AMCO Ins. Co. v. Columbia Maint. Co.

• Decision Date: 31 December 2020
• Docket Number: Case No. 4:19-cv-02202-SRC
• Citation: 510 F.Supp.3d 836
• Parties: AMCO INSURANCE COMPANY, and Depositors Insurance Company, Plaintiffs, v. COLUMBIA MAINTENANCE COMPANY, et al., Defendants.
• Court: U.S. District Court — Eastern District of Missouri

510 F.Supp.3d 836

AMCO INSURANCE COMPANY, and Depositors Insurance Company, Plaintiffs,

v.COLUMBIA MAINTENANCE COMPANY, et al., Defendants.

Case No. 4:19-cv-02202-SRC

United States District Court, E.D. Missouri, Eastern Division.

Signed December 31, 2020

John D. Cooney, Russell F. Watters, Brown and James PC, St. Louis, MO, for Plaintiffs.

James R. Wyrsch, Khazaeli and Wyrsch LLC, St. Louis, MO, for Defendants Columbia Maintenance Company, MK Maintenance, LLC, William Hausman.

Gretchen Myers, Law Offices of Gretchen Myers PC, John J. Greffet, Jr., Brown and James PC, St. Louis, MO, for Defendants Harold Barnett, Charles Taylor.

Memorandum and Order

STEPHEN R. CLARK, UNITED STATES DISTRICT JUDGE

This matter comes before the Court on several pending motions. Defendants Charles Taylor and Harold Barnett filed renewed motions to stay or dismiss the case under the Brillhart/Wilton abstention doctrine. Doc. 53. Subject to the Court's ruling on the motion to dismiss or stay, Plaintiffs and Defendants have filed cross motions for summary judgment. Docs. 38, 61. And, Plaintiffs move to exclude the testimony and opinions of Defendants’ expert. Doc. 59.

I. Facts and background

This declaratory judgment action arises from an insurance coverage dispute the plaintiff insurance companies filed against various defendants. Taylor and Barnett are former employees of Columbia Maintenance Company. William Hausman is Columbia Maintenance Company's sole owner.¹ Prior to the filing of this action, Taylor and Barnett initiated separate employment discrimination lawsuits in state court against Hausman, Columbia Maintenance, and MK Maintenance, LLC, another entity owned by Hausman (collectively, the "Columbia Defendants"). Barnett's suit alleged that Hausman fired him because of his race. Barnett v. Columbia Maintenance Co., et al. , Case No. 15SL-CC04351 (21st Judicial Circuit, St. Louis County Court.). Taylor's suit alleged that Hausman fired him in retaliation for his complaints about Hausman's racially-discriminatory behavior and comments. Taylor v Columbia Maintenance Co., et al. , Case No. 16SL-CC00217 (21st Judicial Circuit, St. Louis County Court).

Plaintiffs AMCO Insurance Company and Depositors Insurance Company both issued policies of insurance to Columbia Maintenance. The Columbia Defendants tendered both state court actions to AMCO and Depositors, demanding that AMCO and Depositors defend and indemnify them under the insurance policies. AMCO and Depositors responded by disclaiming coverage for or duty to defend the Columbia Defendants in the state court actions.

AMCO and Depositors then filed the instant action pursuant to 28 U.S.C. § 2201, seeking a declaration that they do not owe a duty to indemnify or defend the Columbia Defendants under the insurance policies.

A. Insurance policies

As noted above, two insurance policies are at issue in this case. Depositors issued to Columbia Maintenance a Commercial General Liability insurance policy (the "Depositors CGL Policy"). AMCO issued to Columbia Maintenance a Commercial Umbrella Liability insurance policy (the "AMCO Umbrella Policy"). The parties do not dispute that Hausman and Columbia Maintenance are "insureds" under the policies. Further, the parties do not dispute that Hausman and Columbia Maintenance fulfilled all of their obligations under the insurance policies, including payment of premiums, or that the acts alleged in Taylor and Barnett's state court petitions occurred during the policy period. Instead, Defendants contend that the AMCO Umbrella Policy is ambiguous because it appears to grant coverage with one provision but take it away with another. The Court therefore quotes at length the applicable policy provisions.

