American Bankers Insurance Company of Florida v. SFC Enterprises LLC et al

Filing 40

MEMORANDUM Opinion and Order: Plaintiff's motion for summary judgment [Doc. 31 ] is granted and Shockley's motion for summary judgment [Doc. 36 ] is denied. Status hearing set for 2/27/2020 is stricken. Civil case terminated. Signed by the Honorable Robert W. Gettleman on 2/18/2020. Mailed notice (cn).

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
AMERICAN BANKERS INSURANCE
COMPANY OF FLORIDA,

)
)
)
Plaintiff,
)
)
v.
)
)
SFC ENTERPRISES LLC, f/k/a Silver Snaffle,
)
LLC, d/b/a St. Charles Farms & Equestrian Center, )
ASHLEY RATAY, and ROBERT SHOCKLEY, )
JR.,
)
)
Defendants.
)

Case No. 18 C 4495

Judge Robert W. Gettleman

MEMORANDUM OPINION AND ORDER
Defendant Robert Shockley, Jr., sued defendants Ashley Ratay and her employer, SFC
Enterprises LLC, f/k/a Silver Snaffle, LLC, d/b/a St. Charles Farms & Equestrian Center, in the
Circuit Court of Cook County, Illinois, seeking damages for personal injuries Shockley sustained
when he was thrown from and then allegedly run over by a golf cart driven by Ratay.
Shockley v. SFC Enterprises, et al., No. 2017 L 5912. (the “underlying complaint”). In the
instant case, plaintiff American Bankers Insurance Company of Florida has sued defendants
SFC, Ratay, and Shockley, seeking a declaration that it has no duty to defend or indemnify either
SFC or Ratay from Shockley’s claims under a “farmowner policy” issued to SFC. Because
Ratay filed a suggestion of bankruptcy, the case was stayed as to her. The bankruptcy case was
dismissed, but although served, neither Ratay nor SFC appeared or answered, leaving Shockley
as the only defendant participating in the case. Plaintiff has moved for summary judgment on
the duty to defend, and Shockley filed a cross-motion for summary judgment. For the reasons

described below, plaintiff’s motion for summary judgment is granted and Shockley’s motion for
summary judgment is denied.
BACKGROUND
Plaintiff issued a farmowner policy to SFC effective June 1, 2016 through June 1, 2017.
The policy provides coverage for bodily injury caused by an ‘occurrence’ and arising out of
ownership, maintenance, or use of the ‘insured premises’ or operations that are necessary or
incidental to the insured premises. The “insured premises” is defined as SFC’s “North Avenue
premises, and operated or used for farming purposes.” Farming is defined as the ownership,
maintenance or use of the premises for the production of crops and raising of livestock, including
all necessary operations.
The policy also contains a declaration indicating that it “is extended to cover the
following activities in addition to farming” and that farming is intended to include:
Classification
Stables, boarding . . .
Riding Clubs & Academies
Saddle Animals, Comm’l
Instructors Liab

Premium
855
228
289
134

As noted, Shockley was injured when he was ejected and allegedly run over by a golf cart
driven by Ratay. The alleged injury took place at the Barrington Hills Riding Center, which all
parties agree is miles from the North Avenue premises. According to the underlying complaint,
at the time of the incident, Ratay was operating the golf cart owned by SFC in furtherance of
SFC’s business, and that Ratay was responsible for supervising individuals riding SFC’s horses.

