Walden et al v. Maryland Casualty Company

Filing 173

ORDER denying 155 Motion for Partial Summary Judgment. Signed by Judge Dana L. Christensen on 11/30/2018. (ASG)

FILED
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
MISSOULA DIVISION

BREANNE WALDEN, DANIELLE
DESCHENES AZURE, JESSICA
BLACKWEASEL, SABRINA
REMUS COYNE, BRITTANY
DEAN, JENNIFER DEMENT,
DANIELLE DUNCAN, JACKIE
GREAVU, BETH HAYES, JANA
HEILIG, KEALLIE LIETZ, JACKIE
MULLENNAX, SARA ONSAGER,
ANNA RADFORD, BARBARA
SLOAN, MOLLY STILSON, and
KYRA TILSON, Individually and as
Assignees ofDB&D, LLC (d/b/a
DAHL'S COLLEGE OF BEAUTY),

NOV 3 0 2018
Clerk, U.S District Court
District Of Montana
Missoula

CV 13-222-M-DLC

ORDER

Plaintiffs,
vs.
MARYLAND CASUALTY
COMPANY, and DOES 1-5, inclusive,
Defendants.

Before the Court is Defendant Maryland Casualty Company ("Maryland")'s
Motion for Partial Summary Judgment. (Doc. 155.) Because the claims for which
Maryland seeks summary judgment are covered by the operative insurance
policy's School Liability Endorsement, the motion is denied.

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BACKGROUND AND PROCEDURAL HISTORY
As discussed more fully in this Court's Order of May 4, 2018, denying
Maryland's motion for summary judgment, this case is a declaratory judgment
action regarding whether the commercial general liability policy issued by
Maryland provides coverage to Plaintiffs for tort claims against Dahl's College of
Beauty and its member-owners (collectively, "Dahl's"). (Doc. 153.) The only
remaining issue in this case concerns coverage for bodily injury claims arising
from the unintended and unexpected results of Dahl's intentional conduct. (See
Docs. 97 at 5; 101at2; 131at15-18 & n.2).
LEGAL STANDARD
A party is entitled to summary judgment if it can demonstrate 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(a). Summary judgment is warranted where
the documentary evidence produced by the parties permits only one conclusion.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986). In ruling on a motion
for summary judgment, a court must view the evidence "in the light most favorable
to the opposing party." Adickes v. S.H Kress & Co., 398 U.S. 144, 157 (1970).
"[T]he judge's function is not himself to weigh the evidence and determine the

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truth of the matter but to determine whether there is a genuine issue for trial."
Anderson, 477 U.S. at 249.

DISCUSSION
State law governs insurance coverage disputes. Stanford Univ. Hosp. v. Fed.
Ins. Co., 174 F.3d 1077, 1083 (9th Cir. 1999). The interpretation of an insurance

contract is a question of law. Babcock v. Farmers Ins. Exch., 999 P.2d 347, 348
(Mont. 2000). "If the language of a policy is clear and explicit, the policy must be
enforced as written." Nat'/ Farmers Union Prop. & Cas. Co. v. George, 963 P.2d
1259, 1261 (Mont. 1998). "Ambiguities are construed against the insurer and
exclusions are construed narrowly because they are contrary to the fundamental
protective purpose of insurance policies." Id.
Maryland asks the Court to grant it judgment on claims for bodily injury
arising from: (1) a bad pedicure given to Kyra Tilson by another student during the
course of that student's cosmetological instruction; (2) Sara Onsager's loss of hair
as a result of hair coloring and bleaching procedures performed by instructor
Morgan Heikkila; and (3) Breanne (Walden) Grubb's loss of hair following a
highlighting procedure performed by another student under the direction of
Heikkila. Initially, Maryland argued that partial summary judgment is appropriate
because the policy excludes coverage for professional services and instruction.

