United States District Court, District of Columbia
AMY BERMAN JACKSON, UNITED STATES DISTRICT JUDGE.
Plaintiff Nationwide Mutual Fire Insurance Company (“Nationwide”) has brought this lawsuit against defendant Almco, Limited (“Almco”), seeking a declaration pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201, that the insurance policy it issued to Almco is void because it was “procured as a result of a material misrepresentation.” Compl. [Dkt. # 1] ¶¶ 12, 17, 20-22, 24. Specifically, Nationwide alleges that Almco represented on its insurance application that it operated a delicatessen on the insured premises when in fact it operated a pool hall and nightclub, providing live entertainment and hosting private events where alcoholic beverages were sold. Id. ¶¶ 17, 20. Nationwide asks the Court to find that that it is relieved of any obligation to honor the insurance policy pursuant to D.C. Code § 31-4314, which provides that a false statement on an insurance application may bar the insured’s right to recovery if the “false statement was made with intent to deceive, ” or if “it materially affected either the acceptance of the risk or the hazard assumed by the company.” Id. ¶¶ 24-25; D.C. Code § 31-4314.
The parties have filed cross-motions for summary judgment. Mot. of Def. for Summ. J. [Dkt. # 72] (“Def.’s Mot.”); Mem. of P. & A. in Supp. of Def.’s Mot. [Dkt. # 72-1] (“Def.’s Mem.”); Pl.’s Cross-Mot. for Summ. J. [Dkt. # 74] (“Pl.’s Mot.”); Pl.’s Mem. of P. & A. [Dkt. # 74-1] (“Pl.’s Mem.”). Defendant Almco urges the Court to find as a matter of law that there was no intent to deceive and to enter judgment in its favor for that reason. Plaintiff Nationwide argues that Almco’s own admissions make clear that the answers on the application were false, and that since the false statements were material, it is entitled to the declaration it seeks, notwithstanding any evidence related to Almco’s intent. See D.C. Code § 31-4314 (“The falsity of a statement in the application for any policy of insurance shall not bar the right to recovery thereunder unless such false statement was made with intent to deceive or unless it materially affected either the acceptance of the risk or the hazard assumed by the company.”) (emphasis added).
It is not disputed that the insurance application contained false statements about the nature of Almco’s business. And because the Court concludes that there is no genuine dispute that the misrepresentations materially affected Nationwide’s acceptance of the risk or hazard in issuing the policy, Nationwide’s motion for summary judgment will be granted. A disco is not a deli, and the risks posed by the combination of billiards, booze, and entertainment are materially different from the hazards that could arise out of a corned beef on rye. In light of the materiality finding and the alternative nature of the statute, the Court need not reach the question of the existence of an intent to deceive. But even if defendant’s motion for summary judgment were not moot, it would fail because there is a genuine dispute of material fact on the question of Almco’s intent.
The following facts are undisputed, except where noted. Almco was formed by Regina Ruckman in the District of Columbia in May of 2011. Dep. of Regina Ruckman (June 9, 2015), Ex. 1 to Pl.’s Mot. [Dkt. # 74-2] (“Ruckman Dep.”) 18:13-15, 20:16-18. The plan was to eventually operate as a delicatessen, but the sandwich business was not underway at the start. Id. 20:13-15, 20:19-21.
Ruckman, acting as Almco’s principal, “was responsible for securing insurance coverage for Almco.” Declaration of Regina Ruckman, Ex. A to Def.’s Mot. [Dkt. # 72-3] (“Ruckman Decl.”) ¶ 2. From September 1, 2011 through September 1, 2012, the business was covered by a businessowner’s insurance policy provided by Travelers Casualty Insurance Company of America (“Travelers”). Id. ¶ 4; Ex. G to Def.’s Mot. [Dkt. # 72-3] (“Travelers Policy”). That policy was brokered by First Insurance Group, and it listed Almco as a “restaurant pac” in the business of “fast food.” Travelers Policy. Ruckman stated in a sworn declaration that during the period in which Almco was covered by the Travelers Policy, Almco “provided food service, had pool tables, offered live entertainment including DJs, served alcoholic beverages through vendors and caterers licensed to do so and had paid admissions and cover charges.” Ruckman Decl. ¶ 9. From the day it opened, it traded under the name “DC Soundstage.” Ruckman Dep. 40:10-13.
On August 28, 2012, Ruckman completed a cancellation request form to discontinue Almco’s coverage with Travelers, effective September 1, 2012. Ex. C to Def.’s Mot. [Dkt. # 72-3] (“Cancellation Request”). That document was also signed by Audrey Sample,  who was listed as the “producer, ” along with First Insurance Group. Id. Sample initially worked for First Insurance Group, but later was authorized to write insurance products for Nationwide through the Peter Michael Felix Insurance Agency. Dep. of Audrey Sample (June 25, 2015), Ex. 3 to Pl.’s Mot. [Dkt. # 74-4] (“Sample Dep.”) 10:6-13:13.
