Free Motion for Summary Judgment - District Court of Arizona - Arizona

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Wayne Gill, Esq., (FL Bar 114953) Walton Lantaff Schroeder & Carson 1700 Palm Beach Lakes Blvd., 7th Floor West Palm Beach, FL 33401 Tel: 561/689-6700 Fax: 561/689-2647 [email protected] Steven Plitt, Esq. (State Bar No. 007481) Daniel Maldonado, Esq. (State Bar No. 018483) KUNZ PLITT HYLAND DEMLONG & KLEIFIELD A Professional Corporation 3838 North Central Avenue, Suite 1500 Phoenix, Arizona 85012-1092 Telephone: (602) 331-4600 Facsimile: (602) 331-8600 [email protected] [email protected] Attorneys for Defendants IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA U-Haul International, Inc.; U-Haul Company Of Pennsylvania; U-Haul Company Of Florida; and Republic Western Insurance Company, Plaintiffs, vs. Lumbermens Mutual Casualty Company, Defendants. DEFENDANT/COUNTERPLAINTIFF'S MOTION FOR SUMMARY JUDGMENT CASE NO.: CIV-04-0662-PHXDGC (Maricopa County Superior Court Cause No. CV 2004-002438)

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Document 111

Filed 09/30/2005

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Defendant/Counter-Plaintiff Lumbermens Mutual Casualty Company ("LMC"), by and through its undersigned counsel and pursuant to Fed.R.Civ.P. 56, hereby files its Motion for Summary Judgment and states in support thereof the following: 1 MEMORANDUM OF POINTS AND AUTHORITIES I. PREFACE Plaintiff/Counter-Defendant Republic Western Insurance Company ("Republic Western") and Defendant/Counter-Plaintiff Lumbermens Mutual Casualty Company

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("LMC") each claim that what they contributed to the settlement of two underlying cases (Nelson and Fernandez) exceeded what they owed under their policies and applicable law. The parties seek declarations as to their respective obligations, and make claims against each other for damages in the amount of their alleged over-payments.

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LMC's policy provided a policy limit of $13,000,000 in excess of Republic Western's stated limits totaling $7,000,000. The dispute between Republic Western and LMC centers on the issue of whether Republic Western's third layer of coverage (the RU policies) is reduced by Republic Western's payment of defense costs and whether the RU policies and the LMC policies drop down to apply at a lower level due to defense costs eroding the limits of Republic Western's first two layers of coverage (the RG and RX policies). As to the Fernandez settlement, there is also the issue of whether defense costs reduce the aggregate limits of the RG and RX policies.

This Motion is supported by the attached Memorandum of Po ints and Authorities, exhibits and excerpts of insurance policies, listed in Defendant's Statement of Undisputed Material Facts in support of its Motion For Summary Judgment ("SOF") which is filed herewith, and the Court's entire file .

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II. CHOICE OF LAW In a diversity action, the district court is obliged to apply the choice of law rules of the forum state. Martinez v. Ascarco, Inc., 918 F.2d 1467 (9th Cir. 1990). Arizona

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choice of law rules therefore apply in the absence of a choice of law provision. Beckler v. State Farm Mut. Auto. Ins. Co., 195 Ariz. 282, 987 P.2d 768 (Ct. App. 1999). Arizona follows The Restatement (Second) Conflict of Laws § 193 for its choice of law. Beckler, supra. The Restatement provides that the contractual rights and duties of

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parties are determined by the law of the state where the insured risk is located, unless another state has a more significant relationship to parties and transaction. Therefore, Arizona substantive law applies to the insurance coverage issues involved in this action because the subject policies were issued and delivered in Arizona.

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III. FEDERAL SUMMARY JUDGMENT STANDARD Federal Rule of Civil Procedure 56 states: "The judgment sought shall be rendered forthwith 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 facts and that the moving party is entitled to a judgment as a matter of law." Augustine v. U.S., 704 F.2d 1074 (9th Cir. 1983). The mere existence of some factual dispute will not defeat summary judgment unless that factual dispute is material to an issue affecting the outcome of the case. Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 247-49 (1986); Hanon v. Dataproducts Corp., 976 F.2d 497 (9th Cir.
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1992).

