American Service Insurance v. First Class Medical Transportation et al

Filing 62

ORDER - plaintiff's motion for summary judgment is GRANTED. Judgment is entered by this Court, finding: (1) Plaintiff owes no duty to defend First Class Medical Transportation, Inc., n/k/a Express Medical Transportation, Inc. (First Class) wit h respect to the claim presented by TZ, a minor; and (2) Plaintiff owes no duty to indemnify First Class for its liability, if any, to TZ, a minor, resulting from the shooting death of Michel Ziade, which was committed by Willie Parker on July 28, 2015. Signed on 6/12/17 by District Judge Fernando J. Gaitan, Jr. (Enss, Rhonda)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION
AMERICAN SERVICE INSURANCE
COMPANY,

)
)
)
Plaintiff,
)
v.
) Case No. 16-0048-CV-W-FJG
)
FIRST CLASS MEDICAL TRANSPORTATION, )
INC., n/k/a EXPRESS MEDICAL
)
TRANSPORTATIONS, INC., et al.,
)
)
Defendants.
)
ORDER
Pending before the Court is Plaintiff’s Motion for Summary Judgment (Doc. No.
56).
I.

Background
Plaintiff American Service Insurance Company (“ASI”) filed the present declaratory

judgment action on January 24, 2016, seeking a declaration that it owes no duty to
defendant

First

Class

Medical

Transportation,

Inc.,

n/k/a/

Express

Medical

Transportation, Inc. (“First Class”) with respect to the claims presented by TZ, a minor, or
to indemnify First Class for its liability, if any, to TZ, a minor, resulting from the shooting
death of Michel Ziade, committed by Willie Parker on July 28, 2015. Plaintiff argues that
the relevant insurance policy contains an Exclusion for Assault or Battery which
unambiguously excludes coverage for the shooting death of Mr. Ziade.
On April 21, 2017, plaintiff moved for summary judgment. When defendants did
not timely respond to the motion for summary judgment, the Court ordered them to show
cause on or before May 23, 2017, why summary judgment should not be granted for the
reasons stated by plaintiff. On May 22 and May 23, 2017, defendants TZ and First Class

respectively filed responses to the Court’s Order to Show Cause.

Defendant TZ

indicated he cannot oppose the motion for summary judgment consistent with the
requirements of Fed. R. Civ. P. 11(b). See Doc. No. 60. Similarly, defendant First
Class indicated that it cannot oppose plaintiff’s motion for summary judgment consistent
with the requirements of Fed. R. Civ. P. 11(b). See Doc. No. 61. Accordingly, the Court
will consider below whether to grant the unopposed motion for summary judgment.
II.

Facts1
Plaintiff ASI is an insurance company which provided a policy of insurance to

defendant First Class.

Defendant First Class is a medical transportation company,

whose business is to provide non-emergency medical transportation services. Kristen
Ziade is the sole owner of the business. Ms. Ziade is also the mother of defendant TZ,
who is seven years old.

Ms. Ziade was married to Michel Ziade (the decedent).

Together, they started Defendant First Class, with Michel Ziade being employed as a
manager of the company, with his duties including maintenance of vehicles, hiring and
firing drivers, marketing and obtaining new clients. Defendant First Class is operated
primarily based out of Ms. Ziade’s home, and employs approximately 25 people. One of
the employees is Mindy Willis, who works in the office performing administrative tasks,
and dispatching.
Willie Parker was employed by Defendant First Class as a driver. Ms. Ziade knew
Mr. Parker from a prior employer. She contacted him and invited him to interview for the
position of driver with Defendant First Class. Michel interviewed Mr. Parker. Following the

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All facts are taken from plaintiff’s statement of facts, Doc. No. 58.
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interview, Ms. Ziade performed a background check on Willie Parker. Three checks were
made including criminal background, driving record, and sexual offenses, and he cleared
all of those checks. Michel checked Mr. Parker’s references and gave him a driving test.
His references checked out and he passed the driving test. He was then employed by
First Class as a driver. While employed as a driver by Defendant First Class, Mr. Parker
was supervised by both Michel and Kristen Ziade.
Ms. Ziade identified deposition exhibit 2 as the Plaintiff’s policy issued to
Defendant First Class. Ms. Ziade testified that the policy was endorsed to remove the
Sexual and/or Physical Abuse Liability Coverage Form, before the death of Michel Ziade.
She and Michel made this change because First Class had stopped doing business with
Logisticare, a Medicaid transportation company in Missouri, which required this
coverage. Ms. Ziade instructed her assistant Mindy Willis to cancel or remove this
coverage. Via e-mail correspondence dated May 12, 2015, Mindy Willis requested the
removal of the Sexual and/or Physical Abuse Liability Coverage Form. The actual policy
endorsement appears at the second, third and fourth pages of Exhibit B-2. It states that
the endorsement is effective May 8, 2015. It states that the following form(s) have been
deleted: GL 00 01 01/09 Sexual and/or Physical Abuse Liability Coverage Form. It states
that the following form(s) have been added: CG 21 46 07/98 Abuse Or Molestation
Exclusion. It further states that all other terms and conditions of the policy remain the
same.
Ms. Ziade testified that Willie Parker had been employed by Defendant First Class
for about two years prior to the shooting. About one month before the shooting, Mr. Parker

