Colony Ins. Co. v. Pinewoods Enterprises, Inc.
| Decision Date | 05 August 1998 |
| Docket Number | No. 4:96CV202 RWS.,4:96CV202 RWS. |
| Parties | COLONY INSURANCE COMPANY, Plaintiff, v. PINEWOODS ENTERPRISES, INC., et al., Defendants. |
| Court | U.S. District Court — Eastern District of Missouri |
Daniel T. Rabbitt, Rabbitt and Pitzer, St. Louis, MO, for Pinewoods Enterprises, Inc.
John D. Warner, Jr., Partner, Kortenhof and Ely, St. Louis, MO, for Colony Insurance Company.
Scott E. Stewart, Stewart and Dechant Co., L.P., Cleveland, OH, for Billy Dunlap.
Gerre S. Langton, Partner, Sam P. Rynearson, Partner, Adrian P. Sulser, Evans and Dixon, St. Louis, MO, for United States Fidelity & Guaranty Company.
Jack B. Spooner, Wittner and Poger, Clayton, MO, for James F. Payne, Jr.
R. Andrew Beeny, Clayton, MO, Burton A. Kalniz, Kalniz and Iorio, Toledo, OH, for Chad Parritt.
This matter is before the Court on Defendant United States Fidelity & Guaranty Company's ("USF & G") Amended Motion for Summary Judgment on Its Counterclaim Against Colony Insurance Company ("Colony"). The issue is whether the term "premises" as defined by the insurance policy issued by Colony included coverage for the damages arising from the collapse of a deck at a campground. The deck collapsed during a rainstorm injuring a number of people. Since Colony's insurance policy included liability coverage for the use of the deck by those injured, USF & G's motion for summary judgment against Colony will be granted.
This case arose when a deck attached to a lodge at a campground collapsed and injured numerous individuals. The campground is owned by Pinewoods Enterprises, Inc. ("Pinewoods"). An individual, Doug Bledsoe d/b/a Crescent Moon Presents ("Bledsoe"), had leased parts of the campground, from 2 p.m. July 4, 1995 to 2 p.m. July 7, 1995, to be used as campsites for followers of the musical group the Grateful Dead and as an area for Bledsoe and his friends to sell their handmade artwork.1 During this time period, Bledsoe charged thousands2 of Grateful Dead followers an admission price for entry onto the campground.
During a rainstorm on the evening of July 6, 1995, a large number of Grateful Dead followers admitted to the campground entered the lodge area where they climbed on and under a deck attached to the lodge in order to obtain shelter from a storm. The deck collapsed injuring a number of the fans. Pinewoods and Bledsoe were named in lawsuits alleging failure to prevent the campground from becoming overcrowded; failure to adequately supervise and/or train individuals responsible for security and crowd control; and failure to limit the number of persons occupying the lodge's deck.3
The lease agreement between Pinewoods and Bledsoe required that Bledsoe defend and indemnify Pinewoods from personal or property damage occurring on the leased premises. In addition, the lease required Bledsoe to either obtain a liability insurance rider from Pinewoods's insurer (USF & G), or obtain his own liability insurance and name Pinewoods as an additional insured. Bledsoe had an existing liability policy with Colony. Bledsoe added Pinewoods as an additional insured onto the Colony policy. Both USF & G's and Colony's policies were in effect at the time of the accident.
On August 22, 1995, Pinewoods, as an additional insured under Bledsoe's policy, made demand upon Colony to defend and indemnify Pinewoods from the various lawsuits arising from the accident. Colony denied coverage. Pinewoods's insurer, USF & G, has defended Pinewoods in the various lawsuits.
Colony brought the present suit seeking a declaration that the lease did not include the lodge area and that therefore, Colony's policy does not provide coverage to Pinewoods as an additional insured. The Court dismissed Colony's First Amended Complaint for Declaratory Relief on April 2, 1997. In its order, the Court held that the lodge area was part of the premises leased to Bledsoe by Pinewoods.
The issue before the Court is USF & G's counterclaim which seeks a judgment declaring that: (1) Colony has a duty to defend and indemnify Pinewoods with respect to any liability arising out of the accident on July, 6, 1995; (2) USF & G is entitled to contribution by equal share from Colony in the amount of one half of the expenses and attorneys' fees already incurred by USF & G in defense of the lawsuits against Pinewoods arising out of the accident; (3) Colony has a continuing obligation to contribute one half of any future attorneys' fees and related legal expenses incurred in defense of Pinewoods arising out of the accident; and (4) USF & G is entitled to costs incurred in the present case.
