Burlington Insurance Co. v. Blind Squirrel, LLC

228 F. Supp. 3d 1160, 2017 U.S. Dist. LEXIS 3622, 2017 WL 102971
CourtDistrict Court, E.D. Washington
DecidedJanuary 10, 2017
DocketNO. 2:16-cv-00138-SAB
StatusPublished
Cited by2 cases

This text of 228 F. Supp. 3d 1160 (Burlington Insurance Co. v. Blind Squirrel, LLC) is published on Counsel Stack Legal Research, covering District Court, E.D. Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Burlington Insurance Co. v. Blind Squirrel, LLC, 228 F. Supp. 3d 1160, 2017 U.S. Dist. LEXIS 3622, 2017 WL 102971 (E.D. Wash. 2017).

Opinion

ORDER GRANTING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT AND DISMISSING COUNTERCLAIMS

Stanley A. Bastían, United States District Judge

Before the Court is Plaintiff Burlington Insurance Company’s (Burlington) Motion for Summary Judgment, ECF No. 20, and Motion to Dismiss Defendants’ Counterclaims for Bad Faith, ECF No. 30: For the following reasons, Plaintiffs motions are granted.

FACTS AND PROCEDURAL POSTURE

Blind Squirrel is a limited liability company which operates a restaurant and bar known as Stubblefields located in Pullman, Washington. On December -3, 2014, David Warner, an assistant professor at Washington State University, filed a Complaint for Personal Injury and Damages against Blind Squirrel, Corporate Point Developers LLC, and Washington State University in Thurston County Superior Court (2014 Complaint). ECF No. 1-2. The 2014 Complaint seeks damages arising from an incident occurring at Stubblefields on March 30, 2013, during which Warner was permanently injured.

The 2014 Complaint alleges the following: That on March 30, 2013, Warner, along with his two friends Lawrence and Rae McDonald, went to Stubblefields to have a drink, relax, and talk. ECF No, 1-2 ¶3.24. After being overserved, Lawrence McDonald became highly intoxicated. ECF No. 1-2 ¶3.27. Upon leaving Stub-blefields at approximately 2:00 a.m., Warner and Lawrence McDonald encountered four other patrons, who had likewise been overserved, and an altercation between McDonald and these patrons ensued. ECF No. 1-2 ¶¶ 3.28, 3.29. As the altercation escalated, Warner attempted to calm everyone down, stepping between McDonald and the four other patrons to stop a potential fight. ECF No. 1-2 1HI3.31, 3.32. Subsequently, McDonald and the “angry, intoxicated mob lunged at each other,” trapping Warner in the middle. ECF No. 1-2 ¶ 3.33. During the “melee,” Warner was “punched, kicked, or pushed and fell to the ground, striking his head on the concrete.” ECF No. 1-2 ¶ 3.35. As Warner lay on the ground unconscious, the altercation continued and Warner was struck and/or kicked again. ECF No. 1-2 ¶ 3.36. The 2014 Complaint alleges Stubblefields was negligent by failing to exercise its duty of care owed to an invitee; failing to keep the premises free of dangerous conditions; failing to protect Warner from foreseeable misconduct; furnishing intoxicating beverages to obviously intoxicated persons and, thus, creating a risk of violence; and failing to expand security services. ECF No. 1-2 ¶¶ 4.2, 4.3.

On March 3, 2016 Warner filed a second Complaint against Blind Squirrel, its indi[1164]*1164vidual Members, and each Members’ marital community in Whitman County Superi- or Court (2016 Complaint). ECF No. 1-3. The 2016 Complaint is predicated on the same facts at issue in the 2014 Complaint but further alleges that Blind Squirrel un-dercapitalized its business and intentionally purchased grossly insufficient insurance. ECF No. 1-3 ¶¶ 3.12-3.14, 3.16-3.19. Consequently, the 2016 Complaint asks the court to disregard Blind Squirrel’s corporate form and impose personal liability on its Members. ECF No. 1-3 ¶¶ 4.2-4.8.

