits another person to engage in specific conduct which would constitute the felony or misdemeanor or which would establish the other's complicity in its commission.See A.R.S. § 13-1002(A).
On August 13, 2003, Plaintiff filed a civil complaint in the Maricopa County Superior Court against Evan Graham, the lessee of the apartment, Dorman and Kwiatkoski. (Dkt. 23, Exh. 6). On April 5, 2004, the court awarded judgment by default for compensatory damages in the amount of $85,000 against Graham. Plaintiff sought judgment against Kwiatkoski as the perpetrator of the assault for both compensatory and punitive damages. On September 30, 2004, the court issued a minute entry in which it awarded judgment in Plaintiff's favor against Kwiatkoski in the amount of $85,000 for compensatory damages and $10,000 for punitive damages. (Dkt. 23, Exh. 7). The court stated in relevant part as follows in the minute entry:
Defendant Kwiatoski attacked Plaintiff apparently out of jealousy and while under the influence of alcohol or other substances being served [at] the gathering both men attended. The attack was unprovoked, unjustifiable and with the intent to injure the Plaintiff or at least with reckless disregard for the substantial risk of harm that might result . . . the behavior exhibited by Defendant [was] clearly motivated by an evil mind and punitive damages should follow not only to punish the wrongdoer but also to deter others who would engage in this type of activity without regard to its consequences.
(Dkt. 23, Exh. 7 — Minute Entry).
On October 28, 2004, Plaintiff's counsel deposed Kwiatkoski. (Dkt. 27 — Kwiatkoski Deposition). Kwiatkoski testified that he was sitting in the living room, heard the confrontation and "jumped up and walked over there." (id., pp. 15-17). Kwiatkoski stood by about 30 seconds to a minute and then punched Plaintiff. (id., pp. 17-18). When asked what made him decide to punch Plaintiff, Kwiatkoski responded, "My bad decision-making when I get angry. I don't know. I just — all I can hear is . . . I don't know. I get mad and my heart just starts beating and that's all I can hear. I don't know." (id., page 18). He answered "no" when asked if "Chris" [Plaintiff] said anything to upset him. (id., page 18). Kwiatkoski further testified, "I wouldn't say I felt threatened . . . I just made a stupid decision." (id., page 19). Kwiatkoski testified he "was probably a little worried for what was going to happen between him and Jarrod [Dorman]. . . . me and my friends were just — we're just close. We're real close. So it's hard to say. We just watch out for each other." (id., page 19).
After first stating that he thought "Jarrod" [Dorman] pushed "Chris" [Plaintiff], Kwiatkoski could not recall if one pushed the other. (id., pp. 20-22). Kwiatkoski testified that he was "worried" because there were kids at the party from different high schools and he "kind of wanted to stop anything that was going to happen before it happened . . ." (id., pp. 22-23). He also did not want anything to happen to his friend, stating "I didn't want a fight to break out, so I punched him." (id., pp. 25-26). Kwiatkoski testified that "Jarrod" has been his best friend since high school. (id., pp. 38).
The Insurance Policy
On the date of the incident, Kwiatkoski's grandmother, with whom he resided, possessed a homeowner's insurance policy ("the Policy") issued by Defendant. Under "Section II — Liability Coverages, Coverage E — Personal Liability" of the Policy, the agreement states:
If a claim is made or a suit brought against an insured for damages because of bodily injury or property damage caused by an occurrence to which this coverage applies, we will:
1. Pay up to your limit of liability for the damages for which the insured is legally liable . . .; and
2. Provide a defense at our expense by counsel of our choice. Even if the suit is groundless, false, or fraudulent. We may investigate and settle any claim or suit that we decide is appropriate. Our duty to settle or defend ends when the amount we pay for damages resulting from the occurrence equals our limit of liability.
The Policy defines an "occurrence" as:
an accident, including continuous or repeated exposure to substantially the same general harmful conditions which result during the policy period, in
a. Bodily injury; or
b. Property damage.
