Opinion
Civil Action No. 3:01-CV-0443-P
September 4, 2002
MEMORANDUM OPINION AND ORDER
Now before the Court for consideration are:
1. Plaintiff's Motion for Summary Judgment, with brief in support and appendix, filed July 5, 2002.
2. Defendant's response to Plaintiff's Motion for Summary Judgment, with brief in support, filed August 19, 2002.
3. Plaintiff's reply to Defendant's response to Plaintiff's Motion for Summary Judgment, with brief in support, filed August 19, 2002.
4. Intervenor's response to Plaintiff's Motion for Summary Judgment, with brief in support, filed July 26, 2002.
5. Plaintiff's reply to Intervenor's response to Plaintiff's Motion for Summary Judgment, with brief in support, filed August 8, 2002.
6. Intervenor's Motion for Partial Summary Judgment, with brief in support and appendix, filed July 8, 2002.
7. Defendant's Motion for Partial Summary Judgment, with brief in support, filed July 10, 2002.
8. Plaintiff's response to Intervenor and Defendant's Motions for Partial Summary Judgment, with brief in support and appendix, filed July 23, 2002.
9. Intervenor's reply to Plaintiff's response to Intervenor's Motion for Partial Summary Judgment, with brief in support, filed August 8, 2002.
10. Intervening Defendant Miller Equipment Co.'s Motion to File Belated Answer to Plaintiff's First Amended Complaint.
After a thorough review of the evidence, the pleadings, the parties' briefs, and the applicable law, for the reasons set forth below, the court DENIES Plaintiff's Motion for Summary Judgment, DENIES Defendant's Motion for Summary Judgment in part, GRANTS Defendant's Motion for Summary Judgment in part, DENIES Intervenor Lena Nolan's ("Nolan") Motion for Summary Judgment in part, GRANTS Intervenor Nolan's Motion for Summary Judgment in part, GRANTS Intervenor Miller's Motion for Leave to File Belated Answer.
BACKGROUND
Plaintiff St. Paul Surplus Lines Insurance Co. ("St. Paul") brought suit against Defendants Clyde Brothers Johnson Circus Corp., Don Johnson, Shane Johnson and Bob Gibbs ("Gibbs") for Declaratory Relief requesting that the Court declare St. Paul has no duty to defend or indemnify Defendants under St. Paul's Commercial General Liability Policy (the "CGL Policy"). The Court subsequently granted Miller Equipment Co. ("Miller") and Nolan's Motions to Intervene.
On March 19, 1999, St. Paul issued the CGL Policy to Clyde Brothers Johnson Circus Corp. ("Clyde Brothers") as the named insured. Pl.'s App. at 11. The CGL Policy specified who was protected under the CGL Policy:
If you are shown in the Introduction as a named insured and a corporation or an other organization, you are a protected person. Your directors and executive officers are protected persons only for the conduct as your directors or executive officers. . . . Id. at 25.
The CGL Policy continued, defining executive officer as:
[A]ny person holding an officer position created by the charter, constitution, or by-laws, or any other similar governing document, of a corporation or other organization. Id.
The CGL Policy did not cover Clyde Brothers liability for bodily injury to an employee of Clyde Brothers arising from his employment. Id. While The CGL Policy named employees and volunteer workers as protected persons, it excluded coverage for employees or volunteer workers who caused bodily injury or personal injury to fellow employees or volunteer workers. Id. The
The CGL Policy exclusion reads:
[W]e won't cover bodily injury to an employee of the protected person arising out of and in the course of his or her:
• employment by the protected person; or
• performance of duties related to the conduct of the protected person's business.
The CGL Policy exclusion read:
[N]o employee or volunteer worker is a protected person for bodily injury or personal injury to: . . .
• any fellow employee;
• any fellow volunteer worker or any of your employees . . .
CGL Policy defined employee as "a leased worker, other than a leased temporary worker," and volunteer worker as "any person other than (1) an employee, or (2) a leased temporary worker." Id.
The CGL Policy defined leased temporary worker as,
[A] leased worker who is hired to:
• temporarily take the place of a permanent employee on leave; or
• meet seasonal or short-term workload conditions.
On May 15, 1999, a performing elephant leased to Clyde Brothers by Miller killed Shayne Gressett ("Gressett"). Intv. Mot. for Sum. Jud. at 7. On May 25, 2000, Nolan, individually and as the representative of the Estate of Shayne Gressett, filed suit against Clyde Brothers and Don Johnson, Shane Johnson, and Gibbs individually for negligence. Id. At issue in this case is the employment relationship between Gressett and Clyde Brothers, and the rights and duties of St. Paul's to defend and indemnify Clyde Brothers and Don Johnson, Shane Johnson, and Gibbs.
