Opinion
No. 3:02-CV-0078-G
June 25, 2002
MEMORANDUM ORDER
Before the court is motion of the plaintiff, Essex Insurance Company ("Essex"), for summary judgment on its claim for declaratory relief against the defendant, Bhavan, Inc. d/b/a Payless Convenience Store ("Payless"). Payless has not responded to this motion. For the reasons discussed below, Essex's motion for summary judgment is granted.
I. BACKGROUND
The facts in this case are undisputed. Plaintiff's Motion for Summary Judgment Brief ("Motion") at 2-4. Payless is a Texas corporation. Plaintiff's Complaint for Declaratory Relief ("Complaint") at 2. Essex is an insurance company incorporated in Delaware, with its principal place of business in Virginia. Id. at 1. On September 22, 1999, Yonatan Osario was shot by an unknown assailant while he was waiting for a friend in his car in the parking lot of a Payless store in Dallas, Texas. Id. at 3; Motion at 2. In reaction to this tragic incident, Osario's family brought a wrongful death action against Payless (the "Osario Action") in the 192nd Judicial District of Dallas County, Texas. Complaint at 3; Motion at 2. At the time of the shooting, Payless was insured by Essex for certain incidents arising in connection with the business. Complaint at 2-3; Motion at 2-3.
The insurance policy provides, in pertinent part, that Essex shall pay "those sums that [Payless] becomes legally obligated to pay as damages because of bodily injury or property damage to which this insurance applies." Appendix to Plaintiffs Motion for Summary Judgment ("Appendix") at 26. The policy further provides that "[d]amages because of `bodily injury' include damages claimed by any person or organization for care, loss of services or death resulting at any time from the bodily injury." Id. The policy, however, lists several exclusions to the general coverage described above. The exclusions which are relevant to this action are:
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 acts, 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.
Appendix at 17-18.
Subsequent to the Osario Action being filed in Dallas County Court, Essex filed this action, pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201 et seq., and FED. R. Civ. P. 57, requesting a declaration that Essex has no duty to defend or indemnify Payless for the claims asserted against Payless in the Osario Action. Complaint at 1, 8. Essex filed this summary judgment motion on May 2, 2002.
II. ANALYSIS A. Applicable Law
"A federal court must follow the choice-of-law rules of the state in which it sits." St. Paul Mercy Insurance Company v. Lexington Insurance Company, 78 F.3d 202, 205 (5th Cir. 1996) (finding Texas law applies to an insurance coverage dispute). "Under Texas choice-of-law rules, disputes are governed by the law of the state with the most significant relationship to the particular substantive issue." Id. (citing Atlantic Mutual Insurance Company v. Truck Insurance Exchange, 797 F.2d 1288, 1291 (5th Cir. 1986)). In this dispute, the contract appears to have been executed in Texas and it was to be performed in Texas. See Appendix at 13. In addition, Essex, the only non-Texas party, does not dispute that Texas law applies. See generally Motion at 4-6. Accordingly, the court finds that Texas law applies to this controversy.
B. Legal Standard
Summary judgment is proper when the pleadings and evidence on file show that no genuine issue exists 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). "[T]he substantive law will identify which facts are material." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine issue of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. The movant makes such a showing by informing the court of the basis of its motion and by identifying the portions of the record which reveal there are no genuine material fact issues. Celotex Corporation v. Catrett, 477 U.S. 317, 323 (1986). The pleadings, depositions, admissions, and affidavits, if any, must demonstrate that no genuine issue of material fact exists. FED. R. Civ. P. 56(c).
The disposition of a case through summary judgment "reinforces the purpose of the Rules, to achieve the just, speedy, and inexpensive determination of actions, and, when appropriate, affords a merciful end to litigation that would otherwise be lengthy and expensive." Fontenot v. Upjohn Company, 780 F.2d 1190, 1197 (5th Cir. 1986).
Once the movant makes this showing, the nonmovant must then direct the court's attention to evidence in the record sufficient to establish that there is a genuine issue of material fact for trial. Celotex, 477 U.S. at 323-24. To carry this burden, the "opponent must do more than simply show . . . some metaphysical doubt as to the material facts." Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corporation, 475 U.S. 574, 586 (1986). Instead, the nonmovant must show that the evidence is sufficient to support a resolution of the factual issue in its favor. Anderson, 477 U.S. at 249.
While all of the evidence must be viewed in a light most favorable to the motion's opponent, Anderson, 477 U.S. at 255 (citing Adickes v. S.H. Kress Company, 398 U.S. 144, 158-59 (1970)), neither conclusory allegations nor unsubstantiated assertions will satisfy the non-movant's summary judgment burden. Little v. Liquid Air Corporation, 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc); Topalian v. Ehrman, 954 F.2d 1125, 1131 (5th Cir.), cert. denied, 506 U.S. 825 (1992). Summary judgment in favor of the movant is proper if, after adequate time for discovery, the motion's opponent fails to establish the existence of an element essential to its case and as to which it will bear the burden of proof at trial. Celotex, 477 U.S. at 322-23.
