United States District Court, W.D. Kentucky, Louisville Division
B. Russell, Senior Judge United States District Court.
matter is before the Court on motions from both parties.
First, Plaintiff United Specialty Insurance Company filed a
motion for summary judgment, [DN 15.] Defendant Cole's
Place, Inc. responded, [DN 19], and Plaintiff replied, [DN
21.] Second, Defendant filed a motion to dismiss, [DN 16.]
Plaintiff responded, [DN 20], and Defendant replied, [DN 22.]
Fully briefed, these motions are ripe for consideration. For
the reasons discussed below, Defendant's motion to
dismiss is DENIED and Plaintiff's motion
for summary judgment is GRANTED. The Court
will issue a separate Order and Judgment consistent with this
Declaratory Judgment action arises out of a commercial
liability insurance policy between Plaintiff United Specialty
Insurance Company (“USIC”) and Defendant
Cole's Place, Inc. (“Cole's Place”). In
this action, USIC seeks a declaratory judgment finding that
it has no obligation to defend or indemnify Cole's Place
in personal injury lawsuits that are ongoing against
Cole's Place in Kentucky state court.
Place owns and operates a nightclub in Louisville, Kentucky.
[DN 1 at 5 (Complaint).] On July 19, 2015, a shooting took
place at Cole's Place which injured several of its
patrons. [Id.] “In September 2015, a Jefferson
County grand jury indicted Kevon Taylor (not a party to this
[federal] action) on three counts of assault in the
first-degree and five counts of assault in the second-degree
in connection with the shooting. In December 2015, Mr. Taylor
pled guilty to eight counts of assault in the second-degree
and is currently serving time in prison.”
[Id.] Both parties agree that Kevon Taylor was the
shooter at Cole's Place on July 19, 2015. [Id.;
DN 16 at 5.]
result of the shooting, four civil personal injury lawsuits
were filed against Cole's Place in Kentucky state court.
[DN 1 at 5.] The plaintiffs in those actions are Kendall
Latrell Starks; De-Auntay Shrivers; Lanisha Walker, Wayne
Woods and M.W.; and Jessie Offutt. [Id.; DN 16 at
4.] The four state court cases against Cole's Place have
been consolidated into the first action, Kendall Latrell
Starks v. Cole's Place, Inc., Case No. 15-CI-005424
(hereinafter the “State Court Action”). [DN 1 at
5.] The plaintiffs in the State Court Action “allege
they were injured in the shooting and that their injuries
were proximately caused by alleged acts and/or omissions on
the part of Cole's Place.” [Id.]
Specifically, the plaintiffs bring claims for intentional
infliction of emotional distress; negligence; negligent
hiring, training, retention, and supervision; and punitive
damages. [See DN 1-2 (State Court Complaints).]
Cole's Place filed a third party complaint against Kevon
Taylor alleging that Taylor “was the individual who
actually did the shooting, ” that Taylor “has
pleaded guilty to charges arising from the shootings, ”
and that his actions were “the sole and proximate cause
of the injuries and damages complained of by the various
plaintiffs in this action.” [DN 15-2 at 2 (Third Party
currently defending Cole's Place in the State Court
Action, but under a reservation of rights. [DN 1 at 2.] USIC
contends that the terms of the “Commercial Lines
Policy, ” (“the Policy”), between it and
Cole's Place do not obligate USIC to defend or indemnify
Cole's Place in the State Court Action because the claims
in that Action are for bodily injury arising out of an
assault or battery, a specific exclusion contained in the
Policy. [Id. at 3-5, 6-8.] USIC further contends
that it has no duty to indemnify Cole's Place for any
claims for punitive damages, another exclusion in the Policy.
[See id.] The Court will discuss the express
language of the Policy and its exclusions below.
to addressing the parties' coverage dispute, however, the
Court must determine whether to exercise jurisdiction over
this declaratory judgment action. In its motion to dismiss,
Cole's Place argues that the Court should decline to
exercise jurisdiction in this case and therefore that it
should dismiss the suit. [DN 16.] In USIC's motion for
summary judgment, USIC argues the opposite. [DN 15.] The
Court will consider the parties' jurisdictional arguments
first in order to determine if it can proceed to the merits
of USIC's claims for declaratory judgment.
