Essex Ins. Co. v. WILLIAMS STREET CENTER
| Decision Date | 28 February 1994 |
| Docket Number | Civ. A. No. 93-F-646. |
| Citation | 863 F. Supp. 1373 |
| Parties | ESSEX INSURANCE COMPANY, Plaintiff, v. WILLIAMS STREET CENTER, a Colorado corporation, Rick E. Mohnssen, Shelby Read, Danielle Read, and Alexandra Read, by and through their mother and next friend, Darlene Read, Darlene Read, individually, and Betty Read Behrns, Defendants. |
| Court | U.S. District Court — District of Colorado |
John M. Seebohm, Tilly & Graves, P.C., Denver, CO, for plaintiff.
Terryl R. Gorrell, Martha E. Cox, Moye, Giles, O'Keefe, Vermeier & Gorrell, Scott Jurdem, Karen M. Zulauf, Buchanan, Jurdem & Zulauf, P.C., Terri Harrington, Harv Holtzman, Denver, CO, Ed Blizzard, Williams, Blizzard & McCarthy, Houston, TX, for defendants.
This case involves questions of insurance coverage for an operator of a halfway house for criminal offenders. The underlying facts involve an escapee from the halfway house who fled across state lines and ultimately murdered the manager of a restaurant in Texas. Plaintiff seeks a declaratory judgment that it is not liable under the terms of the insurance contract it issued to Williams Street Center and its Executive Director, among others. This matter comes before the Court on Plaintiff's Motion For Partial Summary Judgment and Defendants Williams Street Center and Rick E. Mohnssen's Motion For Summary Judgment. These motions have been fully briefed by the parties. Jurisdiction is based on 28 U.S.C. §§ 1332 and 2201. For the reasons set forth below, Plaintiff's motion is DENIED and Defendants Williams Street Center and Rick E. Mohnssen's motion is GRANTED.
Granting summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. FED.R.CIV.P. 56(c); Raymond v. Mobil Oil Corp., 983 F.2d 1528, 1534 (10th Cir.1993); Ash Creek Mining Co. v. Lujan, 934 F.2d 240, 242 (10th Cir.1991); Metz v. United States, 933 F.2d 802, 804 (10th Cir.1991), cert. denied, ___ U.S. ___, 112 S.Ct. 416, 116 L.Ed.2d 436 (1991); Continental Casualty Co. v. P.D.C., Inc., 931 F.2d 1429, 1430 (10th Cir.1991). A genuine issue of material fact exists only where "there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Merrick v. Northern Natural Gas Co., 911 F.2d 426, 429 (10th Cir.1990). Only disputes over facts that might affect the outcome of the case will properly preclude the entry of summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Fostvedt v. United States, I.R.S., 824 F.Supp. 978, 982 (D.Colo.1993).
In reviewing a motion for summary judgment, the court must view the evidence in the light most favorable to the party opposing the motion. Concrete Workers v. City and County of Denver, 823 F.Supp. 821, 828 (D.Colo.1993). All doubts must be resolved in favor of the existence of triable issues of fact. Boren v. Southwestern Bell Tel. Co., 933 F.2d 891, 892 (10th Cir.1991); Mountain Fuel Supply v. Reliance Ins. Co., 933 F.2d 882, 889 (10th Cir.1991).
In a motion for summary judgment, the moving party's initial burden is slight. In Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 2554-55, 91 L.Ed.2d 265 (1986), the Supreme Court held that the language of rule 56(c) does not require the moving party to show an absence of issues of material fact in order to be awarded summary judgment. Rule 56 does not require the movant to negate the opponent's claim. Id. at 323, 106 S.Ct. at 2552-53. The moving party must allege an absence of evidence to support the opposing party's case and identify supporting portions of the record. Id.
Once the movant has made an initial showing, the burden of going forward shifts to the opposing party. The nonmovant must establish that there are issues of material fact to be determined. Id. at 322-23, 106 S.Ct. at 2552-53. The nonmovant must go beyond the pleadings and designate specific facts showing genuine issues for trial on every element challenged by the motion. Tillett v. Lujan, 931 F.2d 636, 639 (10th Cir.1991). Conclusory allegations will not establish issues of fact sufficient to defeat summary judgment. McVay v. Western Plains Serv. Corp., 823 F.2d 1395, 1398 (10th Cir.1987).
