Opinion
EP-04-CA-363-FM.
August 29, 2005
Memorandum Opinion and Order Granting Summary Judgment
Before the Court is "Essex Insurance Company's Motion for Summary Judgment" [Rec. No. 15] and "Defendant's Response to Plaintiff's Motion for Summary Judgment" [Rec. No. 21] filed in the above captioned case. After carefully reviewing the pleadings, arguments and authorities the Court is of the opinion that "Essex Insurance Company's Motion for Summary Judgment" [Rec. No. 15] should be GRANTED for the following reasons:
I. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff, Essex Insurance Company ("Essex"), brought this complaint seeking declaratory judgment against Manron Associates, Inc. d/b/a Margarita's Lounge ("Manron"), Angel Carmona ("Carmona"), Phillip Lamonte Deal ("Deal") and Marshall Berry ("Berry"). Specifically, Essex requests this court declare the rights and duties under the insurance policy it issued.
On September 2, 1999 Essex issued an insurance policy to Manron. Manron became the named insured under Commercial General Liability Policy No. 3CC8531. Manron owns and operates Margarita's Lounge.
On October 10, 2001 Robert Diaz ("Diaz") brought a lawsuit styled Robert Diaz v. Manron Associates, Inc. d/b/a Margarita's Lounge, Angel Carmona, Phillip Lamont Deal and Marshall Berry in the County Court No. 5 of El Paso County, Texas ("underlying suit"). Diaz alleges that Manron's alleged employees Carmona, Deal and Berry, assaulted, battered and falsely imprisoned Diaz on October 10, 1999. Furthermore, Diaz alleges negligent hiring and retention, intentional infliction of emotional distress and premises liability by Manron.
On August 16, 2004 Manron tendered initial notice of the underlying suit and requested Essex defend and indemnify it from Diaz's claims in the underlying suit.
II. SUMMARY JUDGMENT STANDARD
Summary judgment shall be rendered when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. FED.R.CIV.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986); Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998). A dispute regarding a material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When ruling on a motion for summary judgment, the court is required to view all inferences drawn from the factual record in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co., Inc. v. Zenith Radio Corp., 475 U.S. 574, 585-87 (1986); Ragas, 136 F.3d at 458. Further, the court "may not make credibility determinations or weigh the evidence" in ruling on motion for summary judgment. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150-52 (2000).
Once the moving party has made an initial showing that there is no evidence to support the nonmoving party's case, the party opposing the motion must come forward with competent summary judgment evidence of the existence of a genuine fact issue. Matsushita, 475 U.S. at 586. Mere conclusory allegations are not competent summary judgment evidence, and thus are insufficient to defeat a motion for summary judgment. Eason v. Thaler, 73 F.3d 1322, 1325 (5th Cir. 1996). Unsubstantiated assertions, improbable inferences, and unsupported speculation are not competent summary judgment evidence. See Forsyth v. Barr, 19 F.3d 1527, 1533 (5th Cir. 1994), cert. denied, 513 U.S. 871 (1994). The party opposing summary judgment is required to identify specific evidence in the record and to articulate the precise manner in which that evidence supports his claim. Ragas, 136 F.3d at 458.
III. ANALYSIS
This suit for declaratory judgment was brought by insurer, Essex, against insured to determine insurer's contractual obligations under their general liability insurance policy No. 3CC8531. "Insurance policies are contracts and are controlled by the rules of construction which are applicable to contracts generally." Garrison v. Fielding Reinsurance, Inc., 765 S.W.2d 536 (Tex.App.-Dallas 1989) (citing Barnett v. Aetna Life Ins. Co., 723 S.W.2d 663, 665 (Tex. 1987). "When terms of an insurance policy are unambiguous, they are to be given their plain, ordinary and generally accepted meaning unless the instrument itself shows that the terms have been used in a technical or different sense." Id. (quoting Ramsay v. Maryland Am. Gen. Ins. Co., 533 S.W. 2d 344, 346 (Tex. 1976). Where the underlying action "does not allege facts within the scope of coverage, an insurer is not legally required to defend a suit against its insured." Nat. Unition Fire Ins. Co. of Pittsburgh, Pa v. Merchants Fast Motor Lines, Inc., 939 S.W.2d 139, 141 (Tex. 1997). "An insurer's duty to defend is determined by the allegations in the pleadings and the language of the insurance policy." Id.
The facts resulting in the underlying action as alleged by Diaz are that Diaz "went to [the] Margarita Lounge on October 10, 1999 with his wife and two friends. While within the bar, Plaintiff was assaulted by an unknown individual and pushed to the ground." [Rec. No. 21, Ex. A]. "Defendants' [sic] Carmona, Deal, and Berry arrived while Plaintiff was being assaulted." Id. Defendants "proceeded to assault, batter, and restrain Plaintiff with handcuffs while the unknown individual continued to assault Plaintiff while on the ground" and that Defendants held Diaz at the back door of Margarita's until the Police Department arrived. Id. Defendants Carmona, Deal and Berry were employed by Defendant Manron "at the time of the assault battery and unlawful restrain [sic]." Id. Five causes of action are alleged in the underlying action: 1) assault and battery; 2) false imprisonment and unlawful restraint; 3) negligent hiring and retention; 4) intentional infliction of emotional distress; and 5) premises liability. Id. Defendant contends that its insurance policy covers the underlying action and that Essex should defend and indemnify it from the underlying action.
