David King v. State Farm Fire & Casualty Com

MEMORANDUM

David and Julie King (“the Kings”), residents of Montana and assignees of rights under a comprehensive general liability (“CGL”) policy in favor of their judgment debtor, brought suit against State Farm Fire and Casualty Company (“State Farm”) for satisfaction of a $600,048.47 judgment entered in their favor after a special verdict award by a Montana state court jury in a breach of contract case. The Kings sought three forms of relief: (1) a declaratory judgment that the defendants’ CGL policy in the underlying case covered the damages incurred, (2) estoppel to prevent State Farm from denying coverage, and (8) attorneys’ fees related to the underlying lawsuit. The United States district court properly granted summary judgment in favor of State Farm on all three claims.

The Kings are not entitled to a declaratory judgment because the facts of the underlying case do not constitute an “occurrence” as defined in the State Farm policy. Where the defendants in the underlying case deliberately refused to remedy the breach of a contract to deliver a log home package and the Kings deliberately chose to use the known non-conforming product in constructing their residence, any…