Danny Marks, Jr. v. Scottsdale Insurance Company
Filing
PUBLISHED AUTHORED OPINION filed. Originating case number: 3:14-cv-00025-DJN. [999610728]. [14-1823]
Appeal: 14-1823
Doc: 25
Filed: 06/29/2015
Pg: 1 of 14
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-1823
DANNY RAY MARKS, JR.,
Plaintiff - Appellant,
and
TIMOTHY B. JOHNSON,
Plaintiff,
v.
SCOTTSDALE INSURANCE COMPANY,
Defendant - Appellee.
Appeal from the United States District Court for the Eastern
District of Virginia, at Richmond.
David J. Novak, Magistrate
Judge. (3:14-cv-00025-DJN)
Argued:
May 13, 2015
Decided:
June 29, 2015
Before GREGORY and HARRIS, Circuit Judges, and HAMILTON, Senior
Circuit Judge.
Affirmed by published opinion. Judge Harris wrote the opinion,
in which Judge Gregory and Senior Judge Hamilton joined.
ARGUED:
John Janney Rasmussen, INSURANCE RECOVERY LAW GROUP,
PLC, Richmond, Virginia, for Appellant.
John Becker Mumford,
Jr., HANCOCK, DANIEL, JOHNSON & NAGLE, P.C., Glen Allen,
Virginia, for Appellee.
ON BRIEF:
Eileen R. Geller, HANCOCK,
Appeal: 14-1823
Doc: 25
DANIEL, JOHNSON
Appellee.
Filed: 06/29/2015
&
NAGLE,
Pg: 2 of 14
P.C.,
2
Glen
Allen,
Virginia,
for
Appeal: 14-1823
Doc: 25
Filed: 06/29/2015
Pg: 3 of 14
PAMELA HARRIS, Circuit Judge:
Plaintiff Timothy B. Johnson (“Johnson”) is a member of the
Northumberland Hunt Club (the “Hunt Club” or the “Club”).
While
hunting on Club-leased land, he unintentionally shot and injured
Plaintiff-Appellant
Danny
Ray
Marks,
driving nearby on a public road.
Jr.
(“Marks”),
who
was
Marks sued both Johnson and
the Hunt Club in Virginia court, alleging that each had been
negligent
in
connection
with
his
accidental
shooting.
Defendant-Appellee Scottsdale Insurance Company (“Scottsdale”),
which insures the Club under a general liability policy, denied
coverage to Johnson, contending that the policy does not cover
Club members for their personal recreational activities but only
for liability arising from some official action of the Hunt Club
or actions undertaken on behalf of the Club.
The magistrate
judge agreed with Scottsdale, and awarded it summary judgment.
For the reasons that follow, we affirm.
I.
A.
Scottsdale has issued a commercial general liability policy
to
the
Hunt
Club
(“the
“those
Policy”),
indemnify
for
sums
that
obligated
to
pay
as
damages
‘property
damage’
to
which
under
the
because
this
3
which
insured
of
it
becomes
‘bodily
insurance
agrees
legally
injury’
applies,”
to
and
or
to
Appeal: 14-1823
Doc: 25
Filed: 06/29/2015
Pg: 4 of 14
defend against any suit seeking such damages.
J.A. 143.
Hunt Club is the sole named insured on the Policy.
Policy
also
includes
an
endorsement
(“the
The
But the
Endorsement”)
modifying its coverage:
ADDITIONAL INSURED—CLUB MEMBERS . . .
WHO IS AN INSURED (Section II) is amended to include
as an insured any of your members, but only with
respect to their liability for your activities or
activities they perform on your behalf.
J.A. 160.
The Policy defines “you” and “your” as “the Named
Insured shown in the Declarations,” J.A. 28, which is the Hunt
Club,
J.A.
136,
so
that
the
Endorsement
effectively
extends
Policy coverage to Club members “only with respect to [member]
liability for [the Club’s] activities or activities [members]
perform on [the Club’s] behalf.”
whether
Johnson,
a
Club
The question in this case is
member,
is
an
“insured”
under
the
Endorsement for purposes of Marks’s suit.
