Canopius U.S. Ins., Inc. v. Keefe
| Decision Date | 14 February 2014 |
| Docket Number | Civil Action No.: 4:12-cv-3316-RBH |
| Court | U.S. District Court — District of South Carolina |
| Parties | Canopius US Insurance, Inc., Plaintiff, v. Frank Keefe and Ashley Griffin, Defendants. |
Plaintiff Canopius US Insurance, Inc. ("Canopius" or "Plaintiff") filed this declaratory judgment action on November 19, 2012 seeking a judicial determination of no coverage. See Compl., ECF No. 1. Canopius asserts that coverage is excluded pursuant to a "voluntary labor" exclusion included in the disputed policy. See Compl., ECF No. 1. Defendant Frank Keefe ("Keefe") answered and counterclaimed on January 14, 2013, asserting that either coverage is not excluded or estoppel bars the operation of the exclusion, and that Canopius therefore has a duty to defend and/or indemnify. See Ans. and Countercl., ECF No. 6. Default has been entered against Defendant Ashley Griffin ("Griffin"). See Clerk's Entry of Default, ECF No. 26.
This matter came before the Court on the motion for summary judgment of Canopius, filed on August 27, 2013, and the motion for summary judgment of Keefe, filed on September 25, 2013. See Pl.'s Mot., ECF No. 15; Def.'s Mot., ECF No. 16. A hearing was held before the undersigned on February 2, 2014. Present at the hearing were Paul D. Greene on behalf of Canopius, and Brown W. Johnson and H. Steven Deberry, IV on behalf of Keefe. For the reasons stated below, the Court grants in part and denies in part Canopius's motion for summary judgment, and denies Keefe's motion for summary judgment in its entirety.
This lawsuit arises out of a January 30, 2012 accident in which Keefe suffered injuries. Keefe is retired from logging and sawmill operations, having been in that business for 60 years. Dep. of Frank Keefe, ECF No. 15-6 at 6:12-7:9. Keefe has known Griffin since he was a boy, and Griffin has performed various jobs for Keefe over the years. Dep. of Ashley Griffin, ECF No. 15-7 at 5:24-6:18. When Griffin decided to start a tree service, Keefe advised him on how to get started. Id. at 41:10-14. Keefe assisted Griffin in passing along information about potential jobs, and Griffin would dump brush and logs on Keefe's land so Keefe could sell them or use them in his logging business. Id. at 9:1-21; Frank Keefe Aff., ECF No. 16-2 at ¶ 5. Both Griffin and Keefe described this dynamic as an ongoing business relationship. See ECF No. 15-7 at 9:20-21; Frank Keefe Aff., ECF No. 16-2 at ¶ 6.
Some time prior to the January 20, 2012 accident, Keefe learned of a tree cutting job in the Town of Pamplico. See ECF No. 16-2 at ¶ 8. Keefe mentioned Griffin to the contact, and also informed Griffin of the job. Id. Keefe knew that, in order to perform such a job within the limits of the Town of Pamplico, Griffin would need a business permit and liability insurance. Id. Therefore, Keefe took Griffin to the Ed Smith Agency, an agency with which Keefe had done business with before, to obtain the needed coverage. Id. at ¶ 9. Ultimately coverage was secured from Canopius. Keefe paid the initial premium on the policy and for the Town of Pamplico business permit. Id. at 12.
The policy issued to Griffin contained an exclusion entitled "EXCLUSION - VOLUNTARY LABOR." See ECF No. 15-4 at 22. This provision states that "[t]his insurance does not apply to 'bodily injury' . . . to any member, associate, affiliated member, or to any person or persons loaned toor volunteering services to you, whether or not paid by you, arising out of or in the course of work performed for you or on your behalf." Id. "Volunteering services" is not defined in the policy.
After obtaining the insurance policy and business license, Griffin began working on the job that Keefe had found. ECF No. 16-2 at ¶ 13. Keefe was present while this job was performed, and indicated that he believed Griffin's worker cut one of the trees incorrectly. Dep. of Frank Keefe, ECF No. 16-5 at 21:12-21; ECF No. 15-7 at 22:14-17. While Griffin was working on the first job, another homeowner approached Griffin about having some trees taken down. ECF No. 16-2 at ¶ 13. On January 30, 2012, Griffin began this second job, and Keefe again attended. See ECF No. 16-2 at ¶ 14; ECF No. 16-5 at 21:22-22:7. Keefe testified he was talking with the owner of the property, and told him that Griffin's worker, in Keefe's estimation, was not performing his role properly. Id. at 21:22-22:7. Keefe then spoke to the worker and asked if he could make the cut. Id. at 23:4-24:6. While the worker initially refused, Keefe told him "no, let me do it" and took control of the chainsaw. Id. Keefe made the cuts to the tree while Griffin's worker attached a cable, which was itself attached to a backhoe driven by Griffin. ECF No. 15-7 at 23:9-22, 25:1-26:22. When Griffin's worker gave him the go ahead, Griffin began pulling the tree with the backhoe. Id. at 25:1-26:22. As Griffin pulled the tree to the ground, it struck Keefe and caused him injury. Id. at 26:11-26:22. Griffin testified that he paid Keefe $300.00 to dump the brush from this job on Keefe's land. Id. at 61:1-10.