DISCUSSION
I. STANDARD OF REVIEW FOR SUMMARY JUDGMENT
Summary judgment shall be rendered when the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett., 477 U.S. 317, 323 (1986). The moving party bears the burden of informing the district court of the basis for its belief that there is an absence of a genuine issue for trial, and of identifying those portions of the record that demonstrate such an absence. Id. at 323. However, all evidence and the reasonable inferences to be drawn therefrom must be viewed in the light most favorable to the party opposing the motion. United States v. Diebold, Inc., 369 U.S. 654, 655 (1962).
Once the party has made an initial showing, the party opposing the motion must come forward with competent summary judgment evidence of the existence of a genuine fact issue. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). The party defending the motion for summary judgment cannot defeat the motion unless he provides specific facts that show the case presents a genuine issue of material fact, such that a reasonable jury might return a verdict in his favor. Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986). Mere assertions of a factual dispute unsupported by probative evidence will not prevent a summary judgment. Id. at 248-50; Abbot v. Equity Group, Inc., 2 F.3d 613, 619 (5th Cir. 1993). In other words, conclusory statements, speculation and unsubstantiated assertions will not suffice to defeat a motion for summary judgment. Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415, 1429 (5th Cir. 1996) (en banc).
If the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to his case, and on which he bears the burden of proof at trial, summary judgment is mandatory. Celotex, 477 U.S. at 322-24; Washington v. Armstrong World Industries, Inc., 839 F.2d 1121, 1122 (5th Cir. 1988). A motion for summary judgment cannot be granted simply because there is no opposition, even if the failure to oppose it violates a local rule. Hibernia Nat'l Bank v. Adminstracion Central Sociedad Anonima, 776 F.3d 1277, 1279 (5th Cir. 1985). However, when the nonmovant fails to provide a response identifying the disputed issues of fact, the Court is entitled to accept the movant's description of the undisputed facts as prima facie evidence of its entitlement to judgment. Eversly v. Mbank Dallas, 843 F.2d 172, 173-174 (5th Cir. 1999); Nordar Holdings, Inc. v. Western Sec. (USA) Ltd., No. 3:96-CV-0427-H, 1996 WL 739019, *2 (N.D. Tex. Dec. 18, 1996).
Finally, the Court has no duty to search the record for triable issues. Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998). "The party opposing summary judgment is required to identify specific evidence in the record and to articulate the precise matter in which the evidence supports his or her claim." Id. A party may not rely upon "unsubstantiated assertions" as competent summary judgment evidence. Id.
II. WAS GRESSETT AN EMPLOYEE
The disputed issue at hand is whether or not Gressett was an employee of Clyde Brothers. St. Paul contends that Defendants admitted Gressett was an employee in Defendant's Answer. However, the Court issued an Order allowing Defendants leave to file an Amended Answer to Plaintiff's First Amended Complaint. In Defendant's Amended Answer, Defendant's denied that Gressett was an employee. Because this is the central issue to the case, the parties were aware that Defendant's contested Gressert's employment status. As such, there is was no unfair surprise in granting Defendants leave to amend, making this issue moot.
Plaintiff's next argue that because Clyde Brothers paid for Gressett's Canadian work visa that Gressett was an employee of Clyde Brothers. However, while Clyde Brothers may have paid for the visa, Leonardo Circus was listed on the visa as the employer. St. Paul explains that all of Clyde Brothers employee's visas looked similar to Gressett's visa, in that they all had Leonardo Circus listed as the employer. However, merely because other employees have Leonardo Circus listed as their employer when, in fact, Clyde Brothers is their employer, does not establish that Gressett was an employee of Clyde Brothers.
Thus, to determine Gressett's employment status, we turn to the CGL Policy. The CGL Policy does not include a definition of employee, except to say that "Employee includes a leased worker, other than a leased temporary worker." Pl.'s App. at 25. In Texas, insurance policy interpretation is controlled by the rules of construction applicable to contracts generally. State Farm Fire Cas. Ins. Co. v. Keegan, 209 F.3d 767, 768 (5th Cir. 2000) (citing Cicciarella v. Amica Mutual Ins. Co., 66 F.3d 764, 768 (5th Cir. 1995). When a term in an insurance policy is unambiguous, it is to be given its plain, ordinary and generally accepted meaning. Ramsay, v. Maryland Am. Gen. Ins. Co., 533 S.W.2d 344, 346 (Tex. 1976). Here, the term employee is unambiguous. Therefore, it must be given its plain, ordinary meaning.