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IV. LEGAL ARGUMENT A. Republic Western's and LMC's Coverage for the Nelson Accident and Suit. 1. Republic Western's Payment Of Defense Costs Does Not Reduce The Liability Coverage Limits Of Republic Western's RU Policies (RU99 And RUMM).

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Republic Western's first two policies (RG99 and RX99) are defense inside limits. (Exhibits 5, 6). This is because RG99 contains provisions that expressly reduce RG99's liability coverage limit by the amount of defense costs paid by Republic Western, and

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because of the language contained in RX99's follow form endorsement. The Republic Western records produced by Republic Western's Fed.R.Civ.P. 30(b)(6) witness Douglas Matush lists defense costs (LAE) totaling $361,495.20 in regard to claims arising out of the Nelson accident, and allocates those defense costs as

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follows: $165,105.47 paid under RG99, $85,065.74 paid under RX99, and $111,323.99 paid under RU99. (Exhibit 34). RU99 is Exhibit 4. The erosion of RG99's and RX99's policy limits, due to Republic Western's payment of defense costs, does not cause RU99's coverage to attach and begin paying before $1,000,000 (the combined stated limits of RG99 and RX99) has been paid for indemnity only. The controlling case, which applied Arizona

insurance coverage law, is Planet Ins. Co. v. Mead Reinsurance Co., 789 F.2d 668 (9th Cir. 1986). The holding in Planet was reaffirmed by the 9th Circuit in Mead

Reinsurance v. Granite State Ins. Co., 873 F.2d 1185 (9th Cir. 1988). Mead's liability
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policy provided a $975,000 liability limit to Cochise County in excess of the county's

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$25,000 retained limit.

The county's excess insurer provided $9,000,000 coverage

above Mead's $1,000,000 liability limit. Mead contended that its policy's liability limit included defense costs and that it therefore had no further duty to defend because the

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defense costs exceeded the liability coverage limit. The Mead policy contained an insuring agreement, and a definition of "ultimate net loss" that were essentially identical to those contained in RU99. Mead's insuring agreement provided that: The "Company" [Mead] will indemnify the insured [the County] for ultimate net loss in excess of the retained limit [of $25,000] which the insured shall become legally obligated to pay by reason of liability imposed by law, or liability assumed by contract, insofar as the named insured may legally do so, for damages because of A. Bodily Injury or . . . to which this policy applies, caused by an occurrence which takes place during the policy period. Mead's definition of "ultimate net loss," which consisted of successive clauses, stated: (1) The sum actually paid or payable in cash in the settlement or satisfaction of losses for which the insured is liable either by adjudication or compromise with the written consent of the "company," after making proper deduction for all recoveries and the salvages collectible, (2) and includes attorney's fees, court costs and interest on any judgment or award, (3) but excludes all loss adjustment expenses and all salaries of employees and office expenses of the insured, the "company" or any underlying insurer so incurred. The first clause of Mead's definition of "ultimate net loss" provided for indemnity payments and therefore corresponds to the first clause of RU99's definition of ultimate net loss. The second clause of Mead's underlying net loss definition provided for payment of described defense costs and therefore corresponds to the second clause

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of RU99's definition of ultimate net loss.

