Penn-America Insurance Company v. The Anchor, LLC et al

Filing 126

Order on Motion for Summary Judgment

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA

PENN-AMERICA INSURANCE
COMPANY,

Case No. 3:09-cv-0049-RRB

Plaintiff,
vs.
THE ANCHOR LLC, d/b/a GRAHAM
PROPERTIES LLC; and JASON
CUMMINGS,

ORDER GRANTING
MOTION FOR SUMMARY JUDGMENT

Defendants.

I.

INTRODUCTION
Before the Court is Plaintiff Penn-America Insurance Company

with a Motion for Summary Judgment at Docket 61. Penn argues that
it is entitled to summary judgement in this declaratory judgment
action because Defendant The Anchor, LLC, owner of an Anchorage bar
by the same name, has failed to supply any evidence that it is
entitled to assault liability insurance coverage from Penn under an
estoppel theory. The Anchor opposes at Docket 122, arguing that
Penn is estopped from denying coverage. Specifically, The Anchor
claims that it was misled by Alaska USA Brokers and Penn when it

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3:09-CV-0049-RRB

was led to believe that no liability insurance could be obtained
for its business operations without a coverage exception for
assaults by bar patrons.
II.

BACKGROUND
The facts are well-known to the parties and need not be

recited in great detail here. The Anchor is a bar that began
operation in 2007. In 2006, prior to opening, The Anchor hired
Alaska USA to find a liability insurance policy to cover its
business activities. Alaska USA was able to obtain such a policy
from Penn, and the parties initiated an insurance policy for The
Anchor in November 2006. The policy contained a coverage exception
for injuries stemming from “‘assault,’ ‘battery,’ or ‘physical
altercation,’” on the premises of the bar. It is an undisputed fact
that The Anchor was aware of the assault exception at least as
early as August 2007, and the policy clearly stated the exclusion
when it was issued in 2006.
On November 4, 2008, Jason Cummings filed suit against The
Anchor in Alaska Superior Court. In that suit, Cummings alleged
that he was injured at The Anchor in an assault by one or more bar
patrons on October 20, 2007.1

1

Docket 31 at 3.

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3:09-CV-0049-RRB

The

present

declaratory

suit

judgment

was

brought

regarding

its

by

Penn,

obligation

which
to

seeks

defend

a

and

indemnify The Anchor in Cummings’ underlying state tort action.
This Court has previously ruled that, due the coverage exception
for “‘assault,’ ‘battery,’ or ‘physical altercation,’” the terms of
the liability insurance policy issued by Penn to The Anchor
preclude liability and medical payments coverage for the injuries
sustained by Defendant Jason Cummings on October 20, 2007. The
Court has also ruled that any negligence on the part of The
Anchor’s co-defendant Alaska USA Brokers in improperly obtaining
liability coverage cannot be imputed to Penn on an agency theory.
III. RULE OF DECISION
Summary

judgment

is

appropriate

if

no

genuine

issue

of

material fact exists and the moving party is entitled to judgment
as a matter of law.2 The moving party always bears the burden of
demonstrating the absence of a material issue of fact.3 The moving
party need not present evidence; it need only point out the lack of
any genuine dispute as to material fact.4 Once the moving party
meets this burden, the non-moving party must set forth evidence of

2

Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986).
3

Celotex, 477 U.S. at 323.

4

Id. at 323-325.

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3:09-CV-0049-RRB

specific facts showing the existence of a genuine issue of material
fact.5 All evidence presented by the non-movant must be believed
for purposes of summary judgment, and all justifiable inferences
must be drawn in favor of the non-movant.6
IV.

DISCUSSION
Due to the Court’s prior rulings granting partial summary

judgment to Penn, the only remaining rationale for The Anchor to
receive insurance coverage from Penn for Cummings’ injuries is The
Anchor’s fourth affirmative defense, which alleges that Penn is
estopped from denying coverage. A party invoking equitable estoppel
as an affirmative defense must show 1) assertion of a position by
conduct or word, 2) reasonable reliance thereon, 3) resulting
prejudice, and 4) the estoppel will be enforced only to the extent
that justice so requires.7
In its very brief response to the instant motion, The Anchor
discusses the factual basis for this defense:
The insurance had an Assault and Battery Exclusion. [...]
When The Anchor became aware of same, it went through

5

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49,

(1986).
6

Id.

7

Ogar v. City of Haines, 51 P.3d 333, 335 (Alaska, 2002)
(quoting Municipality of Anchorage v. Schneider, 685 P.2d 94, 97
(Alaska, 1984)).
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3:09-CV-0049-RRB

Alaska USA Insurance Brokers, who informed The Anchor
such insurance was not commercially feasible.8
According to The Anchor, it was able to obtain assault coverage
through Alaska USA after Cummings’ injury occurred.9 The Anchor
apparently believes that its ability to obtain coverage after the
October 2007 incident belies the notion that no such coverage was
“commercially feasible” at the time that The Anchor first obtained
insurance in 2006 or just after the bar opened in 2007.
Assuming, as the Court must, that all of The Anchor’s factual
assertions at this stage are true, they are still insufficient to
support an estoppel defense. As noted above, estoppel can only be
enforced where “justice so requires.” The Anchor has failed to
establish that Penn’s actions were in any way inequitable or
unjust, such that enforcing the terms of the policy would violate
the principles of equity. Penn had no obligation to provide The
Anchor with assault coverage at any price. Thus, Penn had every
right to inform Alaska USA and, by extension, the Anchor, that it
would not provide assault coverage at a “commercially feasible”
rate.
Of course, it may be that Alaska USA and The Anchor could have
obtained assault coverage from another insurance company at a

8

Docket 122 at 1-2.

9

Docket 122 at 2.

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3:09-CV-0049-RRB

reasonable rate. The fact that they did obtain such insurance later
on does not ipso facto prove that such coverage was available prior
to Cummings’ injury. Even if assault coverage had been available,
The Anchor’s claims would lie against Alaska USA, for possible
negligence or breach of contract in failing to find a suitable
policy when such was readily obtainable. Penn cannot be held liable
for any alleged misrepresentations or errors by Alaska USA because
the Court has already determined that Alaska USA did not act as an
agent of Penn.
The Anchor cites a New Mexico Supreme Court case, Barth v.
Coleman, 878 P.2d 319 (N.M., 1994), to establish “the potential
application of estoppel due to miscommunication” and “the failure
to

clearly

disclose

the

policy

terms

to

lay

non-insurance

persons”.10 However, as noted above, the Anchor has not furnished
any evidence that Penn made miscommunicated or failed to disclose
the terms of the policy. Indeed, the evidence before the Court is
that the assault exception was well known to The Anchor prior to
Cumming’s injury. The Anchor has had more than sufficient time to
discover

10

evidence

of

any

Docket 122 at 2.

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3:09-CV-0049-RRB

miscommunication,

impropriety

or

inconsistent conduct by Penn.11 The Anchor has not met the burden
of production necessary to defeat a motion for summary judgment.
V.

CONCLUSION
Because The Anchor has supplied no evidence that it was

purposely or negligently misled by Penn with regard to the terms of
the policy or the availability of assault coverage, Penn’s Motion
for Partial Summary Judgment Re Estoppel at Docket 61 is GRANTED.
It is the Court’s understanding that this resolves all claims and
defenses between Penn and The Anchor in favor of Penn. The parties
are hereby ORDERED to file a joint status report by May 31, 2010.
IT IS SO ORDERED.
ENTERED this 18th day of May, 2010.
S/RALPH R. BEISTLINE
UNITED STATES DISTRICT JUDGE

11

See Dockets 90, 113, 118.

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