Essex Ins. Co. v. Harris
| Decision Date | 30 September 2011 |
| Docket Number | Case No. 4:09CV2071 TIA |
| Parties | ESSEX INSURANCE COMPANY, Plaintiff, v. ROGER HARRIS, HEDIGER ENTERPRISES, INC.,FORUM MANOR ASSOCIATES, L.P., and FORUM MANOR L.L.C., Defendants. |
| Court | U.S. District Court — Eastern District of Missouri |
ESSEX INSURANCE COMPANY, Plaintiff,
v.
ROGER HARRIS, HEDIGER ENTERPRISES, INC.,FORUM MANOR ASSOCIATES, L.P.,
and FORUM MANOR L.L.C., Defendants.
Case No. 4:09CV2071 TIA
UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MISSOURI EASTERN DIVISION
Dated: September 30, 2011
This matter is before the Court on Plaintiff Essex Insurance Company's Motion for Summary Judgment. (Docket No. 25). Defendants Hediger Enterprises, Inc., Forum Manor Associates, L.P., and Forum Manor, L.L.C. filed a Memorandum in Opposition (Docket No. 37) and Defendant Roger Harris filed a Response (Docket No. 38). Plaintiff Essex Insurance Company filed a Combined Reply (Docket No. 42) thereto. All matters are pending before the undersigned United States Magistrate Judge, with the consent of the parties, pursuant to 28 U.S.C. § 636(c).
Plaintiff Essex Insurance Company ("Essex") filed a Complaint for Declaratory Judgment seeking the interpretation of certain insurance policies and a declaration of its rights and obligations thereunder. (Plaintiff's Compl. at ¶ 8). Essex alleges that there is no coverage under a commercial general liability policy Essex issued to Hediger Enterprises, Inc. ("Hediger") for a lawsuit brought by the Department of Housing and Urban Development ("HUD") against Hediger and three other Defendants for alleged violations of the Fair Housing Act ("FHA"). United States v. Roger Harris, et al., Cause No. 4:09cv1859CEJ. In that lawsuit, HUD asserts that Roger Harris, the property
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manager of an apartment complex operated by Hediger, discriminated against two current tenants and two prospective tenants on the basis of race, race association, sex, and retaliation. Through vicarious liability, the suit imputes the discriminatory conduct of Mr. Harris to Hediger as the operator of the apartment complex; Defendant Forum Manor Associates, L.P., as the owner of the complex, and Forum Manor L.L.C., as the only general partner of Forum Manor Associates, L.P. Essex has moved for summary judgment arguing that coverage does not exist under the insurance policy because there was no occurrence or expected or intended injury under the language of the policy, and because the policy's exclusion for wrongful acts applies excluding coverage.
The Eighth Circuit Court of Appeals recently clarified the appropriate standard for consideration of motions for summary judgment as follows:
Summary judgment is proper if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. The movant bears the initial responsibility of informing the district court of the basis for its motion, and must identify those portions of the record which it believes demonstrate the absence of a genuine issue of material fact. If the movant does so, the nonmovant must respond by submitting evidentiary materials that set out specific facts showing that there is a genuine issue for trial. On a motion for summary judgment, facts must be viewed in the light most favorable to the nonmoving party only if there is a genuine dispute as to those facts. Credibility determinations, the weighing of evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge. The nonmovant must do more than simply show that there is some metaphysical doubt as to the material facts, and must come forward with specific facts showing that there is a genuine issue for trial. Where the record is taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.
Trogerson v. City of Rochester, Cause No. 09-1131, 2011 WL 2135636, at *7 (8th Cir. June 1, 2011) (en banc) (citations and quotations omitted). "[T]he interpretation of an insurance contract is generally a question of law, particularly in reference to the question of coverage." D. R. Sherry
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Constr., LTD v. American Mut. Ins. Co., 316 S.W.3d 899, (Mo. banc 2010)
Viewing all facts and drawing all reasonable inferences in the light most favorable of the nonmoving party, A. Brod, Inc. v. SK & I Co., L.L.C., 998 F. Supp. 314, 320 (S.D.N.Y. 1998) the Court sets forth the following facts:
1. Background
On October 1, 2007, Essex issued a Commercial General Liability Policy of insurance, Policy Number ARTX001297 ("Policy") to Hediger Enterprises, Inc. ("Hediger"), effective October 1, 2007 through October 1, 2008. (Complaint at ¶ 12; Exh. 3).
