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AIX Specialty Insurance Co. v. Sombreros, LLC

United States District Court, M.D. Florida, Tampa Division

April 5, 2018

AIX SPECIALTY INSURANCE COMPANY, Plaintiff,
v.
SOMBREROS, LLC, et al., Defendants.

          ORDER

          RICHARD A. LAZZARA, UNITED STATES DISTRICT JUDGE

         BEFORE THE COURT is Plaintiff's Motion for Final Summary Judgment, Statement of Undisputed Facts, affidavits, depositions, and other submissions (Dkts. 91-95), Defendants Sharicka A. Adams and Joelle W. Numan's Memorandum in Opposition and their Statement of Disputed Facts (Dkts. 98 and 99), Defendants Sombreros, LLC, Ashland 2 Partners, LLC, Michael Plechy and David Scalisi's Memorandum in Opposition and their Statement of Disputed Facts (Dkts. 100 and 101), Defendants Cedric Lamarr Booth, Sr., Timeka McCullough, Quinteria Cherise Crumedy, Felicia Yvette Brown, and Cierra Latrell Jones' Memorandum in Opposition and their Statement of Disputed Facts and other submissions (Dkt. 102-104), and Plaintiff's Reply (Dkt. 107).[1]After careful consideration of the motion, the submissions of the parties, and the applicable law, the Court concludes the motion is due to be granted as to both the duty to defend and indemnify.

         BACKGROUND

         Plaintiff, as the commercial liability insurers of Defendants Sombreros, LLC, Ashland 2 Partners, LLC, Michael Plechy, and David Scalisi (the owners), seeks a declaration that it has no duty to defend or indemnify with respect to an incident at The Hall, a nightclub in Palmetto, Florida. David Scalisi was present that night at the bar, as well as the sixteen other named individual Defendants.[2] Three of these patrons were shot with a gun, and the others were trampled in the confusion that ensued. All of the patrons have either filed actions in state court or, if not, have filed pre-suit notices.

         The state-court action filed by Cedric Lamarr Booth, Sr., a shooting victim, alleges that on July 1, 2016, “an unknown patron of The Hall nightclub . . . fired gun shots inside The Hall nightclub as patrons were exiting for the night.” See docket 94-2, page 2, ¶¶ 9-10. He alleges that when he attempted to leave The Hall, he was shot by the unknown patron. See docket 94-2, page 2, ¶ 11.[3] Booth seeks damages for personal injuries based on the negligence of the owner for undertaking various duties to provide adequate protocols and training for sufficient security and for breaching those duties by failing to warn of the dangerous condition, failing to provide proper lighting, and failing to hire, retain, and train enough security personnel to provide a safe venue for patrons. Two other patrons were shot that night, Novell Chestnut and Otis Johnson, but they have not filed suit yet. See docket 94-3, page 2, ¶ 7.

         The state-court complaints of Sharicka Adams and Joelle Numan, Brittany McCullough, and Alfred Morgan seek damages for personal injuries suffered at The Hall in the aftermath, relying on basically the same theories of negligence as Booth. The complaint filed by Sharicka Adams and Joelle Numan alleges that “on or about July 2, 2016, gunshots were fired inside the subject premises, The Hall, which resulted in club patrons panicking and running around inside the premises.” See docket 94-2, page 8, ¶ 5. “[A] a result of the incident described in this Complaint, [Adams and Numan were] knocked down and trampled by other patrons, business invitees, and/or guests of The Hall.” See docket 94-2, pages 10 & 11, ¶¶ 11 & 15). Brittany McCullough's complaint alleges that on July 2, 2016, she “was severely injured as a result of being knocked down and trampled by club patrons who panicked after gun shots were fired inside The Hall.” See docket 94-2, page 14, ¶ 8. Alfred Morgan's complaint simply alleges that he “was trampled and sustained numerous serious injuries” while at The Hall on July 1, 2016. See docket 94-2, page 17, ¶ 6.[4]

         Plaintiff is providing the insureds a defense in the underlying actions and the pre-suit notice matters subject to a reservation of rights. See docket 25, ¶ 36. It now requests a determination of no coverage, and therefore no duty to defend or indemnify, under the operative commercial general liability based on two policy exclusions: assault and battery and firearms. The insureds and the patrons contest such a finding and argue that the terms of both exclusions are ambiguous. The insureds also contend there are disputed, material facts.

         LEGAL STANDARD

         Summary judgment is properly granted where there is no genuine dispute regarding a material fact. Fed. R. Civ. P. 56(a). The court must review the record, and all of its factual inferences, in the light most favorable to the nonmoving party. See United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962). Summary judgment is a particularly appropriate vehicle to determine insurance coverage because the interpretation of a written contract is a question of law for the court. See Technical Coating Applicators, Inc. v. U.S. Fid. & Guar., Co., 157 F.3d 843 (11th Cir. Cir. 1998); DEC Elec., Inc. v. Raphael Constr. Corp., 558 So.2d 427, 428 (Fla. 1990).

