Great Am. All. Ins. Co. v. WHR Soc. Club

• Decision Date: 14 December 2022
• Docket Number: Civil Action 6:20-cv-4374-TMC-KFM
• Parties: Great American Alliance Insurance Company, Plaintiff, v. WHR Social Club, Inc. d/b/a Lavish Lounge, Carlos Antonio Quiroga, Reginal Campbell, Tasha Kotz as Special Administrator of the Estate of Mykala Bell, JyQuavious Young, DeAundre Jacquez Goldsmith, and Tinaszia Tykel Taylor, Defendants.
• Court: U.S. District Court — District of South Carolina

Great American Alliance Insurance Company, Plaintiff,
v.
WHR Social Club, Inc. d/b/a Lavish Lounge, Carlos Antonio Quiroga, Reginal Campbell, Tasha Kotz as Special Administrator of the Estate of Mykala Bell, JyQuavious Young, DeAundre Jacquez Goldsmith, and Tinaszia Tykel Taylor, Defendants.

Civil Action No. 6:20-cv-4374-TMC-KFM

United States District Court, D. South Carolina, Greenville Division

December 14, 2022

REPORT OF MAGISTRATE JUDGE

Kevin F. McDonald, United States Magistrate Judge

This matter is before the court on the plaintiff's motion for summary judgment (doc. 133). Pursuant to the provisions of 28 U.S.C. § 636(b)(1)(A) and Local Civil Rule 73.02(B)(2)(e) (D.S.C.), this magistrate judge is authorized to review all pretrial matters in cases involving pro se litigants and submit findings and recommendations to the district court.^[1]

I. BACKGROUND

A. Underlying State Court Lawsuits

Plaintiff Great American Alliance Insurance Company (“GAIC”) filed this action on December 17, 2020, seeking a declaratory judgment that there is no coverage under a commercial general liability policy (“the Policy”) that GAIC issued to defendant WHR Social

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Club, Inc. d/b/a Lavish Lounge (“Lavish Lounge”) for the allegations raised in underlying state court lawsuits brought by defendant Tasha Kotz as Personal Representative of the Estate of Mykala Bell and defendants JyQuavious Young, DeAundre Jacquez Goldsmith, and Tinaszia Tykel Taylor (see docs. 35-1, 35-1, 35-3, 35-4). The underlying state court lawsuits regard a shooting that took place at Lavish Lounge in the early morning hours of July 5, 2020. At the time, Lavish Lounge was hosting a concert by rapper Foogiano (doc. 35, amend. comp. ¶ 15). Shortly before 2:00 a.m., a scuffle took place near the stage after gang signals were exchanged between attendees at the concert (id.). Thereafter, GAIC alleges, upon information and belief, that Jarquez Kezavion Cooper, a member of Foogiano's entourage, began shooting a firearm (id.). The shooting resulted in the death of Bell and the alleged injuries to Young, Goldsmith, and Taylor (id.). Cooper was indicted on two counts of murder, seven counts of assault/attempted murder, and possession of a weapon during a violent crime, and those charges remain pending (see https://www2.greenvillecounty.org/SCJD/PublicIndex) (last viewed 12/14/2022).

In the underlying state court lawsuits, Kotz, Young, Goldsmith, and Taylor brought claims against Lavish Lounge, Carlos Antonio Quiroga, and Rommie Khalil, who have been named by GAIC as defendants in this action (docs. 35-1, 35-2, 35-3, 35-4).^[2]Quiroga was a member of the Board and also the manager of Lavish Lounge (id.; doc. 1451, Quiroga aff. ¶ 2). Lavish Lounge was located in a building leased from Khalil at 1701 White Horse Road in Greenville, South Carolina (doc. 127 at 2). GAIC is currently defending Lavish Lounge and Quiroga in the underlying lawsuits under a full and complete reservation of rights (doc. 35, amend. comp. ¶¶ 21, 28, 30, 36). GAIC denied coverage to

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Khalil because he is not an insured under the Policy. Reginal Campbell,^[3] who is also a named defendant in this action, was a director, member, signing officer, and treasurer for Lavish Lounge (docs. 133-5, 133-6).

B. The Policy

GAIC issued the Policy (policy number PL2664771) at issue in this declaratory judgment action to a risk purchasing group (“RPG”) known as the Beauty Health & Trade Alliance (“BHTA”) (doc. 133-3, Donovan aff. ¶¶ 2-7; doc. 35-5). The Policy is a master policy issued to the BHTA under a program known as the Food Liability Insurance Program (doc. 133-3, Donovan aff. ¶ 7). The Food Liability Insurance Program is an insurance program written for vendors, distributors, and manufacturers of food products who are participating members of the BHTA (id. ¶ 5). Each insurer in the Food Liability Insurance Program issues a master policy to the BHTA (id. ¶ 6). Members of the RPG can then apply for insurance coverage through the Food Liability Insurance Program and, if approved, become insureds under one or more master policy(ies) through a Certificate of Coverage (id.).

