United States District Court, D. North Dakota, Eastern Division
Rodenburg LLP, doing business as Rodenburg Law Firm, Plaintiff,
Certain Underwriters at Lloyd's, London, Syndicate No. 4020, subscribing to Policy No. DCLPLA 00574-00; and The Cincinnati Insurance Company, Defendants.
ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY
JUDGMENT AND DENYING PLAINTIFF'S MOTION FOR SUMMARY
D. WELTE, CHIEF JUDGE.
the Court are cross motions for summary judgment filed by
Plaintiff Rodenburg LLP (“Rodenburg” or the
“law firm”) and Defendant The Cincinnati
Insurance Company (“Cincinnati”). Doc. Nos. 46,
52. Defendant Certain Underwriters at Lloyd's, London
(“Lloyd's”) filed a separate motion for
summary judgment on January 8, 2020, which the Court will
address after briefing has concluded. Doc. No. 61. Rodenburg
filed its initial summary judgment motion on August 30, 2019.
Doc. No. 46. Cincinnati responded on September 19, 2019,
simultaneously filing a summary judgment motion of its own.
Doc. Nos. 52, 56. Rodenburg filed a combined response/reply
brief on October 10, 2019, and Cincinnati submitted its final
reply on October 24, 2019. Doc. Nos. 58, 60. Rodenburg seeks
a judgment declaring that Cincinnati wrongfully denied
coverage under an insurance policy, as well as damages for
breach of contract. Cincinnati asks for the inverse - a
declaration that it properly denied coverage and dismissal of
the complaint. For the reasons below, Cincinnati's motion
for summary judgment is granted, and Rodenburg's motion
is a North Dakota law firm that primarily engages in debt
collection. Doc. No. 50, ¶ 1. Cincinnati issued a North
Dakota CinciPak Policy (“CinciPak Policy”) to
Rodenburg effective from May 1, 2015 through May 1, 2018.
See Doc. No. 54-2. The CinciPak Policy included
Commercial General Liability Coverage (“CGL
Policy”) and Commercial Umbrella Liability Coverage
(“Umbrella Policy”). See id.
pending motions represent the culmination of an
interconnected web of three separate lawsuits. The first is
the present action in which Rodenburg seeks a declaration
that Cincinnati improperly denied coverage under the Umbrella
Policy. Second is an underlying lawsuit against Rodenburg
that is the subject of the insurance claim. And third is a
debt collection action the law firm pursued that started the
chain of litigation.
dispute traces back to June 2010, when Portfolio Recovery
Associates, LLC (“PRA”) purchased the rights to a
defaulted consumer credit card account. Doc. No. 54-1, ¶
7. As alleged, an individual named Charlene Williams
(“Williams”) owed the debt. Doc. No. 1-4,
¶ 10. PRA assigned the account to Rodenburg in January
2011 for collection. Id. When providing the account
information to Rodenburg, PRA listed an address in Coon
Rapids, Minnesota, that belonged to an individual named
Charlene Williams-Mumbo (“Williams-Mumbo”).
Id. ¶¶ 10-11. Based on this information,
Rodenburg proceeded to commence an action in Minnesota state
court, ostensibly against Williams. Id. ¶ 10.
However, Rodenburg served the summons and complaint on
Williams-Mumbo at the Coon Rapids address. Id.
¶ 11. The Minnesota state court entered a default
judgment on December 6, 2011. Doc. No. 54-1, ¶ 20.
Williams-Mumbo retained an attorney to vacate the default
judgment, but the attorney did not respond to Rodenburg's
inquiries regarding the judgment and apparently withdrew from
the representation. Doc. No. 1-4, ¶ 12; Doc. No. 54-1,
¶ 19. Because Williams never received notice of the
lawsuit, Rodenburg did not obtain a valid judgment against
to collect on the judgment debt, Rodenburg served a notice of
intent to garnish wages at the Coon Rapids address on
November 8, 2016. Doc. No. 54-1, ¶ 42. After receiving
no response, Rodenburg served Williams' employer with
garnishment papers on November 22, 2016. Doc. No. 1-4, ¶
13. Williams, who had never lived at the Coon Rapids address,
learned from her employer that Rodenburg intended to garnish
her wages in December 2016. Doc. No. 54-1, ¶¶ 43,
59. Williams subsequently informed Rodenburg of the wrongful
garnishment multiple times, first contacting the law firm on
December 21, 2016. Doc. No. 1-4, ¶ 14. Williams asserted
that she did not owe the debt and had never received notice
of the lawsuit or the judgment before the garnishment
commenced. Doc. No. 54-1, ¶ 63. Additionally, she filed
complaints against Rodenburg with the Minnesota Attorney
General's Office and the Consumer Financial Protection
Bureau in January 2017. Doc. No. 1-4, ¶ 14. Despite
these protests, Rodenburg continued to garnish a total of
$656.93 from four of Williams' paychecks between December
29, 2016 and February 9, 2017. Doc. No. 54-1, ¶ 68.
