Casher v. Hudson Specialty Insurance Company
ORDER, GRANTING 16 Hudson's Motion for Summary Judgment, and DISMISSING Plaintiff's claims with prejudice. Signed by Senior Judge Callie V. S. Granade on 7/18/2017. (mab)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
DIANNE CASHER, individually
and as representative of the
Estate of Darryl Casher,
CIVIL NO. 17–133–CG–B
This matter is before the Court on Defendant Hudson Specialty
Insurance Company’s (“Hudson”)—misnamed in the complaint as “Hudson
Specialty Insurance Group”—motion for summary judgment (Doc. 16). After a
review of the pleadings and in light of Plaintiff Dianne Casher’s decision not
to respond, the Court finds Hudson’s motion is due to be granted.
On September 11, 2011, Darryl Casher went with a friend to a Mobile,
Alabama nightclub called Club Atlantis. (Doc. 1-3, p. 5). This casual night out
with friends, however, proved to be fatal. After leaving Club Atlantis, Darryl
passed by Cedric Burroughs, a minor who had allegedly been drinking in the
club. Id. at p. 7. Without provocation, Cedric shot Darryl and fatally wounded
him. Id. This case concerns the ensuing litigation.
II. Procedural History
On February 17, 2012, Dianne Casher, individually and as the
representative of Darryl’s estate, filed suit against Crown Theater, Inc.1—the
owner of Club Atlantis—in the Circuit Court of Mobile County (case no. 02–
CV–2012–900345). (Doc. 1-3; Doc. 1-2, pp. 9). In that suit, Casher asserted
claims for (1) violations of the Alabama Dram Shop Act, (2) wrongful death,
(3) negligence, (4) wantonness, (5) negligent training/monitoring/supervision,
and (6) joint venture. (Doc. 1-3).
Hudson insured Crown Theater under a liquor liability policy, number
HSLL–10039, from July 20, 2011 through July 20, 2012. (Doc. 1-1, pp. 20–
41). This policy established the limit of liability at $100,000 for “each common
cause” and for the “aggregate” limit. Id. at 22. Hudson received notification of
the underlying claim on October 5, 2011 from Centrex Underwriters. (Doc. 11, pp. 1, 4–6). The following day, Thomas Peppel, Assistant Vice President—
Claims at Hudson, sent a letter to Crown Theater denying coverage and
refusing to defend it. Id. at pp. 11–13. Hudson refused coverage on the basis
of the policy’s assault and battery exclusion. Id. at 12.
Thereafter, the underlying case proceeded through discovery, and
Crown Theater and its co-defendants moved the circuit court for summary
judgment in their favor. (See Doc. 16-2). Before the court reached a decision,
however, Casher and the underlying Defendants entered into a Pro Tanto
Casher also named Mark Stafford and Gulf Coast Productions, Inc. as
defendants in the underlying state action. (Doc. 1-3).
Order of Dismissal with Prejudice concerning counts II through VI of the
complaint. (Doc. 16-5). Casher “expressly reserve[d] the right to continue the
action against the remaining Defendant CROWN THEATER solely on
Plaintiff’s Dram Shop Claim (Count I).” Id. at p. 2. On February 12, 2016, the
circuit court entered a Consent Judgment in Plaintiff’s favor against Crown
Theater in the amount of $150,000 for Count I. (Doc. 1-3, p. 23).
On July 8, 2016, Casher filed suit against “Hudson Specialty Insurance
Group” in the Circuit Court of Mobile County seeking a direct action claim for
the insurance proceeds pursuant to Alabama Code § 27–23–2. (See Doc. 1).
Casher attempted service twice on the fictitious entity and petitioned the
circuit court for entry of default judgment on October 28, 2018 in the amount
of $158,566.66 (Doc. 11-11). The circuit court entered default judgment
against Hudson on November 22, 2016. (Doc. 1-1, pp. 18–19).
On March 22, 2017, Casher’s counsel sent a letter notifying Hudson
Specialty Insurance Group of the default judgment and stating it would begin
collection efforts. (Doc. 1-1, pp. 1–2, 17). Peppel received the letter on March
23, and Hudson removed the action to this Court on March 28. (Doc. 1).
Hudson moved this Court to set aside entry of the default judgment, and the
Court granted the motion of the basis of improper service under Alabama
law. (Docs. 6, 20). Casher moved to remand the action to the circuit court, but
the undersigned denied the motion on similar findings of improper service.
(Docs. 12, 21).
