Certain Underwriters at Lloyd's London Subscribing to Policy No. CPG 1239 v. Bunker Hill View Guest House, Inc.
Docket: Civil Nos. 2008-26; 2008-27
Court: District Court, Virgin Islands; December 30, 2008; Federal District Court
The plaintiff, Certain Underwriters at Lloyd’s London, seeks summary judgment against Bunker Hill View Guest House, Inc. regarding a liability insurance policy (No. CPG 1239) effective from March 11, 2006, to March 11, 2007, which provides coverage of up to $300,000 per occurrence. Lloyd’s claims that the policy excludes coverage for incidents that have arisen in underlying lawsuits filed by former guests Daren Stevens and Caroley Brunn, who allege Bunker Hill’s negligence in allowing an individual, Joel Dowdye, access to the guest house. Dowdye is accused of fatally shooting Sherett James and injuring Stevens. Lloyd’s seeks a court declaration that the policy does not cover these incidents and has moved for summary judgment, following Bunker Hill’s opposition and Lloyd’s reply.
The court outlines the standard for summary judgment, emphasizing that it is appropriate when there are no genuine material facts in dispute, shifting the burden to the non-moving party to demonstrate specific facts that warrant a trial. Additionally, the court will interpret insurance policy provisions as a matter of law, ensuring that the entire context of the policy is considered, aiming to avoid ambiguities in its language.
Insurance policies must be interpreted based on their plain language when unambiguous, using the understanding of an ordinary person as the standard. Any ambiguities are construed against the insurer in favor of coverage. Lloyd’s claims that a specific policy exclusion bars coverage for allegations in the Underlying Cases, which include claims related to assault and battery. The exclusion states that the insurance does not cover: assaults or batteries regardless of intent, physical altercations, or failures to prevent such incidents, regardless of who caused them. It also excludes damages stemming from related claims, including emotional distress and negligent hiring or supervision.
The court's analysis will focus on the factual allegations in the Underlying Cases, which assert that Bunker Hill was negligent in allowing a person (Dowdye) access to a guest house where he subsequently shot two individuals. The complaints suggest that Bunker Hill's actions led to the assault and battery. The policy’s exclusion clearly denies coverage for any claims arising from acts or omissions related to assault and battery. While no Virgin Islands case law specifically addresses such exclusions in the context of negligent acts leading to assault and battery, similar exclusions in other jurisdictions have been interpreted to deny coverage for negligence claims linked to assaults.
In United Nat’l Ins. Co. v. Entertainment Group, Inc., 945 F.2d 210 (7th Cir. 1991), a female teenager sued a theater owner after being sexually assaulted during a movie, claiming negligence. The theater’s insurance policy excluded coverage for claims stemming from assault and battery. The district court granted summary judgment for the insurer, rejecting the theater's argument that the negligence claim should warrant coverage. The Seventh Circuit affirmed, asserting that the injuries arose from an assault, and thus the exclusion applied, even if the claim was framed as negligence.
Similarly, in Winnacunnet Co-op. Sch. Dist. v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 84 F.3d 632 (1st Cir. 1996), a school sought coverage for negligent supervision claims related to a teacher's conspiracy to commit murder. The First Circuit determined that the claims arose from the excluded violent act, as the damages were linked to the murder. The court emphasized that exclusions for assault claims also bar coverage for negligent acts allowing such assaults.
In Essex Ins. Co. v. Michigan Skatelands, 1994 U.S. App. LEXIS 30776 (6th Cir.), an insurance policy explicitly excluded claims related to assault and battery. The Sixth Circuit ruled that the underlying claims, despite being labeled as breach of contract and negligence, were tied to tortious conduct and thus fell outside coverage due to the clear policy exclusion.
The Underlying Cases do not present a valid negligence claim separate from the assault and battery perpetrated by Dowdye, as all injuries claimed by the Underlying Plaintiffs stem directly from this attack. The Plaintiffs' negligence claims are contingent upon establishing injuries resulting from the assault; thus, these claims "arise out of" acts excluded by the insurance policy. The Court finds that Lloyd's has sufficiently demonstrated the absence of material fact issues, shifting the burden to Bunker Hill to provide evidence of such issues. Bunker Hill contends that the cases cited by Lloyd's are not applicable, arguing that the Underlying Cases do not claim negligence in preventing the assault. However, the Court rejects Bunker Hill's invitation to disregard the exclusion based on the lack of explicit allegations in the complaints, emphasizing that the policy's broad exclusion language encompasses negligence claims linked to the assault, regardless of how they are framed. Bunker Hill also argues that claims of negligent supervision or information provision are conceptually separate from negligence in preventing an attack, citing an unpublished Kentucky case. Nonetheless, the Court finds no ambiguity in the policy's exclusion language, which distinctly prevents coverage for all claims related to the assault and battery. Bunker Hill's narrow focus on a specific exclusion subsection disregards the comprehensive language of the policy. The Court reiterates that an insurance policy should be interpreted in its entirety.
The Court concludes that there are no material facts in dispute, granting Lloyd’s judgment as a matter of law. The motion is approved, and a judgment will follow. The cases were consolidated on May 2, 2008. According to Local Rule of Civil Procedure 56.1(b), any party opposing a motion has 20 days to respond with relevant documentation, addressing the facts presented by the movant and indicating whether they are disputed or undisputed. Bunker Hill's opposition is deemed non-compliant with this rule, as it does not follow Lloyd’s serial numbering or clarify the status of the facts presented. Furthermore, Title 22, Section 846 of the Virgin Islands Code mandates that insurance contracts be interpreted in full, including any attached modifications, with a specific exclusion for claims related to assault or battery.
