Hanover Ins. Co. v. Jones

• Decision Date: 28 October 2013
• Docket Number: Case No. 12–2196–EFM.
• Citation: 979 F.Supp.2d 1210
• Parties: HANOVER INSURANCE COMPANY and Massachusetts Bay Insurance Company, Plaintiffs, v. Robert JONES, et al., Defendants.
• Court: U.S. District Court — District of Kansas

979 F.Supp.2d 1210

HANOVER INSURANCE COMPANY and Massachusetts Bay Insurance Company, Plaintiffs,

v.Robert JONES, et al., Defendants.

Case No. 12–2196–EFM.

United States District Court, D. Kansas.

Oct. 28, 2013.

John G. Schultz, Suzanne Renea Bruss, Franke Schultz & Mullen, PC, Kansas City, MO, for Plaintiffs.

Jerry K. Levy, Ronald L. Schneider, Law Office of Jerry K. Levy, P.A., Lawrence, KS, Jason P. Roth, Patrick G. Copley, Copley Roth & Wilson, LLC, Overland Park, KS, Michelle L. Marvel, Stephen M. Gorny, Bartimus, Frickleton, Robertson & Gorny, Leawood, KS, for Defendants.

MEMORANDUM AND ORDER

ERIC F. MELGREN, District Judge.

This matter is before the Court on Plaintiff Hanover Insurance Company (“Hanover”) and Plaintiff Massachusetts Bay Insurance Company's (“Massachusetts Bay”) Motion for Summary Judgment (Doc. 24). Plaintiffs seek a declaratory judgment stating that the Commercial General Liability Policy and the Business Auto Policy issued to Professional Moving & Storage do not provide Defendants Robert Jones and Doug Havlik liability coverage for the death of Frederick Simmons. Plaintiffs ask the Court to find that they do not have a duty to defend or indemnify Jones and Havlik in a lawsuit alleging wrongful death of Simmons. The Court grants Plaintiffs' Motion for Summary Judgment because exclusions in the Commercial General Liability Policy and the Business Auto Policy preclude liability coverage for Simmons' death, and consequently, Plaintiffs do not have a duty to defend or indemnify Jones or Havlik in a lawsuit alleging wrongful death of Simmons.

I. Factual and Procedural Background¹

Professional Moving & Storage, Inc. (“PMS”) is a Kansas corporation with its principal place of business in Lawrence, Kansas. Defendant Robert Jones is the President of PMS, and Defendant Doug Havlik is the General Manager of PMS (collectively “Defendants”). Jones and Havlik are residents of Kansas. Both Hanover and Massachusetts Bay are stock fire and casualty insurance companies organized and existing under the laws of New Hampshire with principal places of business in Massachusetts (collectively “Plaintiffs”).

This cause of action arises out of a dispute over insurance liability coverage for the death of Frederick Simmons (“Simmons”), an employee of PMS. On July 21, 2011, Simmons was fatally injured while loading furniture and belongings into a PMS moving truck. Simmons' minor daughter L.S. received workers' compensation benefits for her father's death. Bianca Ortiz, mother and Conservator for L.S., subsequently demanded that Hanover and Massachusetts Bay pay out for the death of Simmons under policies issued to PMS.

Hanover issued a Commercial General Liability Policy (“CGL Policy”) to PMS with an effective date from February 28, 2011, through February 28, 2012. The CGL Policy contains a $1,000,000 liability limit and a $5,000 medical payments limit and includes liability coverage for bodily injury and property damage liability. The Coverage A Bodily Injury and Property Damage Liability (“Coverage A”) provision of the insuring agreement states:

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.

Coverage A contains exclusions to the bodily injury and property damage liability coverage. The CGL Policy also provides medical payments coverage. The Medical Payments provision states that Hanover will pay medical expenses for “ ‘bodily injury’ caused by an accident' ” and also contains exclusions to coverage. The Coverage A exclusions and the Medical Payments exclusions will be discussed in greater detail in the Analysis Section.

Massachusetts Bay issued a Business Auto Policy (“Auto Policy”) to PMS with an effective date from February 28, 2011, through February 28, 2012. The Auto Policy contains a $1,000,000 liability limit and a $5,000 medical payments limit. The Auto Policy provides liability coverage for bodily injury and property damage, stating:

We will pay all sums an “insured” legally must pay as damages because of “bodily injury” or “property damage” to which this insurance applies, caused by an “accident” and resulting from the ownership, maintenance or use of a covered “auto”.