STANDARD OF REVIEW: DECLARATORY JUDGMENTS
to the Declaratory Judgment Act, a federal court “may
declare the rights and other legal relations of any
interested party seeking such declaration.” 28 U.S.C.
§ 2201(a). The Act is an enabling act that
“confers a discretion on the courts” to act
“rather than an absolute right upon the
litigant.” Wilton v. Seven Falls Co., 515 U.S.
277, 287 (1995) (quoting Public Serv. Comm'n of Utah
v. Wycoff Co., 344 U.S. 237, 241 (1952)). In other
words, the Act authorizes district courts to exercise
jurisdiction, but does not impose a duty to do so.
Bituminous Cas. Corp. v. J & L Lumber Co., Inc.,
373 F.3d 807, 812 (6th Cir. 2004); Allstate Ins. Co. v.
Mercier, 913 F.2d 273, 276 (6th Cir. 1990),
abrogated on other grounds by Wilton v. Seven Falls
Co., 515 U.S. 277, (1995). A district court may not
decline jurisdiction, however, as a matter of whim or
personal disinclination. Mercier, 913 F.2d at 277.
The Policy and its Exclusions
Policy at issue in this case provides, in relevant part:
We will pay those sums that the insured becomes legally
obligated to pay as damages because of “bodily
injury” or “property damage” to which this
insurance applies. We will have the right and duty to defend
the insured against any “suit” seeking those
damages. However, we will have no duty to defend the insured
against any “suit” seeking damages for
“bodily injury” or “property damage”
to which this insurance does not apply.
at 15 (Commercial Lines Policy).] The Policy contains certain
exclusions from coverage, such as the following
“Assault and Battery” exclusion:
1. This insurance does not apply to
“bodily injury”, “property damage”,
or “personal and advertising injury” arising out
of or resulting from:
(a) any actual, threatened or alleged
assault or battery;
(b) the failure of any insured or anyone
else for whom any insured is or could be held legally liable
to prevent or suppress any assault or battery;
(c) the failure of any insured or anyone
else for whom any insured is or could be held legally liable
to render or secure medical treatment necessitated by any
assault or battery;
(d) the rendering of medical treatment by
any insured or anyone else for whom any insured is or could
be held legally liable that was necessitated by any assault
(e) the negligent:
(v) retention; of a person for whom any
insured is or ever was legally responsible and whose conduct
would be excluded by 1. (a), (b), (c) or (d)
(f) any other cause of action or claim
arising out of or as a result of 1. (a), (b), (c),
(d) or (e) above.
2. We shall have no duty to defend or
indemnify any claim, demand, suit, action, litigation,
arbitration, alternative dispute resolution or other judicial
or administrative proceeding seeking damages, equitable
relief, injunctive relief, or administrative relief where:
(a) any actual or alleged injury arises out
of any combination of an assault or battery related cause and
a non-assault or battery-related cause.
(b) any actual or alleged injury arises out
of a chain of events which includes assault or battery,
regardless of whether the assault or battery is the initial
precipitating event or a substantial cause of injury.
(c) any actual or alleged injury arises out
of assault or battery as a concurrent cause of injury,
regardless of whether the assault or battery is the proximate
cause of injury.
3. For the purposes of this endorsement the
words assault and battery are intended to include, but are
not limited to, sexual assault.
[Id. at 48.]
relevant to this case is the Policy's “Punitive
A. In consideration of the premium charged this
policy has been issued subject to the following exclusions
being added to Coverages A & B:
This insurance does not apply to:
* * *
5. Punitive, Exemplary Treble Damages or Multipliers
of Attorneys' Fees Claims or demands for payment
of punitive, exemplary or treble damages whether arising from
the acts of any insured or by anyone else for whom or which
any insured or additional insured is legally liable;
including any multiplier of attorney's fees statutorily
awarded to the prevailing party.
[Id. at 43.]
motion for summary judgment, USIC argues that “[t]he
Policy's exclusions are unambiguous and preclude coverage
for the claims asserted against Cole's Place in the
underlying state court Complaints.” [DN 15 at 2.]
Before the Court can consider the merits of this argument,
however, it must first determine whether it should exercise
jurisdiction over this declaratory judgment action.
Sixth Circuit has identified five factors, often referred to
as the “Grand Trunk factors, ” for
courts to consider in determining whether the ...