Liberty Corporate Capital Ltd. v. Peacemaker Nat'l Training Ctr., LLC, CIVIL ACTION NO.: 3:17-CV-25 (GROH)

• Decision Date: 24 October 2018
• Docket Number: CIVIL ACTION NO.: 3:17-CV-25 (GROH)
• Citation: 348 F.Supp.3d 585
• Parties: LIBERTY CORPORATE CAPITAL LTD., Plaintiff, v. PEACEMAKER NATIONAL TRAINING CENTER, LLC, Peacemaker Properties, LLC, Ben Goldstein and Diane Goldstein, Defendants.
• Court: U.S. District Court — Northern District of West Virginia

348 F.Supp.3d 585

LIBERTY CORPORATE CAPITAL LTD., Plaintiff,

v.PEACEMAKER NATIONAL TRAINING CENTER, LLC, Peacemaker Properties, LLC, Ben Goldstein and Diane Goldstein, Defendants.

CIVIL ACTION NO.: 3:17-CV-25 (GROH)

United States District Court, N.D. West Virginia, Martinsburg.

Signed October 24, 2018

Caitlin M. Crader, Pro Hac Vice, Gregory L. Mast, Pro Hac Vice, Paul L. Fields, Jr., Pro Hac Vice, Fields Howell LLP, Atlanta, GA, Lee Murray Hall, Sarah A. Walling, Jenkins Fenstermaker, PLLC, Huntington, WV, for Plaintiff.

Christopher P. Stroech, Arnold & Bailey, PLLC, Charles Town, WV, for Defendants.

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

GINA M. GROH, CHIEF UNITED STATES DISTRICT JUDGE

Currently pending before the Court is the Plaintiff's Motion for Summary Judgment [ECF No. 46], filed on August 31, 2018. On September 21, 2018, Peacemaker National Training Center, LLC and Peacemaker Property, LLC filed a Response in Opposition to Plaintiff's Motion for Summary Judgment and Cross Motion for Partial Summary Judgment Regarding Plaintiff's Duty to Defend. ECF No. 48. Plaintiff filed a Reply to Defendants' Response on October 5, 2018. ECF No. 49. For the reasons stated herein, the Plaintiff's motion for summary judgment [ECF No. 46] is GRANTED on all issues.

I. Background

Peacemaker National Training Center, LLC and Peacemaker Properties, LLC¹ have been named as defendants in two lawsuits filed by Ben and Diane Goldstein² , the other above-named Defendants. The first lawsuit was filed in the Circuit Court of Berkeley County, West Virginia on September 21, 2015. The second lawsuit was filed in the Circuit Court of Frederick County, Virginia on May 4, 2017.³ The underlying lawsuits both allege a noise nuisance⁴ by substantial and unreasonable interference with the use of the Goldsteins' property.⁵ Additionally, in both lawsuits the Goldsteins request equitable relief, specifically temporary and permanent injunctive relief regarding the hours of operation and maximum noise levels. The Goldsteins request noise abatement measures be implemented on the shooting range if Peacemaker fails to comply with the injunctions. Furthermore, if these forms of relief are not complied with, the Goldsteins request monetary damages for the cost of implementing reasonable and necessary noise abatement measures on their own property.

Liberty subscribed to various policies that provided Peacemaker with commercial general liability coverage ("the Policy"), subject to their terms.⁶ On March 17, 2017, Liberty filed a complaint for declaratory judgment in this Court specifically seeking a judicial determination that it has no obligation to defend or indemnify Peacemaker in the underlying lawsuits for some or all of the Goldsteins' claims. ECF No. 1. Additionally, Liberty moved for summary judgment as to all initial claims and Peacemaker's Counterclaims. ECF No. 46.

II. Standard of Review

Summary judgment as to a given subject is appropriate under Federal Rule of Civil Procedure 56 when a dispute presents no genuine issue as to any material fact and the moving party is thus entitled to judgment in its favor as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A genuine issue exists "if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Therefore, the Court must conduct "the threshold inquiry of determining whether there is the need for a trial—whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Id. at 250, 106 S.Ct. 2505.

The party opposing summary judgment "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). That is, once the movant has met its burden to show an absence of disputed material facts, the party opposing summary judgment must then come forward with affidavits or other evidence demonstrating there is a genuine issue for trial. Fed. R. Civ. P. 56(c) ; Celotex, 477 U.S. at 323-35, 106 S.Ct. 2548 ; Anderson, 477 U.S. at 248, 106 S.Ct. 2505. "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted."

Anderson, 477 U.S. at 249, 106 S.Ct. 2505 (citations omitted).

