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Nautilus Insurance Co. v. Gwinn Design and Build, LLC

United States District Court, D. New Hampshire

December 11, 2018

Nautilus Insurance Co.
v.
Gwinn Design and Build, LLC, et al.

          Michael F. Aylward, Esq. Jaye Rancourt, Esq.

          ORDER

          Joseph A. DiClerico, Jr., United States District Judge

         Nautilus Insurance Company brought a declaratory judgment action against Gwinn Design and Build, LLC; its owner, Richard Gwinn; and Paul J. Stanton, who received a judgment in state court against Gwinn Design and Gwinn, seeking to establish that Nautilus has no obligation to cover the state court judgment.[1]Nautilus moves for summary judgment on Counts V and VI. Stanton objects to summary judgment.

         Standard of Review

         Summary judgment is appropriate when the moving party “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). “A genuine issue of material fact only exists if a reasonable factfinder, examining the evidence and drawing all reasonable inferences helpful to the party resisting summary judgment, could resolve the dispute in that party's favor.” Town of Westport v. Monsanto Co., 877 F.3d 58, 64-65 (1st Cir. 2017) (internal quotation marks omitted); Flood v. Bank of Am. Corp., 780 F.3d 1, 7 (1st Cir. 2015). The facts and reasonable inferences are taken in the light most favorable to the nonmoving party. McGunigle v. City of Quincy, 835 F.3d 192, 202 (1st Cir. 2016).

         Background

         As alleged in Paul Stanton's state court complaint, he hired Gwinn Design in August of 2015 for a project to renovate his home in Bedford. Stanton and Gwinn entered an updated agreement in October of 2015.[2] Stanton was not satisfied with Gwinn Design's work and notified Gwinn in April of 2016 that the workmanship was faulty and incomplete. On March 28, 2017, Stanton sent notice to Gwinn of his construction defect and breach of contract claims. Gwinn did not respond to the notice.

         Stanton brought suit against Gwinn in Hillsborough County Superior Court in June of 2017. Gwinn did not respond, and default was entered against him. Judgment in the amount of $252, 665.17 was entered by order of the court on September 13, 2017.

         Gwinn Design was insured by Nautilus from May 18, 2015, to May 18, 2016, under a policy of commercial general liability insurance. The policy provides insurance for property damage if caused by an “occurrence.” Doc. 1-3, at 10. The insurance provided under the policy is also subject to exclusions. Doc. 1-3, at 11-12. In addition, the policy imposes certain duties on the insured in the event of an occurrence, offense, claim, or suit as a condition of coverage. Doc. 1-3, at 19.

         Gwinn did not notify Nautilus of Stanton's suit or of the default and judgment entered against him.[3] Stanton's counsel sent a letter to Nautilus in April of 2018, notifying Nautilus of the judgment against Gwinn. In September, counsel provided by Nautilus on behalf of Gwinn moved to have the state court set aside the default judgment. In the motion, counsel represented that Gwinn had failed to respond to the suit because of his personal circumstances including his wife's divorce action against him. The motion was denied on October 11, 2018.

         Nautilus filed suit in this court on July 23, 2018. In the complaint, Nautilus seeks a declaratory judgment that it is not obligated under the policy to provide coverage to Gwinn for Stanton's claims and judgment. The complaint includes six counts that raise separate grounds in support of a declaratory judgment.

         Discussion

         Nautilus moves for summary judgment on Counts V and VII in its complaint.[4] The motion seeks a declaratory judgment that Gwinn has waived coverage under the Nautilus policy by failing to give notice of an accident and failing to give notice of a claim or suit as required under the terms of the policy.[5] Gwinn did not respond to the motion. Stanton objects to the motion for summary judgment.

         In Count V, Nautilus alleges that Gwinn breached his duty under the terms of the policy to give notice of an accident. Nautilus cites Section IV, Part 2.a which requires an insured to give notice of an “occurrence”. In Count VII, Nautilus alleges that Gwinn breached ...


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