... We have the right and duty to defend any “insured” against a “suit” asking for such damages.... However, we have no duty to defend any “insured” against a “suit” seeking damages for “bodily injury” or “property damage” ... to which this insurance does not apply.

The Auto Policy also provides medical payments coverage for “reasonable expenses incurred for necessary medical and funeral services to or for an ‘insured’ who sustains ‘bodily injury’ caused by ‘accident.’ ” The Policy contains exclusions to bodily injury and property damage coverage and medical payments coverage, which will be discussed in greater detail in the Analysis Section.

After Hanover and Massachusetts Bay refused to pay out under the policies, Ortiz, on behalf of L.S., and Simmons' mother Antoinette Alexander filed a wrongful death lawsuit against Jones and Havlik in Douglas County, Kansas (“underlying lawsuit”).² Hanover and Massachusetts Bay assumed the defense of Jones and Havlik in the underlying suit but preserved a full reservation of rights. In the underlying lawsuit, Ortiz and Alexander allege Simmons sustained fatal injuries while in the course and scope of his employment with PMS. According to the petition, Simmons was in the process of moving a PMS customer's belongings from her residence in Kansas City, Missouri, when the PMS truck's parking brake failed and the truck began to roll down a hill. Simmons chased after the rolling truck and was unable to open the driver's side door. Simmons then reached through the driver's side window and attempted to steer the truck until the truck struck a curb and street light pole causing Simmons to fall from the truck. The truck rolled over Simmons, and Simmons suffered fatal injuries.

Ortiz and Alexander contend that Missouri law governs the wrongful death claim because Simmons' injuries occurred in Missouri. Count I of the petition asserts that Jones, as President of PMS, and Havlik, as Simmons' supervisor, owed Simmons a personal duty of care. The petition alleges that Jones and Havlik breached this duty of care by failing to properly maintain the truck, including failing to ensure that the truck had a working parking brake and an operable driver's side door handle. Although Missouri's Workers' Compensation Act is the exclusive remedy against employers for injuries covered by its provisions, the petition alleges that the claim is permitted because the affirmative negligent acts were “something more” than simply failing to provide a reasonably safe workplace.³ Count II of the petition asserts an ordinary negligence claim against Jones and Havlik based on their alleged failure to properly maintain the truck, and Count III alleges negligence against Timothy Copp, a commercial motor vehicle inspector.⁴

Hanover and Massachusetts Bay initiated this declaratory judgment action asking the Court to find that the CGL Policy and the Auto Policy do not provide liability coverage for Simmons' death and that they do not have a duty to defend or indemnify Jones and Havlik for any of the claims in the underlying lawsuit. Hanover and Massachusetts Bay filed a Motion for SummaryJudgment (Doc. 25–1). The matter is fully briefed, and the Court is now prepared to rule.

II. Legal Standard

Summary judgment is appropriate if the moving party demonstrates that there is no genuine issue as to any material fact, and the movant is entitled to judgment as a matter of law.⁵ A fact is “material” when it is essential to the claim, and issues of fact are “genuine” if the proffered evidence permits a reasonable jury to decide the issue in either party's favor. ⁶ The movant bears the initial burden of proof and must show the lack of evidence on an essential element of the claim.⁷ If the movant carries this initial burden, the nonmovant that bears the burden of persuasion at trial may not simply rest upon its pleadings; the burden shifts to the nonmovant to go beyond the pleadings and “set forth specific facts” that would be admissible in evidence in the event of trial from which a rational trier of fact could find for the nonmovant.⁸ These facts must be clearly identified through affidavits, deposition transcripts, or incorporated exhibits.⁹ Finally, summary judgment is not a “disfavored procedural shortcut,” but is instead an important procedure “designed to secure the just, speedy and inexpensive determination of every action.” ¹⁰

In a diversity case, a federal court “applies federal procedural law and the substantive law that would be applied by the forum state.” ¹¹ Here, Kansas is the forum state. Under Kansas choice-of-law rules, the contract law of the state where the insurance contract was entered into controls.¹² Both parties agree that Kansas is the place of contracting and that Kansas law governs whether there is coverage under the insurance policies for Simmons' death and whether Plaintiffs have a duty to defend or indemnify Jones and Havlik in the underlying lawsuit.¹³

III. Analysis

Plaintiffs argue that Hanover does not have a duty to defend or indemnify Havlik because Havlik does not qualify as an insured under the CGL Policy. Plaintiffs also argue that exclusions under the CGL Policy and the Auto Policy preclude liability coverage for Simmons' death and that Plaintiffs only have a duty to defend or indemnify Jones and Havlik if there is...