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In interpreting Mead's definition of ultimate net loss, the 9th Circuit applied what it called the "hierarchical" approach by which it treated the first clause of the ultimate net loss definition as being "hierarchically superior to the subsequent clauses," which it

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held merely clarify the meaning of the first clause. The court, in applying the "hierarchical" approach, invalidated the part of Mead's ultimate loss definition pertaining to defense costs because it found that to include defense costs in the definition of ultimate net loss creates conflict between the definition's first and second

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clauses. The second reason the 9th Circuit refused to interpret Mead's definition of ultimate net loss as not including defense costs despite the express wording of the definition's second clause is that that would create "inconsistencies" with the section of

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Mead's insuring agreement entitled "Defense, Settlement, and Supplementary Payments." The court explained that this section of Mead's insuring agreement

expressly states that Mead "shall contribute to legal expenses" . . . when a judgment or settlement exceeds the insured's retained limit, that to include defense costs in the definition of ultimate net loss "would limit the availability of defense funds," that "nothing in this section purports to confine the amount of legal expenses to the limit placed on ultimate net loss," and that "the concept of ultimate loss is not even mentioned in this section of the policy." The court further held that to interpret Mead's ultimate net loss definition as

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including defense costs "would defeat the reasonable expectations of a person who

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purchased such a policy. This is in accordance with Arizona law which requires the use of an objective test to determine whether an expectation is reasonable. Gordinier v. Aetna, 154 Ariz. 266, 742 P.2d 277 (App. 0987). Based on Planet, this court should

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likewise objectively interpret RU99's ultimate net loss definition as not including defense costs because to interpret the definition as including defense costs would defeat the reasonable expectations of the purchaser of the policy (U-Haul) even if U-Haul were to claim that such was its expectation.

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Another reason why the court should find that RU99's definition of ultimate net loss does not include defense costs is that that would defeat LMC's reasonable expectation that RU99's limits are not reduced by defense costs. Under Arizona law, a court must consider an insurer's reasonable expectations under the reasonable

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expectations doctrine. Gilbreath v. St. Paul Fire & Marine Ins. Co., 141 Ariz. 92, 685 P.2d 729 (1984). The unrebutted testimony of Republic Western employees and employees of AON Risk Management of Arizona, Inc. ("AON") shows that AON acted as the representative of U-Haul in obtaining and placing coverage with LMC. (Exhibits, 1, 10, 11, 27). This establishes AON as the express and/or apparent agent of U-Haul for the purpose of obtaining coverage to apply in excess of Republic Western's limits. Phoenix Western Holding Corp. v. Gleeson, et al., 18 Ariz. App. 60, 500 P.2d 320 (App. 1972). There is no evidence of any communications between U -Haul and LMC, or

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between Republic Western and LMC, leading up to the issuance of LMC's policies to

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U-Haul. (Exhibits 11, 12, 27). The testimony of Mizrachi and Tibbs shows that AON on behalf of U-Haul, and by its words and conduct, represented to U-Haul verbally and through insurance applications it submitted to LMC, that defense costs under Republic

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Western's underlying policy (RU99) would be unlimited and would not reduce RU99's liability limit. (Exhibits 13, 27). The unrebutted evidence shows that LMC not only relied on AON's said representations and conduct, but would not have issued its policy to U-Haul but for AON's said promises and conduct. (Exhibit 27). The Arizona

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Supreme Court has held that the only expectations that can be considered by a court in regard to the reasonable expectations doctrine are "those reasonable expectations which are induced by the word or conduct of the parties." Darner Motor Sales v. Universal Underwriters, 140 Ariz. 383, 682 P.2d 388 (1984). Therefore, this court should find

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that, based on the undisputed facts, LMC's expectation that RU99 would provide defense costs in addition to RU99's policy limits was reasonable, that LMC was induced by AON's said representations and conduct to issue LMC's policy to U-Haul, and that LMC would not have issued the policy but for said inducement. The court should therefore find that, based on the reasonable expectations doctrine, and as a matter of law, RU99's definition of "ultimate net loss" does not include defense costs. The only part of RU99's definition of "ultimate net loss" that pertains to defense costs is clause (2). That clause expressly limits defense costs within RU99's ultimate net loss definition to "all expenses incurred by the insured. . ." Plaintiff's complaint

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alleges, and the unrebutted evidence shows, that all of the defense costs that are the

