United States District Court, D. Maryland
NATIONWIDE MUTUAL FIRE INSURANCE CO., Plaintiff/Consolidated Defendant,
LINDA J. ADAMS, et al Defendant/Consolidated Plaintiff.
David Copperthite United States Magistrate Judge
Defendant, Nationwide Mutual Fire Insurance Co.
("Plaintiff'), moves this Court for summary judgment
(the "Motion") (ECF No. 63). Plaintiff seeks a
declaratory judgment from the Court that it is not obligated
to pay a default judgment from the Anne Arundel Circuit Court
in favor of Linda J. Adams, the Defendant/Consolidated
Plaintiff ("Defendant"), against the underlying
defendants, Margaret Burgone and Welby Joe
Croson.Defendant filed an opposition to Plaintiffs
Motion (ECF No. 66) and Plaintiff replied (ECF No. 67).
considering the Motion and responses thereto, the Court finds
that no hearing is necessary. See Loc.R. 105.6
(D.Md. 2018). In addition, having reviewed the pleadings of
record and all competent and admissible evidence submitted by
the parties, the Court finds that there are genuine issues of
material fact as to the claim asserted. Accordingly, the
Court will DENY Plaintiffs Motion (ECF No. 63).
Road, LLC and the Nationwide Policy
Road, LLC ("Evergreen") was officially formed on
December 1, 2006. ECF No. 66-4 at 8-9. Evergreen was a
property valuation and management company. See ECF
No. 66-5 at 3 (a screenshot of Evergreen's Facebook page
detailing the company's services); see also ECF
No. 66-6 at 6 (deposition of Welby Joe Croson). On the day of
its formation, Evergreen's operating agreement was
amended to reflect that Margaret Burgone was assigned a one
percent membership interest in Evergreen. Id. at
12-13. The following year, on December 20, 2007, the
operating agreement was again amended to increase Ms,
Burgone's membership interest to 2.98%. Id. at
14-15. Ms. Burgone and her then-husband Welby Joe Croson
managed and maintained rental properties owned by Evergreen.
ECF No. 66-6 at 13-15.
issued a Premier Businessowners Policy to Evergreen covering
the period from April 24, 2014 through April 24, 2015. ECF
No. 1 at 2, ¶ 8. The policy covered general liabilities
as well as the properties at 1741 Underwood Road, Gambrills,
Maryland 21054 ("the Premises") and 1745 Underwood
Road, Gambrills, Maryland 21054. ECF No. 1-2 at 20, 22, 24,
26. Evergreen bought the Premises in March 2012. ECF No. 66-3
at 2-3. The policy provided coverage for "damages
because of 'bodily injury' or 'property damage to
which this insurance applies.'" ECF No. 1-2 at 70.
Furthermore, the policy states, "[Plaintiff] will have
the right and duty to defend the insured against any
'suit' seeking those damages for which there is
coverage under this policy." Id. Covered
"insureds" for limited liability companies included
the company itself; "members ... but only with respect
to the conduct of your business"; "managers ... but
only with respect to their duties as your managers"; and
"employees ... but only for acts within the scope of
their employment by you or while performing duties related to
the conduct of your business." Mat 82-83.
Ms. Burgone and Mr. Croson lived at the Premises, they
managed the rental units at 1741 and 1745 Underwood Road. ECF
No. 66-6 at 6. Ms. Burgone handled leases, paperwork, and
other administrative tasks, and received a paycheck from
Evergreen in return. Id. at 7, 12. Mr. Croson
performed various maintenance tasks on behalf of Evergreen,
but it is unclear whether he received a formal paycheck.
See Id. at 6, 14. At the Premises, Ms. Burgone and
Mr. Croson met with potential and current renters, collected
rent, and stored other Evergreen property. Id. at
14. Additionally, there was a separate room in the Premises
to which Ms. Burgone and Mr. Croson referred as "the
office," in which they kept a computer and printer,
desks, and filing cabinets for Evergreen business.
Id. at 14-15.
Underlying Incident and Tort Action
3, 2014, Defendant was at the Premises in her professional
capacity as a hospice nurse. ECF No. 66 at 1. While at the
Premises, Defendant was attacked by Ms. Burgone and Mr.
Croson's bulldog, causing severe bites on her legs and a
torn meniscus and stress fractures on her left knee, among
other injuries. Id. After multiple surgeries in
2014, Defendant was unable to perform her work duties, and
she was fired from her job. ECF No. 1-4 at 3-4, ¶ 9 (the
underlying tort complaint).
January 26, 2017, Defendant filed a tort action against Ms.
Burgone and Mr. Croson in the Circuit Court for Anne Arundel
County. C-02-cv-l 7-000258, Md. Judiciary Case
60&detailLoc=ODYCIVIL. On July 28, 2017, an attorney
hired by Plaintiff entered her appearance in the underlying
case, filed an answer on behalf of Welby Joe Croson (the only
defendant who had been served), and filed a certificate for
discovery. Id; see also ECF No. 66-6 at 13 (during
deposition, Mr. Croson stating, "[Nationwide] said they
were going to handle it was my understanding. It was a
liability policy covering that property. This incident
happened on that property. So, that's how I understood
it."). Neither Ms. Burgone nor Mr. Croson personally
participated in the underlying suit, and Defendant was
seemingly unaware during the pendency of that action that Ms.
Burgone and Mr. Croson did not own the premises. ECF Nos. 66
at 3 & 1-4 at 8, ¶ 41 (Defendant alleging in her
underlying complaint "[a]t all relevant times, [Ms.
Burgone and Mr. Croson] were the owners of the
October 3, 2017, counsel Plaintiff hired for Mr. Croson in
the underlying action filed a motion to strike and withdraw
her appearance. C-02-cv-l 7-000258, supra. On
November 6, 2017, the Anne Arundel County court granted the
motion to withdraw, and instructed the clerk to notify Mr.
Croson he needed to appoint new counsel. Id. No new
attorney ever entered their appearance in the underlying
case, id., and it is not clear that Mr. Croson had
actual knowledge prior to the judgment that his attorney had
withdrawn. ECF No. 66-6 at 13 (responding to a question
asking if he became aware Plaintiff did not "cover"
the underlying litigation, Mr. Croson said, "At some
point, yeah. I thought that the case would end. I didn't
know about this judgment until I received this paper. So, I
thought the case had been kind of just thrown out, gone
away... .[I didn't know about the judgment] [u]ntil I was
served with papers for today.").
the participation of Ms. Burgone and Mr. Croson in the
underlying action, the Anne Arundel County court entered a
default judgment in favor of Defendant on February 27, 2018.
C-02-cv-17-000258, supra. The court awarded
Defendant damages in the amount of $218, 005.00.
Id., Plaintiff attempted to collect the judgment
from Ms. Burgone and Mr. Croson for months, but she was
unsuccessful. See id.