         Sitting in this diversity case, the substantive law of Florida, as the forum state, applies. Sphinx Int'l, Inc. v. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa., 412 F.3d 1224, 1227 (11th Cir. 2005). A declaratory judgment is an appropriate method for the court to determine coverage issues, including the duty to defend or indemnify. Higgins v. State Farm Fire & Cas. Co., 894 So.2d 5, 9 (Fla. 2004). A contract ambiguity is a question of law to be decided by the court. Gulf Tampa Drydock Co. v. Great Atl. Ins. Co., 757 F.2d 1172, 1174 (11th Cir. 1985) (citing Smith v. State Farm Mut. Auto. Ins. Co., 231 So.2d 193, 194 (Fla. 1970)).

         DUTY TO DEFEND

         Under Florida law, the duty to defend is generally determined from the allegations of the complaints of the underlying cases. Addison Ins. Co. v. 4000 Island Boulevard Condo. Ass'n, Inc., 2017 WL 6616690, at *6 (11th Cir. Dec. 28, 2017) (unpublished) (citing Stephens v. Mid-Continent Cas. Co., 749 F.3d 1318 (11th Cir. 2014), and discussing Jones v. Fla. Ins. Guar. Ass'n, Inc., 908 So.2d 435 (Fla. 2005) and Higgins); Meridian Constr. & Dev., LLC v. Admiral Ins. Co., 105 F.Supp.3d 1331, 1338 (M.D. Fla. 2013) (citing Wellcare of Fla., Inc. v. Am. Int'l Specialty Lines Ins. Co., 16 So.3d 904, 906 (Fla.Dist.Ct.App. 2009), but noting exceptions may exist). The complaint triggers the duty when its allegations assert facts that could bring the injury within coverage. Attain Specialty Ins. Co. v. Miami Drywall & Stucco, Inc., 2012 WL 3043002, at *2 (S.D. Fla. Jul. 25, 2012) (citing State Farm Fire & Cas. Co. v. Steinberg, 393 F.3d 1226, 1230 (11th Cir. 2004), which cites Florida law). A duty to defend the entire suit arises even if the complaint alleges facts “partially within and partially outside the scope of coverage.” Auto-Owners Ins. Co. v. Elite Homes, Inc., 676 F.App'x 951, 954 (11th Cir. 2017) (unpublished) (citation omitted); Trailer Bridge, Inc. v. Ill. Nat'l Ins. Co., 657 F.3d 1135, 1141-42 (11th Cir. 2011) (citation omitted). The duty to defend is broader than the duty to indemnify because the duty to indemnify is determined by the actual underlying facts as opposed to the allegations of the complaint. Selective Ins. Co. of the Southeast v. William P. White Racing Stables, Inc., __ F.App'x__, 2017 WL 6368843, at *2 (11th Cir. 2017) (unpublished) (citation omitted); RSUI Indemn. Co. v. Desai, 2014 WL 12621215, at *3 n.3 (M.D. Fla. 2014) (citing Jones, 908 So.2d at 442-43).

         Under the circumstances here, if Plaintiff is absolved of the duty to defend, there is no duty to indemnify either. See, e.g., RSUI Indemn. Co., (discussing considerations in determining whether to stay a separate count seeking to declare duty to indemnify); Tower Ins. Co. of N.Y. v. Lormejuste, 2012 WL 1986881, at *8 (N.D. Fla. 2012) (citing WellCare of Fla., Inc.).[5] None of the parties contest that both duties should be resolved at this time. Although the parties disagree that material facts are in dispute, this Court will examine whether those disputed facts are truly material in view of the allegations of the complaint and the language of the policy.[6] The parties agree that a shooting took place on July 2, 2016, at The Hall, and patrons were either shot or injured. They do not agree whether the gun shots or trampling was the proximate, legal cause of their injuries.

         ANALYSIS

         Defendants oppose the application of the two policy exclusions on the basis that both are ambiguous. They also contend that there are genuine issues of material fact including whether the discharge of the firearm or an assault or battery was the proximate cause of the injuries to the patrons and whether the injury to the patrons was caused from trampling and/or directly or indirectly from the discharge of the firearm. Defendants argue that even if the firearm or assault and battery provision applies to exclude coverage of some claims, there should be coverage for the other non-related claims alleged in their complaints. The patrons contend such non-related claims include negligence in failing to properly hire or train security, maintain the premises to avoid entry of a gun, and provide a reasonably safe environment.

         Assault and ...


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