C. Payless' Coverage Under the Insurance Policy
Generally, under Texas law, an insurer is required to defend only those claims which fall within the scope of the policy. Fidelity Guaranty Insurance Underwriters, Inc. v. McManus, 633 S.W.2d 787, 788 (Tex. 1982). Additionally, if the insured only alleges facts excluded by the policy, the insurer is not required to defend them. Id. In this case, the facts that are alleged by Essex in the declaratory judgment complaint and this summary judgment motion are undisputed. Payless' failure to respond to this motion does not permit the court to enter a "default" summary judgment. This court, however, is allowed to accept the evidence adduced by Essex as undisputed. See Eversley v. MBank Dallas, 843 F.2d 172, 174 (5th Cir. 1988). The failure of Payless to respond means that it has not designated specific facts showing there is a genuine issue for trial. "A summary judgment nonmovant who does not respond to the motion is relegated to [its] unsworn pleadings, which do not constitute summary judgment evidence." Bookman v. Shubzda, 945 F. Supp. 999, 1002 (N.D. Tex. 1996) (Fitzwater, J.) (citing Solo Serve Corporation v. Westowne Associates, 929 F.2d 160, 165 (5th Cir. 1991)). Therefore, because the facts are undisputed, the sole issue before the court is whether Essex has a duty to defend or indemnify Payless, under the parties' insurance policy, from the claims asserted against Payless in the Osario Action.
Essex argues that the assault and battery exclusion in the insurance policy precludes the shooting from qualifying as the kind of event for which Essex is required to defend or indemnify Payless. Motion at 7-11. Several Texas courts have addressed this coverage issue in cases similar to the instant dispute. For example, in Garrison v. Fielding Reinsurance, Inc., 765 S.W.2d 536, 538 (Tex.App.-Dallas 1989, writ denied), the Dallas Court of Appeals held that an insurance policy excluded coverage for the shooting death of an individual under a similar assault and battery exception. In Garrison, a patron of a restaurant was shot by an unknown assailant in the parking lot outside the establishment. Id. at 537. The victim's wife brought suit against the restaurant, and the restaurant in turn sued the insurance company to compel it to reimburse the restaurant for any liability it incurred. Id. The insurer relied on an exclusion which provided, in part: "this policy excludes claims arising out of assault and battery, whether caused by or at the direction of, the insured, his/her employee, patrons, or any cause whatsoever." Id. The restaurant claimed that the underlying lawsuit against it was based on negligence, and therefore the exclusion did not apply. Id. The court concluded that the exclusion precluded the claim from falling within the scope of the policy, because, "[t]he [plaintiffs in the underlying case] would never have brought a lawsuit against the [restaurant] absent the assault and battery committed by the unknown assailant. The endorsement in the insurance policy excludes claims arising out of assault and battery regardless of the cause." Id. at 538.
Two other Texas Courts of Appeals have ruled similarly on the issue of assault and battery exclusions in commercial insurance policies. See Tarrant County Ice Sports, Inc. v. Equitable General Life Insurance Company of Oklahoma, 662 S.W.2d 129, 131 (Tex.App.-Fort Worth 1983, writ refused n.r.e.) (holding that an assault on patrons at an ice hockey game was excluded from the hockey organization's insurance policy by an assault and battery exclusion because, although the parties' claims were based on the negligence of the hockey organization, the incident "was an assault and battery, pure and simple"); Burlington Insurance Company v. Mexican American Unity Council, Inc., 905 S.W.2d 359, 362 (Tex.App.-San Antonio 1995, no writ) (holding that a sexual assault on a youth home's resident was excluded from the policy by an assault and battery exclusion, notwithstanding that the claim was couched in negligence). Finally, at least one federal court in Texas has agreed with this outcome. See Acceptance Insurance Company v. Jedjo, Inc., 897 F. Supp. 978, 979-80 (S.D. Tex. 1995) (holding that the death of a patron as a result of a beating by a bar's bouncers was excluded by both an assault and battery exclusion and a hiring and supervising exclusion in the parties' insurance policy) (citing Garrison, 765 S.W.2d 536).
The facts in the instant case are nearly identical to those in Garrison. Osario, like the victim in Garrison, was shot to death by an unknown assailant outside the insured establishment. As in Garrison, the underlying action alleges negligence on the part of the insured. The court is thus persuaded by the decision in Garrison, and the other decisions cited above, and finds that a similar ruling is appropriate in this case. Therefore, the court finds that Essex has no duty to defend or indemnify Payless, under the assault and battery or hiring and supervision exclusions in the policy, from the claims asserted against Payless in the Osario Action.
That the Osario Action is a wrongful death action based upon the negligence of Payless is irrelevant because, if not for the assault and battery, the Osarios would not have brought suit against Payless. See Garrison, 765 S.W.2d at 538; Burlington Insurance, 905 S.W.2d at 362.
III. CONCLUSION
For the reasons discussed above, Essex's motion for summary judgment is GRANTED. Within ten days of this date, counsel for Essex shall submit a proposed form of judgment conforming to this memorandum order.SO ORDERED.