United States District Court, N.D. Alabama, Southern Division
OWEN BOWDRE CHIEF UNITED STATES DISTRICT JUDGE.
matter comes before the court on “Plaintiff's
Motion for Judgment on the Pleadings Against Defendant The
Break I, Inc.” (Doc. 17). Evanston Insurance Company
filed this case against The Break I, Inc., d/b/a The Break
Restaurant & Billiards, Inc. and Amanda Beasley on July
31, 2018. (Doc. 1). On August 1, 2015, Ms. Beasley was shot
outside The Break in Birmingham, Alabama. Ms. Beasley sued
The Break in the Circuit Court of Jefferson County, Alabama,
on July 6, 2017. The Break allegedly failed to inform
Evanston, its insurer, of the pending lawsuit until June 29,
2018, when the parties were scheduled to mediate the
underlying suit. At that time, The Break requested that
Evanston defend it against Ms. Beasley's lawsuit and
provide coverage for any damages she might obtain.
filed this action seeking a declaratory judgment that (1)
because The Break breached the insurance policy's notice
conditions, Evanston does not owe a duty of defense or
indemnity to The Break; (2) because Ms. Beasley's claim
is barred by the policy's assault-and-battery exclusion,
Evanston does not owe a duty of defense or indemnity to The
Break; and (3)
the policy does not cover punitive damages, Evanston does not
owe a duty of indemnification to The Break for any punitive
damages that may be awarded to Ms. Beasley.
January 9, 2019, Evanston filed its motion for judgment on
the pleadings against The Break, (doc. 17), and a motion for
default judgment against Ms. Beasley, (doc.
The court ordered The Break to respond to the motion for
judgment on the pleadings on or before February 6, 2019, and
Evanston to submit its reply brief, if necessary, on or
before February 20, 2019. (Doc. 21). The Break never filed a
response, and so Evanston never filed a reply brief. The
motion is now ripe for review.
predecessor, Essex, insured The Break prior to the merger
between Evanston and Essex. The policy at issue, Policy
2CU1833, ran from April 6, 2015 until April 6, 2016. Under
the policy, Essex agreed to pay The Break for damages
incurred by bodily injuries or property damages caused by an
occurrence, which must take place in the coverage territory
during the policy period. Essex has “the right and duty
to defend the insured against any ‘suit' seeking
those damages, ” but has no such right or duty to
defend a suit to which the insurance did not apply. (Doc. 1
event of an occurrence, offense, claim, or suit, the policy
required The Break:
(1) [to i]mmediately record the specifics of
the claim or “suit” and the date received; and
(2) [to n]otify [the insurer] as soon as
practicable. You must see to it that [the insurer] receive[s]
written notice of the claim or “suit” as soon as
(Doc. 1 at 3). Further, The Break must “[i]mmediately
send [to the insurer] copies of any demands, notices,
summonses, or legal papers received in connection with the
claim or ‘suit.'” (Id.).
policy specifically excluded from the insurance coverage
injuries arising from assault or battery. The policy also
excluded “[f]ines, penalties, and punitive or exemplary
damages, or any expenses or any obligation to share such
damages or repay another.” (Doc. 1 at 5).
August 1, 2015, Ms. Beasley was shot in the left leg and
ankle outside The Break's place of business at 1001 20th
Street South, Birmingham, Alabama. She alleges that she
observed one of The Break's “security guards or
personnel escort a male and female patron to their
vehicle.” (Doc. 1 at 7). She watched those patrons get
into the vehicle and drive off the premises. Several minutes
later, the same two patrons purportedly returned in their
vehicle and stopped at the parking lot entrance of The Break.
The male patron fired several gunshots before the patrons
fled in their vehicle. The Break's security guard then
brandished a gun and began shooting at the vehicle. During
this time, the security guard allegedly shot Ms. Beasley in
the left leg and ankle.
first learned of the potential claim by Ms. Beasley upon
receiving a letter, dated January 11, 2016, from Ms.
Beasley's then-attorneys, Norris Injury Lawyers. The
letter was directed to The Break's insurance agent,
Nesbitt and Associates, Inc. Evanston subsequently sent two
reservation-of-rights letters to The Break-one in January
2016 and one in May 2016. Both letters included the following
In the event that you receive notice that a suit has been
filed, please forward the suit and any additional information
to our attention as soon as possible so that we can evaluate
the specific allegations under the policy.
(Doc. 1 at 6). In the January 2016 letter, because no suit
had been filed as of that time, Evanston reserved the right
to investigate the matter and disclaim coverage, but pointed
out that “it appears that Ms. Beasley was injured due
to a battery . . . and even a theory that you/your security
had the duty to suppress the assault/battery would not be
covered by the Essex policy.” (Doc. 1-2 at 4). The May
2016 letter merely referred to the January 2016 letter and
included a copy of that letter. (Doc. 1-3).
2017, Ms. Beasley's current attorney, Jarrod Nichols,
wrote to Evanston's claims manager. Mr. Nichols included
the police report relating to the shooting and the affidavit
of Bobby Banks, a purported witness of the shooting.
6, 2017, Ms. Beasley filed a lawsuit against The Break in the
Circuit Court of Jefferson County, Alabama. In Count One, Ms.
Beasley alleged that The Break “engaged in willful
misconduct, malice, wantonness or otherwise demonstrated an
entire want of care with regard to [Ms. Beasley], thereby
entitling [her] to punitive damages.” (Doc. 1 at 8). In
Count Two, she alleged that The Break “negligently
hired, contracted, retained and/or trained its employees,
agents or servants” resulting in the employees, agents,
or servants “not [being] adequately or properly
qualified nor competent to provide safety and security to and
for customers, patrons or invitees of Defendant THE BREAK or
to others on or near Defendant's premises.”
(Id. at 8-9).
September 20, 2017, The Break's owner and president,
James Meeks, Jr., received notice of the lawsuit. The Break
hired its own lawyer and filed its answer to the lawsuit on
September 26, 2017.
January 2018, the Circuit Court ordered The Break and Ms.
Beasley to mediate the claim by June 29, 2018.
29, 2018, The Break informed Evanston of the lawsuit. The
Break's attorney emailed the complaint to an employee of
Evanston's claims manager. The Break did not submit any
additional lawsuit documents and did not inform Evanston of
the mediation order. The Break requested that Evanston defend
it against Ms. Beasley's lawsuit and that Evanston
provide coverage for any damages she may recover. Evanston
agreed to defend The Break, but- according to this
complaint-expressly reserved its right to withdraw the
defense and deny coverage pending the outcome of this
litigation. (Doc. 1 at 10-11).
31, 2018, Evanston filed this declaratory judgment lawsuit
against The Break and Ms. Beasley. Evanston raises three
arguments why it owes no duty to defend or indemnify The
Break: (1) The Break breached the notice conditions of the
insurance policy; (2) Ms. Beasley's injuries arose out of
assaults or batteries, which are excluded from policy