Summary
finding that "the policy language is clear"
Summary of this case from Nautilus Ins. Co. v. Jirsa Contruction Co.Opinion
Civil No. 03-887 (RHK/AJB)
December 1, 2003
Joseph A. Nilan and Amy L. Cralam, Gregerson, Rosow, Johnson Nilan, Ltd., Minneapolis, Minnesota, for Plaintiff
John M. Sheran and Brian W. Thomson, Leonard, Street and Deinard, Minneapolis, Minnesota, for Defendant
MEMORANDUM OPINION AND ORDER
Introduction
Plaintiff West Bend Mutual Insurance Co. ("West Bend") has sued Defendant American Legion, Department of Minnesota ("American Legion Minnesota") for a declaratory judgment that there is no coverage under American Legion Minnesota's general liability policy for claims relating to a traffic death allegedly caused by the sale of alcoholic beverages by American Legion Post 184 ("Post 184"). West Bend has now moved for summary judgment on the ground that coverage is precluded under the express terms of the policy. For the reasons set forth below, the Court will grant the motion.
Background
On August 10, 2000 at approximately 5:02 p.m., Orvin Joel Rolland's car slammed headlong into a car carrying Todd and Barbara Urban and their three children, killing Barbara Urban. (Nilan Aff. Ex. 1 (Complaint,Urban v. American Legion. First Judicial District of Minnesota (Filed August 2, 2002)) ¶ 8.) Rolland, a known problem drinker, was under the influence of alcohol at the time of the accident. (Id.) He was sold the alcohol by Pine Island Liquor, which was owned, in part, by American Legion Post 184. (Id.) Todd Urban and his children filed suit against the American Legion and American Legion Minnesota on August 2, 2002, alleging that the sale of alcohol to Rolland was the cause of the accident. (Id.)The American Legion organization consists of many independent entities that work cooperatively toward common goals, including patriotism, veterans' affairs, and rehabilitation. (Nilan Aff. Ex. 3 (Foltz Dep.) at 7, 20.) In Minnesota, there is one American Legion department-Defendant American Legion Minnesota-ten American Legion districts, and approximately 590 American Legion posts. (Id. at 20.) The posts, including Post 184, are separate and distinct entities. (Id. at 9.) American Legion Minnesota has no control over the day-to-day operations or revenue-producing activities of the individual posts. (Id. at 14.)
American Legion Minnesota is the owner of a commercial general liability policy ("the Policy") issued by West Bend. The Policy provides:
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, we will have no duty to defend the insured against any "suit" seeking damages for "bodily injury" or "property damage" to which this insurance does not apply.
(Nelson Aff. Ex. 2 at WB 0139.) The Policy also contains an exclusion that precludes coverage for ongoing operations, including "ALL AMERICAN LEGION POSTS AND DISTRICTS." (Id at WB 0129.)
Standard of Decision
Summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c). It is to be granted only where the evidence is such that no reasonable jury could return a verdict for the nonmoving party. See Anderson v. Liberty Lobby. 477 U.S. 242, 250 (1986). The Court views the evidence, as well as all reasonable inferences, in a light most favorable to the nonmoving party.See Enterprise Bank v. Magna Bank. 92 F.3d 743, 747 (8th Cir. 1996); see Adkinson v. G.D. Searle Co., 971 F.2d 132, 134 (8th Cir. 1992). The moving party carries the burden of showing that there is no genuine issue of material fact. See Celotex Corp. v. Catrett. 477 U.S. 317, 322 (1986); Mems v. City of St. Paul. Dep't of Fire Safety Servs., 224 F.3d 735, 738 (8th Cir. 2000). The nonmoving party may not rest upon the allegations or denials of its pleadings. Rather, the nonmovant must establish the existence of specific facts that create a genuine issue for trial. Neither mere allegations nor denials are sufficient. See Liberty Lobby. 477 U.S. at 256.
