Sphere Drake v. 101 Variety, Inc., Civ.A. 98-1139.
| Decision Date | 29 January 1999 |
| Docket Number | No. Civ.A. 98-1139.,Civ.A. 98-1139. |
| Citation | 35 F.Supp.2d 421 |
| Parties | SPHERE DRAKE, P.L.C., Plaintiff, v. 101 VARIETY, INC., et al., Defendants. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Jay E. Mintzer, Edelstein, Mintzer, Diamond & Sarowitz, Philadelphia, PA, for Plaintiff.
Alan L. Yatvin, Popper and Yatvin, Philadelphia, PA, Jeffrey M. Scott, City of Phila.-Law Dept., Philadelphia, PA, for Defendants.
Plaintiff, Sphere Drake, P.L.C. ("Drake"), filed the instant declaratory judgment action against defendants 101 Variety, Inc., Papa Doc's Lounge, Inc. t/a Papa Doc's Lounge, and Randolf Hopson, individually and t/a Papa Doc's Lounge (collectively the "Named Insureds"). Plaintiff also named as defendants 52-Rose, Inc. t/a Stu's Bar & Lounge, Carol Hawkins, individually and t/a Stu's Bar & Lounge (collectively the "Stu's defendants"), the City of Philadelphia, Lonnie Hamilton ("Hamilton"), individually and as a police officer for the Philadelphia Police Department, Benjamin Frazier ("Frazier"), individually and as a police officer for the Philadelphia Police Department, and Shirley Clark ("Clark"), in her own right and as Administratrix of the estate of Douglas McCuff ("McCuff"), deceased. Plaintiff seeks declaratory relief regarding its duty to defend and indemnify the Named Insureds in a state court lawsuit filed by Clark and McCuff.1 The Court notes that because the Named Insureds subsequently assigned all of their rights, claims, and causes of action, including the right to defend declaratory judgment actions, to Clark and the estate of McCuff, for the purposes of this action, Clark and McCuff stand in the shoes of the Named Insureds. Therefore, for ease of reference, Clark and McCuff, as assignees of the Named Insureds, hereinafter are collectively referred to as the "Insureds" or "defendants."
Before the Court is defendants' motion to dismiss plaintiff's declaratory judgment complaint pursuant to Fed.R.Civ.P. 12(b)(6), or, in the alternative, motion for summary judgment pursuant to Fed.R.Civ.P. 56(c). In response, plaintiff has filed a cross-motion for judgment on the pleadings pursuant to Fed. R.Civ.P. 12(c). For the reasons stated below, the Court will grant defendants' motion for summary judgment,2 and will deny plaintiff's cross-motion for judgment on the pleadings.
On March 14, 1994, Shirley Clark and Douglas McCuff filed a civil action in the Philadelphia Court of Common Pleas against the Named Insureds, the Stu's defendants, the City of Philadelphia, Hamilton, individually and as a police officer for the Philadelphia Police Department, and Frazier, individually and as a police officer for the Philadelphia Police Department. Clark and McCuff sought compensation for the March 20, 1992 shooting that occurred in Papa Doc's Lounge and resulted in physical injury to both Clark and McCuff.
In the underlying state court complaint, Clark and McCuff alleged that on the night of March 20, 1992, Hamilton, an off-duty police officer, drank to the point of visible intoxication at Stu's Bar & Lounge ("Stu's"). Hamilton allegedly left Stu's and arrived at Papa Doc's Lounge ("Papa Doc's"), where employees continued to serve alcoholic beverages to an already intoxicated Hamilton. Thereafter, Clark and McCuff arrived at Papa Doc's and sat at the rear of the lounge. While inside Papa Doc's, Hamilton got into a physical altercation with another patron, and during such altercation, Hamilton discharged his firearm, shooting the other patron. Clark and McCuff, along with Papa Doc's employees and other patrons, ran into the kitchen and attempted to exit through a rear door, but were unsuccessful because the door was locked with a padlock. In the meantime, a call was made to the police, and Frazier was among the officers who responded. Frazier entered Papa Doc's and fired five (5) shots, two (2) of which struck Hamilton, and the remaining three (3) bullets flew toward the rear of the lounge. Simultaneously, Clark and McCuff, thinking the situation was under control, exited the kitchen and were returning to the bar when one of the stray bullets shot by Frazier hit McCuff in the abdomen, exited his body, and then hit Clark in the stomach. As a result of the shooting, Clark was hospitalized for eight (8) days, and McCuff for six (6) days.