In reviewing the evidence submitted, the court should grant summary judgment only when there is clearly no issue of material fact remaining. In Anderson, 477 U.S. at 249-50, 106 S.Ct. at 2510-11, the Court held that summary judgment should be granted if the pretrial evidence is merely colorable or is not significantly probative. In Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986), the Court held that summary judgment is appropriate when the trial judge can conclude that no reasonable trier of fact could find for the nonmovant on the basis of evidence presented in the motion and the response. Id. at 587, 106 S.Ct. at 1356.
Essex Insurance Co. issued an insurance policy numbered 3AB52472 to Defendants Williams Street Center and Mohnssen, to be effective from March 25, 1989 to March 25, 1990. The policy contained general liability coverage (setting forth Coverages A and B for bodily injury and property damages), and professional liability coverage (Coverage P). The policy is subject to various other exclusions and endorsements. The policy contains a Special Provisions Endorsement pursuant to which it is agreed that certain special provisions apply to the policy. Among these provisions is one entitled "Assault and Battery Exclusion", which reads as follows:
Essex argues that this provision bars defense and/or coverage of the underlying action in state court.
When originally issued, the policy also contained a "Hiring/Supervision Exclusion". That provision, contained in Form ESX-63 (10/86), stated:
This exclusion, however, was deleted pursuant to Endorsement # 1 issued May 19, 1989, effective as of the date of the policy's issuance. The Endorsement stated, in relevant part, the following:
Defendants in this action contend that the "Assault and Battery" exclusion does not apply to the cause of action in the underlying case, and that the fact that the "Hiring/Supervision Exclusion" was deleted from the policy means that coverage for negligent supervision (their asserted cause of action) is indeed covered by the policy.
Defendants also contend that the professional liability coverage provided for in the policy applies to the underlying state cause of action. The "Professional Liability" language reads:
The Company will pay of behalf of the INSURED all sums which the INSURED shall become legally obligated to pay as DAMAGES because of injury arising out of any negligent act, error or omission in rendering or failing to render professional services, during the policy period, of the type described in the Description of Hazards shown above, whether committed by the INSURED or by any person for whom the INSURED is legally responsible.
Policy at 26. The Description of Hazards defines the type of professional services covered by the policy as "Halfway Houses." Id.
Defendants Shelby Read, Danielle Read, Alexandra Read, Darlene Read and Betty Read Behrns have a cause of action in Denver District Court against Williams Street Center,3 Case No. 91-CV-7786 (the "Read Family" action). They seek damages from the Center based on claims for the wrongful death of Robert Dorsey Read. These Defendants contend that Robert Read was killed by Kenneth Stephen Staley, who was a resident at Williams Street Center in Denver, Colorado. Kenneth Staley left Williams Street Center and went on a "crime spree" that culminated in a hostage-taking and the murder of Robert Read at a Steak and Ale Restaurant in Fort Worth, Texas. Robert Read died on October 15, 1989. These Defendants' Claim For Relief alleges that Williams Street Center and Rick Mohnssen "owed a duty to protect against reasonably foreseeable death or injury to unsuspecting innocent persons"; that "Defendants were negligent in failing to act reasonably"; and that "as a direct and proximate result of the defendants' negligence, Robert Dorsey Read was murdered, and the plaintiffs suffered both economic and non-economic losses in an amount to be determined by the trier of fact." Amended Complaint And Demand For Jury Trial, Read, et al. v. Williams Street Center, et al., Case No. 91-CV-7786.4
Essex filed this action seeking a declaration that the policy's "Assault and Battery" exclusion precludes coverage for defense or indemnity with regard to the Read Family action.5 Plaintiff contends that the "Assault and Battery Exclusion" included in the Special Provisions Endorsement applies so as to exclude coverage requiring...
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