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Atlantic Casualty Insurance Co. v. Paradise Club

United States District Court, W.D. Arkansas, Texarkana Division

November 4, 2016

ATLANTIC CASUALTY INSURANCE COMPANY PLAINTIFF
v.
PARADISE CLUB; ISMAEL ARANDA; and BRANDI COODY DEFENDANTS

          MEMORANDUM OPINION

          Susan O. Hickey United States District Judge.

         Before the Court is a Motion for Summary Judgment filed by Plaintiff Atlantic Casualty Insurance Company (“Atlantic Casualty”). ECF No. 19. Separate Defendant Brandi Coody (ECF No. 22) and Separate Defendants Ismael Aranda and Paradise Club (ECF No. 30) have filed responses. Plaintiff has filed a reply (ECF No. 25) to Separate Defendant Coody's response. The Court finds this matter ripe for consideration.

         I. BACKGROUND

         On August 31, 2015, Separate Defendant Brandi Coody filed suit against Separate Defendant Paradise Club in the Circuit Court of Miller County, Arkansas. ECF No. 1-2. In her Complaint, Coody alleges that “[o]n or about May 9, 2015, at approximately 1:47 am, [she] was a business invitee upon the premises of Paradise Club at its place of business” for the purpose of watching her boyfriend take part in the boxing activities hosted by Paradise Club. ECF No. 1-2. Coody alleges that the “occupancy of the Paradise Club exceeded the limit set by the local fire marshal[]” and, following an altercation of some type, “[g]unshots were fired, and [Coody] was struck by the gunfire.” ECF No. 1-2. Coody further alleges that Paradise Club “acting by and through its agents, servants, or employees committed acts and omissions constituting negligence which were a direct and proximate cause of the injuries and damages sustained by Coody.” Coody prays for compensatory and punitive damages. ECF No. 1-2.

         On October 7, 2015, Plaintiff Atlantic Casualty filed a Complaint for Declaratory Judgment in this Court. ECF No. 1. Plaintiff is a North Carolina company with its principal place of business in North Carolina, doing business in Arkansas as a non-resident insurer. Plaintiff issued insurance policy number M202001243 (the “policy”) to Paradise Club, Aranda Ismael DBA, which covered the period between February 13, 2015, and February 13, 2016. That policy provided, in relevant part:

COMMERCIAL GENERAL LIABILITY COVERAGE FORM SECTION I - COVERAGES
COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY
1. Insuring Agreement
a. We will pay those sums that the insured becomes legally obligated to pay as damages because of “bodily injury” or “property damage” to which this insurance applies. We will have the right and the duty to defend the insured against any “suit” seeking covered damages. We will have the right, but not the duty, to defend the insured against any “suit” for which we dispute coverage. We will have no duty to defend or indemnify the insured against any “suit” seeking damages for “bodily injury” or “property damage” to which this insurance does not apply.
We may look to extrinsic evidence outside of the allegations and/or facts pleaded by any claimant to determine whether we owe a duty to defend or indemnify against a lawsuit seeking “bodily injury” or “property damage, ” provided that extrinsic evidence does not contradict a claimant's pleaded allegation and provided that evidence relates to a discrete coverage issue under the policy and not a merits or liability issue. We may, at our discretion investigate any “occurrence” and settle any claim or “suit” that may result. But:
(1) The amount we will pay for damages is limited as described in Section III - LIMITS OF INSURANCE; and
(2) Our right and duty to defend a claim to which this insurance applies ends when we have used up the applicable limit of insurance in the payment of judgments or settlements under COVERAGES A or B or medical expenses under COVERAGE C.
EXCLUSION - PUNITIVE DAMAGES
This insurance does not apply to any claim of or indemnification for punitive, exemplary and/or statutorily enhanced damages, including, but not limited to, multiple damages. If a “suit” seeking compensatory and punitive, exemplary and/or statutorily enhanced damages, including, but not limited to, multiple damages has been brought against you for a claim covered by this policy, we will provide defense for such action. We will not have any obligation to pay for any costs, interests or damages attributable to punitive, exemplary and/or statutorily enhanced damages, including, but not limited to, multiple damages.
EXCLUSION - ASSAULT AND/OR BATTERY
1. This insurance does not apply to and we have no duty to defend any claims or “suits” for “bodily injury'', “property damage” or “personal and advertising injury” arising in whole or in part out of:
a) the actual or threatened assault and/or battery whether caused by or at the instigation or direction of any insured, his employees, patrons or any other person;
b) the failure of any insured or anyone else for whom any insured is legally responsible to prevent or suppress assault and/or battery; c) the negligent
(i) employment;
(ii) investigation;
(iii) supervision;
(iv) training;
(v) retention of a person for whom any insured is or ever was legally responsible and whose conduct would be excluded by (a) or (b) above.
d) any actual or alleged injury arises out of any combination of an assault and/or battery-related cause and a non-assault ...

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