1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 | INDIAN HARBOR INSURANCE Case No. 2:20-cv-6992-JFW (KSx) COMPANY as successor in interest 2 12 | to CATLIN SPECIALTY FINDINGS OF FACT AND B INSURANCE COMPANY, a CONCLUSIONS OF LAW Delaware corporation, 14 Plaintiff, 15 |} v. 16 | GROUP SHS LLC, dba RESIDENT, 7 a California limited liability company, TIMOTHY KREHBIEL, 1g || an individual, 428 S. HEWITT ST. PARTNERSHIP, a California 19 || partnership, and MID-CENTURY INSURANCE COMPANY, a 20 | California corporation, 21 Defendants. 22 23 24 25 26 27 28

FINDINGS OF FACT AND CONCLUSIONS

118469725 -l- OF LAW;

FINDINGS OF FACT

2 AND CONCLUSIONS OF LAW ° This case arises out of a “forklift parade” held to celebrate Bridget Vagedes’s 50th birthday. During the procession, the forklift, driven by Bridget Vagedes’s ° husband Defendant Timothy Krehbiel (“Krehbiel”), drove over and injured the foot ° and ankle of Jason Ashley. On July 29, 2016, Ashley filed a personal injury action against Krehbiel, among other individuals and entities (the “Ashley Action’). Ashley later filed an ° amendment substituting Defendant Group SHS LLC, dba Resident (a business in " which Krehbiel is one third owner) (“Resident”) as one of the Doe defendants. " Plaintiff Catlin Specialty Insurance Company (“Catlin”) issued Policy No. 0401700831 to Resident for the January 29, 2016 to January 29, 2017 Policy Period 5 ° (the “Policy” or the “Catlin Policy’). Plaintiff Indian Harbor Insurance Company is OM the successor in interest to Catlin (“Indian Harbor’’). Indian Harbor defended Resident and Krehbiel in the Ashley Action subject to the reservation of rights set forth in Exhibits 1 through 5. On August 3, 2020, Indian Harbor filed this action, and in its First Amended Complaint sought: (“Count I’) a judgment declaring that Indian Harbor has no obligation to defend or " indemnify Resident, Krehbiel, or 428 S. Hewitt Partnership (a partnership between Krehbiel and Vagades) (“428 S. Hewitt’) in connection with the Ashley Action; and (“Count IT’) rermbursement of the amounts paid under the Catlin Policy to defend Resident and Krehbiel in the Ashley Action. °° On January 4, 2021, the Court concluded that, pursuant to the mobile equipment exclusion, the Catlin Policy provided no coverage for the Ashley Action. Moreover, the Court “conclude[ed] that Indian Harbor adequately reserved its rights ° as to Krehbiel.” The Court granted summary judgment in Indian Harbor’s favor on Count I of its Amended Complaint against 428 S. Hewitt and Krehbiel. vasagonas 4. FINDINGS OF FACT AND CONCLUSIONS

1 On June 29, 2021, the Court granted Indian Harbor’s second motion for 2 || summary judgment, finding that the mobile equipment exclusion barred coverage 3 || for the Ashley Action as to Resident as well. The Court “conclude[d] that Catlin 4 || adequately reserved its rights in its August 2, 2016 letter to Resident.” 5 The only matter left for trial is Count II -- the amount to which Indian Harbor 6 || 1s entitled to recover for payments incurred to defend Resident and Krehbiel in the 7 || Ashley Action. Indian Harbor, Resident, and Krehbiel (collectively, the “Parties”’) 8 || disagree on the date from which Indian Harbor is entitled to recover its defense fees 9 || and costs. 10 Having considered the materials submitted by the Parties, including the facts 11 || stipulated by the Parties for the purposes trial, the Court makes the following 2 12 || findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure : 13 || 52(a). Any finding of fact that may properly be construed as a conclusion of law 14 || shall be so construed, and vice-versa. 15 FINDINGS OF FACT 16 1. At all relevant times, Krehbiel was authorized to act on Resident’s 17 || behalf, and acted in such representative capacity, with respect to insurance coverage 18 || matters. 19 2. Resident first tendered the Ashley Action to Catlin on August 1, 2016. 20 || On August 2, 2016, Catlin sent a letter to Resident, acknowledging that it had 21 || received a Notice of Loss and reserving rights under the Policy. (Joint Exhibit 22 || List/Stipulation of Facts, Dkt. 132 (“Stip.”), Exhibit 1.) 23 3. Catlin appointed Ty Vanderford of Vanderford & Ruiz as defense 24 || counsel for Resident. 25 4, On May 25, 2018, Catlin sent a letter addressed to "Group SHS LLC, 26 || d/b/a/ Resident c/o William Sampson, Esq." (Stip., Exhibit 2.) 27 5. On October 1, 2018, Catlin sent a letter addressed to Sampson and 28 sissaon3 5. FINDINGS OF FACT AND CONCLUSIONS