B.
On January 3, 2013, Johnson was participating in a deer
hunt with other members of the Hunt Club and their guests, on
land
leased
by
the
Hunt
Richmond County, Virginia.
Club
and
adjacent
to
Route
642
in
Johnson shot at a deer, and pellets
from the shot traveled toward the highway and struck and injured
Marks.
4
Appeal: 14-1823
Doc: 25
Filed: 06/29/2015
Pg: 5 of 14
On December 16, 2013, Marks filed suit in Virginia court
(the “Marks Suit”), seeking compensatory and punitive damages.
As
against
Johnson,
negligence.
Marks
According
alleged
to
the
both
negligence
complaint,
and
Johnson,
gross
who
had
extensive firearm training and was familiar with the location,
took a position approximately 75 yards from the highway even
though he knew or should have known that his gun could shoot
further than 75 yards.
When Johnson shot in the direction of
the highway, Marks alleged, one of the pellets from Johnson’s
gun struck Marks in the head.
Marks also brought a separate
negligence claim against the Hunt Club, alleging that the Club
leased
the
officers
land
and
where
members
the
shooting
regularly
occurred,
hunted
there,
knew
but
that
its
failed
to
promulgate rules or regulations to protect the nearby public.
The complaint did not seek to hold Johnson or any other Club
member
vicariously
liable
for
the
alleged
negligence
of
the
Club.
On
Virginia
January
court,
13,
2014,
this
Marks
time
filed
against
a
second
Scottsdale,
complaint
in
seeking
a
declaration under Virginia law that Scottsdale has a duty under
the Policy to defend and indemnify Johnson in the Marks Suit.
In that complaint, Marks alleged that the Endorsement, which
insures Club members “with respect to their liability for [the
Club’s]
activities,”
covered
Johnson’s
5
shooting
of
Marks,
Appeal: 14-1823
Doc: 25
Filed: 06/29/2015
Pg: 6 of 14
because Johnson is a Club member and hunting is one of “[the
Club’s] activities.”
Scottsdale
this
case
to
jurisdiction,
diversity
removed
and
filed
a
federal
court
on
seeking
counterclaim
based
a
declaration that Scottsdale owes no duty to defend or indemnify
Johnson
in
the
Suit. 1
Marks
Scottsdale
argued
that
the
Endorsement does not cover Hunt Club members for their personal
activities
in
hunting
the
day
it
covers
on
Scottsdale,
connection
of
with
the
the
Club,
shooting.
members
only
such
as
Instead,
to
the
Johnson’s
according
extent
they
to
are
vicariously liable for the Club’s own activities or take action
on
behalf
litigation,
of
the
and
Club.
though
Johnson
he
joined
subsequently
the
filed
district
for
court
bankruptcy
protection, the bankruptcy court allowed this action to proceed.
The parties consented to have a magistrate judge adjudicate
the case and filed cross-motions for summary judgment.
Adopting
Scottsdale’s reading of the Policy, the magistrate judge held
that Scottsdale has no duty to defend or indemnify Johnson in
the
Marks
Suit,
and
accordingly
1
granted
summary
judgment
to
Scottsdale’s counterclaim was limited to Marks’s claims
against Johnson; it did not contest its obligation under the
Policy to defend the Hunt Club itself against Marks’s claims.
At oral argument, Scottsdale confirmed that it is defending the
Hunt Club in the Marks Suit.
6
Appeal: 14-1823
Doc: 25
Filed: 06/29/2015
Pg: 7 of 14
Scottsdale while denying the summary judgment motions of Marks
and Johnson.
This timely appeal followed.
II.
We review a grant of summary judgment de novo.
CACI Int’l,
Inc. v. St. Paul Fire and Marine Ins. Co., 566 F.3d 150, 155
(4th Cir. 2009).
apply
the
Virginia.
Because jurisdiction is based on diversity, we
choice-of-law
Id. at 154.
rules
of
the
forum
state
-
here,
In insurance cases, Virginia law looks
to the law of the state where the insurance contract is written
and delivered.
