Late notice shields Nautilus Insurance from shooting victim’s suit

A nightclub waitress who was shot when armed gunmen entered the premises and began shooting at patrons and employees cannot recover from Nautilus Insurance Co., the insurer for the club’s security firm, because of a late notice, says a federal appeals court in upholding a lower court ruling.

Irma Miranda-Mondragon, who was shot in the chest and required significant medical treatments for her injuries, originally filed suit against the nightclub’s operators but later amended her complaint to include Houston Star Security Patrol as a co-defendant, according to Friday’s ruling by the 5th U.S. Circuit Court of Appeals in New Orleans in Nautilus Insurance Co. v. Irma Miranda-Mondragon. Houston Star has never made an appearance in the case.

In June 2016, a state court granted Ms. Miranda-Mondragon’s motion for default judgment against Houston Star. Six weeks later, her attorney sent a letter to Scottsdale, Arizona-based Nautilus containing the judgment.

Nautilus filed a declaratory judgment in U.S. District Court in Houston seeking a determination it owed no duty to defend or indemnify Houston Star.

The District Court ruled in Nautilus’ favor on the basis the insurer had not received notice of the initial lawsuit until more than 40 days after the state court entered a default judgment against Houston Star.

The ruling was unanimously affirmed by a three-judge appeals court panel. While Ms. Miranda-Mondragon contends there are genuine issues of fact, “there is no actual dispute, though, that Nautilus first received notice of the lawsuit when counsel sent a letter to Nautilus over 40 days after the state court entered default judgment against Houston Star,” said the ruling, which said the notice of the lawsuit was sent 41 days later.

“The delayed notice prejudiced Nautilus as a matter of law and relieved Nautilus of liability under the policy,” said the ruling, in affirming the lower court’s decision.