Noble Eagle Sales, LLC d/b/a Shooter's Choice v. Mesa Underwriters Specialty Insurance Company

• Court: Superior Court of Delaware
• Decided: June 4, 2024
• Docket: K22C-03-022 RLG
• Status: Published

Opinion

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

NOBLE EAGLE SALES, LLC d/b/a ) SHOOTER’S CHOICE, A Delaware ) Limited Liability Company, ) ) C.A. No. K22C-03-022 RLG Plaintiff, ) ) MESA UNDERWRITERS ) SPECIALTY INSURANCE ) COMPANY, SELECTIVE ) INSURANCE COMPANY OF ) AMERICA, a New Jersey Corporation, ) WILLIAMS INSURANCE AGENCY, ) INC., a Delaware Corporation, ) MCSWEENY AGENCY, LLC, a New ) Jersey limited liability company, ) ANTHONY DIMARZO, and SETH ) COSTELLO. ) ) Defendants. )

Submitted: February 2, 2024 Decided: June 4, 2024

MEMORANDUM OPINION AND ORDER

Upon Defendant’s Motion for Summary Judgment – DENIED. Upon Plaintiff’s Cross Motion for Partial Summary Judgment – GRANTED.

Catherine M. Cramer, Esquire, Baird Mandalas Brockstedt & Federico, LLC, Wilmington, Delaware. Attorney for Plaintiff.

William T. Mandia, Esquire (argued) and Joelle E. Polesky, Esquire, Stradley, Ronon, Stevens & Young, LLP, Wilmington, Delaware. Attorneys for Defendants MESA Underwriters Specialty Insurance Company and Selective Insurance Company of America.

GREEN-STREETT, J. 1 I. Introduction

Plaintiff, Noble Eagle Sales, LLC d/b/a Shooter’s Choice (“Noble Eagle”),

operates a shooting range in Dover, Delaware.1 A patron of that shooting range used

one of the range’s guns to commit suicide.2 His family and estate subsequently sued

Noble Eagle.3 Noble Eagle previously obtained insurance coverage from Defendant,

Mesa Underwriters Specialty Insurance Company (“MUSIC”), and requested

coverage for the lawsuit under that policy.4 MUSIC denied coverage, citing an

exclusion within the insurance policy.5 Noble Eagle filed the instant action to

compel MUSIC to defend and indemnify Noble Eagle.6 Following discovery, the

parties filed cross motions for summary judgment, seeking a decision from this

Court on whether MUSIC must defend and indemnify Noble Eagle.7

The core of both parties’ arguments centers on an exclusion found within the

insurance policy excluding coverage for bodily injuries caused by sporting

1 Compl. at 2, D.I. 1. 2 Id. at 10. 3 See Aanal Patel, et al., Plaintiffs, v. Shooter’s Choice, Inc., et al., Defendants, C.A. No. K21C- 04-025 RLG. 4 Def.’s Mem. in Supp. of Mot. for Summ. J. at 1, D.I. 76. 5 Id. 6 Compl. at 3, D.I. 1. 7 Opening Br. in Supp. of Pl.’s Mot. for Summ. J. at 4, D.I. 77.

2 equipment rented by Noble Eagle.8 Noble Eagle argues the exclusion does not

clearly define “sporting equipment,” rendering the exclusion ambiguous as to

whether a firearm falls within the exclusion.9 It posits that, as the law requires

interpreting an ambiguous insurance exclusion against the insurer, the insurance

policy should be construed against MUSIC.10

MUSIC contends that the exclusion’s plain meaning clearly conveys what it

excludes, and thus cannot be ambiguous.11 Absent any ambiguity, MUSIC asserts

the exclusion must be applied and enforced in this case.12 For the reasons outlined

below, the Court finds the term “sporting equipment” is ambiguous. Thus, the

sporting equipment rental exclusion cannot be enforced in the context of this specific

case. Accordingly, Plaintiff’s Motion for Summary Judgment is GRANTED, and

Defendant’s Motion for Summary Judgment is DENIED.

