The opinion of the court was delivered by: RICARDO URBINA, District Judge
GRANTING IN PART AND DENYING IN PART THE PLAINTIFF'S MOTION FOR
SUMMARY JUDGMENT; DENYING C.J. THOMAS' CROSS-MOTION FOR SUMMARY
This case is before the court on the plaintiff's motion for
summary judgment and on defendant C.J. Thomas, Inc.'s
cross-motion for summary judgment pursuant to Federal Rule of
Civil Procedure 56. The plaintiff asserts that it is entitled to
summary judgment on its claims against both defendants because
there is no genuine issue of material fact. Because the plaintiff
has not shown that defendant C.J. Thomas, Inc. ("C.J. Thomas")
violated a duty of care, the court denies summary judgment as to
the negligent misrepresentation claim. The court grants the
plaintiff's motion for a declaration that D.C. Code § 31-4314
defeats coverage under the insurance policy because that
insurance application contained a false statement that materially
affected the plaintiff's decision to insure the defendant.
Because the plaintiff has met its burden with respect to its
unjust enrichment claim against defendant Okie Dokie, Inc.,
("Okie Dokie") the court grants the plaintiff's motion for
summary judgment as to that claims. Because the defendants have not provided any substantive justification for
withholding an award of prejudgment interest, the court grants
the plaintiff's motion for an award of prejudgment interest.
Defendant Okie Dokie is the owner and operator of Dream, a
nightclub in the District of Columbia. Compl. ¶¶ 8, 10. Defendant
C.J. Thomas, an insurance broker, prepared an application for
insurance on behalf of Okie Dokie for a general commercial
liability insurance policy to cover Dream. Id. ¶¶ 23, 24. The
application described Dream as a "Restaurant/Bar with Dance
Floor," and stated that: (1) the previous insurance carrier
cancelled its policy primarily because Dream had a dance floor;
(2) Dream does not sponsor "Social Events;" and (3) Dream's $4
million in total sales is comprised of $3 million in food sales
and $1 million in liquor sales. Id. ¶¶ 25-30. The plaintiff,
Burlington Insurance Company ("Burlington"), alleges that it
relied on the statements in the application when it issued a
commercial general liability policy to Okie Dokie on June 28,
2002. Id. ¶¶ 34, 36.
On August 10, 2002, an underaged drunk driver who had allegedly
been drinking at Dream, struck and killed a police officer named
Hakim Farthing. Id. ¶ 44. Farthing's estate sued Okie Dokie for
$50 million on October 1, 2003 ("Farthing Action"). Id. ¶¶
42, 45. Burlington settled the Farthing action for $410,000 on
August 21, 2004. Pl.'s Mot. For Summ. J. ("Pl.'s Mot.") at 5. The
plaintiff also alleges that it incurred legal costs to defend
Okie Dokie in the Farthing action. Id. B. Procedural History
In response to the Farthing Action, Burlington filed this
action against Okie Dokie and C.J. Thomas on September 26, 2003.
See generally Compl. With regard to Okie Dokie, Burlington
seeks: (1) a declaration that Burlington had no duty to defend or
indemnify Okie Dokie in the Farthing Action; (2) rescission of
the insurance policy; and (3) restitution for all costs
Burlington has paid with respect to the Farthing Action. Id.
¶¶ 58, 64, 69. Burlington moves for summary judgment on the
declaratory relief and unjust enrichment counts. Pl.'s Mot. at 2.
With regard to C.J. Thomas, Burlington seeks damages stemming
from alleged negligent misrepresentation in the insurance
application. Compl. ¶ 76. The complaint also alleges that C.J.
Thomas failed to disclose that Dream: (1) is a nightclub, (2)
hosts concerts, (3) seeks the patronage of eighteen to twenty
year olds, (4) derives over 25% of its revenue from the sale of
alcoholic beverages, and (5) regularly features an "open bar."
Id. ¶ 72. The plaintiff asserts that "C.J. Thomas was under a
duty to disclose one or more" of these facts. Id. ¶ 73. The
complaint further alleges that these "false statements and
omissions were material" to the plaintiff's decision to issue the
policy to Okie Dokie. Id. ¶ 74. The plaintiff claims that it
"reasonably relied on one or more of the false statements and
omissions. Id. ¶ 75.
Burlington moves for summary judgment on its claims against
Okie Dokie and C.J. Thomas.*fn1 C.J. Thomas cross-moves for
summary judgment on the negligent misrepresentation claim. The
court now turns to these motions. III. ANALYSIS
A. Legal Standard for a Motion for Summary Judgment
Summary judgment is appropriate when "the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law." FED. R. CIV. P.
56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986); Diamond v. Atwood, 43 F.3d 1538, 1540 (D.C. Cir. 1995).
To determine which facts are "material," a court must look to the
substantive law on which each claim rests. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). A "genuine issue" is one
whose resolution could establish an element of a claim or defense
and, therefore, affect the outcome of the action. Celotex,
477 U.S. at 322; Anderson, 477 U.S. at 248.
In ruling on a motion for summary judgment, the court must draw
all justifiable inferences in the nonmoving party's favor and
accept the nonmoving party's evidence as true. Anderson,
477 U.S. at 255. A nonmoving party, however, must establish more than
"the mere existence of a scintilla of evidence" in support of its
position. Id. at 252. To prevail on a motion for summary
judgment, the moving party must show that the nonmoving party
"fail[ed] to make a showing sufficient to establish the existence
of an element essential to that party's case, and on which that
party will bear the burden of proof at trial." Celotex,
477 U.S. at 322. By pointing to the absence of evidence proffered by
the nonmoving party, a moving party may succeed on summary
In addition, the nonmoving party may not rely solely on
allegations or conclusory statements. Greene v. Dalton,
164 F.3d 671, 675 (D.C. Cir. 1999); Harding v. Gray, 9 F.3d 150, 154 (D.C. Cir. 1993). Rather, the nonmoving party must present
specific facts that would enable a reasonable jury to find in its
favor. Greene, 164 F.3d at 675. If the evidence "is merely
colorable, or is not significantly ...