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Canopius U.S. Insurance, Inc. v. Middleton

United States District Court, D. South Carolina, Charleston Division

August 17, 2016




         The following matters are before the court on plaintiff Canopius U.S. Insurance, Inc.’s (“Canopius”) first and second motions for summary judgment, as well as defendants Omar Hamilton, Jamar Hamilton, Antwonia Heyward (the “Hamilton-Heyward defendants”), and Lateika Jones’s (“Jones, ” together with the Hamilton-Heyward defendants, the “moving defendants”) competing motion for summary judgment. For the following reasons, the court denies Canopius’s first motion for summary judgment, grants Canopius’s second motion for summary judgment, and grants in part and denies in part the moving defendants’ motion for summary judgment.

         I. BACKGROUND

         In the early morning of February 22, 2015, the moving defendants and defendant Brandon Greene (“Greene”) were shot at Charley O’s, a North Charleston, South Carolina, nightclub owned by defendant Charles Middleton, Jr. (“Middleton”). Though it is unclear what exactly precipitated the shooting, the local media reported that police investigators believe the shooting related to a longstanding feud between Stanley Greene[1] and defendant Omar Hamilton. Pl.’s First Mot. Exs. B, C (local news articles describing investigation of the incident). Two defendants-Jones and Greene-also suggested that the gunfire was related to some sort of feud in their correspondence with Canopius. See Pl.’s First Mot. Ex. H (letter from Jones’s counsel stating that “a customer . . . began firing because of some feud”); Pl.’s First Mot. Ex. G (letter from Greene’s counsel including draft complaint which alleges that “a dispute . . . escalated into gunfire”). However, this information has not been confirmed or presented in the form of admissible evidence. All that is known is multiple shots were fired and the incident caused a number of patrons to flee the premises. Pl.’s First Mot. Ex. J, Jones Interrogatories at 3.

         At the time of the incident, Middleton held a commercial general liability insurance policy with Canopius (the “Policy”). Pl.’s First Mot. Ex. A, Policy. Under the Policy, Canopius agreed to “pay those sums that [Middleton] becomes legally obligated to pay as damages because of ‘bodily injury’” when such “‘bodily injury’ is caused by an ‘occurrence’” during the policy period. Id. at 22. “Bodily injury” is defined under the Policy as “bodily injury, sickness or disease sustained by a person.” Id. at 33. An “occurrence” is defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” Id. at 35. The Policy provides a $1, 000, 000 per occurrence limit for this coverage. Id. at 17.

         The Policy also contains an Assault and Battery Exclusion (“A/B Exclusion”), which provides that coverage “does not apply to any claim and/or cause of action arising from”

1. An assault and/or battery regardless of culpability or intent; or
2. A physical altercation; or
3. Any act or failure to act to prevent or suppress such assault and/or battery or physical altercation.

Id. at 47. The A/B Exclusion further specifies that the Policy also excludes the following:

4. Damages arising out of allegations of negligent hiring, placement, training or supervision, or to any act, error, or omission relating to such assault and/or battery or physical altercation[; and]
5. Damages arising out of failure to provide proper security or safe premises to any person subject to and assault and/or battery or physical altercation.


         Canopius filed the instant declaratory judgment action on September 15, 2015, before any action was filed against Middleton, seeking a declaration that it has no obligation to indemnify the defendants for any bodily injury that resulted from the February 22, 2015 incident. Compl. ¶¶ 18-20. Canopius filed its initial motion for summary judgment in this action on February 24, 2016.

         On March 4, 2016, Greene filed a civil lawsuit against Middleton in the Court of Common Pleas for Charleston County (“Greene Action”). Greene’s complaint alleges that “a dispute occurred amongst [] patrons inside Charley O’s, ” and that “this dispute escalated into gunfire resulting in four [] innocent patrons, including [Greene], being shot.” Pl.’s Second Mot. Ex. A, Greene Compl. ¶¶ 4, 5. Greene further claims his injuries were caused by Middleton’s negligence in “failing to protect [Greene] from foreseeable risk of physical harm; [] failing to implement proper measures to deter and prevent crimes on [the] premises; [] failing to staff adequate personnel to ensure the rights and safety of [Greene]; [and] failing to train personnel as were on hand in the best security practices.” Id. ¶ 10. Middleton has demanded that Canopius provide a defense in the Greene Action and indemnify him for any damages incurred in connection therewith. Pl.’s Second Mot. Ex. B.

         On April 14, 2016, following the filing of the Greene Action, Canopius filed a second motion for summary judgment, specifically requesting a declaration that it had no duty to defend or indemnify any defendant with regard to that action. On May 2, 2016, the moving defendants filed a joint response to both motions as well as their own motion for summary judgment.[2] On May 5, 2016, Canopius filed a response to the moving defendants’ motion, and on May 16, 2016, the moving defendants filed a reply. The court held a hearing on the motions on June 22, 2016.

         On July 19, 2016, the Hamilton-Heyward defendants brought three separate, but identical, actions against Middleton in the Court of Common Pleas for Charleston County (“Hamilton-Heyward Actions”). See Exhibit A, Omar Hamilton Compl. ¶¶ 1-5; Exhibit B, Jamar Hamilton Compl. ¶¶ 1-5; Exhibit C, Antwonia Heyward Compl. ¶¶ 1-5. Unlike the Greene Action, the Hamilton-Heyward Actions do not specifically allege that the February 22, 2015 incident arose from a dispute. Instead, the Hamilton-Heyward defendants simply allege that they were “injured by the discharge of a firearm at [Middleton’s] premises, ” and that their injuries were the result of Middleton’s negligence. E.g., Omar Hamilton Compl. ¶ 3.

         The motions are now ripe for the court’s review.

         II. STANDARD

         Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “Rule 56(c) of the Federal Rules of Civil Procedure requires that the district court enter judgment against a party who, ‘after adequate time for discovery . . . fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.’” Stone v. Liberty Mut. Ins. Co., 105 F.3d 188, 190 (4th Cir. 1997) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)). Any reasonable inferences are to be drawn in favor of the nonmoving party. See Webster v. U.S. Dep’t of Agric., 685 F.3d 411, 421 (4th Cir. 2012). However, to defeat summary judgment, the nonmoving party must identify an error of law or a genuine issue of disputed material fact. See Fed.R.Civ.P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986); see also Bouchat v. Balt. Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 2003).

         Although the court must draw all justifiable inferences in favor of the nonmoving party, the nonmoving party must rely on more than conclusory allegations, mere speculation, the building of one inference upon another, or the mere existence of a scintilla of evidence. See Anderson, 477 U.S. at 252; Stone, 105 F.3d at 191. Rather, “a party opposing a properly supported motion for summary judgment . . . must ‘set forth specific facts showing that there is a genuine issue for trial.’” Bouchat, 346 F.3d at 522 (quoting Fed.R.Civ.P. 56(e) (amended 2010)). If the adverse party fails to provide evidence establishing that the factfinder could reasonably decide in his favor, then summary judgment shall be entered “regardless of ‘[a]ny proof or evidentiary requirements imposed by the substantive law.’” Id. (quoting Anderson, 477 U.S. at 248).

         “[A]t the summary judgment stage the judge’s function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Id. at 249. When the party moving for summary judgment does not bear the ultimate burden of persuasion at trial, it may discharge its burden by demonstrating to the court that there is an absence of evidence to support the nonmoving party’s case. Celotex, 477 U.S. at 325. The nonmovant must then “make a showing sufficient to establish ...

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