On summary judgment, the court does not weigh facts or determine the credibility of affidavits and other evidence. See id at 249. The nonmovant cannot, however, avoid summary judgment by highlighting some alleged factual dispute between the parties. Instead, the disputed fact must be "outcome determinative under prevailing law"; it must be material to an essential element of the specific theory of recovery at issue. See Get Away Club, Inc. v. Coleman. 969 F.2d 664, 666 (8th Cir. 1992). In essence, the court determines whether there is a need for a trial. Liberty Lobby. 477 U.S. at 250.
Analysis
West Bend has moved for summary judgment on the ground that the ongoing operations of American Legion posts are specifically excluded under the Policy. Under the "ongoing operations" exclusion, the Policy
The Court need not decide whether coverage is precluded by the Liquor Liability Exclusion, West Bend's alternative ground for summary judgment.
does not apply to "bodily injury" or "property damage" arising out of the ongoing operations described in the Schedule of this endorsement, regardless of whether such operations are conducted by you or on your behalf or whether the operations are conducted for yourself or others.
(Id. at WB 0129.) The Schedule lists "ALL AMERICAN LEGION POSTS AND DISTRICTS" as the designated ongoing operations excluded from coverage. (Id.) Therefore, the activities of Post 184 are not covered under the plain policy language of the exclusion. Despite this apparent clarity of meaning, American Legion Minnesota contends that the exclusion is ambiguous and must be construed against West Bend.
Under Minnesota law, the Court must apply general contract principles when reviewing the language of an insurance policy. Lobeck v. State Farm Mut. Auto. Ins. Co., 582 N.W.2d 246, 249 (Minn. 1998). Any ambiguity in the language of a policy exclusion must be construed in favor of the insured. Henning Nelson Constr. Co. v. Fireman's Fund Am. Life Ins. Co., 383 N.W.2d 645, 652 (Minn. 1986). If, however, the policy's language is clear and unambiguous, it must be given its plain and ordinary meaning. American Commerce Ins. Brokers. Inc. v. Minnesota Mut. Fire Cas. Co., 551 N.W.2d 224, 227-28 (Minn. 1996). The Court must "fastidiously guard against the invitation to create ambiguities where none exist." Columbia Heights Motors. Inc. v. Allstate Ins. Co., 275 N.W.2d 32, 36 (Minn. 1979).
Here, the policy language is clear. While American Legion Minnesota contends that the word "operations" creates an ambiguity, the Court finds no uncertainty of meaning. Indeed, the "ongoing operations described in the Schedule" are specifically described in the schedule as "ALL AMERICAN LEGION POSTS AND DISTRICTS." (Nelson Aff. Ex. 1 at WB 0129.) Thus, the activities of Post 184-including its part ownership of a liquor store-are excluded from coverage. Likewise, the phrase "by you or on your behalf" is plain and unambiguous. (Id.) The clause excludes coverage for American Legion Posts and Districts " regardless of whether such operations are conducted by you or on your behalf." (Id. (emphasis added).) "[C]onstrued as a whole," Henning Nelson Constr., 383 N.W.2d at 652, the clause plainly excludes coverage for the activities of American Legion posts and districts without regard to whether the activity is conducted by or on the behalf of American Legion Minnesota. The clause could not be clearer.
Accordingly, the conduct of Post 184 is not covered by the commercial general liability policy. West Bend has no duty to defend American Legion Minnesota against the Urbans' suit and summary judgment is therefore appropriate.
Conclusion
Based on the foregoing, and all of the files, records, and proceedings herein, IT IS ORDERED that:
1. Plaintiffs Motion for Summary Judgment (Doc. No. 11) is GRANTED;
2. Plaintiff is under no obligation to defend or indemnify Defendant pursuant to West Bend Policy No. SCO 0304517 for the claims alleged in Marcus Robert Urban, et al. v. The American Legion, et al., Goodhue County District Court File No. ___.LET JUDGMENT BE ENTERED ACCORDINGLY.