Kinsale Ins. Co. v. Seaboard Ventures Inc.

• Court: U.S. District Court — District of South Carolina
• Writing for the Court: R. Bryan Harwell, Chief United States District Judge
• Citation: Kinsale Ins. Co. v. Seaboard Ventures Inc., 670 F.Supp.3d 272 (D. S.C. 2023)
• Docket Number: Civil Action No.: 4:22-cv-00944-RBH
• Decision Date: 26 April 2023
• Parties: KINSALE INSURANCE COMPANY, Plaintiff, v. SEABOARD VENTURES INC., David J. Bean, and Diminique Bellamy, Defendants

670 F.Supp.3d 272

KINSALE INSURANCE COMPANY, Plaintiff, v. SEABOARD VENTURES INC., David J. Bean, and Diminique Bellamy, Defendants

Civil Action No.: 4:22-cv-00944-RBH

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

Signed April 26, 2023

Janice Holmes, Clyde and Co., LLP, Washington, DC, Angela Probasco, Clyde and Co. U.S. LLP, Kansas City, MO, for Plaintiff.

David Edward Belding, Belding Law Firm, Columbia, SC, for Defendants Seaboard Ventures Inc., David J. Bean.

Thomas C. Brittain, Brittain Law Firm, Myrtle Beach, SC, for Defendant Diminique Bellamy.

ORDER

R. Bryan Harwell, Chief United States District Judge

This matter is before the Court on Plaintiff Kinsale Insurance Company's ("Kinsale") motion for judgment on the pleadings on its declaratory relief claim and on the counterclaims brought by Defendants Seaboard Ventures Inc. ("Seaboard") and David J Bean ("Bean"). ECF No. 35. Also pending is Kinsale's motion to compel. ECF No. 44. For the reasons stated below, the Court grants Kinsale's motion for judgment on the pleadings and denies Kinsale's motion to compel as moot.¹

Background

Defendant Diminique Bellamy ("Bellamy") filed a lawsuit ("the Underlying Lawsuit") against Bean doing business as Derrieres's Gentlemen's Club ("the Club"), Seaboard, and Next Level Security, LLC ("Next Level") in the Horry County Court of Common Pleas.² ECF No. 1-1. In that action, Bellamy alleges that in the early hours of January 1, 2020, while he was a patron of the Club, he was shot five times and sustained injuries to his left arm, left flank, and abdomen. Id. at ¶¶ 9-11. Bellamy alleges that the Club is owned by Bean who operates the Club through Seaboard, and he alleges that Next Level was responsible for security and safety at the Club. ECF No. 1-1 at ¶¶ 2-7. Bellamy alleges the defendants in the Underlying Action were negligent in failing to provide adequate security and failing to ensure that no weapons were allowed on the premises, failing to ensure the Club was safe, failing to warn patrons of the danger of criminal activity, and failing to properly hire and supervise employees/agents/third-party contractors pertaining to security. ECF No. 1-1 at ¶¶ 14-20.

Kinsale issued a commercial general liability policy, policy number 0100091369-0 ("the Policy"), to Seaboard d/b/a Derrieres Gentlemens Club with effective dates July 9, 2019 to March 11, 2020.³ ECF No. 1 at ¶15; ECF No. 1-2; ECF No. 18 at ¶15.

Seaboard and Bean sought defense and indemnification from Kinsale, and on June 19, 2020, Kinsale denied coverage. ECF No. 18 at p. 6-7. Kinsale filed this declaratory judgment action in this Court requesting a declaration that Defendants Seaboard and Bean are not entitled to policy coverage for Bellamy's claims in connection with the Underlying Lawsuit because the Policy's Assault and Battery Exclusion applies in tandem with the Duty to Defend Exclusion to bar coverage. ECF No. 1 at p. 5. Seaboard and Bean filed an answer and counterclaims seeking a declaration that Seaboard and Bean are entitled to costs and coverage, indemnification, and a defense in the Underlying Lawsuit. ECF No. 18. Bellamy filed an answer. ECF No. 19. Kinsale filed a answer and affirmative defenses to the counterclaims filed by Seaboard and Bean. ECF No. 26. On November 10, 2022, Kinsale filed a motion for judgment on the pleadings on its declaratory relief claim and Seaboard and Bean's declaratory relief counterclaim. ECF Nos. 35 & 35-1. None of the Defendants filed a response.⁴ Kinsale also filed a motion to compel, and the Defendants did not respond. ECF No. 44.

The relevant portions of the Policy are as follows:⁵

SECTION I - COVERAGES

COVERAGE A BODILY INJURY AND PROPERTY DAMAGE

LIABILITY

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 . . . .

. . . .

b. The insurance applies to bodily injury" and "property damage" only if:

(1) The "bodily injury" or property damage" is caused by an "occurrence" that takes place in the "coverage territory";

(2) The "bodily injury" or "property damage" occurs during the policy period . . .

