Nat'l Pastime Sports, LLC v. CSI Ins. Grp., Case No.: 11-11378
| Decision Date | 17 November 2011 |
| Docket Number | Case No.: 11-11378 |
| Parties | National Pastime Sports, LLC, Plaintiff, v. CSI Insurance Group, and New Hampshire Insurance Co., Defendants, and New Hampshire Insurance Co., Counterclaim Plaintiff/Third-Party Plaintiff, v. National Pastime Sports, LLC, Plaintiff/Counterclaim Defendant, and Cleveland Indians Baseball Co., L.P., Third-Party Defendant, and Cleveland Indians Baseball Co., L.P., Third-Party Defendant/Third-Party Counterclaim Plaintiff, v. New Hampshire Insurance Co., Third-Party Plaintiff/Third-Party Counterclaim-Defendant, and Cleveland Indians Baseball Co., L.P., Third-Party Defendant/Third-Party Counterclaim Plaintiff/Fourth-Party Plaintiff, v. CSI Insurance Group, Defendant/Fourth-Party Defendant. |
| Court | U.S. District Court — Eastern District of Michigan |
National Pastime Sports, LLC, Plaintiff,
v.
CSI Insurance Group, and New Hampshire Insurance Co., Defendants,
and
New Hampshire Insurance Co., Counterclaim Plaintiff/Third-Party Plaintiff,
v.
National Pastime Sports, LLC, Plaintiff/Counterclaim Defendant,
and Cleveland Indians Baseball Co., L.P., Third-Party Defendant,
and
Cleveland Indians Baseball Co., L.P.,
Third-Party Defendant/Third-Party Counterclaim Plaintiff,
v.
New Hampshire Insurance Co., Third-Party Plaintiff/Third-Party
Counterclaim-Defendant,
and
Cleveland Indians Baseball Co., L.P.,
Third-Party Defendant/Third-Party Counterclaim Plaintiff/Fourth-Party Plaintiff,
v.
CSI Insurance Group, Defendant/Fourth-Party Defendant.
Case No.: 11-11378
UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION
Dated: November 17, 2011
Honorable Sean F. Cox
Page 2
This is an insurance coverage dispute that arises out of an underlying wrongful-death action currently pending in Ohio State Court. It has become a web of complaints and counterclaims between four separate parties. National Pastime Sports, LLC ("NPS") filed this action against an independent insurance agency, CSI Insurance Group ("CSI" or, for the purposes of this opinion only, "Defendant") and also against its insurer, New Hampshire Insurance Co. ("NHI"). In its complaint, NPS seeks a declaration that NHI defend and indemnify NPS for the Ohio lawsuit, and also alleges negligence against CSI.
NHI subsequently filed a Third-Party Complaint against the Cleveland Indians Baseball Co., L.P. ("the Cleveland Indians," or, for the purposes of this opinion only, "Plaintiff") and a counterclaim against NPS. The Cleveland Indians, in turn, filed a counterclaim against NHI for a declaratory judgment, and also filed a "fourth-party" complaint against CSI.
The matter is currently before the Court on CSI's motion for summary judgment on the
Page 3
Cleveland Indians' "fourth-party" complaint. The parties have fully briefed the issues and the Court heard oral argument on November 3, 2011. For the reasons set forth below, the Court shall GRANT CSI's motion for summary judgment.
On or about March 23, 2010, the Cleveland Indians executed a Production Agreement with NPS to produce certain elements of ten fan festivals, known as "Kids Fun Days," at Cleveland Indians games between May 9, 2010, and September 12, 2010. As part of the events' entertainment, NPS agreed to provide an inflatable slide.
Pursuant to the agreement, NPS was also to "provide comprehensive general liability insurance coverage. . . covering any claims, demands, causes of action, liability or damages, including legal costs and attorney fees, arising out of obligations or performance by producer under [the] Agreement." (Complaint, at ¶ 7). The agreement also provided, "The insurance certificates will also name the following as an additional insured: 'Cleveland Indians Baseball Company. . . .'"
NPS contacted CSI to procure insurance coverage in accordance with NPS's agreement with the Cleveland Indians. On March 2, 2010, NPS submitted an Annual Events Application to CSI. (Plf's Br., Ex. B). On the application, an agent for NPS checked the "yes" box next to the qualification question, "Any event with bounce houses or inflatables? (If yes, certificates of insurance are required)." The application also requests $5,000,000 in general liability insurance. CSI subsequently provided NPS with an insurance proposal for general liability coverage from NHI for a premium of $2,590.00. (Complaint, Ex. B).
