Robert A. Rizzo v. The Insurance Company of State of Pennsylvania, a Pennsylvania corporation; Chartis Claims Inc., a Delaware corporation
Published: Nov. 23, 2013 | Result Date: Aug. 30, 2013 | Filing Date: Jan. 1, 1900 |Case number: 2:12-cv-04347-DMG-FMO Summary Judgment – Defense
Court
USDC Central
Attorneys
Plaintiff
James W. Spertus
(Spertus, Landes & Umhofer LLP)
Ezra D. Landes
(Spertus, Landes & Umhofer LLP)
Defendant
Sara M. Thorpe
(Nicolaides, Fink & Thorpe LLP)
Facts
Robert A. Rizzo sued The Insurance Company of State of Pennsylvania (ICSOP) and Chartis Claims Inc., alleging a duty to defend, breach of insurance contract and breach of implied covenant of good faith and fair dealing. Rizzo also sought declaratory relief against all defendants.
Rizzo was the Chief Administrative Officer for the City of Bell. Defendants insured the City of Bell, its officials, and employees. Rizzo was one of eight city officials named in a corruption scandal that involved allegations of misappropriation of public funds in the City of Bell.
In 2010, the California Attorney General filed a civil action against Rizzo related to Rizzo's conduct while while an official and employee of the city. Criminal charges were also filed against him. Rizzo filed a cross-complaint for declaratory relief against the city for a defense and indemnification under an employment contract. The city then filed a cross-complaint against him relating to Rizzo's alleged misconduct. Rizzo tendered the civil and criminal actions to defendants for coverage.
Defendant declined to defend or indemnify, which prompted the lawsuit.
Chartis was dismissed from the action, because it handled Rizzo's claims for coverage as an agent of ICSOP.
Contentions
PLAINTIFF'S CONTENTIONS:
Plaintiff contended that defendants breach the insurance contract by refusing to cover plaintiff's criminal action. Plaintiff also contended that defendant breached its duty to defend. Plaintiff also contended that defendants' conduct constituted bad faith.
Plaintiff claimed defendants had agreed to the civil case. Defendant then subsequently withdrew their agreement to defend the civil case.
Plaintiff also asserted that they never contended defendants had a duty to indemnify.
DEFENDANTS' CONTENTIONS:
Defendant contended it had no duty to defend because plaintiff did not qualify as an insured, the actions did not seek covered damages, and the claims against Rizzo were excluded because they all arose out of dishonest conduct or acts for plaintiff's gain, profit or advantage.
Result
The district court found in favor of defendant The Insurance Company of the State of Pennsylvania and against plaintiff Rizzo, finding that there was no duty to defend.
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