. . . .

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.

. . . .

SECTION V - DEFINITIONS

3. "Bodily injury" means bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.

. . . .

13. "Occurrence" means an accident, including continuous or repeated exposure to substantially the same general harmful conditions.

. . . .

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

EXCLUSION - ASSAULT AND BATTERY

. . . .

This endorsement modifies insurance provided under the following:

COMMERCIAL GENERAL LIABILITY COVERAGE

The following exclusion is added to this policy:

This insurance does not apply to any claim or "suit" for "bodily injury", "property damage" or "personal and advertising injury" arising out of, related to, or, in any way involving any actual or alleged assault, battery, harmful or offensive contact, or threat, whether provoked or unprovoked. This exclusion includes but is not limited to:

1. The prevention or suppression, or the failure to suppress or prevent any assault, battery, harmful or offensive contact, or threat;

2. The failure to provide an environment safe from any assault, battery, harmful or offensive contact, or threat, or the failure to warn of the dangers of the environment that could contribute to any assault, battery, harmful or offensive contact, or threat;

3. The selling, servicing or furnishing of alcoholic beverages resulting in any assault, battery, harmful or offensive contact, or threat;

4. Injury or damage committed while using reasonable force to protect persons or property or acting in self-defense;

5. The reporting or failing to report to the proper authorities;

6. Conducting or failing to conduct an investigation of any assault, battery, harmful or offensive contact, or threat;

7. Providing or failing to provide first aid or medical treatment, or otherwise handling or responding after there has been an assault, battery, harmful or offensive contact, or threat;

8. Any assault, battery, harmful or offensive contact, or threat whether caused by, or at the instigation, instruction, direction or due to the negligence of the insured, the insured's employees, agents, patrons, customers or any other person arising from any causes whatsoever; or

9. The negligent hiring, employment, training, supervision, or retention of any employee or agent of any insured with respect to items 1. through 8. above.

This exclusion applies regardless of fault or intent and regardless of the particular cause of action.

This exclusion applies to any claim or "suit" regardless of whether assault, battery, harmful or offensive contact, or threat is the initial precipitating cause or is in any way a cause, and regardless of whether any other actual or alleged cause contributed concurrently, proximately, or in any sequence, including whether any actual or alleged "bodily injury", "property damage" or "personal and advertising injury" arises out of a chain of events that includes any assault, battery, harmful or offensive conduct.

. . . .

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

ADDITIONAL POLICY EXCLUSIONS

. . . .

This endorsement modifies insurance provided under the following:

COMMERCIAL GENERAL LIABILITY COVERAGE

PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE

LIQUOR LIABILITY COVERAGE

The following exclusions are added to this policy:

. . . .

DUTY TO DEFEND EXCLUSION

Where there is no coverage under this policy, there is no duty to defend The Policy, ECF No. 1-2 at 7-8; 18-20, 41, 47-48.

Rule 12(c) Standard and Applicable Law

Federal Rule of Civil Procedure 12(c) permits a party to move for judgment on the pleadings "[a]fter the pleadings are closed—but early enough not to delay trial." Fed. R. Civ. P. 12(c). "Judgment on the pleadings is appropriate where no set of facts would entitle the nonmovant to relief." Church Mut. Ins. Co. v. Lake Pointe Assisted Living, Inc., No. 21-1668, 2022 WL 2702427, at *3 (4th Cir. July 12, 2022) (citing Drager v. PLIVA USA, Inc., 741 F.3d 470, 474 (4th Cir. 2014)). The court must view the facts presented in the pleadings and the inferences to be drawn therefrom in the light most favorable to the nonmoving party. Pennsylvania Nat'l Mut. Cas. Ins. Co. v. Beach Mart, Inc., 932 F.3d 268, 274 (4th Cir. 2019). While the Court considers the facts in the light most favorable to the nonmoving party, "[the Court] need not accept the legal conclusions drawn from the facts," and "need not accept as true unwarranted inferences, unreasonable conclusions or arguments." Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008) (quoting Eastern Shore Mkts., Inc. v. J.D. Assocs. Ltd. P'ship, 213 F.3d 175, 180 (4th Cir. 2000)).

Under South Carolina law,⁶ "[a]n insurance policy is a contract between the insured and the insurance company and the policy's terms are to be construed according to the law of contracts." Williams v. Gov't Emps. Ins. Co., 409 S.C. 586, 762 S.E.2d 705, 709 (2014). "If the contract's language is clear and unambiguous, the language alone determines the contract's force and effect . . . [and] a court must construe its provisions according to the terms the parties used; understood in their plain, ordinary, and popular sense." Schulmeyer v. State Farm Fire & Cas. Co., 353 S.C. 491, 579 S.E.2d...