The Policy issued by GAIC to the BHTA through the Food Liability Insurance Program is designed to enroll through certificates individuals or businesses that are smaller in nature involved in operations that include, but are not limited to, concessionaires such as food trucks, food cart or food trailers, personal or private chefs, farmers' markets and caterers (doc. 133-3, Donovan aff. ¶ 8). Lavish Lounge applied for insurance under the Food Liability Insurance Program for “bartending and concession” operations (id. ¶ 9; doc. 133-3 at 8, Donovan aff. ex. 1). The application includes questions relevant to liquor liability and general liability (doc. 133-3 at 12-13, Donovan aff. ex. 1). In the application, Lavish Lounge represented that it was not a bar or tavern and that its operations did not go beyond

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2:00 a.m. (id.). Lavish Lounge also represented that it was not responsible for and did not offer any kind of entertainment with its services (id.). The application also provided that there is no coverage for a “restaurant, cafe, bakery, tavern, or similar establishment, with operations where you own or lease the space where customers enter to purchase food/beverages” (id. at 15).

Pursuant to its representations in the application that it was engaged in bartending and concessions operations, Lavish Lounge became a certificate holder under two master policies issued to the BHTA - the commercial general liability policy issued by GAIC and a liquor liability policy issued by Certain Underwriters at Lloyd's (“Lloyd's”) (doc. 133-3, Donovan aff. ¶¶ 13-14). The Lloyd's liquor liability policy contains a liquor liability coverage form and several endorsements, including an assault and/or battery sublimit endorsement (doc. 133-3 at 19-60, Donovan aff. ex. 2). The only policy at issue in this action is the Policy issued by GAIC.

The insuring agreement under Coverage A - Bodily Injury and Property Damage of the Policy provides, in relevant part, as follows:

SECTION I - COVERAGES

Coverage A - Bodily Injury and Property Damage

1. Insuring Agreement

a. We will pay those sums that the Insured becomes legally obligated to pay as damages because of “bodily injury” or “property damage” to which this insurance applies. We will have the right and duty to defend the insured against any “suit” seeking those damages. However, we will have no duty to defend the insured against any “suit” seeking damages for “bodily injury” or “property damage” to which this insurance does not apply. We may at our discretion, investigate any “occurrence” and settle any claim or “suit” that may result. . . .

b. This insurance applies to “bodily injury” and “property damage” caused by an “occurrence” that takes place in the coverage territory” only if:

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(1) The “bodily injury” or “property damage”:

(a) Occurs on the premises shown in the Schedule or the grounds and structures appurtenant to those premises; or

(b) Arises out of the project or operation shown in the Schedule.

(2) The “bodily injury” or “property damage” occurs during the policy period; and

* * *

(Doc. 35-5 at 14, 56, the Policy).

The Policy also contains a number of exclusions applicable to Coverage A, which provide, in relevant part, as follows:

2. Exclusions

This insurance does not apply to:

a. Expected or Intended Injury

“Bodily injury' or “property damage” expected or intended from the standpoint of the insured. This exclusion does not apply to “bodily injury” resulting from the use of reasonable force to protect persons or property.

* * *

c. Liquor Liability

“Bodily injury or “property damage” for which any insured may be held liable by reason of:

(1) causing or contributing to the intoxication of any person;

(2) the furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or

(3) any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages.

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This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in:

(a) the supervision, hiring, employment, training or monitoring of others by that insured; or

(b) providing or failing to provide transportation with respect to any person that may be under the influence of alcohol;

if the “occurrence” which caused the “bodily injury” or “property damage,” involved that which is described in paragraph (1), (2) or (3) above.

However, this exclusion applies only if you are in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages. For the purposes of this exclusion, permitting a person to bring alcoholic beverages on your premises, for consumption on your premises, whether or not a fee is charged or a license is required for such activity, is not by itself considered the business of selling, serving or furnishing alcoholic beverages.

* * *

o. Personal and Advertising Injury

“Bodily injury” arising out of “personal and advertising injury.”

* * *

(Doc. 35-5 at 14-16, 19, 55-56, the Policy).

The Policy also contains the following relevant endorsements, which modify coverage under the Coverage A - Bodily Injury and Property Damage coverage form:

EXCLUSION - DESIGNATED ONGOING OPERATIONS

This endorsement modifies insurance provided under the following:

COMMERCIAL GENERAL LIABILITY COVERAGE PART

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SCHEDULE

Description of Designated Ongoing Operations

Operations not in compliance with County, State and Federal Food and Safety Regulations

...

Restaurant, Cafe, Bakery, Tavern, or similar establishment, owned or operated by the

...