8 Id. at 6. 9 Id. at 16. 10 Id. at 14-15. 11 Def.’s Mem. in Supp. of Mot. for Summ. J. at 14-15, D.I. 76. 12 Id.

3 II. Factual and Procedural Background

Noble Eagle operates a business in Dover, Delaware comprised of a shooting

range and a retail firearms store.13 Patrons of the shooting range can rent firearms,

safety glasses, and ear plugs, as well as purchase ammunition for use in the shooting

range.14 When a patron rents time in the shooting range, she is not charged until she

has completed her session and exited the range.15

Noble Eagle purchased a commercial general liability insurance policy from

MUSIC covering the shooting range and firearm store (the “Policy”), effective April

15, 2020 through April 15, 2021.16 The premium payment Noble Eagle paid for the

year Policy totaled $13,502.27.17 The Policy covers, among other things, bodily

injuries that occur at the shooting range.18

On April 24, 2020, Aniket Patel procured a firearm from Noble Eagle, entered

the shooting range, and used the firearm to commit suicide.19 On April 27, 2020,

13 Opening Br. in Supp. of Pl.’s Mot. for Summ. J. at 5, D.I. 77. 14 Id. 15 Tr. of Oral Arg. at 5, D.I. 84. 16 Opening Br. in Supp. of Pl.’s Mot. for Summ. J. at 5, D.I. 77. 17 Id. at 6. 18 Id. 19 Id. at 5. 4 Noble Eagle filed a claim under the Policy, seeking defense and indemnity.20

MUSIC denied Noble Eagle’s claim.21 Although the Policy covered bodily injuries

occurring at Noble Eagle’s business, MUSIC cited an exclusion within the policy as

grounds to deny coverage.22 The “Rental of Sporting Equipment Exclusion” (the

“Rental Exclusion”) reads:

In consideration of the premium charged, it is understood and agreed that this policy specifically excludes and does not extend to or provide coverage, indemnity, or defense costs for bodily injury or property damage arising out of the use of sporting equipment rented out by the insured, the insured’s employees or other persons on the insured’s premises. Sporting equipment, for the purpose of this endorsement, does not include golf or tennis equipment.23

Mr. Patel’s estate and family filed suit against Noble Eagle on April 23, 2021,

asserting claims of negligence, wrongful death, negligent entrustment, and negligent

training and supervision.24 After being served with the complaint, Noble Eagle

renewed its request for MUSIC to provide defense and indemnity against those

claims.25 MUSIC again denied coverage, asserting that, “as Shooter’s Choice is a

20 Opening Br. in Supp. of Pl.’s Mot. for Summ. J. at 8, D.I. 77. 21 Id. 22 Id. 23 Def.’s Mem. in Supp. of Mot. for Summ. J. at 4, D.I. 76. 24 First Am. Compl. at 13, D.I. 48. 25 Def.’s Mem. in Supp. of Mot. for Summ. J. at 4, D.I. 76.

5 business that rents firearms for the sport of target shooting, the Rental of Sporting

Equipment Exclusions applies to bar coverage.”26

Noble Eagle then filed the instant action, seeking clarity and a declaration

from the Court regarding MUSIC’s defense and indemnity obligations to Noble

Eagle.27 The parties filed cross motions for summary judgment, asking this Court to

determine if the Rental Exclusion of the Policy bars coverage in this case. Both

parties agree that the only remaining dispute between them is disagreement

regarding the Policy’s terms and conditions.

III. Parties’ Contentions

Noble Eagle raises two arguments in its motion for summary judgment. First,

it argues the Rental Exclusion does not clearly define the term “sporting

equipment.”28 Absent a definition of one of the key terms of the exclusion, Noble

Eagle posits the exclusion translates ambiguously regarding its application to

firearms generally – and, more specifically, the firearm used in Mr. Patel’s case.29

26 Id. at 5. 27 Id. at 4. 28 Opening Br. in Supp. of Pl.’s Mot. for Summ. J. at 16, D.I. 77. 29 Id.

6 If the Court deems the Rental Exclusion ambiguous, Noble Eagle contends Delaware

law requires construing the meaning of the Rental Exclusion against MUSIC.30

Second, Noble Eagle argues Mr. Patel did not rent the firearm.31 Noble Eagle

did not charge Mr. Patel, or his estate, for use of the firearm.32 Noble Eagle never

received any payment for allowing Mr. Patel to borrow the gun, and the gun has not

been returned to Noble Eagle.33 Noble Eagle maintains that, given those facts, no

rental occurred.34 Thus, it contends the Rental Exclusion cannot apply.35

MUSIC counters that the Rental Exclusion precludes coverage because it

clearly and unambiguously applies to the firearm used by Mr. Patel.36 MUSIC

emphasizes the “plain and ordinary” definition of sporting equipment encompasses

the firearm at issue in this case.37 As the Rental Exclusion lacks ambiguity, and

applies to any injury arising from a rented firearm, MUSIC asserts the Rental

30 Id. 31 Id. at 18. 32 Id. 33 Id. 34 Id. 35 Id. 36 Def.’s Mem. in Supp. of Mot. for Summ. J. at 11, D.I. 76. 37 Id.

7 Exclusion bars coverage.38 MUSIC further contends that Mr. Patel clearly rented

the firearm, and to interpret his transaction with Noble Eagle differently would allow

