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Atain Specialty Insurance Co. v. Chouteau Property Management, Inc.

United States District Court, S.D. Illinois

May 2, 2014

ATAIN SPECIALTY INSURANCE COMPANY, Plaintiff,
v.
CHOUTEAU PROPERTY MANAGEMENT, INC., BRENDA ORTIZ and LUIS F. ORTIZ, Defendants.

MEMORANDUM AND ORDER

J. PHIL GILBERT, District Judge.

This matter comes before the Court on plaintiff Atain Specialty Insurance Company's ("Atain") motion for reconsideration (Doc. 34) of the Court's November 19, 2013, order (Doc. 27) denying Atain's motion for judgment on the pleadings. Defendant Chouteau Property Management ("Chouteau") filed a response (Doc. 35) to which Atain replied (Doc. 36). Defendants Brenda Ortiz and Luis F. Ortiz failed to respond. For the following reasons, the Court denies Atain's motion for reconsideration. However, the Court reconsiders its November 19, 2013, order pursuant to Rule 54(b); vacates its November 19, 2013, order; and grants Atain's motion for judgment on the pleadings (Doc. 19).

1. Background

Atain filed its complaint for declaratory judgment seeking a declaration from this Court that it has no duty to defend or indemnify Chouteau in the underlying lawsuit entitled Ortiz v. La Mexicana, Inc., et al., Case No. 12-L-1300, Madison County, Illinois ("underlying lawsuit"). The underlying lawsuit involves an incident that occurred on August 19, 2011, at La Mexicana Restaurant, housed in a building owned by Chouteau in Granite City, Illinois. Fernando Gallegos was consuming alcohol served to him at La Mexicana Restaurant. Due in part to the consumption of this alcohol, Gallegos "physically attacked, assaulted and/or fired a weapon at" two brothers, Jesus Ortiz-Flores and Luis F. Ortiz. Ultimately, the attack caused Ortiz-Flores' death and severe and permanent injuries to Ortiz.

Brenda Ortiz, as the administrator of the estate of her brother Ortiz-Flores, and Ortiz filed a twelve-count complaint against Chouteau and others in the Circuit Court for the Third Judicial Circuit, Madison County, Illinois. Only Counts Three, Six, Nine, and Twelve allege causes of action against Chouteau. Counts Three and Nine allege causes of action under the Illinois Dramshop Act, 235 ILCS 5/6-21, and Counts Six and Twelve allege causes of action for negligence.

Effective at the time of the incident was a Commercial General Liability ("CGL") insurance policy Atain had issued to Chouteau. That policy contained a Total Liquor Liability Exclusion which provided as follows:

Exclusions. This insurance does not apply to:... c. Liquor Liability. "Bodily injury" or "property damage" for which any insured may be held liable by reasons of:
(1) Causing or contributing to the intoxication of any person;
(2) The furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or
(3) Any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages.

Doc. 2-3, p. 52. The policy further contained an "Assault and Battery Exclusion" that provided as follows:

This insurance does not apply under COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY and COVERAGE B PERSONAL AND ADVERTISING INJURY LIABILITY arising from:
(1) Assault and Battery committed by any Insured, any employee of any Insured ...

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