Allstate Ins. Co. v. Mccolly Realtors, Inc.
| Decision Date | 31 October 2017 |
| Docket Number | NO. 2:16–cv–00142,2:16–cv–00142 |
| Citation | 296 F.Supp.3d 947 |
| Parties | ALLSTATE INSURANCE COMPANY, Plaintiff, v. MCCOLLY REALTORS, INC., Ruth Lockhart, and Rosemary Purnell, as administratrix of the Estate of Kennetha Purnell, deceased, Defendants. |
| Court | U.S. District Court — Northern District of Indiana |
Christine V. Anto, PHV, Erika S. Stamper, SmithAmundsen LLC, Chicago, IL, for Plaintiff.
Ernest Summers, III, Faegre Baker Daniels LLP, Chicago, IL, Paula E. Neff, Lucas Holcomb & Medrea LLP, Merrillville, IN, for Defendants.
This matter is before the Court on Allstate Insurance Company's ("Allstate") Motion for Summary Judgment, filed on April 7, 2017 (DE # 26), and Cross Motion for Summary Judgment by McColly Realtors, Inc. and Ruth Lockhart filed on May 19, 2017 (DE # 30). For the reasons set forth below, Allstate's motion for summary judgment (DE # 26) is GRANTED. Defendants' cross motion for summary judgment (DE # 30) is DENIED. The Clerk of the Court is DIRECTED to enter a DECLARATORY JUDGMENT in favor of Allstate declaring that under insurance policy number 648550390, Allstate has no duty to defend or indemnify McColly Realtors, Inc. and/or Ruth Lockhart against claims asserted by Rosemary Purnell in case number 45D01–1503–CT–50 in Lake Superior Court.
On October 12, 2013, Kennetha Purnell ("Kennetha"), her husband and two children died when carbon monoxide gas infiltrated the home they were leasing from a generator operating in the garage. Kennetha's mother, Rosemary Purnell ("Purnell"), filed a wrongful death suit against the homeowner. Purnell later amended her complaint ("Underlying Complaint") to include a wrongful death claim against McColly Realtors, Inc. and Ruth Lockhart (together, "Defendants"), asserting that the homeowner had contracted with Defendants for the purpose of leasing the home.
Defendants requested that Allstate defend and indemnify them against the Underlying Complaint pursuant to an Allstate insurance policy held by McColly Realtors, Inc. ("McColly"). Allstate agreed to defend the Defendants under a reservation of rights, and filed the instant declaratory judgment action against Defendants and Purnell.1 Allstate now moves for summary judgment, asking the Court to find that the insurance policy does not provide coverage for the claim in the Underlying Complaint, and that Allstate has no duty to defend or indemnify the Defendants in that action. The Defendants oppose this motion and filed a cross motion for summary judgment. The motions have been fully briefed and are ripe for adjudication.
Summary judgment must be granted when "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A genuine dispute of material fact exists when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed. 2d 202 (1986). Not every dispute between the parties makes summary judgment inappropriate; "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Id. In determining whether summary judgment is appropriate, the court must construe all facts in the light most favorable to the nonmoving party and draw all reasonable inferences in that party's favor. Ogden v. Atterholt , 606 F.3d 355, 358 (7th Cir. 2010). "However, our favor toward the nonmoving party does not extend to drawing inferences that are supported by only speculation or conjecture." Fitzgerald v. Santoro , 707 F.3d 725, 730 (7th Cir. 2013) (citation omitted).
While the movant bears the initial burden of production to inform the district court why a trial is not necessary, these requirements "are not onerous" where the nonmoving party "bears the ultimate burden of persuasion on a particular issue." Modrowski v. Pigatto , 712 F.3d 1166, 1168 (7th Cir. 2013). A party may move for summary judgment based on either "affirmative evidence that negates an essential element of the nonmoving party's claim" or by "asserting that the nonmoving party's evidence [is] insufficient to establish an essential element of the nonmoving party's claim." Id. at 1169 (citation and internal quotations omitted). A party opposing a properly supported summary judgment motion may not rely on allegations or denials in his own pleading, but rather, must "marshal and present the court with the evidence [he] contends will prove [his] case." Goodman v. Nat'l Sec. Agency, Inc., 621 F.3d 651, 654 (7th Cir. 2010). If the nonmoving party fails to establish the existence of an essential element on which he bears the burden of proof at trial, summary judgment is proper. Massey v. Johnson , 457 F.3d 711, 716 (7th Cir. 2006).
"Interpretation of a written contract, including a contract of insurance, typically presents a question of law suitable for resolution on motions for summary judgment." Royer v. USAA Cas. Ins. Co., 781 F.Supp.2d 767, 770 (N.D. Ind. 2011) (citation omitted). "When the question presented is whether an insurance policy provides liability coverage for a particular claim or lawsuit, the central material facts are ordinarily the terms of the written contract and the contents of the plaintiff's allegations in the underlying litigation." Id. (citation omitted).
The Court finds the following undisputed facts to be supported by admissible evidence in the record:2
The Underlying Complaint
Purnell, as administratrix of Kennetha's estate, filed a lawsuit against Madeline Chale ("Chale") in Lake County Superior Court entitled Purnell v. Chale , No. 45D01–1503–CT–50 ("Underlying Lawsuit"). Purnell's Second Amended Complaint ("Underlying Complaint") asserts claims against Chale and Defendants. The Underlying Complaint alleges that Chale was the owner of premises located in Merrillville, Indiana ("premises" or "property"). Count I alleges that as of October 1, 2013, Kennetha leased the property from Chale, and that Chale owed a duty to follow applicable law in leasing the premises, and a duty to warn of latent or concealed dangers, to the residents of the premises. It alleges that Chale negligently and/or recklessly failed to register the premises as a rental as required by law, thereby causing the premises to be leased without proper inspection. According to the Underlying Complaint, an inspection would have revealed that the property was not fit for habitation, including insufficient barrier protection against infiltration of harmful gases from the garage to the living quarters of the premises. Count I alleges that Chale's violation of law, failure to warn and/or concealment of a latent and dangerous condition wrongfully caused the deaths of Kennetha, her husband and two minor children (together, "Kennetha's family") on October 12, 2013, when carbon monoxide infiltrated the living quarters of the premises from a generator operating in the garage.
Count II asserts a similar wrongful death claim against McColly and Ruth Lockhart ("Lockhart"), who was allegedly working in her capacity as an agent and/or employee of McColly. (DE # 1–1, Ex. A at ¶ 13.) Count II states in part:
Count II alleges that Defendants' violation of law, failure to warn, and/or concealment of a latent and dangerous condition wrongfully caused the deaths of Kennetha's family.
Allstate issued Commercial Package Policy number 648550390 to McColly effective December 15, 2012 to December 15, 2013 ("Policy"). The Policy includes commercial general liability ("CGL") bodily injury and property damage coverage ("Coverage A"). Coverage A states in part:
We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "bodily injury" or "property damage" to which this insurance does not apply....
(DE # 1–1 at 101.) Coverage A only applies if "[t]he ‘bodily injury’ or ‘property damage’ is caused by an ‘occurrence’...." (Id. ) The Policy defines "occurrence" as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions." (Id. at 114.) The term "bodily injury" is defined as "bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time." (Id. at 113.) The term "suit" is defined as "a civil proceeding in which damages because of ‘bodily injury,’ ‘property damage’ or ‘personal and advertising injury’ to which this insurance applies are alleged." (Id. at 115.)
The Policy includes personal and advertising injury liability coverage ("Coverage B"), which states in part:
We will pay those sums that the insured becomes legally...
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