Rodenburg determined that Williams was not the judgment
debtor later in February 2017, ceasing collection efforts
that same month and eventually returning the improperly
garnished funds. Id. ¶ 77.
October 31, 2017, Williams filed suit against Rodenburg in
the U.S. District Court for the District of Minnesota.
See Doc. No. 54-1. Williams' complaint alleged
nine counts, including violations of 15 U.S.C. § 1692,
commonly known as the Fair Debt Collection Practices Act
(“FDCPA”), as well as various Minnesota statutory
and common-law claims. See id. In addition to the
loss of her improperly garnished wages, the injuries Williams
claimed included “extreme emotional distress, anxiety,
and fear, ” as well as “confusion, inconvenience,
humiliation, embarrassment and annoyance.” Id.
¶¶ 88, 91. She also asserted a claim that Rodenburg
violated her right of privacy. Id. ¶¶
Williams filed her lawsuit, Rodenburg sought coverage under
the CinciPak Policy. Doc. No. 50, ¶ 5. Cincinnati denied
coverage in March 2018, refusing to defend or indemnify
Rodenburg under both the CGL Policy and Umbrella Policy.
See Doc. No. 54-3. Rodenburg undertook its own
defense and ultimately entered into a settlement with
Williams in November 2018. Doc. No. 50, ¶ 8. Not long
after, Rodenburg filed the present action in North Dakota
state court, seeking a declaratory judgment and damages
stemming from Cincinnati's denial of coverage.
See Doc. No. 1-4. Cincinnati and Lloyd's timely
removed the case to federal court on January 30, 2019.
See Doc. No. 1.
a case of actual controversy within its jurisdiction, ”
a federal court “may declare the rights and other legal
relations of any interested party seeking such
declaration.” 28 U.S.C. § 2201(a). Summary
judgment is required “if the movant shows that 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); see also Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986). “An issue is ‘genuine' if
the evidence is sufficient to persuade a reasonable jury to
return a verdict for the nonmoving party.” Schilf
v. Eli Lilly & Co., 687 F.3d 947, 948 (8th Cir.
2012) (citing Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986)). “A fact is material if it
‘might affect the outcome of the suit.'”
Dick v. Dickinson State Univ., 826 F.3d 1054, 1061
(8th Cir. 2016) (quoting Anderson, 477 U.S. at 248).
Courts must afford “the nonmoving party the benefit of
all reasonable inferences which may be drawn without
resorting to speculation.” TCF Nat'l Bank v.
Mkt. Intelligence, Inc., 812 F.3d 701, 707 (8th Cir.
2016) (quoting Johnson v. Securitas Sec. Servs. USA,
Inc., 769 F.3d 605, 611 (8th Cir. 2014)). “At
summary judgment, the court's function is not to weigh
the evidence and determine the truth of the matter itself,
but to determine whether there is a genuine issue for
trial.” Nunn v. Noodles & Co., 674 F.3d
910, 914 (8th Cir. 2012) (citing Anderson, 477 U.S.
at 249). If the movant demonstrates the absence of a genuine
issue of material fact, “[t]he nonmovant ‘must do
more than simply show that there is some metaphysical doubt
as to the material facts,' and must come forward with
‘specific facts showing that there is a genuine issue
for trial.'” Torgerson v. City of
Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011) (en banc)
(quoting Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586-87 (1986)).
party seriously disputes the facts here. The only question
for resolution is whether the Umbrella Policy imposed duties
on Cincinnati to defend and indemnify Rodenburg in
Williams' lawsuit. The parties agree that North Dakota
law governs this question. Accordingly, the Court will apply
North Dakota Supreme Court precedent and attempt to predict
how that court would decide any state-law questions it has
yet to resolve. See Stuart C. Irby Co., Inc. v.
Tipton, 796 F.3d 918, 922 (8th Cir. 2015).
policy interpretation is a question of law.”