Prior to the filing of the 2014 Complaint, Blind Squirrel advised Burlington of Warner’s bodily injury claim. ECF No. 1 ¶ 19. On February 4, 2014, Burlington acknowledged receipt of the claim and the parties subsequently discussed the applicable insurance policy (the Policy) and its terms. ECF No. 1 ¶ 19. Burlington advised Blind Squirrel that the Policy provided for policy limits of $260,000 in this case, inclusive of all defense fees and costs, because the claims involved an “assault or battery.” ECF No. 1 ¶ 19. By a letter dated January 30, 2015, Burlington advised Blind Squirrel that it would provide a defense under a complete reservation of rights and appoint defense counsel. ECF No. 1 ¶ 21. Burlington again informed Blind Squirrel that the policy limits were $250,000 inclusive of attorneys’ fees and costs. ECF No. 1 ¶21.

After the commencement of the second action, Blind Squirrel and its Members tendered the 2016 Complaint to Burlington, and in response Burlington agreed to defend Defendants under a complete reservation of rights. ECF No. 1 ¶ 24. Again, Burlington advised Defendants that the applicable insurance policy provided policy limits of $250,000, and further advised Blind Squirrel that the $250,000 policy limit was the total available coverage for both of Warner’s claims (the underlying actions or ‘Warner Lawsuits”). ECF No. 1. ¶ 24.

Burlington’s appointed counsel is currently defending Defendants in the underlying actions and discovery is presently being conducted. ECF No. 25 at 5. As of August 26, 2016, 47 depositions had been taken in the Warner Lawsuits, including depositions of four people directly involved in the altercation, more than six members of the Pullman Police Department, and representatives of Blind Squirrel and other defendants. ECF Nos. 32, 33 ¶3. As of July 31, 2016, Burlington had spent $140,815.13 in defense of Blind Squirrel in the Warner Lawsuits. ECF No. 33 ¶ 4.

On April 29, 2016, Burlington filed its Complaint for Declaratory Judgment with the Court pursuant to the Federal Declaratory Judgment Act, 28 U.S.C. § 2201. ECF No. 1. Burlington seeks a declaration that (1) coverage is only available under the Limited Assault or Battery Liability Coverage endorsements to the Policy; (2) coverage is limited to a total of $250,000, inclusive of attorneys’ fees and costs paid for the defense of Blind Squirrel, and any other insured, i.e., the Members, under the Policy; and (3) coverage is exhausted once Burlington has paid $250,000 in defense costs and/or indemnity payments. ECF No. 1 ¶ 33. Before Defendants filed an Answer, Burlington moved for summary judgment. ECF No. 20. On July 25, 2016, Defendants filed an Answer asserting various affirmative defenses and counterclaims for breach of contract, breach of good faith and fair dealing, bad faith, and a Washington Consumer Protection Act (WCPA) claim. ECF No. 24.

THE INSURANCE POLICY

The applicable insurance policy provides both Commercial General Liability Coverage (CGL Coverage) and Liquor Liability Coverage. ECF No. 1 ¶ 27. Both coverage parts, however, contain an assault and battery exclusion providing that the Policy [1165]*1165does not apply to “bodily injury” or “property damage”:

(1) Expected or intended from the standpoint of any insured.
(2) Arising in whole or in part out of any “assault” or “battery” committed or attempted by any person.
(3) Arising in whole or in part out of any act or omission in connection with avoiding, preventing, suppressing, or halting any actual or threatened “assault” or “battery.”
(4) Arising in whole or in part out of • any actual or threatened verbal or physical confrontation or altercation committed or act or omission in connection with avoiding, preventing, suppressing or halting any actual or threatened verbal or physical confrontation or altercation.

ECF No. 1 ¶ 27, ECF No. 1-1 at 64, 86. The Policy defines assault as “any attempt or threat to inflict injury upon the person of another, or any display of force such as would give a person reason to fear or expect immediate bodily harm.” ECF No. 1-1 at 64, 86. Battery is defined as “physical contact with a person without his or her consent that entails some injury or offensive touching.” ECF No.

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Cite This Page — Counsel Stack

Bluebook (online)
228 F. Supp. 3d 1160, 2017 U.S. Dist. LEXIS 3622, 2017 WL 102971, Counsel Stack Legal Research, https://law.counselstack.com/opinion/burlington-insurance-co-v-blind-squirrel-llc-waed-2017.