Based on the above allegations, Clark and McCuff brought an action in the state court asserting: (1) federal civil rights claim against Hamilton, Frazier, and the City of Philadelphia; (2) assault and battery against Hamilton and Frazier; (3) infliction of emotional distress against the Stu's defendants, the Named Insureds, Hamilton, and Frazier; (4) negligence, gross negligence, and negligence per se against the Stu's defendants and the Named Insureds; (5) premises liability against the Named Insureds; and (6) punitive damages against the Stu's defendants, the Named Insureds, Hamilton, and Frazier.
At the time of the shooting on March 20, 1992, the Named Insureds were listed as the named insureds in a commercial general liability insurance policy (the "Policy") issued by Drake. The Policy contained a limit of liability of $100,000.00 and had effective dates from June 6, 1991 to June 6, 1992. On March 14, 1994, the Named Insureds were served with the complaint filed by Clark and McCuff in the state court. On March 22, 1994, the Named Insureds notified Drake of the claims and sought coverage and a defense under the Policy. See Defs.' Mot. for Summ.J., at Ex. A. On April 5, 1994, Drake declined to provide a defense, contending that the assault and battery exclusion, as well as the liquor liability exclusion, precluded coverage for Clark's and McCuff's claims. See Defs.' Mot. for Summ.J., at Ex. B.
On February 6, 1998, the Named Insureds advised Drake that the state court non-jury trial was to begin on March 6, 1998 before the Honorable Amanda Cooperman. See Defs.' Mot. for Summ.J., at Ex. E. Drake did not provide the Named Insureds a defense nor did it otherwise appear at trial. On March 4, 1998, two (2) days before trial, Drake filed the instant declaratory judgment complaint, but did not seek a stay of the state court action. On April 15, 1998, Judge Cooperman entered findings of fact, conclusions of law, and judgment in favor of Clark, in her own right, and as Administratrix of the estate of McCuff, and against the Named Insureds.3 See Defs.' Mot. for Summ.J., at Ex. G. Specifically, Judge Cooperman found that the shooting of Clark and McCuff was an accident, and not the result of an assault and battery. Judge Cooperman concluded that the Named Insureds' negligence in padlocking the emergency exit was the proximate cause of the injuries to Clark and McCuff because it prevented them from fleeing the dangerous situation inside the bar. On May 13, 1998, the Named Insureds assigned all of their rights, claims, and causes of action, including the right to defend declaratory judgment actions, to Clark and the estate of McCuff. See Defs.' Mot. for Summ. J., at Ex. I. Therefore, for purposes of this action, Clark and McCuff stand in the shoes of the Named Insureds. To restate, for ease of reference, the individuals and entities named as insureds under the Policy are referred to as the "Named Insureds." On the other hand, Clark and McCuff, as assignees of the Named Insureds, are referred to in this memorandum as the "Insureds" or "defendants."
Drake's instant declaratory judgment complaint asserts three (3) Policy exclusions that preclude coverage of Clark's and McCuff's claims: (1) the liquor liability exclusion; (2) the assault and battery/negligent hiring exclusion; and (3) the punitive damages exclusion endorsement. Neither the liquor liability exclusion nor the punitive damages exclusion is implicated at this time since Clark and McCuff did not rely for their claims in the state court on the Named Insureds' conduct in serving liquor to Hamilton after Hamilton had been visibly intoxicated, and no punitive damages were awarded by the state court. The sole issue, therefore, is the applicability of the assault and battery exclusion.
The Insureds have moved for summary judgment, asserting that: (1) Drake's declaratory judgment action is untimely and the Court should refuse to exercise jurisdiction; (2) Drake failed to attach the entire Policy to its complaint, which allegedly is a fatal defect; and (3) Clark's and McCuff's claims are not precluded by the assault and battery exclusion because the state court judge specifically found that the shooting was an accident, and not an assault and battery.4 Therefore, according to the Insureds, Drake has a duty to defend and indemnify the Named Insureds against the claims of Clark and McCuff. In answer to the Insureds' motion, Drake filed a cross-motion for judgment on the pleadings, reasserting its position that the assault and battery exclusion is clear, unambiguous, and precludes coverage of Clark's and McCuff's claims, and, therefore, Drake has no duty to defend and indemnify.
Summary judgment is appropriate if the moving party can "show that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). When ruling on a motion for summary judgment, the Court must view the evidence in the light most favorable to the non-movant. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The Court must accept the nonmovant's version of the facts as true, and resolve conflicts in the non-movant's favor. Big Apple BMW, Inc. v. BMW of North America, Inc., 974 F.2d 1358, 1363 (3d Cir. 1992), cert. denied, 507 U.S. 912, 113 S.Ct. 1262, 122 L.Ed.2d 659 (1993).
The moving party bears the initial burden of demonstrating the...
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