Trainwreck West Inc. v. Burlington Ins. Co.

• Decision Date: 14 August 2007
• Docket Number: No. ED 88428.,ED 88428.
• Parties: TRAINWRECK WEST INC., Appellant, v. BURLINGTON INSURANCE CO., Respondent, and Cheri Neff, Appellant.
• Court: Missouri Court of Appeals

235 S.W.3d 33

TRAINWRECK WEST INC., Appellant, v. BURLINGTON INSURANCE CO., Respondent, and Cheri Neff, Appellant.

No. ED 88428.

Missouri Court of Appeals, Eastern District, Division Two.

August 14, 2007.

Motion for Rehearing and/or Transfer to Supreme Court Denied October 9, 2007.

Thomas B. Hayes, David N. Damick, St. Louis, MO, for appellants.

Michael B. Maguire, St. Louis, MO, for respondent.

PATRICIA L. COHEN, Judge.

Introduction

Trainwreck West, Inc ("Trainwreck") and Cheri Neff ("Ms.Neff") appeal from the judgment of the Circuit Court of St. Louis County granting Burlington Insurance Co.'s ("Burlington") Motion for Summary Judgment with respect to Trainwreck and Ms. Neff's individual requests for a declaratory judgment that Burlington's commercial general liability policy ("CGL policy") covered Ms. Neff's claims for personal injuries. We affirm.

Facts and Proceedings Below

In January 2003, Burlington issued and delivered a CGL policy to Trainwreck, the owner and operator of a nightclub in Westport Plaza. The CGL policy, in effect at the time of Ms. Neff's injury, insured Trainwreck for any loss or damage to a third party arising out of negligent acts committed by Trainwreck while operating as a nightclub and obligated Burlington to defend Trainwreck from those claims. The CGL policy contained an "assault or battery" exclusion, which stated that insurance does not apply to "bodily injury or property damage arising out of assault or battery, or out of any act or omission in connection with the prevention or suppression of an assault or battery."

On January 31, 2003, Ms. Neff and her friends, Susan Price, Mike Price and Gary Woods, were patrons at Trainwreck's bar and restaurant in Westport Plaza. After approximately 3 or 4 hours, one of Ms. Neff's friends, Mike Price, dropped, threw or knocked a glass onto the floor, which then shattered. George Hansford, one of Trainwreck's owner-operators, and Dan Sage, one of Trainwreck's managers, saw Mr. Price throw the glass to the floor. Mr. Hansford subsequently asked Ms. Neff and her party to leave the bar. Although Mr. Price left immediately and went outside, it took Hansford and several employees fifteen to twenty minutes to herd the remaining three out the door. On the way out the door, Ms. Neff fell and sustained personal injuries.

Several months later, Ms. Neff's counsel sent an attorney's lien letter to Trainwreck, contending that Ms. Neff was injured at Trainwreck "when she was violently and unexpectedly pushed out of your establishment by `your' security people. This caused her to fall, resulting in ... damage to her body." On July 23, 2004, Trainwreck submitted the letter, along with a written statement from George Hansford, pages from Trainwreck's logbook and an excerpt from the police report of the incident, to Burlington. Hansford's letter stated that he was present at the nightclub at the time of the incident and remembered it well. The daily log noted that: (1) Ms. Neff and her friends had started a "scuffle;" (2) the "doormen pushed them out;" and (3) Trainwreck called the police to handle the situation. The police report stated that: (1) Ms. Neff and her friends were causing a disturbance in the bar; (2) Ms. Neff and her party refused to leave; (3) one of the people in Ms. Neff's party broke a glass; and (4) it took fifteen minutes to remove them from the bar. On July 24, 2003, Burlington denied coverage, concluding that "the loss arose from an assault or battery." Burlington did not speak with any Trainwreck agents or employees and did not interview anyone present at the bar at the time of the incident.

In July 2004, Ms. Neff filed a lawsuit in the Circuit Court of St. Louis County against Trainwreck for personal injury damages caused by Trainwreck's employees or agents. Count I "Negligence—Trainwreck West, Inc" of Ms. Neff's Petition states, in pertinent part:

....

10. While leaving the facility, Plaintiff was pushed out the door by one of the "bouncers," an employee or agent of the Defendant when she approached the exit.

11. As a direct result of being pushed, Plaintiff fell to the ground, sustaining injuries to her left lower extremity and general trauma through her body.

12. At all times mentioned herein, the facility owed Plaintiff a duty to protect her from foreseeable attacks by bouncers or employees who are careful, knowledgeable and non-violent.

