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Nautilus Insurance Co. v. Action ATM Inc.

United States District Court, S.D. Illinois

December 19, 2019

NAUTILUS INSURANCE COMPANY Plaintiff,
v.
ACTION ATM INC., and SILVER L. FRANKLIN, Defendants.

          MEMORANDUM AND ORDER

          GILBERT C. SISON United States Magistrate Judge.

         Introduction and Background

         Pending before the Court is Nautilus Insurance Company's motion for judgment on the pleadings (Docs. 59, 63). Specifically, Nautilus Insurance Company (“Nautilus”) moves for judgment on the pleadings as to Counts I, III and IV of its Second Amended Complaint.[1] Action ATM Inc. (“ATM”) and Silver L. Franklin (“Franklin”) oppose the motion (Doc. 60). Based on the record, the applicable law and the following, the Court GRANTS the motion for judgment on the pleadings.

         On July 28, 2016, Nautilus filed a second amended complaint for declaratory judgment against ATM and Franklin in this judicial district (Doc. 32). Nautilus seeks a declaration that it does not owe a duty to defend or a duty to indemnify ATM and Franklin under a commercial policy it issued to ATM. The second amended complaint alleges that on November 3, 2015, Ithiwa Woodson and Robert Beene, individually and on behalf of the Estate of Donte Woodson, filed a petition for damages against Franklin, Marie A. Franklin and ATM in the Circuit Court of St. Louis County, Missouri, Case No. 15 SL-CC03780 (“the underlying litigation”). Previously, on June 24, 2016, in the underlying litigation, Woodson and Beene filed a third amended petition for damages and for wrongful death only against Franklin. (Doc. 32-4). The third amended petition in the underlying litigation alleges that on August 16, 2015, decedent Woodson, while in the restroom at a QuickTrip Store in St. Louis, Missouri, was fatally struck by a bullet as a result of an incident with Franklin. Specifically, the third amended complaint alleges that decedent Woodson and Franklin “engaged in some sort of confrontation wherein Defendant Franklin negligently handled and discharged a firearm while near or in the vicinity of Woodson.” (Doc. 32, p. 7 quoting 32-4, p. 3). Woodson and Beene, in the underlying litigation, seek damages from Franklin for the death of their son.

         In the instant litigation, Nautilus seeks a declaratory judgment that it does not have a duty to defend or a duty to indemnify ATM or Franklin in the underlying suit. Nautilus argues that Franklin does not qualify as an insured under the policy at issue because he was sued in his individual capacity, and not as an employee in the course of his employment for ATM. Nautilus also argues that the policy contains a weapons exclusion that expressly bars coverage for “bodily injury” arising out of “the use of any ‘weapon, '” including but not limited to “firearms.” Lastly, Nautilus argues that the policy contains an all assault or battery exclusion that expressly bars coverage for “bodily injury” caused by any “actual or alleged assault or battery” or “physical altercation.”

         Defendant Franklin counters that the duty to defend cannot be resolved without resorting to disputed facts and that the third amended complaint in the underlying litigation does raise the possibility of coverage. Franklin contends that plaintiffs in the underlying litigation alleged that Franklin was at the QuickTrip presumably to service the ATM machine; that the plaintiffs only allege that Franklin mishandled a firearm and that plaintiffs do not allege who owned, held, possessed or acted with any purpose with the firearm. Further, Franklin contends that any action in the encounter with decedent Woodson was in self-defense and that the Policy's “self-defense exception” would be rendered meaningless if the weapons exclusions and the all assault or battery exclusions apply.

         In reply, Nautilus disputes Defendants' assertions. Nautilus contends that Franklin cannot qualify as an insured under the Policy for the alleged shooting; that both the weapons exclusion and the all assault or battery exclusions bar coverage under any scenario presented in the underlying complaint and the “self-defense exception” does not create an ambiguity in the Policy.

         Facts

         Nautilus issued a commercial general liability insurance policy to ATM under policy No. NN487458 for the period of November 4, 2014 to November 4, 2015 (“Policy”) (Doc. 1-2). The Policy defines who is insured and states in pertinent part:

         SECTION II - WHO IS AN INSURED

1. If you are designated in the Declarations as:
d. An organization other than a partnership, joint venture or limited liability company, you are an insured. Your “executive officers” and directors are insureds, but only with respect to their duties as your officers or directors. Your stockholders are also insureds, but only with respect to their liability as stockholders.
2. Each of the following is also an insured:
a. Your … “employees”, other than either your “executive officers” (if you are an organization other than a partnership, joint venture or limited liability company) or your managers (if you are a limited liability company), but only for acts within the scope of their employment by you or while performing duties related to the conduct of your business. . . .
Section V- DEFINITIONS
6. “Executive officer” means a person holding any of the officer positions created by your charter, constitution, by-laws or any other similar governing document.
Section I, subsection 2(a) of the Policy includes a section on “Exclusions” that reads in part:
This insurance does not apply to:
a. Expected or Intended Injury
“Bodily injury” or “property damage” expected or intended from the standpoint of the insured. This exclusion does not apply to “bodily injury” resulting from the use of reasonable force to protect persons or property.

         The Policy also contains an endorsement that contains weapons exclusion that states in relevant part:

A. The following exclusion is added to 2. Exclusions of Section I - Coverage A - Bodily Injury And Property Damage Liability, Coverage B - Personal And Advertising Injury Liability ...

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