Nautilus Ins. Co. v. GC&P Dev., LLC
| Decision Date | 25 July 2018 |
| Docket Number | CIVIL ACTION NO. 5:17CV60 |
| Court | U.S. District Court — Northern District of West Virginia |
| Parties | NAUTILUS INSURANCE COMPANY, Plaintiff, v. GC&P DEVELOPMENT, LLC, GC&P AGGREGATES, LLC, GACS, L.P., KEVIN P. COYNE, SR., individually, WOODSDALE UNITED, and DALE TRAVIS and SHARON TRAVIS, husband and wife, Defendants. |
(Judge Keeley)
The plaintiff, Nautilus Insurance Company ("Nautilus"), seeks a declaratory judgment that it has no obligation to defend or indemnify the defendants GC&P Development, LLC, GC&P Aggregates, LLC, GACS, L.P., and Kevin P. Coyne, Sr. (collectively, "the GACS Defendants") in an underlying action alleging that they have engaged in unlawful timbering activities, and have fraudulently concealed development plans from the City of Wheeling (Dkt. No. 1).
Now pending is the motion for summary judgment filed by Nautilus (Dkt. No. 23). Having examined the relevant policy language in conjunction with the allegations in the underlying complaint, and finding no coverage, the Court GRANTS the motion (Dkt. No. 23) and DECLARES that Nautilus has no duty to defend or indemnify the GACS Defendants on the underlying claims.
This case arises from an action filed by Woodsdale United, Dale Travis, and Sharon Travis (collectively, "the Underlying Plaintiffs") in the Circuit Court of Ohio County, West Virginia (Civil Action No. 16-C-9). According to the operative complaint in the case ("Underlying Complaint"),1 throughout the year 2015, the GACS Defendants engaged in "commercial timbering . . . ; the burning of cutting and debris . . . ; building and maintenance of access roads; excavation of soil with earth moving equipment; alteration of the terrain; and stripping the top of the hill of much of its covering" on certain hilltop property located in Wheeling, West Virginia ("Subject Property") (Dkt. No. 1-3 at 4). The Travises reside in Wheeling and jointly own residential property adjoining the Subject Property.2 Id. at 3.
The Underlying Complaint alleges that the defendant, Kevin P. Coyne, Sr. ("Mr. Coyne"), advised the Travises that he was "removing the top of the hill to quarry the 'natural resources' on his property,"3 and that he "intended to put a 'mall' on the hilltop." Id. Ms. Travis further alleges that when she "expressed concern about the instability of the hillside," Coyne stated, "duh, that's why I have insurance." Id. (internal quotation marks omitted).
The Underlying Plaintiffs allege that Coyne also told residents in the community that he intended to excavate limestone existing under the surface of the Subject Property and to "sell it to a gas company as a necessary 'aggregate' to the fracking industry." Id. The Underlying Complaint further alleges that, while Coyne privately expressed his intentions to numerous residents, the GACS Defendants have "refused to tell [Wheeling] city officials of their intentions," and have "concealed material information about what [they] are doing and intend to accomplish on the hillside" in order to circumvent certain zoning laws, regulations, and processesestablished by the City. Id. at 4. It also alleges that, by cutting timber and excavating soil on the Subject Property, the GACS Defendants have "intentionally ignored the municipal laws of the City of Wheeling," and have "engaged in deceptive and fraudulent concealment from city and state officials." Id. at 6.
In early 2016, the Underlying Plaintiffs filed suit against the GACS Defendants, alleging, among other things, property and bodily damage caused by the timbering and excavation operations on the Subject Property.4 Specifically, Count One of the Underlying Complaint alleges that the GACS Defendants have "negligently cut timber and excavated soil on [the Subject Property], making the hillside upon which it is situate[d] even more unstable," and thereby causing excess water runoff and property damage to the Travises' home. Ms. Travis also alleges that smoke from the burning of debris has caused her to become physically ill. Id. at 6.
In related claims, the Underlying Plaintiffs allege in Count Two that the GACS Defendants' "unlawful commercial timbering and development constitutes a public nuisance," and in Count Three, that the GACS Defendants have "jointly engaged in a commonfraudulent scheme and conspiracy . . . to hide and conceal the true development plans" for the Subject Property. Id. at 7, 8. Finally, in Count Four, the Underlying Plaintiffs seek injunctive relief preventing further development of the property. Id. at 8-9.