On August 31, 2012, Ruckman signed a commercial insurance application on behalf of Almco, seeking a “premier businessowners” policy with Nationwide. Ex. 2 to Compl. [Dkt. # 1-2] (“Insurance Appl.”); Ruckman Decl. ¶¶ 1-2. The application was prepared by Shelley Christine Hall of the Peter Michael Felix Insurance Agency, and it listed Audrey Sample as the “producer contact.” Insurance Appl. at 1-2. The Insurance Application described Almco’s business as a “deli, ” and it stated that Almco did not have a website, did not “serve or sell alcohol, ” and did not “have bouncers, DJs, live entertainment, pool tables . . . paid admissions, cover chargers or other similar exposures.” Id. at 2-3. It also represented that Almco did not have “any other exposures that have not been identified” in the application. Id. at 2. In signing the application, Ruckman certified that the answers were “true, correct and complete to the best of [her] knowledge.” Id. at 1; see also Ruckman Dep. 54:13-16 (“Question: Did you understand that when you signed, you were asserting that the information in the application was true? Answer: Yes.”). As of August 31, 2012, when Ruckman signed the application, Almco had yet to ever operate as a deli, and its business continued to involve billiards and alcohol. Ruckman Dep. 57:8-12, 45:22-46:17, 89:14- 18; Def.’s Statement of Genuine Issues of Material Fact Not in Dispute [Dkt. # 72-2] (“Def.’s SOF”) ¶ 7; Ruckman Decl. ¶¶ 12-13.
In January 2013, a shooting occurred on Almco’s business premises during a private event where alcohol was being served. Ruckman Dep. 10:22-25, 45:22-46:11. Several patrons were injured, and as a result, claims were presented against the Nationwide insurance policy. Id. 11:9- 15, 44:2-8; Compl. ¶ 15. Almco then “demanded that Nationwide afford it indemnification and a defense for all claims and causes of action arising out of” the January 2013 incident. Compl. ¶ 16. Since then, the company has ceased to do business. Ruckman Dep. 23:12-15.
Nationwide initiated this action on July 2, 2013, seeking a declaratory judgment that the insurance policy it issued to Almco “was procured as a result of a material misrepresentation by Almco Limited, and as a result, the said policy is void, thereby relieving Nationwide from any obligation to defend, indemnify or otherwise provide insurance coverage or benefits” to Almco pursuant to D.C. Code § 31-4314. Compl. ¶ 24. On September 22, 2015, Almco moved for summary judgment on the grounds that it did not intend to deceive Nationwide through its responses on the Insurance Application. Def.’s Mem. at 2, 4. On September 30, 2015, Nationwide opposed Almco’s motion, Pl.’s Resp. to Def.’s Mot. [Dkt. # 73] (“Pl.’s Opp.”), and it filed a separate cross-motion for summary judgment on the issue of whether the allegedly false statements on the application materially affected Nationwide’s decision to issue the insurance policy. Pl.’s Mot.; Pl.’s Mem. On October 11, 2015, Almco filed a combined reply in support of its motion and an opposition to Nationwide’s cross-motion. Opp. of Def. to Pl.’s Mot. [Dkt. # 75]; Mem. of P. & A. in Opp. to Pl.’s Mot. [Dkt. # 75-1] (“Def.’s Opp.”); see also Reply of Def. to Pl.’s Opp. & Opp. to Pl.’s Mot. [Dkt. # 76]. Nationwide did not file a reply in support of its cross-motion.
STANDARD OF REVIEW
Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The party seeking summary judgment “bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (internal quotation marks omitted). To defeat summary judgment, the non-moving party must “designate specific facts showing that there is a genuine issue for trial.” Id. at 324 (internal quotation marks omitted).
The mere existence of a factual dispute is insufficient to preclude summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). A dispute is “genuine” only if a reasonable fact-finder could find for the non-moving party; a fact is “material” only if it is capable of affecting the outcome of the litigation. Id. at 248; Laningham v. U.S. Navy, 813 F.2d 1236, 1241 (D.C. Cir. 1987). In assessing a party’s motion, the court must “view the facts and draw reasonable inferences ‘in the light most favorable to the party opposing the summary judgment motion.’” Scott v. Harris, 550 U.S. 372, 378 (2007) (alterations omitted), quoting United States v. Diebold, Inc., 369 U.S. 654, 655 (1962) (per curiam).
“The rule governing cross-motions for summary judgment . . . is that neither party waives the right to a full trial on the merits by filing its own motion; each side concedes that no material facts are at issue only for the purposes of its own motion.” Sherwood v. Wash. Post, 871 F.2d 1144, 1147 n.4 (D.C. Cir. 1989) (alteration in original), quoting McKenzie v. Sawyer, 684 F.2d 62, 68 n.3 (D.C. Cir. 1982). In assessing each party’s motion, “[a]ll underlying facts and inferences are analyzed in the light most favorable to ...