The relationship between servant and master exists whenever the employer retains the right to control the employee. El Paso Laundry Co., Inc. v. Gonzales, 36 S.W.2d 793 (Tex.Civ.App.-El Paso 1931, writ dism'd). The Texas Supreme Court has recently outlined factors to assist in determining if the employer did, in fact, have the right to control. Limestone Products Distribution, Inc. v. McNamara, 71 S.W.3d 308, 312 (Tex 2002). These factors include "(1) the independent nature of the worker's business; (2) the worker's obligation to furnish necessary tools, supplies, and materials to perform the job; (3) the worker's right to control the progress of the work except about final results; (4) the time for which the worker is employed; and (5) the method of payment, whether by unit of time or by the job." Id.
Where there are specific facts that show the case presents a genuine issue of material fact then summary judgment must be denied. In examining the first and third Limestone factor, the worker's independence and right to control his work, conflicting facts exist. Plaintiff's claim that Gressett's work was not independent, rather it was highly supervised. Pl's Mot. for Sum. Jud. at 9-11. Plaintiff further asserts that as Clyde Brother's employee, Gressett had no discretion as to when or how he handled the elephants, indicating that his work was not independent and that Gressett did not have the right to control the progress of the work. Pl.'s Mot. for Sum. Jud. at 11. However, Intervenor claims that Gressett was not an employee and provided statements from Gibbs in which Gibbs denied that Gressett was his assistant, or even working on a job for him. Intv.'s App. at 30. Gibbs further claimed that there were certain things that Gressett could not do because he was not the regular employee. Id. at 31. For example, if Gressett was assisting Gibbs and then decided to leave, Gibbs could not force him to finish the job — because he was not an employee. Id. at 32. Likewise, Shane Johnson stated that Gressett did not have a job with Clyde Brothers, but would help out occasionally. Id. at 22.
In considering further conflicting testimony presented pertaining to the fourth Limestone factor, the time for which the worker is employed, Plaintiff claims that Gressett was hired prior to the Canadian tour and employment continued for the duration of the tour. Pl.'s Mot for Sum. Jud. at 11. However, Intervenor claims that Gressett was not an employee, but merely a friend of Shane Johnson. Gressett merely had time off and wanted to travel. Intv.'s App. at 33.
Finally, there is a fact issue as to whether or not Gressett was paid. Wesley Ver Kuilen, an employee of Clyde Brothers stated that Shayne Gressett was paid weekly by Shane Johnson. Pl's App. at 106. However, both Don Johnson and Gibbs testified that Gressett was not paid. Intv.'s App. at 29, 38. Furthermore, Shane Johnson stated that Gressett was not earning his keep while on tour. Id. at 25.
Because the specific facts show the case presents a genuine issue of material fact, Plaintiff, Defendant's and Intervenor's Motions for Summary Judgment are DENIED as to the issue of Gressett's employment status.
III. FELLOW EMPLOYEE EXCLUSION AND EXECUTIVE OFFICER EXEMPTION
The CGL Policy included a fellow employee exclusion. The CGL Policy exclusion read:
[N]o employee or volunteer worker is a protected person for bodily injury or personal injury to:
. . .
• any fellow employee;
• any fellow volunteer worker or any of your employees . . .
The use of the word fellow preceding employee and volunteer makes it clear that the first listed exclusion applies to employees and the second to volunteers. Thus, according to the Court's interpretation of the CGL Policy, no employee is covered for an injury to a fellow employee and no volunteer is protected for injury to either a fellow volunteer or an employee. If the jury determines that Gressett was a volunteer worker, then St. Paul has a duty to defend and indemnify Shane Johnson, Don Johnson and Gibbs because there is no exclusion for an employee injuring a volunteer worker.
The Court adopts Defendant's interpretation of the CGL Policy as to the fellow employee exclusion.
If the jury finds that Gressett is an employee, then the exclusion applies because this would be an instance of an employee injuring a fellow employee. However, The CGL Policy also included an exemption which stated that the employees and volunteer workers section would not apply to executive officers if the protected person is a corporation or other organization. Pl.'s App. at 25. Defendants and Intervenor claim that Don Johnson and Shane Johnson are executive officers. St. Paul disputes this because Clyde Brother's status as a corporation had lapsed long before the time of the accident. Thus, St. Paul continues, if Clyde Brothers is not a corporation, then there can be no executive officers, and no applicable exemption.
