National Union Fire Insurance v. Papa John's International, Inc.

29 F. Supp. 3d 961, 2014 WL 2993825, 2014 U.S. Dist. LEXIS 90792
CourtDistrict Court, W.D. Kentucky
DecidedJuly 3, 2014
DocketCivil Action No. 3:12-CV-00677-CRS
StatusPublished
Cited by4 cases

This text of 29 F. Supp. 3d 961 (National Union Fire Insurance v. Papa John's International, Inc.) is published on Counsel Stack Legal Research, covering District Court, W.D. Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Union Fire Insurance v. Papa John's International, Inc., 29 F. Supp. 3d 961, 2014 WL 2993825, 2014 U.S. Dist. LEXIS 90792 (W.D. Ky. 2014).

Opinion

MEMORANDUM OPINION

CHARLES R. SIMPSON III, Senior District Judge.

This matter is before the Court on the following motions:

1) cross motions for summary judgment (DNs 21, 25) filed by Plaintiffs National Union Fire Insurance Company of Pittsburgh, Pennsylvania (“National Union”) and American Home Assurance Company (“American Home”) (collectively “Plaintiffs”), and Defendants Papa John’s International, Inc., and Papa John’s USA, Inc. (collectively “Defendants”);
2) a motion for leave to file supplemental authority (DN 50) filed by Plaintiffs.

For the reasons set forth below, the Court will:

1) grant the motion for summary judgment filed by Plaintiffs;
2) deny the motion for summary judgment filed by Defendants; and
3) deny as moot the motion for leave to file supplemental authority filed by Plaintiffs.

BACKGROUND

Unless otherwise indicated, the following facts are undisputed. Defendants are insured under several commercial general liability (“CGL”) policies issued by Plaintiffs covering different time periods.1 Although issued by different companies at different times, each of the policies provided coverage for liability incurred by Defendants for “property damage” and “personal and advertising injury” resulting from their business operations. As defined in the policies, “property damage” consists of either: 1) “[pjhysical injury to tangible property;” or 2) “[l]oss of use of tangible property that is not physically injured.” In order to qualify for coverage, any property damage must be “caused by an ‘occurrence,’ ” which the policies define as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” In pertinent part, the policies define “personal and advertising injury” as “injury, including consequential ‘bodily injury,’ humiliation, mental anguish, or shock, arising out of ... oral or written publication in any manner, of material that violates a person’s right of privacy.”

Importantly, the policies’ coverage for property damage and personal and advertising injury were subject to an exclusion for “Violation of Statutes in Connection With Sending, Transmitting, or Communi-[964]*964eating Any Material or Information.” Specifically, the exclusion provided that:

This insurance does not apply to any loss, injury, damage, claim, suit, cost or expense arising out of or resulting from, caused directly or indirectly, in whole or in part by, any act that violates any statute, ordinance or regulation of any federal, state or local government, including any amendment of or addition to such laws, that includes,2 addresses or applies to the sending, transmitting or communicating of any material or information, by any means whatsoever.

In July 2010, a class action "lawsuit was filed against Defendants in .the United States District Court for the Western District of Washington alleging that Defendants unlawfully sent" unsolicited text messages to the class plaintiffs’ cellular telephones between October 2009 and April 2010. According to the complaint, Defendants encouraged its franchisees to employ an advertising company called “ONTIME4U” to send text messages advertising Defendants’ products to the cellular telephones of residents of Seattle, Washington. Accordingly, the class plaintiffs have asserted the following causes of action against Defendants:

1) Violation of the Telephone Consumer Protection Act (“TCPA”);
2) Violation of the Washington State Consumer Protection Act (“WSCPA”); and
3) Negligent marketing practices by • failing to properly supervise or train its franchisees and allowing them to access class plaintiffs’ private cellular telephone numbers.

Ultimately, the district court certified a national class consisting of “All persons in the United States of America who were sent, to their cellular telephone numbers, at least one unsolicited text message that marketed a Papa John’s branded product, good, or service through ONTIME4U.” Upon Papa John’s appeal, the Ninth Circuit upheld the district court’s certification of the national class.

Since its inception, Plaintiffs have consistently denied that the class action lawsuit qualifies for coverage under the terms of Defendants’ CGL policies. According to Plaintiffs, the lawsuit does not seek damages for either “property damage” caused by an “occurrence” or “personal and advertising injury” as those terms are defined in the policies. Furthermore, even if coverage were held to exist, Plaintiffs claim that the policies’ exclusion for “Violation of Statutes in Connection With Sending, Transmitting, or Communicating Any Material or Information” negates any such coverage because the alleged transmission of unsolicited text messages clearly violated the TCPA.3

Accordingly, on October 17, 2012, Plaintiffs filed the present action seeking a declaratory judgment establishing the absence of coverage for the class action lawsuit under Defendants’ CGL policies. On February 6, 2013, Plaintiffs filed a motion for summary judgment (DN 21), arguing that there was no genuine dispute that the class action lawsuit failed to qualify for coverage under the terms of the policies. On April 4, 2013, Defendants filed a cross motion for summary judgment (DN 25), arguing that the damages alleged by the class plaintiffs qualified as both “property damage” and “per[965]*965sonal and advertising injury” and that the exclusion for violations of statutes defeated its reasonable expectations as the insured and therefore must be invalidated.

On October 29, 2013, Magistrate Judge James D. Moyer conducted a status conference wherein he determined that the parties should be granted an opportunity to file supplemental memoranda discussing any relevant legal authority that had been issued since the initial filing of the motions for summary judgment. (DN 41). On November 22, 2013, the parties each filed their supplemental authority briefs. (DNs 44, 45). In their response to Plaintiffs’ supplemental authority brief, Defendants argued that several cases and arguments relied on by Plaintiffs were available during the initial briefing period and therefore were not properly considerable as supplemental authority. (DN 49).

Having considered the parties’ briefs and being otherwise sufficient advised, the Court will now address the motions for summary judgment.

STANDARD

Before granting a motion for summary judgment, the Court must find that there is no genuine issue of material fact such that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The party moving for summary judgment bears the initial burden of establishing the nonexistence of any issue of material fact, Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
29 F. Supp. 3d 961, 2014 WL 2993825, 2014 U.S. Dist. LEXIS 90792, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-union-fire-insurance-v-papa-johns-international-inc-kywd-2014.