At the time of some, if not all, of the GACS Defendants' purported timbering and excavation operations on the Subject Property, they were insured under a commercial general liability policy issued by Nautilus on October 30, 2015, to cover several tracts of real property, including the Subject Property ("the Policy") (Dkt. No. 1-2). The GACS Defendants requested that, pursuant to the Policy, Nautilus defend and indemnify them on the claims alleged in the Underlying Complaint. Id.
Nautilus filed its complaint in this Court on May 19, 2017 (Dkt. No. 1), seeking a declaration that the Policy does not provide coverage to the GACS Defendants for any of the claims asserted against them in the Underlying Complaint, and that it therefore has no duty to defend or indemnify them in connection with the underlying case. The GACS Defendants answered the complaint on June 8, 2017 (Dkt. No. 9).
Following the entry of a briefing schedule, Nautilus moved for summary judgment (Dkt. No. 23), arguing that there is no issue ofmaterial fact in dispute regarding whether its policy affords coverage for the underlying claims against the GACS Defendants.5 In support of its motion, Nautilus primarily argues that timbering and excavation operations, whether negligent or not, do not constitute an "occurrence" so as to trigger coverage under the Policy. Id. at 8-10. It argues in the alternative that the Policy's "Construction Operations" exclusion precludes coverage relating to tree clearing, debris removal, and excavation, and that its "Work Performed by Contractors or Subcontractors" exclusion prohibits coverage where property damage arises out of work performed by a contractor or subcontractor. Id. at 10-15. Further, for the same reasons it argues that the Underlying Complaint fails to allege an occurrence under the Policy, it argues that the "Expected or Intended Injury" exclusion operates to exclude coverage for the underlying claims.
Nautilus makes additional arguments that (1) the Policy does not provide coverage for injunctive relief, (2) the Policy's "Pollution" exclusion precludes coverage for Ms. Travis's bodilyinjury claim, and (3) the Policy excludes coverage for punitive damages. Id. at 10, 15-18, 19.
In response, the GACS Defendants first concede that the Policy does not provide coverage for the underlying claims for injunctive relief, conspiracy, punitive damages, or bodily injury to Ms. Travis (Dkt. No. 27 at 2). While conceding the issue of coverage as to those claims, they argue that Nautilus owes them an ongoing duty to defend because the Underlying Plaintiffs' allegations of negligence are covered by the Policy. According to the GACS Defendants, because the Underlying Complaint alleges "negligent" timbering and excavation, and does not allege an "intention" to cause excess water runoff, the allegations related to property damage constitute an occurrence under the Policy. Id. at 6-7. They further contend that neither the Construction Operations exclusion nor the Work Performed by Contractors or Subcontractors exclusion "appl[ies] to the facts alleged in the Underlying Complaint." Id. at 7.
In replying to these arguments, Nautilus asserts that, while characterized as negligence-based claims in the Underlying Complaint, the allegations describe intentional conduct by the GACS Defendants and, therefore, do not constitute an occurrence triggering coverage under the Policy. Nautilus also reiterates itsarguments regarding the applicability of the Policy's Construction Operations and Work Performed by Contractors or Subcontractors exclusions to preclude coverage for the underlying claims. Id. at 5-8. The matter is now fully briefed and ripe for disposition.
Summary judgment is appropriate where the "depositions, documents, electronically stored information, affidavits or declarations, stipulations . . . , admissions, interrogatory answers, or other materials" establish that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed R. Civ. P. 56(a), (c)(1)(A). When ruling on a motion for summary judgment, the Court reviews all the evidence "in the light most favorable" to the nonmoving party. Providence Square Assocs., L.L.C. v. G.D.F., Inc., 211 F.3d 846, 850 (4th Cir. 2000). The Court must avoid weighing the evidence or determining its truth and limit its inquiry solely to a determination of whether genuine issues of triable fact exist. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).
The moving party bears the initial burden of informing the Court of the basis for the motion and of establishing the nonexistence of genuine issues of fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party has made thenecessary showing, the non-moving party "must set forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 256 (internal quotation marks and citation omitted). The "mere existence of a scintilla of evidence" favoring the non-moving party will not prevent the entry of summary judgment; the evidence must be such that a rational trier of fact could reasonably find for the nonmoving party. Id. at 248-52.
In a declaratory judgment action based on diversity jurisdiction, the...
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