Noble Eagle to invalidate the Rental Exclusion at will.39

IV. Standard of Review

This Court grants summary judgment if “there is no genuine issue as to any

material fact and … the moving party is entitled to a judgment as a matter of law.”40

“Where cross motions for summary judgment are filed on a particular issue and

neither party argues the existence of a genuine issue of material fact thereon, the

Court may consider the motions as a stipulation for decision on the record submitted

by the parties.”41 “The standard for summary judgment is not altered because the

parties have filed cross-motions for summary judgment.”42 The Court must still

determine if any genuine factual disputes exist.43

38 Id. 39 Id. at 19.

40 Sycamore Partners Mgmt., L.P. v. Endurance Am. Ins. Co., 2021 WL 4130631, at *9 (Del. Super. Sept. 10, 2021) (internal quotations omitted) (quoting Del. Super. Ct. Civ. R. 56(c)). 41 Id. (citing Del. Super. Ct. Civ. R. 56(h)).

42 Total Care Physicians, P.A. v. O’Hara, 798 A.2d 1043, 1050 (Del. Super. 2001) (internal quotations omitted) (quoting Haas v. Indian River Vol. Fire Co., 2000 WL 1336730, at *3 (Del. Ch. Aug. 14, 2000)).

43 United Vanguard Fund, Inc. v. TakeCare, Inc., 693 A.2d 1076, 1079 (Del. 1997).

8 V. Discussion

As a threshold matter, the Court finds no material facts remain in dispute.

Both parties agree with the timeline of events leading to Mr. Patel’s death, and

neither party disputes that the Policy covered the date in question. The only issue

remaining before the Court concerns whether the Rental Exclusion bars coverage in

the instant case. Given there are no material facts in dispute, summary judgment is

appropriate at this stage.44

A. The Standard for Insurance Contract Interpretation

This Court’s “interpretation of a contract must rely on a reading of all

pertinent provisions of the policy as a whole, and not on any single passage in

isolation.”45 “Contracts are to be interpreted in a way that does not render any

provision illusory or meaningless.”46 Clear and unambiguous contract terms are

given their plain meaning, and the Court cannot “destroy or twist policy language

under the guise of construing it.”47 Ambiguity exists within a contract “when the

provisions in controversy are reasonably or fairly susceptible of different

44 Del. Super. Ct. Civ. R. 56(c).

45 O’Brien v. Progressive N. Ins. Co., 785 A.2d 281, 287 (Del. 2001). 46 Id. (internal quotations omitted) (quoting Sonitrol Holding Co. v. Marceau Investissements, 607 A.2d 1177, 1183 (Del. 1992)).

47 Rhone-Poulenc Basic Chemicals Co. v. Am. Motorists Ins. Co., 616 A.2d 1192, 1195 (Del. 1992).

9 interpretations[,] or may have two or more different meanings.” 48 If the Court can

determine the meaning of a contract from “knowledge of the simple facts on which,

from the nature of language in general, its meaning depends,” the Court must find

the contract unambiguous.49

When ambiguity does exist, “the language of an insurance contract [must] be

construed most strongly against the insurance company that drafted it.”50 Further,

“contracts should be read to accord with the reasonable expectations of a reasonable

purchaser.”51 To avoid its duty to defend the insured, “the insurer must demonstrate

that the allegations of the underlying complaints are solely and entirely within

specific and unambiguous exclusions from coverage.”52 The burden lies with the

insurer to show an exclusion unambiguously applies in a particular case to bar

coverage.53 Thus, MUSIC must show the Rental Exclusion unambiguously applies.

