Free Response to Motion - District Court of Colorado - Colorado

Case 1:04-cv-00725-RPM

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Senior District Judge Richard P. Matsch Civil Action No. 04-cv-725-RPM-OES THE QUIZNO'S MASTER LLC, a Colorado limited liability company and THE QUIZNO'S HOLDING COMPANY, a Nevada corporation, as assignee of and successor in interest to THE QUIZNO'S CORPORATION, a Colorado corporation, Plaintiffs, v. WESTCHESTER FIRE INSURANCE COMPANY, a New York corporation and ROYAL INDEMNITY COMPANY, a Delaware corporation, Defendants.

QUIZNO'S RESPONSE TO DEFENDANT ROYAL INDEMNITY COMPANY'S MOTION FOR SUMMARY JUDGMENT

Plaintiffs The Quizno's Master LLC and The Quizno's Holding Company (hereinafter referred to singularly as "Quizno's"), hereby responds to Defendant Royal Indemnity Company ("Royal")'s Motion for Summary Judgment as follows: INTRODUCTION Quizno's does not dispute that Royal has set forth undisputed material facts and raised an issue of law in its Motion. Indeed, Quizno's is contemporaneously filing herewith its own Motion for Partial Summary Judgment addressing the same issues as raised by Royal. However, Quizno's, as the insured in this insurance coverage lawsuit, is requesting that the Court render a ruling which may or may not be adverse to Royal. Quizno's other insurance carrier, Westchester Fire Insurance Company ("Westchester") has taken the exact opposite

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position as Royal with respect to the proper interpretation of the substantively identical terms in their respective policies. Thus, in Quizno's Motion Partial for Summary Judgment, Quizno's requests that this Court resolve the legal issue of the proper interpretation of these terms in the respective insurance policies. Quizno's Motion for Partial Summary Judgment is incorporated herein by this reference. RESPONSE TO STATEMENT OF UNDISPUTED MATERIAL FACTS As noted above, Quizno's agrees that Royal has established that the material facts necessary for the Court to decide the issue before it are undisputed. However, Quizno's notes that with respect to the documents referred to and attached to Royal's Motion (both the documents attached to the Declaration of Douglas Perry and the documents attached to the Request for Judicial Notice) speak for themselves. Thus, Quizno's requests that the Court review the underlying documents and not the parties' characterizations of them in resolving this matter. For example, without limitation: · In ¶ 20 of Royal's Statement of Undisputed Facts, Royal indicates that Kathy Carry in her February 25, 1999 letter, attached as Exhibit 5 to the Declaration of Douglas Perry, "acknowledged that the information contained in the Eisner letter was sufficient `notice of a circumstance which may give rise to a claim pursuant to a Notice provision, Section 4. Conditions (G)(2).'" Emphasis added. However, review of the February 25, 1999 letter demonstrates that Ms. Carry did not limit her reference to the Eisner letter, but rather referenced Mr. Meyers' letter of which the Eisner letter was an attachment.

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Further, in ¶ 39, Royal characterizes the January 7, 2004 issued by District Judge Robert L. McGahey, Jr. in the Dissenters Case. Quizno's refers this Court to a copy of that opinion for the full and accurate description of the Judge's findings.

·

In ¶¶ 44, 45, Royal characterizes the allegations in the Nickerson complaint, and again, Quizno's directs this Court to the Nickerson complaint for the full and accurate description of the claims made in that case.

Further, Quizno's notes that the service copy sent to Quizno's did not contain page 4 of the April 10, 2002 letter attached as Exhibit 7 to the Declaration of Douglas Perry. Quizno's disputes, but does not believe the dispute is material, some of the facts set forth in Royal's Statement of Undisputed Material Facts. By way of example and without limitation, Quizno's disputes the statement in ¶ 24 with respect to the number of shares purchased in the December tender offer. Further, Quizno's believes that the allegation in ¶ 21 that Royal never received any further communication regarding the notice from Eisner or the December 1998 proposal prior to the filing of this lawsuit, in essence states a legal conclusion that this Court is required to reach in that Westchester takes the position that notice of the Nickerson Action arose out of the same facts and circumstances as the Sebesta Action, which arose out of the same facts and circumstances as the December 1998 Schaden proposal. RESPONSE TO LEGAL ARGUMENTS Quizno's agrees that Royal's obligation to cover Quizno's losses associated with Sebesta, Appraisal and Nickerson claims is not based on a claim that those claims were made during the policy.

