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Founders Insurance Co. v. Hamilton

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

August 9, 2017

Founders Insurance Company, Plaintiff,
John Hamilton a/k/a Jim Hamilton, Individually and d/b/a Aces High Club, Aces High Club and Kenneth Weatherford, Defendants.


         Plaintiff Founders Insurance Company (“Plaintiff”), filed this declaratory judgment action against Defendants John Hamilton a/k/a Jim Hamilton, individually and d/b/a Aces High Club (“Hamilton”), and Aces High Club (“AHC”) (together “Defendants”) seeking a declaration by the court that a Liquor Liability Policy issued by Plaintiff and bearing policy number LLSC00270 (“Policy”) does not provide coverage to Defendants, create an obligation to defend Defendants or create an obligation to indemnify Defendants with regard to the lawsuit styled Kenneth Weatherford v. John Hamilton, Aces High Club, John Calvin Sikes, Fish Tales a/k/a JS Fish Tales, pending in the Court of Common Pleas for Orangeburg County (South Carolina) and bearing Case No. 2014-CP-38-00433 (hereinafter the “Underlying Lawsuit”). (ECF No. 1 at 1-2.)

         This matter is before the court on Plaintiff's Renewed Motion for Summary Judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure (“Renewed Rule 56 Motion”). (ECF No. 64.) Defendants and their Co-Defendant Kenneth Weatherford (“Weatherford”) oppose Plaintiff's Renewed Rule 56 Motion asserting that it should be denied. (ECF Nos. 66 & 68.) For the reasons set forth below, the court GRANTS Plaintiff's Renewed Rule 56 Motion.


         The court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332(a) based on Plaintiffs allegations that the action is between citizens of different states and the amount in controversy is in excess of $75, 000.00, exclusive of costs and interest. (ECF No. 1 at 2 ¶ 5-3 ¶ 11)


         Defendants are involved in the Underlying Lawsuit that alleges their negligence on or about January 22, 2012, in serving Oscar Melvin (“Melvin”) excessive amounts of alcohol was the cause of an assault perpetrated by Melvin against Weatherford at a different bar than AHC, which resulted in physical injury to Weatherford. (ECF No. 1 at 4 at ¶¶ 16-17.) Defendants claim they are insured and entitled to coverage under the Policy, and are entitled to have Plaintiff defend and indemnify them in regard to the Underlying Lawsuit. (Id at 4 ¶ 19-5 ¶ 20.)

         Plaintiff issued the Policy to Defendants with effective dates of June 3, 2011, through June 3, 2012. (ECF No. 64-2 at 8.) In the Policy, there is an “Exclusions to Coverage” subsection that contains a paragraph (k) titled “Assault and/or Battery, ” which paragraph provides as follows:

This insurance does not apply to: . . . “Injury” arising from: (1) assault and/or battery committed by any “insured”, any “employee” of an “insured”, or any other person; (2) The failure to suppress or prevent assault and/or battery by any person in subparagraph k. (1) above; (3) The selling, serving or famishing of alcoholic beverages which results in an assault and/or battery; or (4) The negligent: (a) Employment; (b) Investigation; (c) Supervision; (d) Reporting to the proper authorities, or failure to so repost; or (e) Retention of or by a person for whom any “insured” is or ever was legally responsible and whose conduct would be excluded by subparagraphs k. (1) through k. (3) above.

(Id at 1, 3.)

         On or about April 24, 2014, Weatherford filed the Underlying Lawsuit alleging claims against Defendants, John Calvin Sikes and Fish Tales a/k/a JB Fish Tales for (1) “negligence/dram shop/negligence per se/survival/conscious pain and suffering”; and (2) to pierce the corporate veil. (ECF No. 1-2 at 9 ¶ 24-13 ¶ 37.) Plaintiff provided Defendants a defense in the Underlying Lawsuit pursuant to a reservation of rights. (ECF No. 64-1 at 3.)

         On January 28, 2015, Plaintiff filed the instant declaratory judgment action in this court. (ECF No. 1.) On October 14, 2015, Plaintiff filed a Rule 56 Motion. (ECF No. 36.) Neither Defendants nor Weatherford filed opposition to Plaintiffs first Rule 56 Motion. However, because the copy of the Policy that was attached to the Complaint did not contain a declarations page, the court asked Plaintiff to file a complete copy of the Policy. On September 19, 2016, Plaintiff filed another copy of the Policy that also did not contain the declarations page. (ECF No. 53.) As a result, the court entered a Text Order on September 20, 2016, denying Plaintiffs first Rule 56 Motion without prejudice. (ECF No. 54.) Plaintiff moved for reconsideration of the September 20, 2016 Text Order on September 28, 2016 (ECF No. 55), which Motion was denied on January 24, 2017. (ECF No. 62.)

         Thereafter, on February 13, 2017, Plaintiff filed the instant Renewed Rule 56 Motion. (ECF No. 64.)


         A. Declaratory ...

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