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subject of this litigation were paid by Republic Western and were not incurred by UHaul. (Exhibits 37, 34, 35, 36). Therefore, none of the defense costs for which

plaintiffs make claim in this action are defense costs as defined by RU99's definition of
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"ultimate net loss." RU99's insuring agreement (which includes the terms "ultimate net loss") expressly requires that the ultimate net loss be loss ". . . which the insured shall become obligated to pay by reason of the liability imposed upon the insured by law or assumed

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by the insured by contract." As a matter of law, the term "o bligated to pay by reason of the liability imposed by law" does not include defense costs. Westchester Fire Ins. Co. v. Stewart & Stevenson, 31 S.W. 3d 654 (Tex. App. 2000). Therefore, none of the defense costs for which plaintiffs make claim in this action are defense costs within the

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meaning of RU99's definition of "ultimate net loss." The last part of RU99's ultimate net loss definition states: "This policy shall not apply to defense, investigation, settlement or legal expenses covered by underlying insurance." The Minnesota Supreme Court has construed this type of provision as prohibiting a primary carrier whose duty to defend has not been extinguished from compelling an excess carrier to reimburse defense costs even though the excess carrier's definition of ultimate net loss (unlike RU99's definition) specifically includes the type of defense costs for which reimbursement is sought. The Home Ins. Co. v. National Union Fire Ins. Co. of Pittsburg, 658 N.W. 2d 522 (Minn. 2003). This court should

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like wise hold that, regardless of whether the court interprets Republic Western's

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ultimate net loss definition to include Republic Western's defense costs, Republic Western cannot escape from or shirk its non-delegable duty to defend by compelling LMC to reimburse Republic Western's defense costs. The ruling in Home makes sense

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because otherwise a carrier with the continuing duty to defend (here Republic Western under RU99) would have no motive to incur only reasonable defense costs since it would plan to look to the next layer of coverage (LMC) to reimburse such costs in full. This would make RU99's duty to defend nothing more than a sham or pretense. This is

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therefore another reason why the court should interpret RU99's ultimate net loss definition as not including any kind of defense costs when, as here, RU99 still has a duty to defend. 2. Erosion Of RG99's And RX99's Liability Limits Does Not Cause RU99 To Drop Down Before $1,000,000 Has Been Paid In Indemnity, And Does Not Cause LMC's Policy To Drop Down Before $7,000,000 Has Been Paid For Indemnity Only.

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Although RU99 contains a drop down provision regarding application of its
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products aggregate limit, it contains no drop down provision regarding application of its occurrence limit. In Maricopa County v. Federal Ins. Co., 157 Ariz. 308, 757 P.2d 112 (App. 1988), the court said there is no "statute, public policy, regulation, or constitutional mandate requiring the excess carrier to drop down," and that to require a

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drop down in coverage would "defeat the reasonable expectations of the parties" because "an insured pays a reduced premium to the excess carrier expressly because that carrier will be obligated to pay a claim only after a certain amount has been paid by the

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primary carrier." Comparison of the $145,000 premium charged for the 4/1/00-01 LMC policy and the $7,610,864 premium charged by RUMM for $2,000,000 less coverage is an example of this. The premiums for these policies are listed on the policies'

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declarations pages. (Exhibits 4, 9). Pursuant to Maricopa, RU99, and LMC's policy, are, as a matter of law, not required to drop down to apply immediately in excess of any reduced underlying limits (except to the extent any such limits have been reduced by the payment of indemnity only).

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The Arizona reasonable expectations doctrine bars a drop down of RU99 and LMC for the further reason that the unrebutted testimony of AON account manager Mae Sandoval, AON's account executive Michael Mizrachi, and LMC's excess manager Stephen Tibbs show that based on promises made by U-Haul to LMC through U-Haul's

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agent AON, and also based on AON's conduct, LMC reasonably expected that its coverage would not apply before $7,000,000 had been paid for indemnity only, and that but for such promises and conduct of AON, LMC would not have issued its policy to UHaul. (Exhibits 10, 13, 27). Since RU99 is a defense in addition to limits policy, LMC's definition of "loss" does not include defense costs and therefore LMC's insuring agreement does not include payment for costs of defense. The monetary level at which a policy attaches is a matter of the policy's "lower limit" because it is the point where the obligation to pay the limit begins. Metropolitan

