Preview:

UNITED STATES DISTRICT COURT DISTRICT OF MAINE COLONY INSURANCE COMPANY, PLAINTIFF v. DANLY, INC.,
ET AL.,

DEFENDANTS and BABAK YAZDANI,
ET AL.,

PARTIES-IN-INTEREST

) ) ) ) ) ) ) ) ) ) ) ) ) ) )

CIVIL NO. 10-308-P-H

DECISION AND ORDER ON MOTIONS FOR SUMMARY JUDGMENT In this declaratory judgment lawsuit, an excess liability insurance carrier seeks judgment that it has no obligation to pay benefits under its policy. The reasons, it says, are that (1) the underlying tort lawsuit, also filed in this court, Yazdani v. Danly, Inc., No. 2:09cv108-DBH ("the underlying lawsuit"), has been settled without its consent, and (2) the settlement in that lawsuit provides that the Insureds have no obligation to pay any damages to the injured parties. The injured parties have filed a counterclaim, seeking declaratory judgment that they are entitled to recover in a future reach and apply lawsuit against the carrier which, they say, they will file once they have judgment in the underlying lawsuit in accordance with the settlement agreement (first, they need judicial approval of their settlement). The Insureds have also filed a counterclaim

seeking their attorney fees growing out of the excess carrier's alleged breach of the duty to defend and indemnify; declaratory judgment that there is coverage; and judgment on claims under Maine's Unfair Claims Settlement Practices Act for the excess carrier's alleged failure to acknowledge and review claims in a timely manner, make a timely reservation of rights, or engage in reasonable settlement discussions. The excess carrier has moved for summary judgment on all claims. The injured parties have moved for judgment on the pleadings, and for summary judgment. All motions are denied. FACTS AND PROCEDURAL HISTORY During the summer of 2007, a nine-year old boy suffered a serious injury to his right eye at the archery range of a summer camp owned by the Insureds. The minor's twin brother, who was also participating in the archery activity, witnessed the accident. The minor's parents, Babak and Lisa Yazdani1 ("the Yazdanis") sued the summer camp and its owners. Compl., Yazdani v. Danly, Inc., No. 2:09cv108-DBH (Docket Item 1). At the time of the accident, ACE

American Insurance Company provided primary insurance coverage to the summer camp and its owners with a limit in the amount of $1 million per occurrence. Thaler Decl., Ex. AA (Docket Item 55-1). The plaintiff Colony

Insurance Company provided excess liability coverage with a limit in the amount of $10 million per occurrence. Biondich Decl., Ex. 1 (Docket Item 531).
                                                            
1 The Yazdanis brought this suit individually and as personal representatives of their injured son and his twin brother. Compl., Yazdani v. Danly, Inc., No. 2:09cv108-DBH (Docket Item 1).

2



The primary carrier provided the Insureds with a defense to the underlying tort lawsuit. Biondich Decl.

Download DBH_12092010_2-10cv308_COLONY_INSURANCE_DANLEY.pdf

Maine Law