E B Management Company, LLC v. Houston Specialty Insurance Co.

          APPEAL FROM THE PULASKI COUNTY CIRCUIT COURT, FI FT H D I VIS I O N [NO. 60CV-17-4424] HONORABLE WENDELL GRIFFEN, JUDGE

          J. Andrew Vines, P.A., by: J. Andrew Vines, for appellants.

          Friday, Eldredge & Clark, LLP, by: William A. Waddell, Jr., for appellee Houston Specialty Insurance Company.

          WAYMOND M. BROWN, JUDGE

         Appellants E B Management Company, LLC (E B Management), and Ernie of Little Rock, Inc., d/b/a Ernie Biggs (Ernie Biggs), and Brandon Griffin^[1] appeal from the circuit court's order denying their motion for summary judgment, dismissing their complaint for declaratory judgment, and granting the cross-motion for summary judgment of appellees Houston Specialty Insurance Company (Houston Specialty), and Michael Scott Tice. On appeal, Ernie Biggs argues that the (1) circuit court erred in finding that the insurance policy was unambiguous and (2) allegations of the underlying complaint give rise to the possibility of coverage and trigger the appellee's duty to defend. We affirm.

         On August 29, 2015, Houston Specialty issued a commercial general liability (CGL) policy to E B Management. The policy stated the following:

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 duty to defend the insured against any "suit" seeking those damages.

         However, a limited-assault-or-battery-coverage section stated that it modified the CGL policy:

I. LIMITED ASSAULT AND BATTERY INSURING AGREEMENT

A. We will pay all sums the Named Insured is legally obligated to pay as damages because of "injury", "bodily injury", "property damage" or "personal and advertising injury" arising out of an "assault or battery incident" by any insured.

         In the "EXCLUSIONS" section, the policy stated:

The following exclusion is added to the COMMERCIAL GENERAL LIABILITY COVERAGE FORM:

Injury, damage or loss, however caused, arising, directly or indirectly, out of:

1. Assault;

2. Battery;

3. Any "assault or battery incident".

         In the immediately following "DEFINITIONS" section, "assault and battery incident" is defined:

"Assault and battery incident" means harmful or offensive contact between or among two or more persons including, but not limited to, apprehension or harmful or offensive contact or threats or harmful or offensive contact. An "assault or battery incident" may be:

a. provoked or unprovoked by any person, and

b. arise out of or result form any act or omission in connection with:

(1) Prevention or suppression of an "assault or battery incident";

(2) Protection of persons or property;

(3) Negligent hiring, supervision, retention or training or any "employee" of the Insured; or

(4) Implementation of adequate security measures, through security personnel, surveillance or other security devices.

         On December 29, 2015, Griffin paid an entry fee into Ernie Biggs as well as twenty dollars to a piano player to GO on stage and play the drums during a song being played by that piano player. Stating that Griffin was not keeping the beat, the piano player stopped playing the song. Griffin asked for the return of his twenty dollars; the piano player declined. At some point near this time, Tice removed Griffin from the stage and threw Griffin out the door of the establishment. After being released by Tice, Griffin hit his head on the concrete sidewalk, causing injury.

         On April 5, 2016, Griffin filed a complaint against Ernie Biggs and Tice, asserting a cause of action for negligence under the doctrine of respondeat superior, because Tice "negligently decided to come on stage and jerk Plaintiff Brandon Griffin off the stage, negligently led him to the door with too much force, and negligently threw Plaintiff Brandon Griffin out the door causing Plaintiff Brandon Griffin to hit his head on the concrete sidewalk outside the front door." Griffin further alleged that he was "knocked unconscious, sustained a brain bleed causing a traumatic brain injury, and has permanent brain damage." Houston Specialty provided a defense to Ernie Biggs under the policy's assault-and-battery coverage and not its CGL coverage.^[2]

         In an amended complaint filed on July 31, 2017, Griffin added E B Management as a defendant in the case. He also modified his statement of the case to assert that he paid the piano player forty dollars and that the piano player offered return of only twenty dollars when he requested a refund.

         On August 20, 2017, E B Management and Ernie Biggs filed a complaint for declaratory judgment. Griffin answered in agreement on October 10, 2017. Houston Specialty answered in opposition on November 30, 2017, and sought dismissal of the complaint with prejudice.

         Griffin voluntarily nonsuited his negligence complaint at some point. He refiled his complaint of December 28, 2017, adding Little Rock Ambulance Authority d/b/a Metropolitan Emergency Medical Services (MEMS), Arch Insurance Company, and five John Doe insurance companies as additional defendants. A negligence claim was asserted against these entities due to MEMS's employees allegedly being "negligent in causing further injury to Plaintiff Brandon Griffin, with that negligence being imputed to" MEMS.

         On March 9, 2018, Houston Specialty filed a motion for summary judgment and a separately filed memorandum in support. It asserted that it had "already accepted coverage under the Policy's only applicable coverage afforded for "assault and battery incidents" subject to a $100, 000 limit of liability, and owes no further obligation to [E B Management and Ernie Biggs] in connection with this lawsuit."

         Also on March 9, 2018, E B Management and Ernie Biggs filed a cross-motion for summary judgment and a separately filed brief in support. Therein, it stated:

5. The [Houston Specialty] Policy provides coverage under its Commercial General Liability Coverage Form (the "CGL Coverage Form"), which also has certain exclusions as more fully set forth in the Complaint accompanying brief in support of this motion. One such exclusion is for an "assault and battery incident," which is defined under the Policy and gives rise to limited Assault and Battery Coverage [(A&B Coverage)].

6. The limits of insurance under the CGL Coverage Form are $1 million. The limits of insurance under the A&B Coverage are $l00, 000. Both limits of insurance are inclusive of the costs of defense or "eroding" limits.

7. The complaint filed in the Underlying Action alleges theories of recovery grounded exclusively in negligence and does not allege (nor purport to allege) any claim, injury, damage, or loss arising out of an "assault," "battery," or "assault or battery incident."

8. [Houston Specialty] has denied coverage under the Policy's CGL Coverage Form for the Underlying Action and refuses to provide them with either a defense or indemnification under that coverage part. [Houston Specialty] is instead providing a defense to the ...