On November 12, 2009, the Secretary of the United States Department of Housing and Urban Development ("HUD"), through the Office of the General Counsel, filed its Complaint against Roger Harris, Hediger Enterprises, Inc., Forum Manor Associates, L.P., and Forum Manor L.L.C. (collectively "Defendants") for violations of the FHA. United States v. Roger Harris, et al., Cause No. 4:09cv1859CEJ (Complaint, Docket No. 1). On April 14, 2010, the United States filed its First Amended Complaint ("HUD Complaint")in that action. (Id. at Docket No. 28). The HUD Complaint was filed in this Court on behalf of four individuals who were allegedly discriminated against by Mr. Harris in his capacity as the property manager for Forum Manor Apartments. (Id. at ¶¶ 1,5).
On December 18, 2009, Essex filed the instant Complaint for Declaratory Judgment seeking the interpretation of certain insurance policies and a declaration of its rights and obligations thereunder regarding coverage under the commercial general liability policy issued to Hediger. (Plaintiff's Compl. at ¶ 8).
2. The HUD Complaint
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On November 12, 2009, the United States brought an action to enforce Title VII of the Civil Rights Act of 1968, as amended by the Fair Housing Amendments Act of 1988, on behalf of Anna Webster and her minor child, and Crystal Hall and her minor children, Lindsey Smith, and Daniel Howard and his minor children. United States v. Roger Harris, et al., Cause No. 4:09cv1859CEJ (Complaint, Docket No. 1). Roger Harris ("Harris"), Hediger Enterprises, Inc.("Hediger"), Forum Manor Associates, L.P., and Forum Manor LLC were named as Defendants (collectively "Defendants"). Mr. Harris, a resident of Phelps County, Missouri has been Forum Manor's property manager and is responsible for all aspects of management at Forum Manor, including interviewing and approving prospective tenants, processing rental applications, determining tenant rent payments and overseeing maintenance staff. (Id. at ¶ 5). Hediger is a South Carolina corporation with its principal place of business in South Carolina. (Id. at 7). Hediger operates approximately sixty residential properties in multiple states, including Forum Manor Apartments, a 44-unit residential property located at 1900 Farrar Drive in Rolla, Missouri that is subsidized under the project-based Section 8 housing assistance program. (Id. at ¶¶ 4, 6). Forum Manor Associates, L.P., owns Forum Manor Apartments and is a limited partnership organized and existing under the laws of Missouri with its principal place of business in the State of Missouri. (Id. at 7). Forum Manor, L.L.C., is the only general partner of Forum Manor Associates, L.P., and is a limited liability corporation organized and existing under the laws of the State of South Carolina with its principal place of business in South Carolina. (Id. at 8). Hediger hired Mr. Harris as the property manager of Forum Manor, both on its own behalf and on behalf of Forum Manor Associates, L.P. and Forum Manor LLC, and supervises him as its employee. (Id. at ¶ 6).
In that case in the First Amended Complaint, the United States alleges Defendants engaged
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in discriminatory conduct and sexual harassment in violation of the FHA. United States v. Roger Harris, et al., Cause No. 4:09cv1859CEJ (First Amended Complaint, Docket No. 28). In the First Claim for Relief, the United States alleges by their actions and statements Defendants refused to rent, refused to negotiate for the rental for, or otherwise made unavailable or denied, a dwelling because of race and sex; discriminated in the terms, conditions or privileges of the rental of a dwelling on the basis of race; represented, because of sex, that a dwelling is not available for inspection or rental when such dwelling is in fact so available; and coerced, intimidated, threatened or interfered with persons in the exercise or enjoyment of, or on account if their having exercised or enjoyed, their rights under the FHA. (Id. at ¶ 32(a)-(e)). The United States further contends that Defendants' actions were intentional, willful and /or taken in reckless disregard for the rights of others. (Id. at ¶ 34). In the Second Claim for Relief, the United States contends that Defendants' actions, conduct and statements, constitute a pattern or practice of resistance to the full enjoyment of rights granted by the FHA; and a denial to a group of persons of rights granted by the FHA. (Id. at ¶ 36(a)-(b)).
In the Factual Allegations, the United States alleges that the First Amended Complaint is based on the four complaints of discrimination with the United States Department of Housing and Urban Development ("HUD") filed by Anna Webster "(Webster"), Lindsey Smith ("Smith"), Crystal Hall ("Hall"), and Daniel...
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