United States District Court, D. Arizona
A. Teilborg Senior United States District Judge
26, 2017, Plaintiffs and Defendant Vahik Alaverdyan and
Quantum Transportation L.P. (“Quantum”) agreed to
enter into a stipulated judgment against these two
Defendants. (Doc. 42). The proposed stipulated judgment does
not mention defendants Jane Doe Alaverdyan (Vahik
Alaverdyan's wife) or Dole Fresh Fruit Company
(“Dole”). However the stipulation itself says
pursuant to an agreement of the “parties, ” and
the judgment does not contain language pursuant to Federal
Rule of Civil Procedure 54(b), so presumably this judgment
would resolve the whole case, with no judgment being entered
against either Mrs. Alaverdyan or Dole.
their stipulation, the parties acknowledged that they were
entering into a “Damron Agreement.” (Doc. 42).
The Court inquired whether it had any duty to investigation
the reasonableness of the amount of the stipulated judgment
(in this case $25, 000, 000.00) before entering the judgment.
Damron v. Morris Agreements
Defendant Quantum, and Defendant Vahik Alaverdyan (“the
settling parties”) responded to the Court's inquiry
and argued that when the parties enter into a Damron
Agreement, the Court does not conduct a reasonableness
inquiry. (Doc. 48 at 4-6). Conversely, the settling parties
concede that when the parties enter into a Morris Agreement,
the Court does have a duty to conduct a reasonableness
inquiry. (Doc. 48 at 4-6). The settling parties further noted
that a Damron Agreement is used when the insurance company
has refused to defend, and a Morris Agreement is used when
the insurance company is defending under a reservation of
rights. (Doc. 48 at 4-6).
responded to the Court's inquiry by stating that it is
not a party to the Damron Agreement. (Doc. 49). Further Dole
argued that neither defense of this action, nor a request for
indemnification, have been tendered to Dole. (Doc. 49).
Finally, citing nothing, Dole stated that a reasonableness
hearing on the Damron agreement would be required in this
case, but then went on to explain why a reasonableness
hearing is required between an indemnitor and indemnitee.
(Doc. 49 at 2).
response to the Court's inquiry, two insurance companies
moved to intervene: Greenwich Insurance Company and XL
Specialty Insurance Company (hereinafter
“intervenors”). (Docs. 46 and 47). The
intervenors made several arguments in opposition to the Court
entering the stipulated judgment.
first argument made by intervenors is that they had no duty
to defend. (Doc. 47 at 3). The Court finds that issue is the
subject of another case (CV 17-2270) and not relevant to
whether the stipulated judgment may be entered in this
case. Specifically, the Court rejects the
intervenor's argument that this Court must find a duty to
defend on the part of a non-party insurance company before
the Court ever enters a judgment pursuant to a Damron
intervenors argue that defense of this action was never
tendered to them. (Doc. 47-2 at 6). In response, the settling
parties provided a copy of a June 15, 2016 letter from
counsel for Quantum and Mr. Alaverdyan tendering the defense
of this case to intervenors. (Doc. 55-2 at 2-3). Intervenors
reply to this evidence by claiming that that XL never
received the letter. (Doc. 56 at 9).
settling parties also provided a copy of a November 14, 2016
letter counsel for Hallmark sent to XL formally tendering
defense of this case to Greenwich. (Doc. 55-3 at 2-3). While
intervenors admit to receiving this letter, they argue it
should not “count” as a tender because it was not
sent by counsel for Quantum or Mr. Alaverdyan. (Doc. 56 at
9-10). However, in responding to the November 14, 2016
letter, intervenors' claims specialist said, “XL
Catlin, on behalf of Greenwich Insurance Company,
acknowledges receipt of the attached letter … wherein
you tender defense and indemnity on behalf of Quantum
Transportation… for the case styled Yves Geurden,
et al., v. Quantum Transportation, et al.” (Doc.
55-4 at 2).
Court finds that Quantum's insurance company, Hallmark,
could and did tender defense of this case on Quantum's
behalf; and, moreover, intervenors accepted such letter as
formal tender of defense and indemnity. Accordingly, the
Court finds that defense of this case was tendered to
intervenors. Further, the Court finds that either by the June
15, 2016 letter, or by the November 14, 2016 letter, Mr.
Alaverdyan tendered defense and indemnity to intervenors.
Specifically, on March 9, 2017, intervenors wrote Mr.
Alaverdyan a seven page single spaced letter denying
coverage. (Doc. 54-1). While that letter disputes formal
tender, clearly intervenors were on notice of the claim and
the current lawsuit and knew that Mr. Alaverdyan sought
coverage under intervenors' policy. Thus, intervenors
argument that they did not received the June 15, 2016 letter,