As previously noted, insurance policy interpretation is controlled by the rules of construction applicable to contracts generally. State Farm Fire Cas. Ins. Co. v. Keegan, 209 F.3d 767, 768 (5th Cir. 2000) (citing Cicciarella v. Amica Mutual Ins. Co., 66 F.3d 764, 768 (5th Cir. 1995). When a term in an insurance policy is unambiguous, as it is here, it is to be given its plain, ordinary and generally accepted meaning. Ramsay, v. Maryland Am. Gen. Ins. Co., 533 S.W.2d 344, 346 (Tex. 1976). The CGL Policy specifically defined Corporation stating that "if you are shown in the Introduction as a named insured and a corporation or an other organization, you are a protected person." Pl.'s App. at 24-25. The introduction of the CGL Policy states that the insured is a Corporation, and lists the insured as Clyde Brothers Johnson Circus Corp. Thus, because the insurance policy specifically contemplates the "corporate" or "other organization" status of Clyde Brothers, then the Court will not re-write the contract to find otherwise. Clyde Brother's coverage was based on its corporate status, Clyde Brothers paid premiums under corporate status, and Clyde Brothers renewed its insurance each term based on its corporate status. The Court therefore holds that Clyde Brothers has coverage as a corporation under the CGL Policy.
Because Clyde Brothers is a corporation or "other organization," we next turn to the CGL Policy's definition of executive officer. The CGL Policy defines executive officer as "any person holding an officer position created by charter, constitution, or by-laws, or any other similar governing document, of a corporation or other organization." Id. at 25. Don Johnson stated that he was an officer of the corporation. Pl.'s App. to Resp. to Intv.'s Mot. for Sum. Jud. at 115. While the parties have provided no formal documentation proving that Don Johnson was an executive officer, Don Johnson clearly provides in his deposition that he was the owner of Clyde Brothers and an officer of the corporation. Id. Accordingly, because a sworn statement is competent Summary Judgment evidence and Plaintiff has submitted no evidence to the contrary, the court finds sufficient evidence to hold that Don Johnson was an executive officer of Clyde Brothers. Thus, the CGL Policy was written to cover Clyde Brothers Corp., as a corporation, and the executive officer exemption applies to Don Johnson.
The Court next addresses whether or not Shane Johnson was an executive officer of Clyde Brothers. In his deposition, Don Johnson stated that his son was an officer of the corporation in later years, but that it was "not anything official." Pl.'s App. to Resp. to Intv.'s Mot. for Sum. Jud. at 115. Shane Johnson stated that "at one time" he was the vice president of Clyde Brothers. Id. at 164. However, Shane Johnson answered, when asked if he held any position as an officer of Clyde Brothers, "No. My father is the owner of the show, of the corporation." Intv.'s App. at 23. Shane Johnson continued, admitting that at one time he was the vice president, but that he currently was not the vice president of the show. Id. at 23-24. Based on these inconclusive statements, the Court holds that neither Intervenors nor Defendants have provided sufficient evidence on which the Court can conclude Shane Johnson was an officer of Clyde Brothers at the time of the accident. While Shane Johnson may have been vice president "at one time," the Court concludes that for the purpose of coverage under the CGL Policy, Shane Johnson is not an executive officer.
Therefore, if the jury finds that Gressett was an employee of Clyde Brothers, then having resolved the issue pertaining to the executive officer's exemption, St. Paul would have the duty to defend or indemnify Don Johnson. However, St. Paul would not have the duty to defend or indemnify Gibbs or Shane Johnson because they are not executive officers and they fall within the fellow employee exclusion.
Accordingly, Intervenor's Partial Motion for Summary Judgment and Defendant's Motion for Summary Judgment is GRANTED as to the executive exemption's application to Don Johnson.
IV. COOPERATION WITH ST. PAUL'S INVESTIGATION
St. Paul claimed that Clyde Brothers, Don Johnson, Shane Johnson or Gibbs failed to cooperate with St. Paul's investigation of the claims in this case. St. Paul provided no evidence as to defendant's failure to cooperate with their investigation. Accordingly, Intervenor and Defendant's Motions for Partial Summary Judgment are hereby GRANTED in part as to their failure to cooperate.
V. MILLER'S MOTION TO FILE ANSWER
Defendant/Intervenor Miller filed a Motion for Leave to File Belated Answer. Because Miller does not allege new facts nor raise any affirmative defenses and because this will not prejudice the parties, this motion is hereby GRANTED.
CONCLUSION
Accordingly, upon careful review of the parties' arguments, the summary judgment evidence, and the relevant law, for the reasons stated above, the court DENIES Plaintiff's Motion for Summary Judgment, DENIES Defendant's Motion for Summary Judgment in part, GRANTS Defendant's Motion for Summary Judgment in part, DENIES Intervenor Lena Nolan's ("Nolan") Motion for Summary Judgment in part, GRANTS Intervenor Nolan's Motion for Summary Judgment in part, GRANTS Intervenor Miller's Motion for Leave to File Belated Answer.