48 Id. 49 Id. 50 Id. (citing Steigler v. Insurance Company of North America, 384 A.2d 398, 400 (Del. 1978)).

51 Id. (citing Steigler, 384 A.2d at 401).

52 Nat’l Union Fire Ins. Co. of Pittsburgh, PA. v. Rhone-Poulenc Basic Chemicals Co., 1992 WL 22690, at *8 (Del. Super. Jan. 16, 1992). 53 Smith v. Liberty Mut. Ins. Co., 201 A.3d 555, 571 (Del. Super. 2019). 10 B. Noble Eagle rented the firearm to Mr. Patel

The Court first turns to Noble Eagle’s assertion that, as it never collected any

money from Mr. Patel, the transaction involving the firearm does not qualify as a

rental.54 Noble Eagle correctly notes the Rental Exclusion fails to define the term

“rented out.”55 Noble Eagle argues a rental requires an exchange of money.56 As

Mr. Patel never paid for the use of the firearm, Noble Eagle asserts no rental

occurred.57

“The Delaware Supreme Court has instructed courts to use dictionary

definitions as a guide when determining the plain meaning of undefined contract

terms.”58 Merriam-Webster defines “rented” as “to grant the possession and

enjoyment of in exchange for rent; to take and hold under an agreement to pay

rent.”59 Noble Eagle does not dispute that, had Mr. Patel walked out of the shooting

range alive, he would have owed an obligation to pay for the time he spent

54 Pl.’s Opening Br. in Supp. of Pl.’s Mot. for Summ. J. at 18, D.I. 77. 55 Id. 56 Id. 57 Id.

58 Harper v. State Farm Mut. Auto. Ins. Co., 2022 WL 17494200, at *3 (Del. Super. Dec. 8, 2022). 59 Rented, MERRIAM-WEBSTER.COM, https://www.merriam-webster.com/dictionary/rented (last visited Apr. 16, 2024).

11 possessing the firearm.60 Noble Eagle generated a receipt for the transaction, listing

a charge of $15.00 for “range gun rental.”61 Noble Eagle also confirmed it made the

voluntary decision not to pursue Mr. Patel’s estate to recover the money owed for

the gun rental.62

The transaction between Mr. Patel and Noble Eagle involving the firearm

unquestionably fits into the definition of “rented out.” Once Mr. Patel incurred the

obligation to pay for possessing the firearm, a rental occurred. Noble Eagle’s choice

not to charge Mr. Patel’s estate does not transform the transaction into something

other than a rental. Finding otherwise would allow Noble Eagle to circumvent

Policy exclusions by choosing not to charge rent following any incident that may

otherwise trigger an exclusion. Accordingly, for the purposes of applying the Rental

Exclusion, the firearm in this case qualifies as “rented out.”

C. The Policy is ambiguous as to whether a firearm falls under “Sporting Equipment”

The Court must next determine if the firearm rented out by Noble Eagle

unambiguously falls into the category of “sporting equipment” as outlined by the

Rental Exclusion. Noble Eagle admits their shooting range sometimes hosts

60 Tr. of Oral Arg. at 26, D.I. 84. 61 Def.’s Mem. in Supp. of Mot. for Summ. J. at 18, D.I. 76. 62 Id.; see also Tr. of Oral Arg. at 12, D.I. 84.

12 shooting sports, and concedes firearms can be “sporting equipment.”63 As the Policy

does not define “sporting equipment,” Noble Eagle asserts reasonable minds could

differ as to when a firearm qualifies as “sporting equipment.”64 Noble Eagle argues

firearms are not always “sporting equipment,” and that the distinction balances on

the firearm’s intended use at that particular time.65 Noble Eagle lists several other

uses for firearms at their shooting range, including training by law enforcement,

prospective buyers testing a gun, and gun safety training.66 It posits that, when

firearms are used in those contexts, firearms are not “sporting equipment.”67 As Mr.

Patel did not use the firearm to participate in sports shooting, Noble Eagle contends

the firearm he used cannot be considered “sporting equipment” under the Rental

Exclusion.68

MUSIC’s position centers on the fact that Noble Eagle only rents out “guns,

protective eyewear, and earplugs.”69 MUSIC argues that, if firearms are not

63 Tr. of Oral Arg. at 12, D.I. 84. 64 Id. 65 Id. 66 Id. 67 Id. 68 Id. 69 Id. at 6.

13 categorized as “sporting equipment,” the Rental Exclusion becomes

“meaningless.”70 As firearms often function as equipment for shooting sports,

MUSIC maintains the Rental Exclusion clearly and unambiguously includes

firearms within its definition of “sporting equipment.”71

Neither side disputes that firearms can be used as sporting equipment.

Additionally, the parties do not dispute that Mr. Patel’s use of the firearm does not

qualify as a sport. The core question the Court must answer hinges on whether

firearms are always – definitionally – sporting equipment. Guided by Delaware

decisional law, the Rental Exclusion can only be enforced if the sole reasonable

interpretation of “sporting equipment” encompasses all firearms Noble Eagle rents

out, regardless of the purpose for which the customer rents the firearm.

