Cincinnati Ins. Co. v. Fine Home Managers, Inc.
| Decision Date | 28 October 2011 |
| Docket Number | No. 4:09CV0234 HEA,4:09CV0234 HEA |
| Parties | THE CINCINNATI INSURANCE COMPANY, Plaintiff, v. FINE HOME MANAGERS, INC., et al., Defendant. |
| Court | U.S. District Court — Eastern District of Missouri |
This matter is before the Court on defendant The Cincinnati Insurance Company's (hereafter "CIC") Motion for Summary Judgment [Doc. 39]. The defendants, Bill and Carol Adcock (hereafter "Adcocks") and Fine Home Mangagers Inc. (hereafter "FHM), have filed a written opposition to this motion [Docs. 43 and 45] with supporting excerpts from various depositions. The plaintiff thereafter filed a reply to these responses [Docs. 49 and 50]. For the reasons set forth below, the Motion is granted.
On or about October 2, 2008, the Adcocks filed a lawsuit against defendant FHM. The lawsuit is currently pending in the Circuit Court of St. Louis County,Missouri.2 CIC alleges that the dispute in the underlying lawsuit arose out of FHM's contracting to clean the home and personal property of the Adcocks. Defendant FHM does not contest this statement. The Adcocks contend that the underlying lawsuit arose as a result of the chemicals FHM's subcontractor mistakenly allowed to come into contact with the Adcocks' personal property while she was cleaning their home. CIC issued an insurance policy to FHM, which was in effect from March 1, 2006 to March 1, 2009. The Petition in the underlying lawsuit includes counts for Negligence, Breach of Contract and Res Ipsa Loquitor.
The standard for summary judgment is well settled. In determining whether summary judgment should issue, the Court must view the facts and inferences from the facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Woods v. DaimlerChrysler Corp., 409 F.3d 984, 990 (8th Cir. 2005); Littrell v. City of Kansas City, Mo., 459 F.3d 918, 921 (8th Cir. 2006). The moving party has the burden to establish both the absence of a genuine issue of material fact and that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986);Enterprise Bank v. Magna Bank, 92 F.3d 743, 747 (8th Cir. 1996). Once the moving party has met this burden, the nonmoving party may not rest on the allegations in his pleadings but by affidavit or other evidence must set forth specific facts showing that a genuine issue of material fact exists. Fed.R.Civ.P. 56(e); Anderson 477 U.S. at 256; Littrell , 459 F.3d at 921. "The party opposing summary judgment may not rest on the allegations in its pleadings; it must 'set forth specific facts showing that there is a genuine issue for trial.'" United of Omaha Life Ins. Co. v. Honea, 458 F.3d 788, 791 (8th Cir.2006) (quoting Fed.R.Civ.P. 56(e)); Hitt v. Harsco Corp., 356 F.3d 920, 923 (8th Cir. 2004). An issue of fact is genuine when "a reasonable jury could return a verdict for the nonmoving party" on the question. Anderson, 477 U.S. at 248; Woods, 409 F.3d at 990.
To survive a motion for summary judgment, the Putman v. Unity Health System, 348 F.3d 732, 733-34 (8th Cir. 2003). A plaintiff may not merely point to unsupported self-serving allegations, but mustsubstantiate allegations with sufficient probative evidence that would permit a finding in the plaintiff's favor. Wilson v. Int'l Bus. Mach. Corp., 62 F.3d 237, 241 (8th Cir.1995). "The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff." Anderson, 477 U.S. 242 at 252; Davidson & Associates v. Jung, 422 F.3d 630, 638 (8th Cir. 2005). Summary Judgment will be granted when, viewing the evidence in the light most favorable to the nonmoving party and giving the nonmoving party the benefit of all reasonable inferences, there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Samuels v. Kansas City Mo. Sch. Dist., 437 F.3d 797, 801 (8th Cir. 2006). "Mere allegations, unsupported by specific facts or evidence beyond the nonmoving party's own conclusions, are insufficient to withstand a motion for summary judgment." Thomas v. Corwin, 483 F.3d 516, 526-7(8th Cir. 2007). "Simply referencing the complaint, or alleging that a fact is otherwise, is insufficient to show there is a genuine issue for trial." Kountze ex rel. Hitchcock Foundation v. Gaines, 2008 WL 2609197, 3 (8th Cir. 2008).