In determining whether summary judgment should issue, the Court views 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, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The moving party has the burden to establish both the absence of a genuine issue of fact and that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party has met this burden, the nonmoving party may not rest on the allegations in its 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).
In the present case, the facts that gave rise to the injuries suffered when the lodge's deck collapsed are not in dispute. Rather, the parties ask the Court to rule on whether the insurance contract between Colony and Bledsoe obligates Colony to provide coverage to Pinewoods, as an additional insured, for past, current, and future lawsuits related to the accident. The parties agree that this case can properly be disposed of through the Court's ruling on their opposing motions for summary judgment.4 Upon review of the briefs and the record, the Court finds that there are no genuine issues of disputed facts and that USF & G is entitled to summary judgment.
State law controls the rules of construction of insurance contracts. St. Paul Fire and Marine Insurance Co. v. Missouri United School Insurance Council, 98 F.3d 343, 345 (8th Cir.1996). Colony asserts that Missouri law governs the construction of its policy with Bledsoe. Since USF & G does not challenge this assertion, the Court finds that Missouri law governs this issue. Under Missouri law, whether the language of an insurance contract is ambiguous is a question of law. Id. Ambiguity in an insurance contract exists when there is duplicity, indistinctness or uncertainty of the meaning of the language used in the policy. Id. The court must construe an ambiguous insurance contract in favor of the insured so long as that construction is reasonable. Id. However, the court must give effect to the intentions of the parties as disclosed by the clear and unambiguous language of the policy. Id.
Although the question of whether the lease between Pinewoods and Bledsoe included the lodge area at the campground has already been decided by the Court in its order of April 2, 1997, the Court will provide a brief discussion of the lease provisions in light of the disputed coverage of the Colony insurance policy.
The lease between Pinewoods and Bledsoe provides the following:
The LESSEE [Bledsoe] shall have the exclusive use of the Pinewoods Park from 2:00 p.m. July 4, 1995 through 2:00 p.m. July 7, 1995 as and for a camp site for followers of a Grateful Dead tour and concert. The only exception being the areas of the permanent guests, revenue lakes and the Lodge area and any existing reservations taken by June 10, 1995 all of which are marked and identified on the Pinewoods Park Map, attached hereto and identified as Exhibit # 1.
5) LESSEE [Bledsoe], its customers, guests and invitees will share the Lodge area and facilities, i.e. store, gift shop, bait and tackle area, and snack bar with the fishermen and permanent guests and any campers reserved prior to June 10, 1995.
6) LESSEE [Bledsoe] will provide its own personnel at the entrance gate as depicted on Exhibit # 1, and security personnel; additionally, LESSEE [Bledsoe] shall provide portable toilets and dumpsters in the areas designated on Exhibit # 1.
8) LESSEE [Bledsoe] shall have a liability insurance rider to the policy of Pinewoods Enterprises, Inc. or provide its own insurance, naming LESSOR [Pinewoods] as an additional insured, subject to approval of Pinewoods Enterprises, Inc.; LESSEE [Bledsoe] shall defend and indemnify Pinewoods Enterprises, Inc. and save it harmless from and against personal or property damage by whomsoever caused to any person or property, occurring on the premises; that LESSEE [Bledsoe] shall provide LESSOR [Pinewoods] with proof of said insurance.
Colony asserts that the lease terms in the first paragraph above plainly state that Bledsoe did not lease the lodge area of the Pinewoods Park campgrounds. Colony makes this assertion based on the first quoted paragraph of the lease that excepts Bledsoe's exclusive use of the lodge area. Colony reasons that since the lodge area was not leased to Bledsoe, any liability arising from injuries incurred at the lodge was outside of the coverage provided to Pinewoods as an additional insured under Colony's policy. Colony's position fails to consider other terms of the lease.
The Court's memorandum and order of April 2, 1997 found that the lease granted Bledsoe exclusive use of parts of Pinewoods Park which did not include the lodge area. However, the lodge area was clearly leased to Bledsoe in paragraph five (5) of the lease. The lease simply designated that Bledsoe did not have exclusive use of the lodge area.
The present question is whether Colony's coverage of Pinewoods as an additional insured extends to the accident that occurred at the lodge on July 6, 1995. If so, then...
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