1 || Resident. (Stip., Exhibit 3.) Krehbiel selected Sampson to serve as his 2 || independent counsel, and Indian Harbor consented to Krehbiel’s request. 3 6. On March 23, 2020, Catlin sent a letter to "Timothy Krehbiel Group 4 || SHS LLC, DBA: Resident" at Resident's address, with a copy to Sampson. (Stip., 5 || Exhibit 4.) 6 7. On August 5, 2020, counsel for Indian Harbor wrote to Sampson. 7 || (Stip., Exhibit 5.) The August 5, 2020 letter enclosed a copy of the Complaint that 8 || had been filed in this action. The operative complaint is the First Amended 9 || Complaint, filed on August 31, 2020. (Dkt. 14.) 10 8. Indian Harbor paid $45,858.04 to defend Resident between March 23, 11 || 2020 and July 1, 2021, and has paid an additional $2,585.36 from July 1, 2021 to 2 12 || August 9, 2021. (Supplemental Joint Exhibit List/Stipulation of Facts, Dkt. 144 : 13 || (Supp. Stip.”), 917b.) At the time judgment is entered, the Parties will stipulate : 14 || that any additional amounts to be paid by Indian Harbor before the date of the 15 || judgment will be included in the judgment. (Supp. Stip., 417d.) 16 9. Indian Harbor paid $0.00 to defend Krehbiel since March 23, 2020. 17 || (Supp. Stip., §17c.) 18 CONCLUSIONS OF LAW 19 1. This Court has jurisdiction over this action under 28 U.S.C. §§ 1332 20 || and 1338 because it presents a controversy between citizens of different states and 21 || the matter in controversy exceeds $75,000. Venue is proper in this judicial district 22 || pursuant to 28 U.S.C. § 1391 because a substantial amount of the events or 23 || occurrences took place in the Central District of California. 24 2. To obtain rer1mbursement of defense costs, Indian Harbor must prove 25 || (1) that there was no potential for coverage and thus no duty to defend Resident or 26 || Krehbiel in the Ashley Action, (2) Indian Harbor provided a defense to Krehbiel 27 || and Resident which it was never obligated to furnish, and (3) Indian Harbor 28 sissaon3 3. FINDINGS OF FACT AND CONCLUSIONS

1 || defended Krehbiel and Resident under a reservation of rights, that reserved the right 2 || to seek reimbursement of defense costs. Scottsdale Ins. Co. v. MV Transportation, 3 || 36 Cal. 4th 643, 658 (2005) (“By law applied in hindsight, courts can determine 4 || that no potential for coverage, and thus no duty to defend, ever existed. If that 5 || conclusion is reached, the insurer, having reserved its right, may recover from its 6 || insured the costs it expended to provide a defense which, under its contract of 7 || surance, it was never obliged to furnish.”). 8 3. This Court previously determined as a matter of law and undisputed 9 || fact that there was no potential for coverage and thus no duty to defend Resident or 10 || Krehbiel in the Ashley Action, and that Indian Harbor provided a defense to 11 || Krehbiel and Resident which it was never obligated to furnish. (Dkt, 74, 75, 131.) 2 12 4. Indian Harbor’s March 23, 2020 reservation of rights was sufficient to : 13 || reserve its right to obtain reimbursement of defense costs incurred in the Ashley 14 || Action thereafter from Krehbiel and Resident. 15 5. Indian Harbor is entitled to judgment on Count II of its First Amended 16 || Complaint for all amounts paid by Indian Harbor in defense of Resident in the 17 || Ashley Action after March 23, 2020 in the amount to which the parties have 18 || stipulated or otherwise according to proof, plus prejudgment interest as provided by 19 || law. 20 IT ISSO ORDERED 21 This 31“ day of August, 2021. 22 23 “ EECA ca □□□□ 25 TED STATES DISTRICT JUDGE 26 27 Dated: August 31, 2021 28 sissaon3 4. FINDINGS OF FACT AND CONCLUSIONS