The opinion of the court was delivered by: James M. Moody United States District Judge
Pending is Defendant's motion for summary judgment. (Docket # 119). Plaintiffs have responded. For the following reasons Defendant's motion is denied.
Plaintiff, Fireman's Fund Insurance Company, later succeeded by Medical Liability Mutual Insurance Company, issued two insurance policies to Defendant for liability in the operations of Defendant's nursing home, Crestpark Retirement Inn of Marianna ("Crestpark"), with effective dates of January 15, 2000 to January 15, 2001 ("Policies"). On May 27, 2003 Carl Bibbs, as administrator of the Estate of Idella Thompson, deceased, filed suit against the nursing home in the Circuit Court of Lee County, Arkansas alleging negligence, breach of contract and violations of the Arkansas Long Term Care Residents Rights Act. Ms. Thompson's residence at Crestpark began on February 3, 2000 and ended on June 30, 2001. Therefore, as to Ms. Thompson's residence at Crestpark, coverage was in effect under the Policies from February 3, 2000 to January 15, 2001.
From January 15, 2001 to January 15, 2002, Defendant had in effect a policy issued by Lexington Insurance Company, however, Lexington denied coverage for this Nursing Home Suit pursuant to the claims-made coverage provision of its policy and Defendant did not dispute the denial of coverage.
Plaintiffs acknowledge that they have partial coverage of the Nursing Home Suit. Therefore, Plaintiffs assumed the defense of Defendant in the Nursing Home Suit, employed counsel and paid all costs associated with the defense. Plaintiffs requested that Defendant contribute to a settlement of the claims and when the Defendant refused, Plaintiffs funded the settlement completely. Plaintiffs now bring this action for reimbursement of some of the settlement amount paid asserting causes of action for reimbursement/contribution/indemnity; equitable subrogation, and quantum meruit/unjust enrichment. Defendant claims that it is entitled to judgment as a matter of law.
Standard for Summary Judgment
Summary judgment is appropriate only when there is no genuine issue of material fact, so that the dispute may be decided solely on legal grounds. Holloway v. Lockhart, 813 F.2d 874 (8th Cir. 1987); Fed. R. Civ. P. 56. The Supreme Court has established guidelines to assist trial courts in determining whether this standard has been met:
The inquiry is the threshold inquiry of determining whether there is a need for trial -- whether, in other words, there are genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.
The Eighth Circuit Court of Appeals has cautioned that summary judgment should be invoked carefully so that no person will be improperly deprived of a trial of disputed factual issues. Inland Oil & Transport Co. v. United States, 600 F.2d 725 (8th Cir. 1979), cert. denied, 444 U.S. 991 (1979). The Eighth Circuit set out the burden of the parties in connection with a summary judgment motion in Counts v. M.K. Ferguson Co., 862 F.2d 1338 (8th Cir. 1988):
[T]he burden on the moving party for summary judgment is only to demonstrate, i.e., '[to] point out to the District Court,' that the record does not disclose a genuine dispute on a material fact. It is enough for the movant to bring up the fact that the record does not contain such an issue and to identify that part of the record which bears out his assertion. Once this is done, his burden is discharged, and, if the record in fact bears out the claim that no genuine dispute exists on any material fact, it is then the respondent's burden to set forth affirmative evidence, specific facts, showing that there is a genuine dispute on that issue. If the respondent fails to carry that burden, summary judgment should be granted.
Id. at 1339. (quoting City of Mt. Pleasant v. Associated Elec. Coop., 838 F.2d 268, 273-274 (8th Cir. 1988) (citations omitted)(brackets in original)). Only disputes over facts that may affect the outcome of the suit under governing law will properly preclude the entry of summary judgment. Anderson, 477 U.S. at 248.
Defendant claims that the terms and conditions of the policies preclude recovery by Plaintiffs' first because the settlement was paid voluntarily and Evergreen was not legally obligated to pay any damages to the Estate of Idella Thompson and second because the policies do not provide an obligation on Defendant's part to pay a settlement covered under the policy. The Court finds that the settlement of the underlying Nursing Home Suit was not "voluntary" because Plaintiffs "faced a tremendous amount of exposure in the event the matter went to trial." Jean-Pierre, M.D. v. Plantation Homes, 350 Ark. 569, 89 S.W.3d 337 (2002) citing Carpetland of Northwest ...