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asked Michel to loan him some money. Mr. Parker asked for $3,000, and Michel decided
to loan him $1,500. They planned to deduct $200 per week from his paycheck until the
loan was repaid. About two weeks before the shooting, Mr. Parker started acting strange.
When customers would get into the van and ask his name, he would say his name was
God or he would say his name was Driver. He started loading wheelchair-bound patients
into the van backwards, facing the rear instead of facing forward. Michel spoke to Mr.
Parker, and told him to load the customers properly and to give his real name.
On July 28, 2015, Willie Parker shot Michel at the Kansas University Medical
Center. It was a coincidence that they met at the K.U. Medical Center. Mr. Parker was
arrested approximately one week after the shooting. Ms. Ziade testified that the
investigating detective informed her that the motive for the shooting was that Mr. Parker
felt disrespected by Mr. Ziade, so he killed him. Mr. Parker has been charged with the
crime and found competent to stand trial; his trial is set for July 12, 2017.
Ms. Ziade testified that an investigation into the shooting was conducted on behalf
of Defendant First Class. The drivers were all brought into a room and interviewed. Ms.
Ziade testified that attorney Ben Schmidt was representing her, and she further testified
that attorney Ben Schmidt was working with attorneys Edward Williams and Gregory
Eufinger.
A certified copy of ASI policy number GL-0240000043-01 issued to First Class
appears in the docket as exhibit “B” to ASI’s Complaint for Declaratory Judgment. (Doc.
No. 1-2, filed 1/24/16, page 1 of 66). The policy was issued by Integrated Insurance
Agency located in Missouri, and delivered to First Class at its mailing address located in

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Missouri. The policy period is October 21, 2014 to October 21, 2015. The policy provides
Commercial General Liability Coverage, subject to all of its terms, conditions, limitations,
definitions and exclusions. The Schedule of Forms and Endorsements lists the various
forms and endorsements which were part of the policy as originally issued. Among the
listed forms and endorsements are the following:
CG 00 01 04/13 Commercial General Liability Coverage Form
GL 00 04 06/13 Exclusion – Assault Or Battery
GL 00 01 01/09 Sexual and/or Physical Abuse Liability Coverage Form.
The policy also includes Endorsement number 1, effective May 8, 2015. Endorsement
number 1 states as follows:
The following forms(s) have been deleted: GL 00 01 01/09,
Sexual and/or Physical Abuse Liability Coverage Form.
The following form(s) have been added: CG 21 46 07/98,
Abuse Or Molestation Exclusion.
All other terms and conditions remain the same.
The endorsement shows that this policy change resulted in a premium credit to First
Class of $1,092.00. The insuring agreement of the policy states as follows:
COVERAGE A – BODILY INJURY AND PROPERTY
DAMAGE LIABILITY
1. Insuring Agreement
a. We will pay those sums that the insured becomes legally
obligated to pay as damages because of “bodily injury” or
“property damage” to which this insurance applies. We will
have the right and duty to defend the insured against any
“suit” seeking those damages. However, we will have no duty
to defend the insured against any “suit” seeking damages for
“bodily injury” or “property damage” to which this insurance
does not apply. * * *

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b. This insurance applies to “bodily injury” and “property
damage” only if:
(1) The “bodily injury” or “property damage” is caused by an
“occurrence” that takes place in the “coverage territory”; [and]
(2) The “bodily injury” or “property damage” occurs during the
policy period; * * *
The policy Exclusion – Assault Or Battery states, in relevant part, as follows:
Exclusion – Assault Or Battery
1. This insurance does not apply to “bodily injury”, “property
damage”, or “personal and advertising injury” arising out of or
resulting from:
(a) any actual, threatened or alleged assault or battery
committed by any insured;
(b) the failure of any insured or anyone else for whom the
insured is or could be held legally liable to prevent or suppress
any assault or battery;
(c) the failure of any insured or anyone else for whom the
insured is or could be held legally liable to render or secure
medical treatment necessitated by any assault or battery;
(d) the rendering of medical treatment by any insured or
anyone else for whom the insured is or could be held legally
liable that was necessitated by any assault or battery;
(e) The negligent: (i) employment; (ii) investigation; (iii)
supervision; (iv) training; (v) retention; of a person for whom
any insured is or ever was legally responsible and whose
conduct would be excluded by 1.(a), (b), (c) or (d) above;
(f) the vicarious liability of any insured arising out of 1.(a), (b),
(c) or (d) above;
(g) any other cause of action or claim arising out of or as a
result of 1.(a), (b), (c), (d) or (e) above.
2. We shall have no duty to defend or indemnify any claim,
demand, suit, action, litigation, arbitration, alternative dispute
resolution or other judicial or administrative proceeding
seeking damages, equitable relief, injunction relief, or
administrative relief where:
(a) Any actual or alleged injury arises out of any combination
of assault or battery-related cause and a non-assault or
battery-related cause;
(b) Any actual or alleged injury arising out of a chain of events
which includes assault or battery, regardless of whether the