Forsman v. Blues, Brews & Bar-B-Ques, Inc., 2017
ND 266, ¶ 10, 903 N.W.2d 524 (citing K & L
Homes, Inc. v. Am. Family Mut. Ins. Co., 2013 ND 57,
¶ 8, 829 N.W.2d 724). The North Dakota Supreme Court has
consistently explained its approach to interpreting insurance
policies this way:
We look first to the language of the insurance contract, and
if the policy language is clear on its face, there is no room
for construction. If coverage hinges on an undefined term, we
apply the plain, ordinary meaning of the term in interpreting
the contract. While we regard insurance policies as adhesion
contracts and resolve ambiguities in favor of the insured, we
will not rewrite a contract to impose liability on an insurer
if the policy unambiguously precludes coverage. We will not
strain the definition of an undefined term to provide
coverage for the insured. We construe insurance contracts as
a whole to give meaning and effect to each clause, if
possible. The whole of a contract is to be taken together to
give effect to every part, and each clause is to help
interpret the others.
Borsheim Builders Supply, Inc. v. Manger Ins., Inc.,
2018 ND 218, ¶ 8, 917 N.W.2d 504 (citation omitted).
basic task is to determine if the insurance policy's
affirmative coverage provisions apply, and if so, to then
look at whether any exclusions bar coverage. “It is
axiomatic that the burden of proof rests upon the party
claiming coverage under an insurance policy.”
Forsman, 2017 ND 266, ¶ 12, 903 N.W.2d 524
(citation omitted). “If and only if a coverage
provision applies to the harm at issue will the court then
examine the policy's exclusions and limitations of
coverage.” Borsheim Builders, 2018 ND 218,
¶ 9, 917 N.W.2d 504 (citation omitted). “While the
insured bears the initial burden of demonstrating coverage,
the insurer carries the burden of establishing the
applicability of exclusions.” Id. ¶ 10
(citation omitted). “Exclusions from coverage . . .
must be clear and explicit and are strictly construed against
the insurer.” Id. ¶ 8 (ellipses in
original) (citation omitted).
argues that Williams' lawsuit triggered both a duty to
defend and a duty to indemnify. The duties to defend and
indemnify “are two separate and distinct contractual
obligations . . . determined by applying different
standards.” Tibert v. Nodak Mut. Ins. Co.,
2012 ND 81, ¶ 33, 816 N.W.2d 31 (citing Hanneman v.
Cont'l W. Ins. Co., 1998 ND 46, ¶ 39, 575
N.W.2d 445). “While the duty to defend focuses on the
complaint's allegations, the duty to indemnify generally
is determined by the actual result in the underlying
action.” Forsman, 2017 ND 266, ¶ 32, 903
N.W.2d 524 (citing Tibert, 2012 ND 81, ¶ 33,
816 N.W.2d 31).
insurer's duty to defend is broader than its duty to
indemnify.” Id. ¶ 31 (citing Farmers
Union Mut. Ins. Co. v. Decker, 2005 ND 173, ¶ 13,
704 N.W.2d 857). As a corollary to this principle, if there
is no duty to defend, there is no duty to indemnify. See
Selective Ins. Co. of Am. v. Smart Candle, LLC, 781 F.3d
983, 985 (8th Cir. 2015) (citations omitted). “An
insurer does not have a duty to defend an insured if there is
no possibility of coverage under the policy.”
Decker, 2005 ND 173, ¶ 14, 704 N.W.2d 857
(citing Schultze v. Cont'l Ins. Co., 2000 ND
209, ¶ 8, 619 N.W.2d 510). “When several claims
are made against the insured in the underlying action, the
insurer has a duty to defend the entire lawsuit if there is
potential liability or a possibility of coverage for any one
of the claims.” Tibert, 2012 ND 81, ¶ 30,
816 N.W.2d 31 (citations omitted). “Any doubt about
whether a duty to defend exists must be resolved in favor of
the insured.” Id. ¶ 31 (citations
this foundation in mind, a truncated summary of the CinciPak
Policy is useful to frame the issues. Both the CGL Policy and
Umbrella Policy provide Rodenburg with insurance for damages
resulting from three types of injuries: “bodily injury,
” “personal and advertising injury, ” and
“property damage.” Doc. No. 54-2, p. 22;
id. at 70. For coverage to apply, the injuries must
result from an “occurrence, ” meaning for
practical purposes, an accident.Id. at 40, 85. Two
exclusions are at play as well. The first bars coverage for
injuries that Rodenburg “expected or intended” to
cause, while the second bars coverage if Rodenburg's
conduct violated certain categories of statutes. Id.
at 62, 91 (expected or intended injury exclusions);