Canopius instituted the present declaratory judgment action seeking a judicial determination of no coverage. It submits that Keefe was volunteering services to Griffin, and thus coverage is excluded under the terms of the policy. Canopius further contends that equitable estoppel is not applicable in this case. Keefe disagrees on both counts. First, Keefe submits that he was not "volunteering services" to Griffin at the time he sustained his injuries, and therefore the voluntarylabor exclusion does not apply. Second, Keefe contends that Canopius is estopped from asserting the exclusion to bar coverage.
Summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). The moving party has the burden of proving that summary judgment is appropriate. Once the moving party makes the showing, however, the opposing party must respond to the motion with "specific facts showing there is a genuine issue for trial." Fed. R. Civ. P. 56(e).
When no genuine issue of any material fact exists, summary judgment is appropriate. Shealy v. Winston, 929 F.2d 1009, 1011 (4th Cir. 1991). The facts and inferences to be drawn from the evidence must be viewed in the light most favorable to the non-moving party. Id. However, "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Id. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986)).
In this case, the moving party "bears the initial burden of pointing to the absence of a genuine issue of material fact." Temkin v. Frederick Cnty. Comm'rs, 845 F.2d 716, 718 (4th Cir. 1991) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)). If the moving party carries this burden, "the burden then shifts to the non-moving party to come forward with fact sufficient to create a triable issue of fact." Id. at 718-19 (citing Anderson, 477 U.S. at 247-48).
Moreover, "once the moving party has met its burden, the nonmoving party must come forward with some evidence beyond the mere allegations contained in the pleadings to show there is agenuine issue for trial." Baber v. Hosp. Corp. of Am., 977 F.2d 872, 874-75 (4th Cir. 1992). The nonmoving party may not rely on beliefs, conjecture, speculation, of conclusory allegations to defeat a motion for summary judgment. See id; Doyle v. Sentry, Inc., 877 F. Supp. 1002, 1005 (E.D. Va. 1995). Rather, the nonmoving party is required to submit evidence of specific facts by way of affidavits, depositions, interrogatories, or admissions to demonstrate the existence of a genuine and material factual issue for trial. See Fed. R. Civ. P. 56(c), (e); Baber, 977 F.2d at 875 (citing Celotex, 477 U.S. at 324)). Moreover, the nonmovant's proof must meet "the substantive evidentiary standard of proof that would apply at a trial on the merits." Mitchell v. Data Gen. Corp., 12 F.3d 1310, 1316 (4th Cir. 1993); DeLeon v. St. Joseph Hosp., Inc., 871 F.2d 1229, 1223 n.7 (4th Cir. 1989).
As an initial matter, the Court notes that Keefe has not argued that the exclusion is ambiguous or void as a matter of public policy. The Court agrees and finds that the exclusion is valid and enforceable. Accordingly, the only issues for the Court are: (1) whether the exclusion operates to bar coverage, and (2) if the exclusion does apply, whether estoppel operates to bar its operation.
The Court first notes that the Complaint asserts that Canopius has no duty to defend in this action because coverage is excluded, while the Answer asserts that there is a duty to defend. See ECF No. 1 at ¶ 13; ECF No. 6 at ¶ 27. "[U]nder South Carolina law, '[q]uestions of coverage and the duty of a liability insurance company to defend a claim brought against its insured are determined by the allegations of the [underlying] complaint.'" Auto Owners Ins. Co. v. Pers. Touch Med Spa, LLC, 763 F. Supp. 2d 769, 776 (D.S.C. 2011) (quoting City of Hartsville v. S.C. Mun. Ins. & Risk Fin. Fund, 677 S.E.2d 574, 578 (S.C. 2009)). The duty to defend is broader than the duty to indemnify.Ross Dev. Corp. v. Fireman's Fund Ins. Co., 809 F. Supp. 2d 449, 457 (D.S.C. 2011). The underlying complaint has not been introduced into the record by either party, but Canopius's counsel has advised that they have been defending the underlying matter under a reservation of rights. As neither party has afforded the Court with a copy of the underlying complaint, and as the Court has determined, as detailed below, that there is a genuine issue...
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