Id.
The parties agree that the Policy was
written and delivered in Virginia and therefore that Virginia
law governs.
A.
In
directed
construing
by
the
Virginia
Policy
law
provision
to
at
apply
issue,
ordinary
we
are
contract-
interpretation principles, deducing the parties’ intent from the
words of the Policy itself.
See Va. Farm Bureau Mut. Ins. Co.
v. Williams, 677 S.E.2d 299, 302 (Va. 2009).
We are to give the
text its “ordinary and customary meaning,” Salzi v. Va. Farm
Bureau Mut. Ins. Co., 556 S.E.2d 758, 760 (Va. 2002) (quoting
Graphic Arts Mut. Ins. v. C.W. Warthen Co., Inc., 397 S.E.2d
876, 877 (Va. 1990)), and may not insert by construction a term
that
is
not
expressly
in
the
contract,
7
Lansdowne
Dev.
Co.,
Appeal: 14-1823
Doc: 25
Filed: 06/29/2015
Pg: 8 of 14
L.L.C. v. Xerox Realty Corp., 514 S.E.2d 157, 161 (Va. 1999).
Virginia
does
apply
one
rule
of
construction
insurance contracts and relevant here:
ambiguous,
then
it
is
to
be
to
If policy language is
construed
Williams, 677 S.E.2d at 302.
specific
against
the
insurer.
But – and equally relevant here –
a term will not be deemed ambiguous unless it is “capable of
more
than
one
reasonable
examined in context.
meaning”
even
after
it
has
been
Res. Bankshares Corp. v. St. Paul Mercury
Ins. Co., 407 F.3d 631, 636 (4th Cir. 2005).
The Endorsement in question, again, insures “any of [the
Club’s] members, but only with respect to [member] liability for
[the Club’s] activities or activities [members] perform on [the
Club’s]
clause
behalf.”
–
Marks
covering
concedes
member
on
activities
appeal
that
performed
the
second
the
Club’s
on
behalf – does not reach Johnson’s hunting expedition, but argues
that the first clause – member liability for Club activities –
unambiguously
activities.
is
at
least
does,
because
hunting
is
one
of
the
Club’s
Alternatively, Marks argues that the first clause
ambiguous
on
the
point,
and
therefore
must
be
construed in his favor.
We disagree.
and
the
policy
respect
other
Instead, we agree with the magistrate judge
federal
provisions:
to
[member]
courts
The
that
clause
liability
covering
for
8
have
[the
considered
Club
identical
members
Club’s]
“with
activities”
Appeal: 14-1823
Doc: 25
Filed: 06/29/2015
unambiguously
restricts
Pg: 9 of 14
coverage
to
situations
involving
a
member’s alleged vicarious liability for the activities of the
Club as an entity.
J.A. 384–87; see Everett Cash Mut. Ins. Co.
v. Ins. Corp. of Hanover, Civ. A. No. 1:07-CV-0641, 2008 WL
4453113,
at
endorsement
*5–6
to
(M.D.
hunt
club
Penn.
Sept.
insurance
30,
policy
2008)
(identical
does
not
cover
member’s accidental shooting during recreational hunt); Lenox v.
Scottsdale Ins. Co., No. Civ. 04-2282(SRC), 2005 WL 1076065, at
*3–5 (D.N.J. May 5, 2005) (identical endorsement to beach club
insurance policy does not cover member’s accidental injury of
guest on club property). 2
First,
even
standing
on
its
own,
the
phrase
liability for [the Club’s] activities” is quite clear.
liability
for
the
Club’s
activities”
is
the
“[member]
“Member
language
of
vicarious liability, and it is most plainly read to apply “when
a member is held vicariously liable for some activity undertaken
2
In a third case, Mt. Hawley Ins. Co. v. Nat’l Cas. Co.,
Civ. A. No. 13–cv–01652–CMA–KLM, 2015 WL 428768, at *4–5 (D.
Colo. Jan. 30, 2015), this one involving a national go-karting
association,
the
court
addressed
a
policy
endorsement
substantively identical to the second clause here, covering
members when they are “acting on [the club’s] behalf.”