III. Summary Judgment Standard
Summary judgment should be granted only if “there is no issue as to
any material fact and the moving party is entitled to judgment as a matter of
law.” FED. R. CIV. P. 56(c). The party seeking summary judgment bears “the
initial burden to show the district court, by reference to materials on file, that
there are no genuine issues of material fact that should be decided at trial.”
Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). Once the
moving party has satisfied its responsibility, the burden shifts to the
nonmoving party to show the existence of a genuine issue of material fact. Id.
“If the nonmoving party fails to make ‘a sufficient showing on an essential
element of her case with respect to which she has the burden of proof,’ the
moving party is entitled to summary judgment.” Id. (quoting Celotex Corp. v.
Catrett, 477 U.S. 317 (1986) (footnote omitted)). “In reviewing whether the
nonmoving party has met its burden, the court must stop short of weighing
the evidence and making credibility determination of the truth of the matter.
Instead, evidence of the non-movant is to be believed, and all justifiable
inferences are to be drawn in his favor.” Tipton v. Bergrohr GMBH-Siegen,
965 F.2d 994, 999 (11th Cir. 1992) (internal citations and quotations
omitted). The mere existence, however, of any factual dispute will not
necessarily compel denial of a motion for summary judgment; rather, only
material factual disputes preclude entry of summary judgment. Lofton v.
Secretary of Dep‘t of Children and Family Servs., 358 F.3d 804, 809 (11th Cir.
As noted, Plaintiff filed no response to the instant motion. Summary
judgment is not automatically granted by virtue of a nonmovant’s silence.2
Nonetheless, the Eleventh Circuit has provided clear guidance that a court is
not obligated to read minds or to construct arguments or theories of relief
that counsel have failed to raise and that are not reasonably presented on the
face of the pleadings. See Resolution Trust Corp. v. Dunmar Corp., 43 F.3d
587, 599 (11th Cir. 1995) (“There is no burden upon the district court to distill
every potential argument that could be made based upon the materials before
it on summary judgment.”); see also Gleason v. Norwest Mortg., Inc., 243 F.3d
130, 142 (3d Cir. 2001) (“The ruling on a motion for summary judgment is to
be made on the record the parties have actually presented, not on one
potentially possible.”); Higgins v. New Balance Athletic Shoe, Inc., 194 F.3d
252, 260 (1st Cir. 1999) (declaring a “party who aspires to oppose a summary
judgment motion must spell out his arguments squarely and distinctly, or
See, e.g., Vermont Teddy Bear Co. v. 1–800 Beargram Co., 373 F.3d 241, 246
(2d Cir. 2004) (“Although the failure to respond may allow the district court
to accept the movant’s factual assertions as true . . . the moving party must
still establish the undisputed facts entitle him to a judgment as a matter of
law”); Custer v. Pan Am. Life Ins. Co., 12 F.3d 410, 416 (4th Cir. 1993) (“the
court, in considering a motion for summary judgment, must review the
motion, even if unopposed, and determine from what it has before it whether
the moving party is entitled to summary judgment”); but see Isquith for and
on Behalf of Isquith v. Middle S. Utils., Inc., 847 F.2d 186, 199 (5th Cir. 1988)
(“citing as “general rule” that “summary judgment was appropriate because
the nonmovant, although faced with a summary judgment motion, chose not
to respond to the motion at all”).
else forever hold his peace,” as a district court may ignore arguments not
adequately developed by the non-movant”); Erff v. MarkHon Indus., Inc., 781
F.2d 613, 619 (7th Cir. 1986) (trial judge need not conduct search for
unraised issues that may lurk in the pleadings). Clearly, “the onus is upon
the parties to formulate arguments.” Resolution Trust, 43 F.3d at 599. For
that reason, Plaintiff’s election not to proffer argument, evidence, or
authority in response to the motion is at their peril, and this Court will not
commit scarce judicial resources to ferreting out every possible contention
they could have made, but chose not to make, in opposition to the motion.
Hudson moves for summary judgment on the basis that the general
commercial liability policy it issued to Crown Theater excludes coverage for
assault and/or battery such that the policy bars Casher’s Section 27–23–2
claim for recovery of the $150,000 state court consent judgment.