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assault or battery is the initial precipitating event or a
substantial cause of injury; or
(c) Any actual or alleged injury arising out of assault or battery
as a concurrent cause of injury, regardless of whether the
assault or battery is the proximate cause of injury.
This exclusion does not apply to assault or battery committed by any insured, or by
a person for whom any insured is or ever was legally responsible, resulting from the use
of reasonable force to protect person or property.
The policy Exclusion for Abuse Or Molestation states, in part, as follows:
ABUSE OR MOLESTATION EXCLUSION
This endorsement modifies insurance provided under the
following: Commercial General Liability Coverage Part.
The following exclusion is added to Paragraph 2., Exclusions
of Section I – Coverage A -- Bodily Injury and Property
Damage Liability * * *
This insurance does not apply to “bodily injury” [or] “property
damage” arising out of:
1. The actual or threatened abuse or molestation by anyone
of any person while in the care, custody or control of any
insured, or
2. The negligent: a. Employment; b. Investigation; c.
Supervision; d. Reporting to proper authorities; or failure to so
report; or e. Retention, of a person for whom any insured is or
ever was legally responsible and whose conduct would be
excluded by Paragraph 1. above.

On December 3, 2015, plaintiff ASI received a letter dated November 11, 2015
from attorney Edward Williams. Attached to and enclosed with the letter from Mr. Williams
was the e-mail correspondence dated November 10, 2015 from attorney Ben Schmidt to
attorney Edward Williams. These letters constitute the first notice to plaintiff ASI of the
shooting death of Michel Ziade, and the claim presented on behalf of defendant TZ, a
minor by attorney Ben Schmidt, resulting from the shooting death of Mr. Ziade.

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Mr. Schmidt’s claim letter addressed to defendant First Class dated November 10,
2015 states, in part, as follows:

Michel Ziade was the natural father of [TZ] and [TZ] is his only
child, natural or adopted. Michel lost his life as a result of
being shot by Willie Parker. Willie Parker was an employee of
your client [First Class] at the time he committed the assault
on and killed my clients (sic) decedent. This is particularly
troubling considering the know (sic) fact that Mr. Parker had
an open hatred of white people (including Michel Ziade) and
had exhibited strange behavior over a long period of time
while employed by your client [First Class]. Any supervision
by your client [First Class] would have disclosed and caused
corrective action. Any reasonable supervision or retention
practice would have avoided this tragedy.
We hereby demand $1,000,000 from your client [First Class]
or your clients (sic) insurer. Please identify the name of any
liability insurer your client. (sic). In exchange for payment of
this amount we will offer a full release for the benefit of your
client [First Class]. Naturally this case have (sic) a value far
beyond the demand, for this reason this offer will be
withdrawn on Friday, December 11, 2015 at 5 p.m. CST.
Once withdrawn it will never be made again.
/s/ Ben Schmidt
Attorney Edward Williams’ letter to plaintiff ASI dated November 11, 2015 states, in
part, as follows:
Please be advised that I [attorney Williams] represent [First
Class] and Kristen Ziade. Any communication with any of
these entities or persons must be directed to me.
Enclosed, please find a copy of a time limit demand that I
received from Ben Schmidt, attorney for [TZ]. My investigation
has revealed that your insured / my client [First Class] is at
fault for the death of Michel Ziade.
As you can see from the enclosed, Mr. Schmidt is claiming
that your insured is responsible for this act of workplace
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violence as a result of the negligent hiring and retention
practices of your insured. * * *
This incident is clearly covered under the “Sexual and/or
Physical Abuse Liability Coverage Form.” In that form, your
company [ASI] agreed to pay all sums for damages to any
person arising out of physical abuse caused by one of the
employees arising out of the failure to supervise. The policy
defines physical abuse to mean assault and battery or
deliberate touching.
Michel Ziade, the natural father of TZ, was shot and killed by
Willie Parker, an employee of your insured. Michel Ziade was
on a personal, non-business related, errand at the time of the
shooting. The shooting is an assault and/or battery.
Willie Parker was apparently a very strange, highly erratic,
likely racist and militant individual. Mr. Parker also openly
stated his displeasure and dislike of Michel Ziade. There was
no supervision of Mr. Parker.
Mr. Schmidt is correct when he states that the insured failed to
supervise Mr. Parker and that such lack of supervision lead to
the assault and battery, and subsequent death, of Michel
Ziade. As such we hereby demand that you pay the demand
set forth in the email I received from Mr. Schmidt. Failure to do
so will likely result in a judgment far in excess of the policy
limits.
/s/ Edward A. Williams.
The law firm of Sanchez Daniels & Hoffman, LLP (“SD&H”), serves as coverage
counsel to plaintiff ASI. SD&H wrote a letter on behalf of plaintiff ASI to Attorney Williams
dated December 11, 2015. That letter informed Mr. Williams that the policy as originally
written included the Sexual and/or Physical Abuse Liability Coverage Form. However, the
policy was endorsed effective May 8, 2015 to delete that Coverage Form and replaced it
with the Exclusion for Abuse Or Molestation. The December 11, 2015 letter quotes the
policy exclusion for Assault Or Battery, and the policy exclusion for Abuse Or Molestation,