The Policy specifically excludes coverage for "intentional acts" under "Section II — Exclusions," which states:
1. Coverage E — Personal Liability and Coverage F — Medical Payments to Others do not apply to bodily injury or property damage:
a. Which is expected or intended by the insured.
(Dkt. 23-2, Defendant's Statement of Facts, ¶¶ 37-42 [Ex. 9] (emphasis in original)).
This provision was later amended by Endorsement HO-300 (Ed. 11/00) as follows:
Section II — Exclusions
Under 1. Coverage E — Personal Liability and Coverage F — Medical Payments to Others; item a. is deleted and replaced by the following:
a. Which is expected or intended by one or more insureds; . . .
(Dkt. 23-2, Defendant's Statement of Facts, ¶ 42 [Exh. 10] (emphasis in original)).
On June 28, 2004, Defendant denied coverage for the incident based on the Policy language definition of a covered "occurrence" and the "intentional acts" exclusion. (Dkt. 23-2, Defendant's Statement of Facts, ¶ 43). Kwiatkoski and Plaintiff entered into a Damron Agreement in which Kwiatkoski assigned his rights against Defendant to Plaintiff. (Dkt. 23, Exh. 12). Plaintiff subsequently filed this lawsuit.
A Damron Agreement generally refers to an agreement in which the insured defendant admits to liability and assigns to a plaintiff his or her rights against the liability insurer, including a cause of action for bad faith, in exchange for a promise by the plaintiff not to execute the judgment against the insured. See Associated Aviation Underwriters v. Wood, 98 P.3d 572, 577 n. 1 (Ariz.App. Div. 2 2004).
Standard of Review
A court must grant summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). Under summary judgment practice, the moving party bears the initial responsibility of presenting the basis for its motion and identifying those portions of the record, together with affidavits, that it believes demonstrate the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323; Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001) (en banc). In assessing whether a party has met its burden, the court views the evidence in the light most favorable to the nonmoving party.Allen v. City of Los Angeles, 66 F.3d 1052, 1056 (9th Cir. 1995). Generally, all reasonable inferences are drawn in the favor of the nonmovant. Gibson v. County of Washoe, 290 F.3d 1175, 1180 (9th Cir. 2002). Where cross-motions for summary judgment are at issue, each motion is evaluated separately, "giving the nonmoving party in each instance the benefit of all reasonable inferences."American Civil Liberties Union of Nevada v. City of Las Vegas, 466 F.3d 784, 790-91 (9th Cir. 2006).
If the moving party meets its burden with a properly supported motion, the burden then shifts to the opposing party to present specific facts that show there is a genuine issue for trial. Fed.R.Civ.P. 56(e); Auvil v. CBS "60 Minutes", 67 F.3d 816, 819 (9th Cir. 1995); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 n. 4 (1986). If the moving party presents evidence that, taken by itself, would establish the right to a directed verdict at trial, the motion for summary judgment must be granted in the absence of any significant probative evidence tending to support the opposing party's theory of the case. First Nat'l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 289-290 (1968); THI-Hawaii, Inc. v. First Commerce Fin. Corp., 627 F.2d 991, 993-94 (9th Cir. 1980). Conclusory allegations, unsupported by factual material, are insufficient to defeat a motion for summary judgment. Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). The opposing party must, by affidavit or as otherwise provided by Rule 56, designate specific facts that show there is a genuine issue for trial. Anderson, 477 U.S. at 249; Devereaux, 263 F.3d at 1076.
In a diversity case, the court must apply the substantive law of the forum state. Takahashi v. Loomis Armored Car Service, 625 F.2d 314, 316 (9th Cir. 1980). In the absence of controlling authority, a federal court sitting in diversity is justified in using its own best judgment in predicting how the state's highest court would decide the case. Id.