13. That notwithstanding the duty owed by the Defendant to the Plaintiff, Defendant facility committed one or more of the following negligent and careless acts or omissions:

a. Defendant's employee or agent negligently pushed Plaintiff with excessive force or otherwise unnecessarily, causing her to fall;

b. Failed to provide adequate pre-employment screening;

c. Failed to provide for adequate employee hiring;

d. Failed to provide adequate employee training;

e. Failed to provide adequate employee supervision;

f. Failed to provide adequate trained security personnel[.]

Count II "Battery—Trainwreck West, Inc" of Ms. Neff's Petition states in pertinent part:

....

10. While leaving the facility an employee or agent of the Defendant committed a battery upon the plaintiff by pushing her and causing her to fall. As a result of being pushed Plaintiff fell to the ground, sustaining injuries to her left lower extremity and general trauma throughout her body.

11. ... [T]he facility owed Plaintiff a duty to protect her from foreseeable attacks by bouncers or employees, to supervise employees in a diligent and reasonable manner as well as to hire employees, to supervise employees in a diligent and reasonable manner as well as to hire employees who are careful, knowledgeable and non-violent[.]

Upon receiving notice of Ms. Neff's lawsuit, Trainwreck tendered the defense of it to Burlington and sought indemnity with respect to Ms. Neff's claims. On August 5, 2004, Burlington again denied coverage, asserting the CGL policy's "assault or battery" exclusion barred coverage.

In October 2004, Trainwreck filed the instant declaratory judgment action against Burlington, claiming that the CGL policy did not bar coverage for Ms. Neff's injuries and therefore, required Burlington to defend and indemnify Trainwreck for the claims contained therein. Burlington successfully moved to join Ms. Neff as a necessary party, pursuant to Rule 52.04, and then brought a counterclaim against Trainwreck and a cross-claim against Ms. Neff. In both pleadings, Burlington asserted that, because Ms. Neff's personal injuries arose out of an "assault or battery or out of acts or omissions in connection with the prevention or suppression of an assault or battery," it did not owe a duty to defend or indemnify Trainwreck from the underlying lawsuit.

Thereafter, Burlington moved for summary judgment, claiming that the "assault or battery" exclusion barred coverage. Trainwreck responded to Burlington's Motion for Summary Judgment, arguing that genuine issues of material fact existed regarding whether Ms. Neff sustained her injuries through a Trainwreck employee's negligence. In so arguing, Trainwreck relied upon several depositions taken in the underlying lawsuit.

The same day as the hearing on Burlington's Motion for Summary Judgment, without notice to either the trial court or Burlington, Ms. Neff and Trainwreck entered into a Section 537.065¹ agreement in the underlying lawsuit and Ms. Neff filed an Amended Response to Burlington's cross-claim.² Thereafter, Trainwreck filed a Motion to Supplement Plaintiff's Response to Defendant's Motion for Summary Judgment, in which Trainwreck requested leave to file additional exhibits in response to Burlington's motion. These exhibits included Ms. Neff's Amended Response to Burlington's Cross—Claim and the Amended Petition from the underlying lawsuit. Trainwreck did not include its Section 537.065 agreement with Ms. Neff or the $150,000 Judgment entered, on November 28, 2005 following a bench trial, in the underlying case. The trial court denied Trainwreck's Motion to Amend and Ms. Neff did not provide Burlington with a copy of her Amended Petition prior to entering into a settlement agreement with Trainwreck.

The trial court granted summary judgment in Burlington's favor. The trial court found that the "assault or battery" exclusion barred coverage because: (1) the "assault or battery" exclusion was unambiguous; (2) the ascertainable facts at the time the lawsuit was filed were consistent with the allegations in Ms. Neff's Petition; and (3) both the ascertainable facts and the Petition supported application of the "assault or battery" exclusion. Trainwreck and Ms. Neff appealed individually and later consolidated their appeals.

Standard of Review

Our review of summary judgment is de novo. ITT Comm'l Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). We will uphold the grant of summary judgment on appeal if no genuine issues of material fact exist and the movant is entitled to judgment as a matter of law. Id. "[A] `genuine issue' exists where the record contains competent materials that evidence two plausible, but contradictory, accounts of the essential facts." Id. at 382. We view the record in the light most favorable to the party against whom judgment was entered, according that party all reasonable inferences that may be drawn from the record. Id. at 376. We accept as true facts contained in affidavits or otherwise in support of a party's motion unless contradicted by the non-moving party's response to the summary judgment motion. Id. "Summary judgment is frequently used in the context of insurance coverage questions, and the interpretation of an insurance policy is a question of law." Niswonger v. Farm Bureau Town & Country Ins. Co., 992 S.W.2d 308, 312 (Mo.App. E.D. 1999). "Where the underlying facts are not in question, disputes arising from the interpretation and application of an insurance policy are matters of law." Keisker v....