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United States Fire Insurance Co. v. Fea

United States District Court, D. Hawaii

October 14, 2016

UNITED STATES FIRE INSURANCE COMPANY AND THE NORTH RIVER INSURANCE COMPANY, Plaintiffs,
v.
LALOFAU FEA, Defendant.

          TOM PETRUS & MILLER LLLC RICHARD B. MILLER 3729-0 PATRICIA KEHAU WALL 3498-0 IAN A. NISHI 9829-0 Attorneys for Plaintiffs UNITED STATES FIRE INSURANCE COMPANY AND THE NORTH RIVER INSURANCE COMPANY

          FINDINGS AND RECOMMENDATION GRANTING PLAINTIFFS UNITED STATES FIRE INSURANCE COMPANY AND THE NORTH RIVER INSURANCE COMPANY'S MOTION FOR DEFAULT JUDGMENT OR, IN THE ALTERNATIVE, FOR SUMMARY JUDGMENT AGAINST DEFENDANT LALOFAU FEA

          Kevin S.C. Chang United States Magistrate Judge

         Currently pending before this Court is Plaintiffs UNITED STATES FIRE INSURANCE COMPANY AND THE NORTH RIVER INSURANCE COMPANY's ("US Fire") Motion for Default Judgment or, in the Alternative, for Summary Judgment. Said Motion came on for hearing on October 14, 2016, with Ian A. Nishi appearing on behalf of U.S. Fire. Upon careful consideration of the Motion, the supporting memoranda, and the arguments of counsel, the Court hereby recommends that U.S. Fire's Motion be GRANTED to the extent it seeks default judgment.

         I. BACKGROUND

         The instant declaratory relief action was brought by U.S. Fire to obtain a determination as to its defense and indemnity obligations, if any, for claims asserted against Defendant LALOFAU FEA (“Defendant”) in an action entitled State of Hawaii v. Fea, CR No. 14-1-1029 (the “Underlying Lawsuit”).

         A. The Underlying Lawsuit

         On February 11, 2016, Julie Krauss ("Krauss") (not a party hereto) commenced the Underlying Lawsuit, which arises out of Fea's alleged attack and sexual assault upon Krauss, against Fea, his employer AAA Rent to Own -Hawaii, Inc. ("AAA"), and others. The Underlying Lawsuit alleges that Fea, on behalf of AAA, delivered and installed a television at Krauss's residence on April 12, 2014. When the television's installation was completed, Fea allegedly trapped Krauss in her bedroom and sexually assaulted her. Id. Specifically, Fea allegedly forced his arms around Krauss and attempted to kiss her neck, groped her breasts and buttocks, tore open her shorts, and fondled her genitalia. Fea then allegedly chased Krauss down a hallway as she attempted to escape, grabbed her from behind, pinned her against the wall, and continued to molest and fondle her. Id.

         The Underlying Complaint asserts three counts against Fea for (1) assault, (2) intentional infliction of emotional distress, and (3) negligent infliction of emotional distress. Id., generally. The Underlying Complaint further alleges that Fea "intentionally, recklessly, or with gross negligence sexually assaulted Ms. Krauss, " and that Fea's "wrongful, criminal, intentional, and outrageous conduct in sexually assaulting and imprisoning Ms. Krauss" has caused her to suffer: "pain and suffering; mental anguish; emotional distress, including post-traumatic stress disorder and depression; loss of enjoyment of life; loss of income; economic loss; medical expenses; and other expenses….”

         B. Procedural History

         Plaintiffs filed their Complaint for Declaratory Judgment in this case on April 13, 2016 (the “Complaint”). The Complaint and Summons were personally served on Fea on April 20, 2016, at 94-124 Pupukahi Street, Apt. D, Waipahu, Hawaii 96797.

         The time within which Fea may answer or otherwise move or defend against the Complaint, as provided by the Federal Rules of Civil Procedure or any other rule of the Court, has expired. Fea has not answered or otherwise moved in accordance with Federal Rule of Civil Procedure 12, and the time for Fea to answer or otherwise move has not been extended. Entry of Default of Fea as to the Complaint was filed by the Clerk of this Court on June 3, 2016.

         C. The USFIC Commercial General Liability Policy

         USFIC issued Commercial General Liability Policy Number 5037714297 (the “CGL Policy”) to AAA for the relevant policy period beginning on October 1, 2013 and ending on October 1, 2014. PSCS at ¶ 13; Exhibit “7”. The CGL Policy was written on Policy Form CG0001 (12/07), as amended by various endorsements, which contains the following pertinent provisions:

COMMERCIAL GENERAL LIABILITY COVERAGE FORM
Various provisions in this policy restrict coverage. Read the entire policy carefully to determine rights, duties and what is and is not covered.
Throughout this policy the words “you” and “your” refer to the Named Insured shown in the Declarations, and any other person or organization qualifying as a Named Insured under this policy. The words “we”, “us” and “our” refer to the company providing this insurance.
The word “insured” means any person or organization qualifying as such under Section II - Who Is An Insured.
Other words and phrases that appear in quotation marks have special meaning. Refer to Section V - Definitions.
SECTION I - COVERAGES
COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY
1. Insuring Agreement
a. 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. However, we will have no duty to defend the insured against any “suit” seeking damages for “bodily injury” or “property damage” to which this insurance does not apply….
b. This insurance applies to “bodily injury” and “property damage” only if … the “bodily injury” or “property damage” is caused by an “occurrence” that takes place in the “coverage territory….”
2. Exclusions
This insurance does not apply to:
a. Expected Or Intended Injury “Bodily injury” or “property damage” expected or intended from the standpoint of the insured. This exclusion does not apply to “bodily injury” resulting from the use of reasonable force to protect persons or property.
o. Personal And Advertising Injury “Bodily injury” arising out of “personal and advertising injury”.
COVERAGE B PERSONAL AND ADVERTISING INJURY LIABILITY
1. Insuring Agreement
a. We will pay those sums that the insured becomes legally obligated to pay as damages because of “personal and advertising injury” to which this insurance applies. We will have the right and duty to defend the insured against any “suit” seeking those damages. However, we will have no duty to defend the insured against any “suit” seeking damages for “personal and advertising injury” to which this insurance does not apply….
b. This insurance applies to “personal and advertising injury” caused by an offense arising out of your business but only if the offense was committed in the “coverage territory” during the policy period.
2. Exclusions
This insurance does not apply to:
a. Knowing Violation Of Rights Of Another “Personal and advertising injury” caused by or at the direction of the insured with the knowledge that the act would violate the rights of another and would inflict “personal and advertising injury”.
d. Criminal Acts “Personal and advertising injury” arising out of a criminal act committed by or at the direction of the insured.
SECTION II - WHO IS AN INSURED
1. If you are designated in the Declarations as … an organization other than a partnership, joint venture or limited liability company, you are an insured….
2. Each of the following is also an insured:
a. Your … “employees” … but only for acts within the scope of their employment by you or while performing duties related to the conduct of your business….
SECTION V - DEFINITIONS
3. “Bodily injury” means bodily injury, sickness or disease sustained by a person, including mental anguish, mental injury, humiliation or death resulting from any of these at any time.
4. “Coverage territory” means … the United States of America….
13. “Occurrence” means an accident….
14. “Personal and advertising injury” means injury, including consequential “bodily injury”, arising out of one or more of the following offenses:
a. False arrest, detention or imprisonment….
18. “Suit” means a civil proceeding in which damages because of “bodily injury”, “property damage” or “personal and advertising injury” to which ...

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