Discussion
Defendant argues that there is no question that Kwiatkoski's "sucker-punch" of Plaintiff was an exercise of his own volition. Moreover, even if Kwiatkoski's admissions are disregarded, Kwiatkoski's intent must be presumed since punching Plaintiff, who was in no position to defend himself, was virtually certain to cause injury. Defendant argues that Kwiatkoski's insurance contract with Defendant specifically excluded coverage for intentional acts and the policy's exclusion bars coverage for the assault. Defendant also argues that Kwiatkoski cannot now deny that he intentionally punched Plaintiff based on his guilty plea.Plaintiff in his Response and Cross-Motion for Summary Judgment argues, under Arizona law, that if the insured can show facts that might establish that he acted with privilege, he is permitted to explain his subjective intent and it is for the fact finder to determine whether he had an underlying purpose to injure. Plaintiff argues that there are facts which show that Kwiatkoski was acting with privilege, and there is no dispute of material fact that Kwiatkoski's subjective intent was to prevent a fight and injury to his friend Dorman rather than to injure Plaintiff. Plaintiff further argues that neither Kwiakoski's guilty plea nor the state civil court's findings in the minute entry apply to bar the claim. Plaintiff argues that as a matter of law, Defendant breached its contract with Kwiatkosi when it denied coverage and indemnity on the underlying claim.
In Arizona, insurers may deny coverage for those intentional acts which are virtually certain to cause injury. Determining an insured's subjective intent to injure is ordinarily a question of fact. Farmers Ins. Co. of Arizona v. Vagnozzi, 675 P.2d 703, 709 (Ariz. 1983) (insured injured Vagnozzi in a scuffle during a three-on-three recreational league basketball game). However, Arizona law presumes that an insured intends harm if the nature of the act was such that harm was substantially certain to occur:
[T]here is a presumption of intent to injure if the act is "`virtually certain to cause injury,' . . . The so-called ` Steinmetz-Clark' `presumption applies' "if the nature and circumstances of the insured's intentional act were such that harm was substantially certain to result.K.B. v. State Farm Fire and Casualty Co., 941 P.2d 1288, 1290 (Ariz.App. 1997) (referring to Steinmetz v. National Am. Ins. Co., 589 P.2d 911, 914 (Ariz.App. 1979), and Clark v. Allstate Ins. Co., 529 P.2d 1195, 1196 (Ariz.App. 1975)). See, Ohio Casualty Insurance Co. v. Henderson, 939 P.2d 1337, 1343 (Ariz. 1997) (circumstances surrounding armed robbery made it certain that someone in or around the scene would suffer bodily injury). Where the act is virtually certain to cause harm, the requisite intent to harm will be inferred as a matter of law. State Farm Fire and Casualty Co. v. Doe, 797 P.2d 718, 720 (Ariz.App. 1990); Republic Ins. Co. v. Feidler, 875 P.2d 187, 190-91 (Ariz.App. Div. 1 1993). The Steinmetz-Clark presumption does not apply when the insured lacks the mental capacity to act rationally.K.B., 941 P.2d at 1290.
Plaintiff relies on Transamerica Insurance Group v. Meere, 694 P.2d 181 (Ariz. 1984), in which Meere, a former police officer, was confronted by one Pruitt, a prison guard. Words were exchanged and a fight ensued during which Meere knocked Pruitt to the ground and he sustained serious injury. Id., at 187. The issue in Meere was whether a person acting in self-defense or with other justification "intends" to injure even though he acts in a manner quite likely or even certain to cause some injury. The Arizona Supreme Court observed that "if the insured can show facts which might establish that he acted with privilege . . ., he will be permitted to explain his subjective intent, and it will be for the fact finder to determine whether he had an underlying purpose to injure." Id., at 189. In this type of case, "the question of intent must be resolved by a determination of the basic purpose or desire underlying the insured's conduct." Fire Ins. Exchange v. Berray, 694 P.2d 191, 193 (Ariz. 1984) (insured allegedly shot victim in self-defense).