Essex contends that an endorsement to the policy excludes coverage of the events in the underlying action. The endorsement M/E-001 in question to Policy No. 3CC8531 states in pertinent part:
Plaintiff also moved for summary judgment on the ground that it should be excluded from coverage because Manron failed to provide timely notice of its claim. The Court does not reach this issue because Plaintiff has not alleged that failure to provide timely notice has prejudiced it. See Harwell v. State Farm Mutual Automobile Ins. Co., 896 S.W.2d 170, 174-76 (Tex. 1995).
It should be noted that the Assault and Battery exclusion also appears in substantially similar language in Combination Endorsement -003.
5. Exclusions
. . . This insurance does not apply to any claim, suit cost or expense arising out of:
D. ASSAULT AND/OR BATTERY: Assault and/or Battery or out of any act or omission in connection with the prevention or suppression of such act, whether caused by or at the instigation or direction of any insured, Insured's employees, patrons or any other person.
E. HIRING AND/OR SUPERVISION: Charges or allegations of negligent hiring, training, placement or supervision.
A parties' agreement must be enforced according to its plain meaning. Aero Int., Inc. v. United States Fire Ins. Co., 713 F.2d 1106, 1109 (5th Cir. 1993). The insurance contract in the case at bar is not ambiguous. The plain meaning of this insurance contract clearly excludes assault and battery and actions connected to the assault and battery regardless of whether it was caused by Defendant's employees. The facts of the underlying action support that the claim alleges an assault and battery. Furthermore, the plain meaning of this contract also excludes coverage for any claims of negligent hiring or supervision. Thus, Plaintiff need not defend or indemnify Defendant against these two claims.
"Assault and battery" is an act that "intentionally, knowingly, or recklessly causes bodily injury to another." TEX. PEN. CODE ANN. § 21.01(a)(1). The elements for assault are the same in civil and criminal cases. Wal-Mart Stores, inc. v. Odem, 929 S.W.2d 513, 523 (Tex.App.-San Antonio 1996, writ denied).
Plaintiff also claims that the underlying suits' claims of false imprisonment and unlawful restraint, negligent retention of employees and intentional infliction of emotional distress are also precluded. The Court agrees.
The policy states that it "does not apply to any claim, suit cost or expense arising out of" the following. (emphasis added). "When an exclusion precludes coverage for injuries `arising out of' described conduct, the exclusion is given a broad, general, and comprehensive interpretation. A claim need only bear an incidental relationship to the described conduct for the exclusion to apply." Scottsdale Ins. Co., v. Texas Security Concepts and Investigation, 173 F.3d 941, 943 (5th Cir. 1999) (citing American States Ins. Co. v. Bailey, 133 F.3d 363, 371 (5th Cir. 1998)).
In this case, the assault, unlawful restraint and false imprisonment occurred concurrently as part of the same sequence of events. Thus, the policy excludes the claims because they arose out of the assault and battery. Furthermore, the claims for negligent retention as well as intentional infliction of emotional distress stem from the assault and battery. Diaz would not have raised these claims against Manron absent the assault and battery. Because each claim arises out of the assault and battery, the exclusion applies, and the insurer has no duty to defend.
Plaintiff also contends that the alleged facts do not support a claim for premises liability. "In Texas, an insurer's contractual duty to defend must be determined solely from the face of the pleadings, without reference to any facts outside the pleadings." National Union, 939 S.W.2d at 142 (citing and quoting Tex.App. — Houston [1st Dist.] 1990, writ denied). The facts alleged in the pleadings do not allege any situation where failure to inspect the premises caused injuries to Diaz. Moreover, Diaz would not have brought a lawsuit against Manron absent the assault and battery allegedly committed as stated above and thus are also precluded because they arise out of the assault and battery.
There is no question of material fact that Defendant is not covered by the insurance policy it has with Plaintiff. Manron, the insured, is precluded from recovering from, insurer, based on the facts of the underlying suit.
Defendant attempts to raise a genuine question of material fact in its response. Defendant states, "Defendant paid agent for Plaintiff, Armando Gonzalez for coverage regarding the case action for which they were subsequently sued." [Rec. No. 21] Further, the President of Manron Associates, Inc., Armando Juarez, states through his affidavit, "I obtained insurance coverage for my establishment, Margarita's through insurance agent Armando Gonzalez. I was assured that Margaritas was fully covered, including liability coverage for which Margaritas was sued under Cause No. 2001-3812." [Rec. No. 21]. Mere conclusory allegations are not competent summary judgment evidence, and thus are insufficient to defeat a motion for summary judgment. Eason v. Thaler, 73 F.3d 1322, 1325 (5th Cir. 1996). Unsubstantiated assertions, improbable inferences, and unsupported speculation are not competent summary judgment evidence. See Forsyth v. Barr, 19 F.3d 1527, 1533 (5th Cir. 1994), cert. denied, 513 U.S. 871 (1994). Thus, Manron has not presented competent summary judgment evidence raising a genuine question of material fact and cannot create such an issue based on assurances where the contract at issue is unambiguous and excludes coverage.
IV. CONCLUSION
Because the claims of false imprisonment and unlawful restraint, negligent hiring and retention, intentional infliction of emotional distress and premises liability arise from the assault and battery, the underlying lawsuit falls within the policy exclusions, and the insurer, Essex, has no duty to defend.
IT IS THEREFORE ORDERED "Essex Insurance Company's Motion for Summary Judgment" [Rec. No. 15] is GRANTED.