Following Lenox and Everett Cash, as well as the magistrate
judge in this case, the court held that the term “on behalf of”
does not encompass the voluntary, recreational activities of
members, but instead extends only to actions undertaken by
members at the request or for the benefit of the club. See id.
Again, on appeal, Marks concedes that the Endorsement’s second
clause is not applicable in this case.
9
Appeal: 14-1823
Doc: 25
Filed: 06/29/2015
Pg: 10 of 14
by the Club as a corporate entity.”
*4;
see
also
Everett
Cash,
2008
Lenox, 2005 WL 1076065, at
WL
4453113,
at
*5
(“club
activities” refers to “those actions taken by the Club in its
capacity as a non-profit corporate entity”); J.A. 387 (same).
In
his
brief,
Marks
argues
that
the
Policy
covers
his
suit
against Johnson because the shooting occurred “during” a Hunt
Club activity, Appellant’s Br. at 12, or “arose from” a Hunt
Club activity, id. at 17.
But that is not what the Policy says,
and we cannot add words that are not there.
S.E.2d
at
liability
161.
for
Members
the
are
covered
with
Club’s
own
corporate
See Lansdowne, 514
respect
activities,
to
not
their
with
respect to anything they may do during or in connection with
Club activities.
That reading is confirmed when we look at the Endorsement
as
a
whole.
The
limiting
terms
with
which
the
Endorsement
begins – the Policy is modified to cover Club members, “but only
with respect to [member] liability for [the Club’s] activities
or activities [members] perform on [the Club’s] behalf” – “make
clear that the Policy is not intended to cover every member
pursuit at the Club.”
Lenox, 2005 WL 1076065, at *4.
And that
point is reinforced by the joint operation of the Endorsement’s
two clauses.
The first, as we have explained, is most naturally
read to invoke actions by the Club as an entity – entering into
contracts, suing and being sued, buying and selling property –
10
Appeal: 14-1823
for
Doc: 25
which
a
Filed: 06/29/2015
member
might
be
Pg: 11 of 14
held
vicariously
liable.
The
individual activities of Club members, by contrast, are covered
by the second clause – “activities [members] perform on [the
Club’s]
behalf”
–
but
only
when
they
are
undertaken
at
the
request or for the benefit of the Club, a condition that Marks
concedes is not satisfied here.
that
restriction
is
entirely
On Marks’s reading, however,
superfluous,
because
all
member
activities in connection with the Club are covered already, by
the first clause.
Endorsement
that
We decline to adopt a construction of the
renders
so
much
of
it
redundant.
Cf.
id.
(party taking same position as Marks “essentially asks the Court
to interpret this provision in such a way that the limiting
language is irrelevant”).
Marks’s
contrary
argument
rests
almost
exclusively
on
dictionary definitions of “activity,” under which, he contends,
“hunting”
comfortably
constitutes
an
fits.
“activity”
We
do
within
the
not
doubt
that
freestanding
“hunting”
meaning
of
that word, and even an “activity” to which the Hunt Club is
committed.
And if the Policy broadly extended coverage to Club
members for, say, “all member activities on Club property,” or
“all member activities within the scope of the Club’s purpose,”
we would have a different case.
See id.
The problem for Marks
is not the word “activity,” but the words right around it in the
Policy actually before us, extending coverage to Club members
11
Appeal: 14-1823
Doc: 25
Filed: 06/29/2015
Pg: 12 of 14
“but only with respect to [member] liability for [the Club’s]
activities.”
precludes
That
Marks’s
is
the
language,
interpretation,
taken
as
a
unambiguously
whole,
that
covering
Club
members only with respect to their vicarious liability for the
activities of the Club as an entity.
See Gates, Hudson, &
Assocs. v. Fed. Ins. Co., 141 F.3d 500, 502 (4th Cir. 1997)
(contract term is deemed unambiguous if its meaning is clear in
context).
B.
Having determined the Policy’s scope of coverage, the rest
of our task is straightforward.
