Liberty Corp. Capital v. First Metro. Baptist Church

• Decision Date: 13 September 2021
• Docket Number: CV420-179
• Parties: LIBERTY CORPORATE CAPITAL, LTD, Plaintiff, v. FIRST METROPOLITAN BAPTIST CHURCH, ALFONZA MCCLENDON, SR., and JANE DOE, Defendants.
• Court: U.S. District Court — Southern District of Georgia

LIBERTY CORPORATE CAPITAL, LTD, Plaintiff,
v.
FIRST METROPOLITAN BAPTIST CHURCH, ALFONZA MCCLENDON, SR., and JANE DOE, Defendants.

No. CV420-179

United States District Court, S.D. Georgia, Savannah Division

September 13, 2021

ORDER

WILLIAM T. MOORE, UNITED STATES DISTRICT JUDGE

Before the Court are Defendant Jane Doe and Defendant First Metropolitan Baptist Church's Motion for Summary Judgment (Doc. 37) and Plaintiff Liberty Corporate Capital's Cross Motion for Summary Judgment (Doc. 51).^[1] Both motions have been opposed. (Docs. 52, 57.) For the following reasons, Liberty's motion for summary judgment (Doc. 51) is GRANTED, and Defendants' motion for summary judgment (Doc. 37) is DENIED.

BACKGROUND^[2]

I. THE UNDERLYING LAWSUIT

This declaratory judgment action involves a dispute about whether seven insurance policies Liberty underwrote for First Metropolitan from 2011 to 2017 provide coverage for claims Jane Doe brought against First Metropolitan and Alfonza McClendon, Sr., in an underlying state court case (the "Underlying Lawsuit"). (Doc. 1.) First Metropolitan is a Baptist church located in Savannah, Georgia. (Doc. 53 at ¶ 1; Doc. 58 at ¶ 1.) From 1994 until December 12, 2019, Alfonza McClendon served as First Metropolitan's pastor. (Doc. 38 at ¶ ¶ 1-2; Doc. 54 at ¶ ¶ 1-2.)

As a child, Jane Doe spent summers with her grandmother in Savannah and attended church at First Metropolitan. (Doc. 38 at 55 16-18; Doc. 54 at ¶ ¶ 6-18.) Jane Doe alleges that McClendon subjected her to repeated acts of sexual abuse when she attended First Metropolitan. (Doc. 38 at 55 19-27.) The sexual abuse, Jane Doe alleges, began in summer 2011 and continued until summer 2017.^[3] (Id.)

In May of 2020, Jane Doe filed the Underlying Lawsuit against First Metropolitan and McClendon in the State Court of Chatham County. (Doc. 39, Attach. 7.) Jane Doe brought claims against First Metropolitan for negligent training and supervision, negligent retention, negligent failure to report, and negligent infliction of emotional distress. (Id. at n 25-4 9.) Jane Doe also brought claims against First Metropolitan and McClendon for breach of fiduciary duty, punitive damages, and attorneys' fees. (Doc. 39, Attach. 7 at n 50-62; Doc. 77, Attach. 12 at 3-4.) The claims in the Underlying Lawsuit all stem from McClendon's alleged sexual abuse of Jane Doe.

II. THE APPLICABLE INSURANCE POLICIES

During the time period in which the sexual abuse allegedly occurred, summer 2011 to summer 2017, Liberty was a primary underwriter on seven insurance policies issued to First Metropolitan. (Doc. 38 at ¶¶ 24, 34-36; Doc. 54 at ¶¶ 24, 34-36.) Specifically, Liberty subscribed to the following policies issued to First Metropolitan:

1. Policy No. 394377: effective from April 14, 2011, to April 14, 2012 (the "2011 Policy")

2. Policy No. LBW394377R1: effective from April 14, 2012, to April 14, 2013 (the "2012 Policy")

3. Policy No. LBW394377R2: effective from April 14, 2013, to April 14, 2014 (the "2013 Policy")

4. Policy No. LBW394377R3: effective from April 14, 2014, to April 14, 2015 (the "2014 Policy")

5. Policy No. LBW394377R4: effective from April 14, 2015, to April 14, 2016 (the "2015 Policy")

6. Policy No. LBW394377R5: effective from April 14, 2016, to April 14, 2017 (the "2016 Policy")

7. Policy No. LBW394377R6: effective from April 14, 2017, to April 14, 2018 (the "2017 Policy")

(collectively referred to as the "Applicable Policies"). (Doc. 53 at ¶ 2; Doc. 58 at ¶ 2.)

The Applicable Policies each contain the same liability coverage insuring agreement, which states in relevant part:

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.

b. This 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

(Doc. 53 at ¶ 6; Doc. 58 at 5 6.) Under the Applicable Policies, "occurrence" is defined as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions." (Doc. 38 at ¶ 38; Doc. 54 at 5 38.)