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as well as the policy condition for prompt notice of occurrence, claim and suit. This lawsuit
followed shortly thereafter.

III.

Standard
Summary judgment is appropriate if the movant demonstrates that there is no

genuine issue of material fact and that the movant is entitled to judgment as a matter of
law. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986). The facts and inferences are
viewed in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 586–90 (1986). The moving party must carry the
burden of establishing both the absence of a genuine issue of material fact and that such
party is entitled to judgment as a matter of law. Matsushita, 475 U.S. at 586–90.
A nonmoving party must establish more than “the mere existence of a scintilla of
evidence” in support of its position. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252
(1986).
The nonmovant must do more than simply show that there is
some metaphysical doubt as to the material facts, and must
come forward with specific facts showing that there is a
genuine issue for trial. Where the record taken as a whole
could not lead a rational trier of fact to find for the nonmoving
party, there is no genuine issue for trial.
Torgerson v. City of Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011) (en banc) (citations
and quotations omitted).
IV.

Discussion
Under Missouri law, which applies to this action, a liability insurer has two distinct

duties: the duty to defend and the duty to indemnify. Trainwreck West, Inc. v. Burlington

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Ins. Co., 235 S.W.3d 33, 44 (Mo. Ct. App., 2007). The obligation of the insurer to defend
arises only as to claims and suits for damages covered or potentially covered under the
policy. McCormack Baron Management Services, Inc. v. Am. Guarantee & Liab. Ins. Co.,
989 S.W.2d 168, 170 (Mo., 1999). There is no duty to defend a suit where the facts fail to
bring the case within the coverage of the policy. Trainwreck, 235 S.W.3d at 42. If there is
no duty to defend, there is no duty to indemnify. Id. at 44.
Plaintiff correctly notes that the insured’s owners (Kristen and Michel Zaide)
decided to remove coverage for Sexual and/or Physical Abuse, and such removal of
coverage was effective months before Michel Zaide was killed. Thus, the insured could
not be covered if the incident was classified as Sexual and/or Physical Abuse under the
old, no-longer-effective policy. Furthermore, as discussed by plaintiff in its motion for
summary judgment, the policy Exclusion for Assault Or Battery clearly and
unambiguously excludes coverage for the shooting death of Mr. Ziade. Plaintiff notes
that similar policy exclusions have been upheld by Missouri courts, and both of the
attorneys for T.Z. and the insured stated in their initial demand letters that the actions
committed by Mr. Parker constituted an assault and battery.

Because the policy

exclusion for Assault Or Battery is applicable, and only one exclusion is necessary to
preclude coverage, plaintiff’s motion for summary judgment must be granted. Spirtas Co.
v. Nautilus Ins. Co., 715 F.3d 667, 672-73 (8th Cir. 2013).
V.

Conclusion
Accordingly, for all the reasons stated herein, plaintiff’s motion for summary

judgment is GRANTED. Judgment is entered by this Court, finding: (1) Plaintiff owes no

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duty to defend First Class Medical Transportation, Inc., n/k/a Express Medical
Transportation, Inc. (“First Class”) with respect to the claim presented by TZ, a minor; and
(2) Plaintiff owes no duty to indemnify First Class for its liability, if any, to TZ, a minor,
resulting from the shooting death of Michel Ziade, which was committed by Willie Parker
on July 28, 2015.
IT IS SO ORDERED.

Dated: June 12, 2017
Kansas City, Missouri

/s/ Fernando J. Gaitan, Jr.
Fernando J. Gaitan, Jr.
United States District Judge

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