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Capitol Specialty Insurance Corp. v. Whitaker

August 13, 2009


The opinion of the court was delivered by: J. Phil Gilbert District Judge


This matter comes before the Court on the motion to dismiss filed by defendants Charles Whitaker and Rodney Moore (Doc. 25). Plaintiff Capitol Specialty Insurance Corporation ("Capitol") has responded to the motion (Doc. 29).

I. Dismissal Standard

Whitaker and Moore seek to dismiss this action pursuant to Federal Rule of Civil Procedure 12(b)(6). When reviewing a Rule 12(b)(6) motion to dismiss, the Court accepts as true all allegations in the complaint. Erickson v. Pardus, 551 U.S. 89, 94 (2007) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). To avoid dismissal under Rule 12(b)(6) for failure to state a claim, a complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). This requirement is satisfied if the complaint (1) describes the claim in sufficient detail to give the defendant fair notice of what the claim is and the grounds upon which it rests and (2) plausibly suggests that the plaintiff has a right to relief above a speculative level. Bell Atl., 550 U.S. at 555; see EEOC v. Concentra Health Servs., 496 F.3d 773, 776 (7th Cir. 2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (citing Bell Atl., 550 U.S. at 556).

Although even after Bell Atlantic and Iqbal liberal federal notice pleading standards ensure that minimally detailed complaints can survive a motion to dismiss, those standards will not prevent dismissal of complaints that plead too much. A case can be dismissed because a complaint pleads facts establishing that the defendant is entitled to prevail. Bennett v. Schmidt, 153 F.3d 516, 519 (7th Cir. 1998); Soo Line R.R. Co. v. St. Louis S.W. Ry. Co., 125 F.3d 481, 483 (7th Cir. 1997); see Hecker v. Deere & Co., 556 F.3d 575, 588 (7th Cir. 2009) (dismissal appropriate when party pleads facts establishing defense to his claim).

II. Facts and Procedural History

This matter arose after defendant Michael Taylor and his son were assaulted on November 12, 2006, in Club Elite, a tavern in Cairo, Illinois. On September 25, 2008, Taylor sued defendants Whitaker and Moore, the owners of Club Elite, in state court. See Taylor v. Whitaker, No. 2008 L 9 (Ill. Cir. Ct. Alexander Co.). The state law suit advanced a premises liability negligence theory, that is, it charged that the defendants were negligent in their affirmative duty as a business inviting people onto its premises for business purposes to aid or protect their patrons against unreasonable risk of physical harm. Marshall v. Burger King Corp., 856 N.E.2d 1048, 1058 (Ill. 2006); see Restatement (Second) of Torts § 344 (1965).*fn1

The case before the Court is an action by Capitol under the Declaratory Judgment Act, 28 U.S.C. § 2201, seeking a declaration that a liability insurance policy it issued to Whitaker (No. CS00322809) ("Policy"), which also covered Moore as an additional insured, does not cover liability from the November 12, 2006, assault and that, as a consequence, it is not obligated to defend or indemnify Whitaker or Moore. The Policy contains two parts: a commercial general liability insurance ("CGL") part and a commercial liquor liability ("CLL") part. Capitol believes the assault falls within a liability exclusion in the CGL part of the Policy that applies to:

A. Assault and/or battery committed by any . . . person, whether or not . . . arising because of the negligence of the insured; or

C. The failure to prevent or suppress an assault and battery by any person; or

D. The failure to provide an environment safe from assault and battery, including but not limited to the failure to maintain security. . . .

Policy, CGL Form 309 (Doc. 2-4 at 57).

In their motion to dismiss, Whitaker and Moore concede that CGL Form 309 excludes coverage under the CGL part of the Policy. They argue, however, that Capitol's case should be dismissed because the Complaint fails to allege facts showing that the state lawsuit is not covered by the CLL part of the Policy. The CLL part provides insurance coverage where liability "is imposed on the insured by reason of the selling, serving or furnishing of any alcoholic beverage." Policy, § I, ¶1.a, CG 00 33 12 04 (Doc. 2-4 at 62). Essentially, their argument boils down to the belief that Capitol has pled too much by including the CLL part of the Policy as an attachment to the Complaint, which they believe demonstrates the Policy creates a duty to defend and indemnity for the underlying lawsuit.

In response, Capitol argues that its Complaint meets liberal federal pleading standards even under Bell Atlantic and Iqbal because it pleads sufficient facts to give the defendants notice of the basis of its claim. It further claims the Complaint does not refer to the CLL part of the Policy because the underlying lawsuit does not allege any liability covered ...

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