A. Direct Action Claim for Insurance Proceeds
As noted above, Casher filed the instant action pursuant to Alabama’s
direct-action statute, Section 27–23–2, Ala. Code (1975). Section 27–23–2
Upon the recovery of a final judgment against any
person, firm, or corporation by any person . . . for
the loss or damage on account of bodily injury . . . if
the defendant in such action was insured against
the loss or damage at the time when the right of
action arose, the judgment creditor shall be entitled
to have the insurance money provided for in the
contract of insurance between the insurer and the
defendant applied to the satisfaction of the
judgment, and if the judgment is not satisfied
within 30 days after the date when it is entered,
the judgment creditor may proceed against the
defendant and the insurer to reach and apply the
insurance money to the satisfaction of the
Ala. Code § 27–23–2 (1975). In other words, for the purposes of the instant
action, Casher effectively stands in the shoes of the insured (Crown Theater)
subject to all coverage defenses that would be available to the insurer
(Hudson) had the action been brought by Crown Theater. See, e.g., Travelers
Indem. Co. of Conn. v. Miller, 86 So. 3d 338, 342 (Ala. 2011) (explaining the
statute and that the injured party’s rights under the tortfeasor’s insurance
policy are derivative); St. Paul Fire & Marine Ins. Co. v. Nowlin, 542 So. 2d
1190, 1194 (Ala. 1988) (“The law is clear that a judgment creditor’s right
under § 27–23–2 to proceed against the insurance company to satisfy a
judgment obtained against the defendant/insured is dependent upon the
rights of the insured against its insurer under the policy.”).
In Alabama, “[g]eneral rules of contract law govern an insurance
contract.” Safeway Ins. Co. of Ala., Inc. v. Herrera, 912 So. 2d 1140, 1143
(Ala. 2005). An insurance policy “shall be construed liberally in favor of the
insured and strictly against the insurer. Exclusion are to be interpreted as
narrowly as possible, so as to provide maximum coverage for the insured, and
are to be construed most strongly against the insurance company, which
drafted and issued the policy.” Allstate Ins. Co. v. Skelton, 675 So. 2d 377,
379–80 (Ala. 1996) (internal citations omitted). “To the extent the language of
an insurance policy is ambiguous, all ambiguities must be resolved against
the insurance company.” Safeway Ins. Co., 912 So. 2d at 1143. Nonetheless,
“[i]nsurance companies are entitled to have their policy contracts enforced as
written, rather than risking their terms either to judicial interpretation or
the use of straining language, and the fact that different parties contend for
different constructions does not mean that the disputed language is
ambiguous.” Woodall v. Alfa Mut. Ins. Co., 658 So. 2d 369, 371 (Ala. 1995)
(internal citations omitted). “Whether a provision of an insurance policy is
ambiguous is a question of law.” Safeway Ins. Co., 912 So. 2d at 1143.
The test to be applied by [a] court in determining whether
there is ambiguity is not what the insurer intended its
words to mean, but what a reasonably prudent person
applying for insurance would have understood them to
mean. . . . In determining whether an ambiguity exists, a
court should apply the common interpretation of the
language alleged to be ambiguous. . . . This means that
the terms of an insurance policy should be given a
rational and practical construction.”
Poterfield v. Audubon Indem. Co., 856 So. 2d 789, 799 (Ala. 2002) (internal
citations and quotations omitted); see also Am. Resources Ins. Co. v. H & H
Stephens Const., Inc., 939 So. 2d 868, 873 (Ala. 2006). Under Alabama law,
the insured bears the burden of establishing coverage by demonstrating that
a claim falls within the policy, see Colonial Life & Accident Ins. Co. v. Collins,
194 So. 2d 532, 535 (Ala. 1967), while the insurer bears the burden of proving
the applicability of any policy exclusion. See U.S. Fidelity & Guar. Co. v.
Armstrong, 479 So. 2d 1164, 1168 (Ala.1985).
Further, an “insurer's duty to defend is more extensive than its duty to
[indemnify].” Porterfield v. Audubon Indem. Co., 856 So. 2d 789, 791 (Ala.
2002) (quoting Armstrong, 479 So. 2d at 1168). Generally, an insurer’s
obligations with respect to providing a defense to its insured in an action
brought by a third party are determined by the allegations contained in the
third party’s complaint. Ladner and Company, Inc. v. Southern Guaranty Ins.
Co., 347 So. 2d 100, 102 (Ala. 1977) (citations omitted). “If the allegations of
the injured party's complaint show an accident or occurrence which comes
within the coverage of the policy, the insurer is obligated to defend regardless
of the ultimate liability of the insured.” Id. (citing Goldberg v. Lumber
Mutual Casualty Ins. Co., 297 N.Y. 148, 77 N.E.2d 131 (1948)).
