Pfeister v. RSUI Indemnity Company

Background

Joanna L. Pfeister, who represented herself, sued RSUI Indemnity Company. RSUI insured Gramercy Towers Condominium Association and provided coverage to association directors for certain claims involving covered “wrongful acts.” Pfeister claimed RSUI failed to defend her in a state criminal case.

The San Francisco District Attorney charged Pfeister on February 1, 2019, based on conduct at a January 30, 2019 settlement conference. The charges included felony assault on a public official, felony criminal threats, misdemeanor assault, and misdemeanor disturbance of the peace. The opinion states that Pfeister received the criminal complaint and learned of the charges at her February 4, 2019 initial appearance, although one portion of the opinion contains an apparent reference to February 4, 2020.

RSUI’s policy period ran from April 1, 2019 to April 1, 2020. The policy covered claims for wrongful acts by a director acting on behalf of Gramercy. Gramercy’s February 13, 2019 policy application did not list Pfeister as a director. The record showed that Pfeister was elected to the association’s board on April 11, 2019, after the alleged incident and after the criminal case began.

Pfeister tendered her defense to RSUI on June 21, 2019. RSUI initially accepted the defense subject to a reservation of rights, identified coverage issues, and later disclaimed coverage on November 14, 2019. Pfeister sued, asserting breach of contract, defamation, intentional infliction of emotional distress, and fraud-related claims. RSUI removed the case to federal court and moved for summary judgment.

Summary-Judgment Standard

The court explained that summary judgment must be granted when there is no genuine dispute about any material fact and the moving party is entitled to judgment as a matter of law. A material fact is one that could affect the result, and a genuine dispute exists when the evidence could allow a reasonable jury to rule for the nonmoving party.

Court’s Analysis

The court granted RSUI’s motion for summary judgment on the coverage claim for two independent reasons.

First, the court held that the criminal claim fell outside the policy period. The criminal complaint was filed on February 1, 2019, and the court found that Pfeister knew about the charges at her February 4, 2019 initial appearance. Because the policy did not begin until April 1, 2019, the claim was not made during the policy period. The court rejected Pfeister’s assertion that she did not receive the complaint until April 2, 2019, finding that the hearing transcript contradicted that account and that there was no genuine factual dispute about when she learned of the charges.

Second, the court held that the criminal action was not based on a covered “wrongful act.” Under the policy, a wrongful act had to be committed by an insured person, such as a director, while acting in that capacity and on behalf of Gramercy. The undisputed evidence showed that Pfeister was not elected to the board until April 11, 2019, after the January 30 incident and the February 2019 criminal case.

The court also granted summary judgment on Pfeister’s defamation, intentional-infliction-of-emotional-distress, and fraud-related claims because those claims depended on the coverage claim. To the extent the defamation and fraud claims relied on RSUI’s statements that the criminal action was not covered, the court found those statements were not false. The court also found that the record did not support the argument that RSUI’s initial defense offer subject to a reservation of rights and later coverage determination constituted outrageous conduct intended or recklessly likely to cause emotional distress.

Disposition

Judge Laurel Beeler granted RSUI’s motion for summary judgment. The court stated that its rulings meant Pfeister’s other motions were dismissed as moot and identified the order as disposing of ECF Nos. 79, 136, 140, and 145.