Merriam-Webster defines a “firearm” as “a weapon from which a shot is

discharged by gunpowder, usually used of small arms.”72 The dictionary definitions

of “sporting” and “equipment,” cited by MUSIC, do not provide clarity, other than

to suggest that anything used in a sport can be sporting equipment depending on the

70 Id. at 9. 71 Id. 72 Firearm, MERRIAM-WEBSTER.COM, https://www.merriam-webster.com/dictionary/firearm (last visited Apr. 16, 2024); see also Gun, MERRIAM-WEBSTER.COM, https://www.merriam- webster.com/dictionary/gun (last visited Apr. 16, 2024) (“a piece of ordnance usually with high muzzle velocity and comparatively flat trajectory; a portable firearm; a device that throws a projectile”).

14 context.73 The parties do not dispute that firearms function as sporting equipment at

times. A definition, however, that allows for anything conceivably used in a sport

to be classified as “sporting equipment,” and thus excluded under the Rental

Exclusion, constitutes far too broad a definition.

Thus, this Court must determine if the only reasonable interpretation of

“sporting equipment” under the Policy always includes all firearms rented out by

Noble Eagle. One reasonable interpretation certainly includes all firearms as

“sporting equipment,” as presumably all firearms can be used in some type of target-

shooting sport. Another reasonable interpretation, however, would not apply to

firearms that are much less frequently used as equipment in sport shooting. The

Court cannot determine from the plain language of the policy where to draw the line

between firearms that can be sporting equipment, and firearms that are always

sporting equipment. MUSIC, as the insurer, stood as the party best positioned to

make that delineation when drafting the Policy. MUSIC’s failure to do so renders

the Rental Exclusion’s application to firearm rentals ambiguous.

The Court also finds ambiguity regarding what shooting activities should be

considered sports under the Policy. Aside from participating in a target shooting

73 See Sporting, MERRIAM-WEBSTER.COM, https://www.merriam-webster.com/dictionary/sporting (last visited Apr. 16, 2024) (“of, relating to, used, or suitable for sport”); see also Equipment, MERRIAM-WEBSTER.COM, https://www.merriam-webster.com/dictionary/equipment (last visited Apr. 16, 2024) (“the set of articles or physical resources serving to equip a person or thing such as the implements used in an operation or activity”). 15 competition, or practicing for one, there are myriad reasons a customer may wish to

rent time with a firearm on a shooting range. Practice for self-defense; acclimating

to a new firearm; testing out a firearm to purchase; law enforcement training; and

training as part of a firearm class are all possible reasons to rent a firearm. Those

reasons do not fit unambiguously into the definition of sports, and thus the

equipment used in those activities does not fit squarely into the definition of

“sporting equipment.”

As the Rental Exclusion contains ambiguity, it must be construed most

strongly against MUSIC. The Court cannot conclude all firearms are unequivocally

and definitionally “sporting equipment.” Nor can the Court conclude all activities

that occur at a shooting range are sports. MUSIC has not carried its burden to

demonstrate the Rental Exclusion bars coverage in this case.

The record reflects and supports that MUSIC was aware, at the time of

issuance of the Policy to Noble Eagle, that Noble Eagle constituted “a business that

rents firearms for the sport of target shooting.” Noble Eagle’s reasonable

expectation – as a shooting range that paid nearly $14,000 for a liability policy – was

to insure its establishment against liability involving firearms. MUSIC, as evidenced

by the Policy language, clearly attempted some definition of “sporting equipment,”

as it carved out explicitly golf and tennis equipment.

16 While the Court levies no allegation or accusation against MUSIC, this

litigation certainly highlights the benefit to MUSIC of ambiguity. Ambiguity

amounts to broader coverage denial. This Court cannot allow MUSIC to take that

position, particularly when Delaware law dictates construal against MUSIC for

precisely this reason.

VI. Conclusion

A gun or firearm is always a weapon; foundationally, elementally, hoc est

quod est (it is what it is). A gun or firearm can morph into sporting equipment, but

does not cease to exist as a weapon – and certainly does not constitute sport

equipment definitionally. Given that the Rental Exclusion failed to bar coverage

unambiguously, Noble Eagle is entitled to coverage, defense, and indemnity for the

incident involving Mr. Patel. Accordingly, Noble Eagle’s Motion for Summary

Judgment is GRANTED and MUSIC’s Motion for Summary Judgment is

DENIED.

IT IS SO ORDERED.