In deciding whether Scottsdale
has a duty to defend Johnson in the Marks Suit, under Virginia’s
“eight
corners
rule”
we
look
only
to
Marks’s
underlying
complaint, and determine whether its allegations against Johnson
come within the scope of the Policy’s coverage.
AES Corp. v.
Steadfast Ins. Co., 725 S.E.2d 532, 535 (Va. 2012); see also
CACI, 566 F.3d at 155–56; Fuisz v. Selective Ins. Co. of Am., 61
F.3d 238, 242 (4th Cir. 1995).
If the complaint alleges any
facts that, if proved, would render Scottsdale liable under the
Policy
for
a
judgment
against
Johnson,
defend Johnson in the Marks Suit.
then
Scottsdale
must
See CACI, 566 F.3d at 155.
But if it is clear based on the complaint that Scottsdale would
not be liable under the Policy for any judgment based on the
12
Appeal: 14-1823
Doc: 25
Filed: 06/29/2015
Pg: 13 of 14
allegations against Johnson, then Scottsdale has no such duty to
defend.
See id.
The complaint in the Marks Suit does not allege any facts
that, if proved, would render Scottsdale liable as to Johnson
under the Policy as we have construed it.
Marks alleges only
that Johnson, a member of the Club, was on land leased by the
Club
and
regularly
fired his gun.
his
claim
used
by
Club
members
to
under
hold
he
negligently
As Marks concedes, that is not enough to bring
the
Endorsement’s
second
activities “on [the Club’s] behalf.”
seek
when
Johnson
vicariously
clause,
for
member
Nor does the complaint
liable
“for
[the
Club’s]
activities” so as to trigger coverage under the first clause.
The complaint does raise a separate claim against the Club as an
entity, charging it with negligence in failing to protect the
safety of the nearby public – but what it does not do is seek to
hold Johnson vicariously liable “for [the Club’s] activities” in
this regard.
Instead, its allegations against Johnson rest only
on “the recreational pursuits indulged in by Club members,” see
Everett
Cash,
2008
WL
4453113,
at
*5,
which,
as
we
have
explained, fall outside the scope of the Endorsement. 3
3
The facts alleged in the complaint give us no occasion to
consider whether coverage under the first clause of the
Endorsement might extend to situations in which a Club member
has participated in a group activity organized or sponsored by
the Club itself – say, an annual picnic, or official Club
13
Appeal: 14-1823
Doc: 25
Because
Filed: 06/29/2015
it
is
clear
from
Pg: 14 of 14
the
Marks
Suit
complaint
that
Scottsdale would not be liable for any judgment against Johnson,
Scottsdale
has
no
duty
to
defend
Johnson.
It
follows
that
Scottsdale also has no duty to indemnify Johnson in the Marks
Suit.
See Penn-America Ins. Co. v. Coffey, 368 F.3d 409, 413
(4th
Cir.
indemnify);
2004)
AES
(duty
Corp.,
to
defend
725
is
S.E.2d
broader
at
than
535–36
duty
to
(same).
Accordingly, we hold that the magistrate judge properly granted
summary judgment to Scottsdale and denied summary judgment to
Marks and Johnson. 4
III.
For the foregoing reasons, we affirm the judgment of the
magistrate judge.
AFFIRMED
breakfast.
That question was reserved expressly by the
magistrate judge, as well as by the court in Lenox, 2005 WL
1076065, at *5; see also Everett Cash, 2008 WL 4453113, at *5
(recreational hunting “outside the context of a club event” is
not covered club activity), and we need not decide it today.
4
In analyzing Scottsdale’s duty to defend, the magistrate
judge referred not only to the allegations of the Marks Suit
complaint but also to undisputed facts adduced during discovery.
To the extent the magistrate judge relied on materials outside
the complaint, it appears to have erred under Virginia law. But
the result is the same when we confine our analysis to the
underlying complaint, and so the magistrate judge’s conclusion
is in any event correct.
See United States v. Smith, 395 F.3d
516, 519 (4th Cir. 2005) (appellate court may affirm on any
ground apparent in the record).
14
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?