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In reply to Plaintiffs' response brief, however, Maryland concedes that two
endorsements, the "School Liability Extension Endorsement" and the "Barbers and
Beauticians Professional Liability Endorsement," override the professional
services and instruction exclusion. (Doc. 161 at 2-3.) In spite of its concession,
Maryland continues to advocate for partial summary judgment. Maryland
contends that "the professional services exclusion eliminated by the School
Liability Extension Endorsement is replaced by the Barbers and Beauticians
Professional Liability Endorsement." (Doc. 161 at 3.) The latter endorsement
covers only negligent, rather than intentional, conduct, and-as this Court and the
Ninth Circuit have noted-Plaintiffs' underlying claims are brought only under
intentional tort theories. (See, e.g., Docs. 97 at 5; 101at2; 131at15-18 & n.2.)
Maryland argues that Plaintiffs cannot find coverage for their claims in the policy
because they do not fall under the Barbers and Beauticians Professional Liability
Endorsement.
The Court disagrees. The two endorsements do not operate to replace the
exclusion. Rather, the School Liability Extension Endorsement renders the
exclusion inapplicable as to the instruction or supervision of students, and the
Barbers and Beauticians Professional Liability Endorsement adds an additional,
separate grant of coverage. As Maryland recognizes, the School Liability

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Extension Endorsement eliminates the exclusion that Maryland initially relied
upon. This endorsement provides that the professional services exclusion "does
not apply to instruction or supervision of students by [Dahl's] 'employees."' (Doc.
50-3 at 4.)
Thus, whether coverage exists under the Barbers and Beauticians
Professional Liability Endorsement is beside the point. There is coverage under
the policy for "occurrences" arising from the instruction or supervision of students
by Dahl's employees under the School Liability Endorsement, regardless of
whether such instruction and supervision fall within the scope of the Barbers and
Beauticians Professional Liability Endorsement. All of the claims for which
Maryland seeks partial summary judgment fall under the School Liability
Endorsement. Construing the facts in favor of the non-moving party, Tilson lost
her toenails as a result of the school's failure to adequately teach her classmate
how to perform a pedicure. Onsager's hair loss resulted, at least in part, from her
instructor using her as a model in order to teach the class how to lighten hair
without bleach. And, for her part, Grubb lost her hair because of her instructor's
failure to instruct and supervise her classmate during a hair bleaching procedure.
Plaintiffs do not need the Barbers and Beauticians Professional Liability
Endorsement to find coverage for their claims.

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What is more, the conduct discussed in Maryland's brief-two bad dye jobs
and a bad pedicure-would, in fact, give rise to a cause of action based on
negligence and would therefore fall under the Barbers and Beauticians Professional
Liability Endorsement. However, this determination necessarily raises a separate
issue, that of the relevance of injuries caused by negligent rather than intentional
conduct. Because it is not properly before the Court, the Court will not grant
partial summary judgment on this (or any) ground, but-in the interest of judicial
economy-the Court takes advantage of this opportunity to remind the parties that
Plaintiffs did not bring a claim for negligence against Dahl's, and the Court will
not allow evidence or argument regarding negligence at trial. (See Docs. 97 at 5
("There is no material factual dispute that the Dahl's defendants' conduct was
intentional[ and] volitional."); 101 at 2 (decision by Ninth Circuit noting that
"plaintiffs complained of only intentional acts"); 131 at 15-18 (granting motion in
limine to exclude evidence and argument of negligence).) The only remaining
issue, as Plaintiffs note in their brief, is whether and to what extent Plaintiffs
suffered bodily injury as a result of the conduct alleged in Count I of the
underlying complaint. (Doc. 159 at 3; see also Doc. 131 at 15-18 & n.2.)
Accordingly, IT IS ORDERED that Defendant Maryland's Motion for
Partial Summary Judgment (Doc. 155) is DENIED.

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DATED this

~ 0""' day of November, 2018.

Dana L. Christensen, Chief Judge
United States District Court

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