However, a court is not constrained to consider only
the allegations of the underlying complaint, but
may additionally look to facts which may be proved
by admissible evidence. Tanner [v. State Farm Fire
& Cas. Co., 874 So. 2d 1058, 1064 (Ala.2003)]; see
also Hartford Cas. Ins. Co. v. Merchants & Farmers
Bank, 928 So. 2d 1006, 1010 (Ala. 2005) (in
deciding whether the allegations of the complaint
show a covered accident or occurrence, “the court is
not limited to the bare allegations of the complaint
... but may look to facts which may be proved by
admissible evidence”) (citations omitted). The test,
ultimately, is this: “The insurer owes no duty to
defend only if neither does the complaint against
the insured allege a covered accident or occurrence
nor does the evidence in the litigation between
insurer and insured prove a covered accident or
occurrence.” Tanner, 874 So. 2d at 1065.
Essex Ins. Co. v. Foley, 2011 WL 1706214, *3 (S.D. Ala. May 5, 2011).
While it is clear Casher cannot recover the insurance proceeds unless
Crown Theater could have recovered them, see Miller, 86 So. 3d at 342, the
Court must determine whether the claimed policy exclusion bars recovery.
See Alfa Specialty Ins. Co. v. Jennings, 906 So. 2d 195, 199 (Ala. Civ. App.
2005). The policy exclusion at issue states:
Assault & Battery Exclusion – Absolute
This insurance policy does not apply to claims
arising out of an assault and/or battery, whether
caused by or at the instigation of, or at the
direction of, or omission by, the insured, and/or his
(Doc. 1-1, p. 36) (emphasis in the original). As this Court has already
determined in a case applying the same policy exclusion,
The exclusion applies in at least four (4)
circumstances: 1) assault/battery caused by the
insured and/or his employees; 2) assault/battery at
the instigation of the insured and/or his employees;
3) assault/battery at the direction of the insured
and/or his employees; and 4) assault/battery due to
an omission by the insured and/or his employees.
Robinson v. Hudson Specialty Ins. Group, 984 F. Supp. 2d 1199, 1207–08
(S.D. Ala. 2013).
In the original, underlying state court complaint, Casher alleged
Crown Theater was negligent and wanton, thereby proximately causing
Darryl’s injuries and resulting death. (Doc. 1-3, pp. 12–17). Further, Casher
contended Crown Theater violated Alabama’s Dram Shop Act by serving
Cedric, a minor. Id. at 8–11. All of these actions, including the alleged serving
of alcohol to a minor, culminated in assault/battery (shooting) which resulted
in Darryl’s untimely death. These allegations speak clearly to the relevant
exclusion. Discussing shockingly similar circumstances, this Court has
As alleged, [Casher’s] negligence claim clearly
“arises out of” the assault/battery caused by
omissions on the part of Crown Theater and/or its
employees—i.e. the club’s failure to maintain safety
and order resulting in [his] being shot [and killed].
In other words, but for the assault/battery (the
shooting), [Casher] would have no negligence claim
because he would have had no injury. Here, there is
only one set of indivisible injuries suffered by
[Darryl], the victim of an assault/battery. “Those
injuries cannot be severed and allocated to different
causes, whether those ‘causes’ are separate legal
theories or ‘claims’ relating to the same act or are
actually separate acts that combined to cause the
injuries.” Admiral Ins. Co. v. Price-Williams, 129
So. 3d 991, 1002 (2013). . . . In sum, “liability-policy
clauses that exclude losses arising from an assault
and battery are effective to bar payments for any
such loss, even when the only improper conduct of
the insured is a purely negligent act or omission
that simply made possible or facilitated the
subsequent intentional assault or battery[.] PriceWilliams, 129 So. 3d at 1001 (referencing and
discussing the holdings of Auto-Owners Ins. Co. v.
Am. Central Ins. Co., 739 So. 2d. 1078 (Ala. 1999)
and Gregory v. W. World Ins. Co., Inc., 481 So. 2d
878 (Ala. 1985)).
Robinson, 984 F. Supp. 2d at 1208–09. Based on this Court’s prior holdings,
the Court is compelled to conclude the assault/battery exclusion in Policy
HSLL–10039 bars Casher’s claim. As such, Hudson’s motion for summary
judgment is granted.
For the reasons stated above, the Court GRANTS Hudson’s motion for
summary judgment (Doc. 16), and Plaintiff’s claims are hereby DISMISSED
with prejudice. A separate judgment will enter.
DONE and ORDERED this 18th day of July, 2017.
/s/ Callie V. S. Granade
SENIOR UNITED STATES DISTRICT JUDGE
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