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Leasing v. Pacific Employers Ins. Co., 633 N.E. 2d 434 (Minn. App. 1994). LMC's

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Schedule of Underlying Insurance Excess provides that LMC does not follow the form of the underlying policy's ". . . amount or Limits of Liability." Therefore, paragraph B6 of LMC's insuring agreement prohibits LMC from dropping down due to Republic

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Western's payment of defense costs because, as previously discussed, LMC's definition of "loss" does not include defense costs (since RU99 provides defense in addition to limits), and also because RU99 itself does not drop down. For the reasons stated herein, LMC's coverage for the Nelson accident does not

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attach until $7,000,000 has been paid by Republic Western (or by Republic Western and U-Haul) in indemnity payments to settle bodily injury claims and/or to pay judgments for bodily injury claims arising out of the Nelson accident, in addition to U -Haul's $25,000 self-insured retention. Republic Western satisfied $40,000 of this requirement

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prior to the settlement of the Nelson lawsuit, by paying $40,000 to settle a bodily injury claim of another person arising out of the same accident. (Exhibit 34). Therefore, what LMC owes as its legal share of the $7,500,000 Nelson lawsuit settlement is $540,000. LMC, by paying a total of $666,221 in regard to all claims arising out of the Nelson lawsuit has paid $126,221 in excess of its legal obligation, for which it is entitled to be reimbursed by Republic Western pursuant to LMC's counterclaim. (Eickert Affidavit, Exhibit 32). LMC therefore owes no reimbursement to plaintiffs for any part of what plaintiffs paid to settle claims arising out of the Nelson lawsuit. B. Republic Western's and LMC's Coverage for the Fernandez Accident and Suit.

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The only aggregate limit contained in RGMM is a $250,000 annual "Products and Completed Operations" annual limit for "all damages because of 'bodily injury' and 'property damage' included within the Products and Completed Operations hazard. . ."

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(Endorsement #5 to RGMM). The only aggregate limit contained in RXMM is a $1,750,000 annual products hazard for "all damages because of bodily injury and property included within the Products Hazard. . ." (Endorsement #4 to RXMM). RGMM, RXMM, RUMM, and LMC policy number 9SR120037-02 were all issued for

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the policy period 4/1/00-01. The Martinez and Fernandez accidents occurred during that policy year. (Affidavit of Lesley Eickert, Exhibit 32). The total amount of the Fernandez lawsuit settlement was $8,000,000. (Affidavit Eickert, Exhibit 32). The Republic Western records produced by Republic Western's

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Fed.R.Civ.P. 30(b)(6) witness Douglas Bell list the following indemnity payments and defense costs as having been paid by Republic Western under RGMM and RXMM on account of claims arising out of the Martinez accident and suit: RGMM indemnity payment of $171,625 and defense cost payment of $53,375.27; RXMM indemnity payment of $119,351.29 and defense cost payment of $1,657,247.34. (Exhibit 35). Pursuant to their express wording, the products aggregate endorsements of RGMM and RXMM only apply to damages because of "Bodily Injury" or "Property Damage." RXMM's following form endorsement causes RXMM to follow the form of RGMM's definitions. RGMM's definitions of "Bodily Injury" and "Property Damage"

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do not include any type of defense costs. Therefore, the defense costs paid under

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RGMM and RXMM for the Martinez settlement do not reduce those policies' aggregate limits. Another reason why RUMM's Section VI's drop down provision is not applicable

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to the Fernandez settlement is that it states it is "subject to the above limitations" including the limitation contained in Section VI that the liability in question be only as to "ultimate net loss." But, for the reasons previously discussed, the defense costs for which Republic Western makes a claim do not come within RU99's definition of

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"ultimate net loss." RGMM's $250,000 aggregate limit was reduced to $78,375 due to Republic Western's payment of $171,625 in indemnity under RGMM for claims arising out of the Martinez accident. (Exhibit 35). RXMM's aggregate limit was reduced to