III. Applicable Law

In this case, the Policy does not contain a choice of law provision to govern disputes between the parties. However, there is a "service of suit" clause that states, "[i]t is agreed that in the event of our failure to pay any amount claimed to be due hereunder we will, at your request submit to the jurisdiction of any court of competent jurisdiction within the United States." ECF No. 46-3 at 14. Under the "Erie doctrine," federal courts sitting in diversity apply state substantive law and federal procedural law. Erie R. Co. v. Tompkins, 304 U.S. 64, 76, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). It is clear that the proper law to apply to the issue before the Court is West Virginia law, the law of the state. See Guaranty Trust Co. of N.Y. v. York, 326 U.S. 99, 109, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945) (determining if an issue is procedural or substantive by looking at if it "significantly affect[s] the result of a litigation"). Furthermore, "determination of the proper coverage of an insurance contract when the facts are not in dispute is a question of law", and therefore, is well suited for summary judgment. Mitchell v. Federal Kemper Ins. Co., 204 W.Va. 543, 544, 514 S.E.2d 393 (1998) (quoting Pacific Indemnity Co. v. Linn, 766 F.2d 754, 760 (3rd Cir. 1985) ).

Two duties arise from the existence of a liability insurance policy, the duty to defend and the duty to indemnify. State ex rel. Nationwide Mut. Ins. Co. v. Wilson, 236 W.Va. 228, 233, 778 S.E.2d 677 (2015). Under West Virginia law, the duty to defend may arise where the duty to indemnify does not. See Id. (finding that the duty to defend is broader than the duty to indemnify). "If part of the claims against an insured fall within the coverage of a liability insurance policy and part do not, the insurer must defend all of the claims, although it might eventually be required to pay only some of the claims." Horace Mann Ins. Co. v. Leeber, 180 W.Va. 375, 378, 376 S.E.2d 581 (1988).

An insurer has a duty to defend an action against its insured only if the claim stated in the underlying complaint could, without amendment, impose liability for risks the policy covers. If the causes of action alleged in the complaint are entirely foreign to the risks covered by the insurance policy, then the insurance company is relieved of its duties under the policy.

State Auto. Mutual Ins. Co. v. Alpha Engineering Services, Inc., 208 W.Va. 713, 716, 542 S.E.2d 876 (2000) (per curiam ) (citations omitted).

"Where the provisions of an insurance policy contract are clear and unambiguous they are not subject to judicial construction or interpretation, but full effect will be given to the plain meaning intended." Keffer v. Prudential Ins. Co. of America, 153 W.Va. 813, 815-16, 172 S.E.2d 714 (1970). An insurance policy is ambiguous if it is "reasonably susceptible of two different meanings or is of such doubtful meaning that reasonable minds might be uncertain or disagree as to its meaning." Prete v. Merchants Property Ins. Co. of Indiana, 159 W.Va. 508, 511, 223 S.E.2d 441 (1976). West Virginia courts have "consistently followed the general principle that [ambiguous] insurance contracts are to be strictly construed against the insurance company and in favor of the insured." Broy v. Inland Mut. Ins. Co., 160 W.Va. 138, 141, 233 S.E.2d 131 (1977).

IV. Discussion

The relationship between Liberty and Peacemaker was established by way of an insurance policy that Liberty issued to Peacemaker.⁷ Liberty argues that the Policy does not require it to defend or indemnify Peacemaker under West Virginia law because the actions for which Peacemaker is now being sued are not covered under Coverage A or B of the Policy. Liberty also argues that any potential coverage is barred because Peacemaker did not comply with the notice requirement under the Policy. Furthermore, Liberty contends that if they are not required to defend or indemnify Peacemaker that the Defendants' counterclaims must also fail. For the following reasons, the Court finds that Liberty has no duty to defend or indemnify Peacemaker.

A. Coverage A of the Policy

Coverage A of the Policy provides that if a claim is made against an insured for damages because of " ‘bodily injury’ or ‘property damage’ that is caused by an ‘occurrence’ " then Liberty will pay up to its limit in liability, including providing a defense to the insured. ECF No. 46-3 at 15. The Court must determine what the parties' understanding of "bodily injury" and "property damage" include to determine if there is potential coverage under Coverage A of the Policy. Furthermore, if the Court determines the Goldsteins alleged "bodily injury" or "property damage" as defined under the Policy, then the Court must determine if it was caused by an "occurrence," and if it is the type of damages covered under the Policy.

1. Bodily Injury

"Bodily injury" is defined by the Policy as "bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time. ‘Bodily injury’ shall also include disability, shock, mental anguish or mental injury, provided that such disability, shock, mental anguish or mental injury is a direct result of bodily injury, sickness, disease or death sustained by a person." ECF No. 46-3 at 30. Peacemaker argues that the Goldsteins alleged bodily injury in the underlying lawsuits because they alleged deprivation of their "physical,...