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Westfield Insurance Co. v. Golden Phoenix Restaurant, Inc.

United States District Court, N.D. Indiana, Hammond Division

May 4, 2017

WESTFIELD INSURANCE COMPANY, Plaintiff,
v.
GOLDEN PHOENIX RESTAURANT, INC., EVELYN HUYNH, QUYNH PHUNG, and ANTHONY PARDUCCI, Defendants.

          OPINION AND ORDER

          PAUL R. CHERRY, UNITED STATES DISTRICT COURT MAGISTRATE JUDGE

         This matter is before the Court on Defendant's Motion for Joinder [DE 17], filed by Defendant Anthony Parducci on February 7, 2017. On February 19, 2017, Plaintiff Westfield Insurance Company (“Westfield”) filed a response, and, on February 24, 2017, nonparty Progressive Universal Insurance Company (“Progressive”) filed a separate response. On February 24, 2017, and March 3, 2017, Parducci filed a reply to each of the responses. With leave of Court, Westfield filed a surresponse on March 27, 2017, and Parducci filed a surreply on April 3, 2017.

         This matter is also before the Court on Defendant Parducci's Motion to Strike Progressive's Response to His Motion for Joinder [DE 31], filed on March 3, 2017. On March 17, 2017, Progressive filed a response in opposition, and Parducci filed a reply on March 24, 2017.

         Both motions are now fully briefed and ripe for ruling.

         BACKGROUND

         The Motion for Joinder involves the interplay of three lawsuits-an underlying personal injury lawsuit brought by Anthony Parducci against Evelyn Huynh, Quynh Phung, and Golden Phoenix Restaurant (“Golden Phoenix”); a declaratory judgment action brought in state court by Progressive, Evelyn's personal automobile insurer; and the instant declaratory judgment action brought by Westfield, Golden Phoenix's CGL insurer.

         1. Underlying Personal Injury Lawsuit: Parducci v. Evelyn Huynh, Quynh Phung, and Golden Phoenix Restaurant

         In a personal injury suit pending in this Court under separate Cause Number 2:15-CV-392, Anthony Parducci sued Evelyn Huynh for personal injuries under a theory of negligence. Parducci later amended his complaint to add Quynh Phung and Golden Phoenix-Evelyn's alleged employers-as defendants.

         In the First Amended Complaint, Parducci alleges that, on September 13, 2015, Parducci was a pedestrian in the parking lot located at 1715 U.S. 41 in Schererville, Indiana. On that date, Evelyn was in her vehicle in the parking lot and struck Parducci. Parducci alleges that Evelyn was at fault. Parducci further alleges that, on that date, Evelyn was the agent, servant, and/or employee of Quynh and Golden Phoenix and that Quynh and Golden Phoenix were negligent in the hiring, supervising, training, and retention of Evelyn.

         2. Declaratory Judgment Action in State Court: Progressive v. Parducci, Evelyn Huynh, and Wendy Huynh

         Subsequently, on March 21, 2016, Progressive filed a declaratory judgment action in the Lake County Superior Court against Parducci, Evelyn, and Wendy Huynh. In the Complaint for Declaratory Judgment, Progressive alleges that it issued an automobile insurance policy to Wendy and that Evelyn was a named driver and household resident listed on the policy. Progressive alleges that the vehicle Evelyn was driving on September 13, 2015, which struck Parducci, was owned by Evelyn and was insured under the Progressive policy. Progressive further alleges that, at the time of the accident, Evelyn was using the vehicle for retail delivery, specifically to transport food for Golden Phoenix. Progressive states that it is defending Evelyn pursuant to the liability provisions of the policy and under a reservation of rights.

         Progressive alleges that, pursuant to the liability provisions of the policy, coverage is excluded for any claims for bodily injury arising out of the use of any vehicle while being used for retail delivery, including but not limited to, the transport of food. Progressive alleges that, at the time of the accident, Evelyn was engaged in the transport of food within the meaning of the policy and, thus, that there is no liability coverage under the policy for Parducci's personal injury lawsuit against Evelyn. Thus, in the state court action, Progressive seeks a declaratory judgment that there is no coverage under the Progressive policy for the claims brought by Parducci against Evelyn in the underlying litigation.

         3. Instant Declaratory Judgment Action: Westfield v. Parducci, Evelyn Huynh, Quynh Phung, and Golden Phoenix Restaurant

         On January 5, 2017, Westfield, which is Golden Phoenix's Commercial General Insurance (“CGL”) provider, filed the instant declaratory judgment action. Westfield alleges that, on January 1, 2015, it issued a CGL policy to Golden Phoenix with effective dates of coverage of January 1, 2015, to January 1, 2016. Westfield alleges that Quynh was the sole shareholder, president, and secretary of Golden Phoenix and is Evelyn's aunt. Westfield alleges the following events leading to Parducci's injury: Evelyn made a delivery for Golden Phoenix on September 13, 2015, and, after making the delivery, stopped to put gas in her vehicle and then could not restart her car; Evelyn called Quynh, who asked Parducci, a former employee, to help Evelyn start her car; Parducci arrived at the gas station, parked his car in front of Evelyn's car, got out of his car, and assisted Evelyn with her car; Parducci asked Evelyn to start her car; and, when Evelyn started her car, the car moved forward, pinning Parducci between the two cars.

         In its Complaint for Declaratory Judgment, Westfield alleges that it denied Golden Phoenix's request to defend and indemnify Golden Phoenix, Quynh, and Evelyn under the Westfield policy against the personal injury lawsuit brought by Parducci. Westfield alleges that Parducci's underlying personal injury claims against Golden Phoenix, Quynh, and Evelyn are subject to the “Auto Exclusion” to the Westfield policy's CGL “Bodily Injury And Property Damage Liability” (“CGL BI/PD”) coverage because Evelyn's car qualifies as an “auto” as defined in the policy. Westfield also alleges that Parducci's allegations of negligent hiring, supervising, training, and retention against Golden Phoenix and Quynh are not an “accident” or “occurrence” for purposes of the CGL BI/PD coverage. Thus, Westfield alleges that it has no duty under the CGL BI/PD coverage to defend or indemnify Golden Phoenix, Quynh, and Evelyn in the underlying lawsuit brought by Parducci.

         Westfield further alleges that Parducci's underlying lawsuit against Golden Phoenix, Quynh, and Evelyn does not allege a “personal and advertising injury” as that term is defined by the Policy's CGL “Personal and Advertising Injury Liability” (“PAI”) coverage and, thus, that Westfield has no duty under that ...


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