NPS accepted the proposal and on April 27, 2010, CSI issued a Certificate of Insurance to
Page 4
NPS and the Cleveland Indians. (Plf's Br., Ex. D). The Certificate of Insurance provides that NPS is covered by $5,000,000 of commercial general liability insurance and lists the Cleveland Indians as an additional insured. The certificate states, "This coverage is with respect to Cleveland Indians Kids Fun Day event to be held [on the specific dates listed]." Furthermore, near the top, right corner, the Certificate of Insurance provides, "THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW." (Plf's Br., Ex. D). The certificate also states, "THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. . . ." Id.
On June 12, 2010, during one of the scheduled Kids Fun Day events, two Cleveland Indians spectators, Douglas Johnson and David Brown, were injured when an inflatable slide, which was provided by NPS for the Kids Fun Day event, collapsed. Mr. Johnson died on June 21, 2010, presumably as a result of the injuries suffered while attending the Kids Fun Day. The Johnson Estate and David Brown filed a lawsuit against the Cleveland Indians and NPS.
On June 22, 2010, NPS contacted CSI and notified it of the Johnson/Brown suit. CSI replied to NPS, stating that "inflatables are excluded on the policy you purchased from us." (Plf's Br., Ex. F at 2). NPS responded, "With regards to the inflatable question on the cover page of the application we did check that inflatables would be in use for this event." Id. That same day, an agent for CSI replied, "Oh, ok. Sorry, I guess I missed it. I'm so used to quoting up your events I think I hardly look at anything but the dates and the details of the event. I will be sure to
Page 5
pay more attention in the future. I have forwarded your email to the carrier." Id. at 1.
On June 24, 2010, the Cleveland Indians tendered the Johnson/Brown suit to NPS for defense and indemnification. Despite the fact that NPS indicated on its Annual Events Application that the Kids Fun Days would include inflatables, the NHI claims administrator wrote a letter to the Cleveland Indians on August 11, 2010, notifying them that the Johnson/Brown suit is not covered under the terms of the insurance policy. (Def's Br., Ex. 4). In the letter, NHI referenced the policy's endorsement, which excluded coverage for bodily injury "[a]rising out of ownership, operation, maintenance or use of any 'amusement device.'" Id. at 7. The endorsement defines "amusement device" as, among other things, "any equipment a person rides for enjoyment, including, but not limited to, any mechanical or non-mechanical ride, slide. . . ." Id. An additional endorsement provides, "This policy does not apply to any 'bodily injury' or 'property damage' arising out of the collapse of a temporary grandstand, tent, bleacher, stage and/or any other temporary structure." Id. at 8.
On June 21, 2011, in response to the Cleveland Indians' "fourth-party" complaint, CSI filed the instant motion for summary judgment.
Summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56 (c). The party seeking summary judgment has the initial burden of informing the court of the basis for its motion and identifying those portions of the pleadings, depositions, answers to interrogatories, and admission on file together with the
Page 6
affidavits which it believes demonstrate the absence of a genuine issue of material fact. Celotex v. Catrett, 477 U.S. 317, 323 (1986). The burden then shifts to the nonmoving party who "must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986) (quoting FED. R. CIV. P. 56(e)). In deciding a motion for summary judgment, a court must view the evidence and draw all reasonable inferences in favor of the nonmoving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
In its complaint, the Cleveland Indians seek a declaration "as to the rights and legal relations of the parties" under the insurance policy issued by NHI. The Cleveland Indians also allege the following counts against CSI: (1) Count I - Negligence, (2) Count II - Innocent Misrepresentation, (3) Count III - Fraud Based on False Representation, (4) Count IV - Silent Fraud.
I. The Cleveland Indians' Negligence Claim:
The Cleveland Indians contend that CSI "was the express and/or implied agent, servant, employee, broker, or producer of NHI, and owed duties to both NPS and the Cleveland Indians to review, process, procure and deliver the insurance products requested by NPS that would fulfill NPS's legal obligation to the Cleveland Indians." (Complaint at ¶ 32). Specifically, the Cleveland Indians assert that CSI had a duty to provide coverage within a commercial general liability policy for bodily injury arising out of the use, maintenance, or operation of inflatables. The Cleveland Indians further allege that CSI breached that duty by failing to review and properly process the insurance application.
Page 7
To establish a prima facie case of negligence, a plaintiff must establish: (1) a legal duty owed by the defendant to the plaintiff, (2) that the defendant...
To continue reading
Request your trial