CIC alleges that none of the claims in the underlying lawsuit (Breach of Contract, Negligence, and Res Ipsa Loquitor) allege an "occurrence" under the CIC Policy and under applicable law. Defendants FHM and the Adcocks contend that damage caused by FHM's cleaning service is covered because it is an "occurrence" of "property damage", which is a covered event under the Policy. CIC's standard form commercial general liability ("CGL") policy defines an "occurrence" to mean "an accident, including continuous or repeated exposure to substantially the same general harmful conditions." [Policy, Pltf's Exh. 1C, at 29]. Under Missouri law, an "accident" is defined as Columbia Mut. Ins. Co. v. Epstein, 239 S.W.3d 667, 672 (Mo.App.E.D.2007) quoting West v. Jacobs, 790 S.W.2d 475, 477 (Mo.App.W.D.1990).
The purpose of CGL policies like the one at issue is to protect against the unpredictable and potentially unlimited liability that can result from accidentally causing injury to other persons or their property. Columbia Mut. Ins.Co. v. Schauf, 967 S.W.2d 74, 78 (Mo. banc 1998). A CGL such as this is not intended to protect business owners against every risk of operating a business. Id. Generally, this typeof policy does not contemplate coverage for losses which are a normal, frequent or predictable consequence of the business operations. American States Ins. Co. v. Mathis, 974 S.W.2d 647, 649 (Mo.App.E.D.1998).
Under the definitions discussed supra, a breach of contract is not an "accident" and "occurrence". Id. at 650; West v. Jacobs, 790 S.W.2d 475, 478 (Mo.App.1990). This is due to the fact that performance of the contract according to its specified terms was "within the insured contractor's control and management and its failure to perform cannot be described as an undersigned or unexpected event." Koch Engineering Co. v. Gibraltoar Cas. Co., 878 F.Supp. 1286 , 1288-1289 (E.D.Mo.1995). In the underlying case, the purported cause of the Adcocks' loss was due to FHM's negligent cleaning of the Adcock's home furnishings. A breach of a contractual duty of this sort does not constitute an "accident." FHM's performance of the contract according to the terms specified was within its control and management. The failure to perform-i.e. damage to the Adcocks' objects-does not constitute an undesigned or unforseen event. See Columbia Mut. Ins. Co. v. Epstein, 239 S.W.3d 667, 672 (Mo.App.E.D.2007) quoting West v. Jacobs, 790 S.W.2d 475, 477 (Mo.App.W.D.1990). As such, no "occurrence" or "accident" actually occurred pursuant to the clear language of the CGL Policy.
Furthermore, assuming in arguendo that an "occurrence" or "accident" did occur, the Policy's "care, custody or control" exclusion precludes coverage. Under the policy, the exclusion states that no coverage exists for "[p]roperty damage to: . . . [p]ersonal property in the care custody or control of an insured... " Generally, "the insurer has the burden of proving that an insurance policy exclusion applies." Am. Econ. v. Jackson, 476 F.3d 620, 623 (8th Cir.2007); Am. Fam. v. Co Fat Lee, 439 F.3d 436, 439 (8th Cir.2006). While FHM fails to specifically address this exclusion, the Adcocks argue that the exclusion does not apply because (a) FHM wasn't at the Adcocks' home-only its subcontractor was-and the policy states that the "care, custody, control" exception does not apply to actions of subcontractors; and (b) the damage actually occurred after the Adcocks' personal property was out of any control of FHM's subcontractor's might have had, when the chemicals left on the furnishings later damaged them.
As CIC points out, the clear language of the Policy specifically states that exclusion applies if the property is in damaged in the care, custody or control of any insured. (Emphasis added). Ms. Ratliff-the individual in question who was responsible for cleaning the Adcocks' home-is an employee of FHM under the CGL policy. Pursuant to Missouri case law and the Workers' Compensation Act, "employee", as used in liability insurance policies such as this, is defined as "everyperson in the service of any employer ... under any contract of hire, express or implied, oral or written, or under any appointment or election, including executive officers of corporations." § 287.020.1.RSMo (2004). See also Auto Owners Mut. Ins. Co. v. Wieners, 791 S.W.2d 751, 756 (Mo.App. S.D. 1990) (). As such, the Court finds that regardless of whether Ms....
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