1. Depositors CGL Policy

Subject to certain exclusions, the Depositors CGL Policy provides insurance coverage for "bodily injury," "property damage," and "personal and advertising injury." In relevant part, the policy provides:

COVERAGE A – BODILY INJURY AND PROPERTY DAMAGE LIABILITY

1. Insuring Agreement

a. 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. We may at our discretion investigate any offense and settle any claim or "suit" that may result.

...

b. This insurance applies to "bodily injury" and "property damage" only if:

(1) The "bodily injury" or "property damage" is caused by an "occurrence" that takes place in the "coverage territory";

(2) The "bodily injury" or "property damage" occurs during the policy period

...

COVERAGE B – PERSONAL AND ADVERTISING INJURY LIABILITY

1. Insuring Agreement

a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "personal and advertising injury" 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 to which this insurance does not apply. We may at our discretion investigate any offense and settle any claim or "suit" that may result.

b. This insurance applies to "personal and advertising injury" caused by an offense arising out of your business but only if the offense was committed in the "coverage territory" during the policy period.

Doc. 40-1. The Depositors CGL policy also includes an endorsement entitled "EMPLOYMENT-RELATED PRACTICES EXCLUSION." Doc. 40-2. This exclusion provides that the insurance policy "does not apply" to:

"Bodily injury" to:

(1) A person arising out of any:

(a) Refusal to employ that person;

(b) Termination of that person's employment; or

(c) Employment-related practices, policies, acts or omissions, such as coercion, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, discrimination or malicious prosecution directed at that person

...

"Personal and advertising injury" to:

(1) A person arising out of any:

(a) Refusal to employ that person;

(b) Termination of that person's employment; or

(c) Employment-related practices, policies, acts or omissions, such as coercion, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, discrimination or malicious prosecution directed at that person

Id. The Depositors CGL Policy includes definitions of pertinent terms. This section provides in pertinent part:

SECTION V – DEFINITIONS

...

3. "Bodily injury" means bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.

...

13. "Occurrence" means an accident, including continuous or repeated exposure to substantially the same harmful conditions.

14. "Personal and advertising injury" means injury, including consequential "bodily injury" arising out of one or more of the following offenses:

a. False arrest, detention or imprisonment;

b. Malicious prosecution;

c. The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies, committed by or on behalf of its owner, landlord, or lessor.

d. Oral or written publication, in any manner, of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services;

e. Oral or written publication, in any manner, of material that violates a person's right of privacy;

f. The use of another's advertising idea in your "advertisement"; or

g. Infringing upon another's copyright, trade dress or slogan in your "advertisement."

Doc. 40-1.

2. AMCO Umbrella Policy

The AMCO Umbrella Policy includes an "Umbrella Liability Insurance" provision, which provides in relevant part:

[W]e will pay on behalf of the "insured" damages the "insured" becomes legally obligated to pay by reason of liability imposed by law because of "bodily injury", "property damage", or "personal and advertising injury" covered by this insurance which takes place during the Policy Period and is caused by an "occurrence".

...

8. This insurance applies to "bodily injury" and "property damage" only if:

a. The "bodily injury" or "property damage" is caused by an "occurrence" that takes place in the "coverage territory"

Doc. 40-3. The AMCO Umbrella Policy includes an "Employment-related practices" exclusion that is substantively identical to the Depositors CGL Policy exclusion. Id. The AMCO Umbrella Policy exclusion provides in relevant part:

[T]his insurance does not apply to:

...

"[B]odily injury" or "personal and advertising injury" to:

a. A person arising out of any:

1) Refusal to employ that person;

2) Termination of that person's employment; or

3) Employment-related practices policies, acts or omissions, such as coercion, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, discrimination or malicious prosecution directed at that person

Id. The AMCO Umbrella Policy also includes the following pertinent definitions:

"Occurrence" means an accident, including continuous or repeated exposure to substantially the same general harmful conditions.

"Bodily injury" means physical injury, sickness or disease to a person and, if arising out of the foregoing, mental anguish, mental injury, shock or humiliation, including death at any time resulting therefrom.

"Personal and advertising injury" means injury, including consequential "bodily injury", arising out of one or more of the following offenses committed in the course of your business:

a. False arrest, detention or imprisonment;

b. Malicious prosecution;

c. The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies, committed by or on behalf of its owner, landlord, or

...