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However, Quizno's has been forced by its other insurance carrier to pursue alternative claims in its complaint against both Royal and Westchester by taking the exact opposite position that Royal takes with respect to whether the circumstances described in the early 1999 notice letters from Patrick Meyers are the same circumstances that gave rise to the Sebesta and/or Nickerson and/or Dissenters Actions. As more fully set forth in Quizno's Motion for Partial Summary Judgment, the insurance carriers are taking the opposite position on this issue and, therefore, it is necessary for this Court to decide the proper interpretation of the relevant provisions within the various insurance policies based on the undisputed facts. CONCLUSION Quizno's is requesting that this Court render a ruling on the issues raised by Royal's Motion for Summary Judgment in a consistent manner with respect to the interpretation of the same substantive terms in the Westchester policies. Resolution of these issues will assist the parties going forward in their discovery and assessment of their claims and positions. Quizno's understands that this is a unique response to a motion for summary judgment. Quizno's has been placed in a unique position by its former insurance carriers. WHEREFORE, Quizno's respectfully requests that this Court enter an order finding that: 1. The circumstances giving rise to the Sebesta Action (and the Dissenters Action)

and the Nickerson Action are the same as the circumstances described in Quizno's early 1999 notice letters and, therefore, deny Royal's Motion for Summary Judgment; or 2. The circumstances underlying the Sebesta Action (and the Dissenters Action) and

the Nickerson Action are different than the circumstances described in Quizno's early 1999

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notice letters thereby granting Royal's Motion for Summary Judgment and simultaneously rejecting Westchester's legal argument that Endorsement 6 on its first policy applies; or 3. The circumstances underlying the Sebesta Action (and the Dissenters Action) are

the same as the circumstances described in Quizno's early 1999 Notice Letters and the circumstances underlying the Nickerson Action are different than the circumstances described in Quizno's 1999 Notice Letters thereby granting in part and denying in part Royal's Motion for Summary Judgment and simultaneously rejecting Westchester's legal argument that Endorsement 6 on its first policy applies; and 4. The facts and circumstances underlying the Sebesta Action are different than the

facts and circumstances underlying the Nickerson Action thereby rejecting Westchester's argument that Exclusion A(1) of its subsequent policy applies. Dated this 1st day of July 2005. Respectfully submitted,

/s/ Leonard H. MacPhee Leonard H. MacPhee Attorney for Plaintiffs Perkins Coie LLP 1899 Wynkoop Street, Suite 700 Denver, CO 80202 Telephone: (303) 291-2300 Facsimile: (303) 291-2400 Email: [email protected]

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CERTIFICATE OF SERVICE I hereby certify that on July 1, 2005 I electronically filed the foregoing with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following email addresses:
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Joseph F. Bermudez [email protected] Laurence Murray McHeffey [email protected] [email protected] R. Anthony Moya [email protected] [email protected] Michael D. Nosler [email protected] [email protected]

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Cindy Coles Oliver [email protected] [email protected] R. Gaylord Smith [email protected] [email protected] Hilary Dawn Wells [email protected] [email protected]

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and I hereby certify that I have mailed the foregoing to the following non EM/ECF participant via U.S. Mail, postage prepaid: Calvin S. Whang Musick, Peeler, & Garrett, LLP One Wilshire Boulevard, #2000 Los Angeles, CA 90017 /s/ Leonard H. MacPhee Leonard H. MacPhee Attorney for Plaintiffs Perkins Coie LLP 1899 Wynkoop Street, Suite 700 Denver, CO 80202 Telephone: (303) 291-2300 Facsimile: (303) 291-2400 Email: [email protected]

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