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$1,630,648.71 due to Republic Western's payment of $119,351.29 under RXMM in indemnity for claims arising out of the Martinez accident. (Exhibit 35). Republic Western recovered $100,000 on a cross-claim filed against Avila Monte in regard to the Fernandez accident and lawsuit. (Exhibit 37). Therefore, a total of $1,809,023.71 in coverage remained available under RGMM and RXMM for the Fernandez settlement. As to why Republic Western's payment of defense costs under RUMM does not reduce RUMM's per-occurrence liability limit, and is not included in RU99's definition of ultimate net loss, LMC adopts and incorporates by reference each of the reasons previously discussed as to why defense costs paid by Republic Western under RU99 do

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not reduce RU99's per-occurrence liability limit and are not included in RU99's

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definition of ultimate net loss. Therefore, RUMM's defense obligation continues even if the amount of defense costs paid under RUMM were to exceed RUMM's liability coverage limit. Consequently, at the time of the Fernandez settlement, RUMM's full

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$5,000,000 occurrence limit was available for the Fernandez settlement. Thus, the total coverage that Republic Western had available under RGMM, RXMM, and RUMM, for payment to the Fernandez settlement was not less than $6,709,023.71. Section VI of RUMM entitled "Limits" contains a drop down provision which

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states in relevant part that: In the event of the reduction or exhaustion of the aggregate limits of liability of the underlying policies listed in Schedule A by reason of losses paid thereunder, this policy, subject to the above limitations. (1) in the event of reduction shall pay the excess of the reduced underlying limits. . . RUMM does not define the term "Losses." As previously discussed, RGMM's and RXMM's Products Aggregate endorsements do not apply to defense costs. Therefore, since RU99's Section VI's drop down provision is tied to reduction or

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exhaustion of the underlying policies' aggregate limits, the only types of "losses" that can trigger RUMM's drop down provision are indemnity payments, and not payments of defense costs. As to why Republic Western's payment of defense costs under RGMM and

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RXMM do not cause RUMM and LMC to drop down and attach at a lower level, LMC adopts and incorporates by reference each of the reasons previously discussed as to why defense costs paid under RG99 and RX99 do not cause RU99 and LMC to drop down

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and attach at a lower level. RUMM's coverage for the Fernandez settlement applies in excess of RGMM's and RXMM's combined stated occurrence limits of $2,000,000. Therefore, LMC's coverage for the Fernandez settlement does not drop down and does

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not apply to and is not owed for any part of the first $7,000,000 of the $8,000,000 Fernandez settlement. LMC's payment of $4,110,769.50 to the Fernandez settlement constituted an overpayment by LMC of $3,110,769.50. Therefore LMC, in regard to the Fernandez settlement, is entitled pursuant to LMC's counterclaim to reimbursement

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from Republic Western in the amount of $2,919,793.32, and from U-Haul in the amount of $190,976.29 pursuant to LMC's counterclaim. Further, all claims by plaintiffs

against LMC for reimbursement in regard to Republic Western's payments made to settle the Fernandez accident claims are thereby barred.

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C.

LMC Owed No Coverage For The Fernandez Settlement Due To Exhaustion of LMC's Products-Completed Operations Aggregate Limit Prior to the Fernandez Settlement The Martinez and Fernandez accident both occurred during the 4/1/00-01 policy

year. (Eickert Affidavit, Exhibit 32). The Martinez lawsuit was settled prior to the Fernandez lawsuit. (Eickert Affidavit, Exhibit 32). LMC's products-completed operations aggregate limit for the 4/1/00-01 policy period is $13,000,000. (Exhibit 9). LMC's payment of $13,000,000 to settle the Martinez settlement exhausted LMC's products-completed operations aggregate limit and left LMC with no coverage available for the subsequent Fernandez settlement. Paragraph 2 of LMC's answer to the Second

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Amended Complaint pleads that LMC's "policy is subject to the terms, conditions, and

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limitations contained therein." Therefore, all claims asserted herein by plaintiffs against LMC for reimbursement of part of plaintiffs' contribution to the Fernandez settlement are barred.