The Applicable Policies also contain a sexual abuse exclusion, which states:

6. EXCLUSION FOR SEXUAL ABUSE

This insurance does not apply to "Bodily Injury" or "Property Damage" arising out of any actual or alleged sexual or physical abuse, or attempt thereof, of or by any person including, but not limited to any person whose care is entrusted to any "insured."

(Doc. 53 at ¶ 8; Doc. 58 at ¶ 8.) The Applicable Policies, except for the 2017 Policy, also contain an assault and battery exclusion, which states in relevant part:

I. ASSAULT AND BATTERY EXCLUSION

This insurance does not apply to under [sic] COVERAGE A. BODILY INJURY AND PROPERTY DAMAGE LIABILITY and B. PERSONAL AND ADVERTISING INJURY LIABILITY arising from:

1. Assault and Battery committed by any Insured, any employee of any Insured, or any other person

2. The failure to suppress or prevent Assault and Battery by any person in 1. above

3. Any Assault or Battery resulting from or allegedly related to the negligent hiring, supervision or training of any employee of the Insured; or

4. Assault or Battery, whether or not caused by or arising out of negligent, reckless or wanton conduct of the Insured, the Insured's employees, patrons or other persons lawfully or otherwise on, at or near the premises owned or occupied by the Insured, or by any other person.

(Doc. 53 at 1 9.) The assault and battery exclusion was removed from the 2017 Policy. (Doc. 38 at ¶ 41; Doc. 54 at 1 41.)

III. THE DECLARATORY JUDGMENT ACTION AND CROSS MOTIONS FOR SUMMARY JUDGMENT

On August 7, 2020, Liberty filed this 28 U.S.C. § 2201 action for declaratory judgment against First Metropolitan, Jane Doe, and McClendon.^[4] (Doc. 1.) In its complaint, Liberty alleges that the claims against First Metropolitan in the Underlying

Lawsuit are based on purposeful and deliberate conduct rather than an "accident" and, therefore, are not covered by the Applicable Policies' insuring agreement. (Id. at 9.) Liberty further alleges that even if the claims in the Underlying Lawsuit triggered the Applicable Policies' liability coverage, the sexual abuse exclusion precludes coverage. (Id. at 9-10.) Finally, Liberty contends that the assault and battery exclusion included in the 2011 through 2016 policies excludes coverage for the claims asserted in the Underlying Lawsuit. (Id. At 10-11.)

Based on these allegations, Liberty requests a declaration that it owes no duty to defend or indemnify First Metropolitan in the Underlying Lawsuit or against any claims or suits that may have been or may be brought arising out the facts alleged in the Underlying Lawsuit. (Id. at 13.) Liberty also requests a declaration that no coverage exists under the Applicable Policies for punitive or exemplary damages awarded in connection with the Underlying Lawsuit. (Id.) Finally, Liberty asks the Court to award its costs of suit. (Id.)

Now, the Parties bring cross motions for summary judgment. (Docs. 37, 51.) In Defendants' motion for summary judgment, Defendants move the Court to declare, as a matter of law, that the Applicable Policies are required to provide coverage for the negligence claims asserted against First Metropolitan in the Underlying Lawsuit. (Doc. 37 at 1.) First, Defendants contend that the sexual abuse giving rise to the Underlying Lawsuit is considered an "occurrence" as defined by Georgia law. (Doc. 39 at 10-14.) Second, Defendants contend that the exclusion for sexual abuse provision included in the Applicable Policies does not exclude the negligence claims brought in the Underlying Lawsuit. (Id. at 14-18.) Finally, Defendants argue that coverage is not excluded by the assault and battery exclusion included in the 2011 through 2016 policies. (Id. at 18-21.)

In response, Liberty brings its own motion for summary judgment, arguing that the sexual abuse did not constitute an "occurrence" under Georgia law and, alternatively, that coverage for the Underlying Lawsuit is excluded by either the sexual abuse exclusion or assault and battery exclusion in the Applicable Policies. (Doc. 51; Doc. 52 at 1-2.) The parties' cross motions are now ripe for review.^[5]

STANDARD OF REVIEW

According to Fed.R.Civ.P. 56(a), "[a] party may move for summary judgment, identifying each claim or defense-or the part of each claim or defense-on which summary judgment is sought." Such a motion must be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Id. The "purpose of summary judgment is topierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial [.]'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986) (quoting Fed.R.Civ.P. 56(e) advisory committee's note to 1963 amendment). Summary judgment is appropriate when the nonmoving party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). The substantive law governing the action determines whether an element is material. DeLong Equip. Co. v. Wash. Mills Abrasive Co., 887 F.2d 1499, 1505 (11th Cir. 1989).

As the Supreme Court explained:

Doc. 52 at 6.) Accordingly, the Court finds the motions are ripe for disposition.

[A] party seeking summary judgment always bears

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