Plaintiff cites the following summary of facts as supporting his claim that he has made the necessary showing under Meere:
It is undisputed in this case that Dorman shoved Love and exchange[d] heated words with him. The confrontation appeared to Kwiatkoski likely to come to blows. Kwiatkoski also believed that Dorman would likely be hurt as Love [Plaintiff] was the larger person. Thus, the facts clearly demonstrate that Kwiatkoski was acting in the defense of a third person, Dorman.
(Dkt. 25 — Plaintiff's Response and Cross Motion for Summary Judgment, at page 8).
Kwiatkoski testified during his deposition that he heard and then saw "a verbal confrontation" between the Plaintiff and Dorman. (Dkt. 27 — Kwiatkoski Deposition, pp. 15-16). When Kwiatkoski was asked if he saw Plaintiff push Dorman, Kwiatkoski initially answered: "I believe Jarrod pushed Chris — I honestly don't remember . . . I don't remember what — who pushed who to be truthfully honest with you." (Dkt. 27, p. 20). When asked if he remembered if somebody got pushed, Kwiatkoski testified: "It's hard to say. I remember — I remember — no, I can't say for sure. I don't want to say for sure because I don't know for sure." (Dkt. 27, p. 21). Kwiatkoski testified: "I'm pretty sure Chris didn't push Jarrod . . . I'm not going to say for sure Jarrod pushed Chris . . . I just remember Jarrod pushing somebody. . . . So I don't believe Jarrod pushed him . . . So I'm pretty sure there was no pushing. There might have been, but I'm — I'm pretty positive there wasn't." (Dkt. 27, pp. 21-22).
Kwiatkoski testified that he "immediately jumped up" and went over to where the two men were standing. (Dkt. 27, pp. 15-16). After 30 seconds to a minute, Kwiatkoski punched Plaintiff. When asked why, Kwiatkoski testified "my bad decision-making when I get angry. I don't know." (Dkt. 27, p. 18). He further answered "no" when asked if Plaintiff had said anything to him to upset him. (Dkt. 27, p. 18). He testified: "I wouldn't say I felt threatened, no. I just made a stupid decision." (Dkt. 27, p. 19).
The Court has considered Kwiatkoski's explanation that fights sometimes occur at a party when there are people present from different high schools. However, Kwiatkoski could not "say for sure if a fight was going to happen or not," testifying that if a fight is going to happen, he would "rather be the one who gets it over with first . . ." (Dkt. 27, pp. 22-24). According to Kwiatkoski, Plaintiff "didn't look like he wanted to leave, so it gave me the impression that maybe he was going to — you know, resistance was there. I didn't know because Jarrod was telling him to get out." (Dkt. 27, p. 20). Kwiatkoski testified that Plaintiff "didn't have his fists up or anything like that." (Dkt. 27, p. 22). Kwiatkoski also testified: "I didn't want a fight to break out so I punched him." (Dkt. 27, p. 26).
The undisputed facts show that Kwiatkoski's punch to Plaintiff's face was unprovoked. The blow was volitional, the event was in Kwiatkoski's control, and no accident or calamity beyond Kwiatkoski's control occurred. See Meere, 694 P.2d at 187-90 (discussing unprovoked, unprivileged act of striking someone in the face with a fist). The exclusion applies because the insured may not be indemnified against loss resulting from his own willful wrongdoing. Id., 694 P.2d. at 186.
It is unnecessary to consider the Parties' other arguments as Defendant is entitled to summary judgment based on the undisputed facts of record.
Accordingly,
IT IS ORDERED that Defendant's Motion to Withdraw Argument in Summary Judgment Motion (Dkt. 24) is granted.
IT IS FURTHER ORDERED that Defendant's Motion for Oral Argument (Dkt. 43) is denied. IT IS FURTHER ORDERED granting Defendants Motion for Summary Judgment (Dkt. 23) on Plaintiff's breach of contract claim.
IT IS FURTHER ORDERED denying Plaintiff's Cross Motion for Partial Summary Judgment (Dkt. 25) on the breach of contract claim.