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D.

LMC'S Affirmative Defense of Estoppel The aforesaid promises and conduct of AON, which were previously discussed in

this motion as providing the basis for LMC's aforesaid reasonable expectations, also entitle LMC to prevail against plaintiffs on LMC's affirmative defense of estoppel.

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Heltzel v. Mecham Pontiac, 152 Ariz. 58, 730 P. 2d 235 (1987). E. Counter-Defendants' First and Second Affirmative Defenses Those defenses allege that Counts I and II of LMC's counterclaim for declaratory judgment fail to state a claim upon which relief can be granted. The coverage dispute

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alleged in those counts meets the "actual controversy" requirement for obtaining a declaratory judgment under 28 U.S.C. § 2201, and for establishing an Article III "Case" or "Controversy." West American Ins. Co. v. Goschi, 1985 WL 5113 (N.D. Ill. 1985). Whereby, LMC is entitled to summary judgment as to said affirmative defense. F. Counter-Defendants' Third Affirmative Defense The parties' pleadings admit that plaintiffs and defendant LMC have preserved their rights to make claims against each other. Therefore, LMC's claim for equitable subrogation states a claim upon which relief can be granted. Lamb Excavation, Inc. v. Chase Manhattan Mortgage Corp., 208 Ariz. 478, 95 P.3d 542 (App. 2004). Whereby,

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LMC is entitled to summary judgment as to said affirmative defense.

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G.

Counter-Defendants' Fourth Affirmative Defense Counsel for plaintiffs/counter-defendants has stipulated on the record at

deposition that plaintiffs/counter-defendants' have no one to produce as a designated
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corporate representative regarding said defense of alleged "waiver, estoppel, and laches." (Bell 90-20/91-16, Exhibit 1). Whereby, LMC is entitled to summary

judgment as to said affirmative defense. CONCLUSION

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Wherefore, Defendant/Counter-Plaintiff LMC respectfully requests that this court enter summary judgment in its favor declaring that the amounts that LMC contributed to the Nelson and Fernandez settlements exceeded its legal obligations under LMC policy, that LMC is therefore entitled to be reimbursed by

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plaintiffs/counter-defendants for said over-payments, and that all claims asserted herein by plaintiffs against LMC are barred. Lumbermens Mutual Casualty Company further requests the court to retain jurisdiction to award LMC pre-judgment interest, postjudgment interest, taxable costs, and attorney's fees incurred herein pursuant to A.R.S. § 12-341.01(A) and for such additional, alternative, injunctive, supplemental, and for such other further relief as the court deems just and proper. DATED this 30th day of September, 2005 WALTON LANTAFF SCHROEDER & CARSON LLP Wayne T. Gill, Esq. Southtrust Center 1700 Palm Beach Lakes Blvd., #700

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West Palm Beach, FL 33401 KUNZ PLITT HYLAND DEMLONG KLEIFIELD By:_s/Daniel Maldonado_________________ Steven Plitt, Esq. Daniel Maldonado, Esq. 3838 N. Central Ave., Suite 1500 Phoenix, AZ 85012-1902 Attorneys for Defendant/Counter-Plaintiff

CERTIFICATE OF SERVICE ORIGINAL filed this30th day of September, 2005, and a copy electronically served/mailed to: Gerald Gaffaney, Esq. David J. Ouimette, Esq. Attorneys for Plaintiff Mariscal, Weeks, McIntyre & Friedlander, P.A. 2901 North Central, Suite 200 Phoenix, AZ 85012 Bruce Friedman, Esq. Mark S. Fragner, Esq. Attorneys for Plaintiff Rubin, Fiorella & Friedman, LLP 292 Madison Avenue New York, NY 10017

s/Joye Gilsinger_____________

Case 2:04-cv-00662-DGC

- 19 Document 111 - Filed 09/30/2005

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