George v. Great Lakes Reinsurance (UK) PLC

2015 Ark. App. 36

454 S.W.3d 243

Anthony George; Heart & Soul, LLC d/b/a The Heart & Soul Club and d/b/a PNC Club; Ricotta Lambert; Neca Scarber; and Vera George, Appellants

v.Great Lakes Reinsurance (UK) PLC, Appellee

No. CV–14–557

Court of Appeals of Arkansas, DIVISION I.

Opinion Delivered January 28, 2015

Taylor Law Partners, LLP, by: Williams B. Putman, for appellants.

Bassett Law Firm LLP, by: Shannon L. Fant and Dale W. Brown, Fayetteville, for appellee.

Opinion

BRANDON J. HARRISON, Judge

The Benton County Circuit Court granted summary judgment to Great Lakes Reinsurance (UK) PLC. It ruled that Great Lakes had no duty to defend or indemnify separate claims made against the insured (George) because no possibility of coverage existed under the insurance policy. The claims that triggered this coverage dispute were filed in a related circuit-court case. The court found that the commercial general liability policy in this case was unambiguous in excluding coverage for claims arising from an assault or battery that spawned the separate case.

George appeals, arguing that the insurance policy is ambiguous. We affirm the circuit court.

I.

The facts are undisputed. George, through appellant Heart & Soul, LLC, owns a facility in Columbia County that is rented out for dances, parties, and other events. At one of these events, a gunman fired into the crowd and injured several people. Two of those injured, appellants Ricotta Lambert and Neca Scarber, were shot and later filed suit (the underlying action) in Columbia County against George, his LLC, and several John Does, alleging that George and his LLC were negligent in failing to protect them and seeking compensatory and punitive damages.

When the events leading to the underlying action occurred, George was insured under a commercial general liability insurance policy issued by Great Lakes. Under the policy's liability coverage, Great Lakes agreed to pay damages for bodily injuries caused by an “occurrence.” The policy defined “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.”

There was also exclusionary language in section 1 of the policy:

2. Exclusions

This insurance does not apply to:

a. Expected or Intended Injury

“Bodily injury” or “property damage” expected or intended from the standpoint of the Insured. This exclusion does not apply to “bodily injury” resulting from the use of reasonable force to protect persons or property.

At the time of the policy's issuance, there was also a Combination Endorsement —1. That endorsement specifically excluded coverage for bodily injuries that arise out of an assault or battery, or coverage for punitive damages—both of which were asserted in the underlying action. The endorsement's “bodily injury” exclusion provides as follows:

2. EXCLUSION—EXPECTED OR INTENDED INJURY AND ASSAULT OR BATTERY

Exclusion a. of Coverage A (Section I) is deleted and replaced with the following:

“Bodily injury” or “property damage”:

(1) expected or intended from the standpoint of any insured;

(2) arising out of assault or battery, or out of any act or omission in connection with assault or battery, or with the prevention or suppression of an assault or battery; or

(3) arising out of charges or allegations of negligent hiring, training, placement or supervision with respect to (1) or (2) above.

George notified Great Lakes of the underlying action, and Great Lakes notified George that it was providing a defense under a reservation of rights because the policy unambiguously excluded coverage for the claims in the underlying action. Great Lakes then filed this declaratory-judgment case, asserting that it did not have a duty to defend or indemnify George. Great Lakes moved for summary judgment and asked the court to order that George had no coverage under the policy. George also moved for summary judgment, arguing that the policy was ambiguous and should therefore be construed against the drafter to provide coverage for the underlying suit.

As stated earlier, the court ruled that the policy language was not ambiguous and excluded coverage for acts or omissions arising from an assault or battery. The court further found that the applicable exclusionary language was contained in an endorsement, that the endorsement was a part of the insurance contract, and that the endorsement expressly deleted and replaced the exclusionary language in the Commercial General Liability Coverage Form. Therefore, the policy did not apply to the claims asserted against George in the underlying action because those claims were excluded, and Great Lakes was not obligated to defend the action.

II.

Because this case comes to us from an order of summary judgment where the parties agree that there are no facts in dispute, our review focuses on the circuit court's application of the law to the facts. Harasyn v. St. Paul Guardian Ins. Co., 349 Ark. 9, 75 S.W.3d 696 (2002) ;...