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DISCUSSION
The parties have filed cross-motions for summary judgment. Summary judgment is
appropriate when the movant shows there is no dispute as to any material fact if “the movant
shows that there is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(s); Celotex v. Catrett, 477 U.S. 317, 322
(1986). A moving party can prevail on summary judgment by either pointing to undisputed
facts supported by the record that demonstrate that it is entitled to judgment, or it can point to an
absence of evidence of an essential element of the responding party’s claim or affirmative
defense. Id. Once a moving party has met its burden, the nonmovant must go beyond the
pleadings and set forth specific facts showing that there is a genuine issue for trial. See Fed. R.
Civ. P. 56(c); Becker v. Tenenbaum-Hill Associates, Inc., 914 F.2d 107, 110 (1990). The court
does not weigh conflicting evidence or make credibility determinations, but considers the
evidence as a whole and draws all inferences in the light most favorable to the nonmoving party.
Green v. Carlson, 826 F.2d 647, 651 (7th Cir. 1987).
A genuine issue of material fact exists when “the evidence is such that a reasonable jury
could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (186). The nonmoving party, must, however, do more than simply “show there is
some metaphysical doubt about the material facts.” Matsushita Elec. Indus. Co. Ltd. v. Zenith
Radio Corp., 475 U.S. 574, 586 (1986). “The mere existence of a scintilla of evidence in
support of the [nonmoving party’s] position will be insufficient, there must be some evidence on
which the jury could reasonably find for the [nonmoving] party.” Anderson, 477 U.S. at 252;
see Modrowski v. Pigatto, 712 F.3d 1166, 1167 (7th Cir. 2003) (The court must enter summary
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judgment against a party that “does not come forward with evidence that would reasonably
permit the finder of fact to find in its favor on a material question.”)).
The parties agree that Illinois law governs the instant dispute. Under Illinois law,
whether an insurer has a duty to defend is determined by comparing the factual allegations of the
underlying complaint to the terms of the policy. “Ordinarily, in a declaratory judgment action
on an insurer’s duty to defend the insured, courts follow the eight-corners rule, comparing the
four corners of the underlying complaint with the four corners of the insurance contract. If the
facts alleged in the underlying complaint fall within, or potentially within, the policy’s coverage,
the insurer’s duty to defendant is triggered.” Pekin Ins. Co. v. St. Paul Lutheran Church, 2016
IL App. (4th) 150966, ¶ 63 (4th Dist. 2016) (emphasis in original, and internal quotations and
citations omitted). The court may, however, consider extrinsic evidence so long as the factual
matters do not bear upon issues in the underlying litigation. Id.
The court’s primary function when construing the language of an insurance policy is to
give effect to the intent of the parties as expressed by the words of the policy. Central Ill. Light
Co. v. Home Ins. Co., 213 Ill.2d 141, 153 (2004). “An insurance policy, like any contract, is to
be construed as a whole giving effect to every provision, if possible, because it must be assumed
that every provision was intended to serve a purpose.” Id. If the policy language is clear and
unambiguous, it is to be given its plain, ordinary, and popular meaning. If, however, the words
used are susceptible to more than one reasonable interpretation, the ambiguity must be resolved
in favor of coverage. Rich v. Principal Life Ins. Co., 226 Ill.2d 359, 371 (2007).

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In the instant case, the parties agree that the standard language of the farmowner policy at
issue restricts coverage to on-site risks associated with traditional crop growing and harvesting;
“farming” activities. The standard language includes Exclusion No. 13, which provides:
13.
“We” do not pay for “bodily injury” or “property damage” arising out of
the ownership, use, or maintenance of: . . .
(c)
“insured.”

saddle animals while they are rented to others by or for an

The policy also contains an endorsement indicating that “the commercial liability
coverage (Farm Premises) is amended by the following:
Under Exclusions That Apply to Bodily Injury and/or Property Damage,
Exclusion 13 does not apply with respect to the activities described on the
“declarations.”
The activities described on the declarations to which the endorsement refers are the listed
additional activities included in the definition of farming: “Stables, Boarding; Riding Clubs &
Academies; Saddle Animals, Comm’l; and Instructors Liability.”
Based on this language, Shockley argues that it is “reasonable to interpret the policy
language to provide coverage for risks arising from rides involving the rental of SCF’s horses to
riders being trained and supervised by an SFC instructor held outside of the ‘insured premises’”
(emphasis added). To support this argument he relies on Indiana Ins. Co. v. Royce Realty and
Management, Inc., 2013 Ill. App. (2d) 121184 (2d Dist. 2013), in which the court rejected an
argument that coverage was restricted to risks arising out of the use of the premises as included
in an endorsement. The Royce court’s reasoning, however, does not apply to the instant case
because, that court concluded that the policy at issued was a commercial general liability policy

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(“CGL”) providing coverage for all risks associated with the insured business operations. Id. at
¶ 28.
Unlike in Royce, the instant policy is not a CGL but a farmowner policy which, like a
homeowner policy, is limited to occurrences that arise out of the ownership, maintenance, or use
of the insured premises, or are operations that are necessary or incidental to the insured premises.
Use of the insured premises includes the listed activities, but nothing in the policy language
suggests that activities miles from the insured premises are covered. The policy in question
does not cover SFC’s business operations, only those operations on site. It is not a CGL
because, unlike a standard CGL, the farmowner policy limits coverage to an express geographic
location. Try as he might, Shockley cannot get around this limitation. Consequently, because
Shockley’s injuries do not arise out of an operation incidental to the insured premises, plaintiff
has no duty to defendant SFC or Ratay in the underlying action. Consequently, plaintiff’s
motion for summary judgment is granted and Shockley’s motion for summary judgment is
denied.
CONCLUSION
For the reasons stated above plaintiff’s motion for summary judgment [Doc. 31] is
granted and Shockley’s motion for summary judgment [Doc. 36] is denied.
ENTER:

February 18, 2020

__________________________________________
Robert W. Gettleman
United States District Judge

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