Nationwide Mutual Insurance Co. v. Frost

          MEMORANDUM OPINION

          KARON OWEN BOWDRE CHIEF UNITED STATES DISTRICT JUDGE.

         This matter comes before the court on “Plaintiff's Motion for Summary Judgment, ” in which Plaintiff Nationwide Mutual Insurance Company moves for summary judgment against Defendants David and Judy Frost. (Doc. 39). More specifically, Nationwide asks this court to enter a declaratory judgment that Nationwide has no legal obligation to defend or indemnify either of the Frosts for claims related to an incident that took place on the Frosts' property. (See Doc. 1 at ¶ 34). For the reasons stated below, the court WILL GRANT Nationwide's motion and WILL ENTER JUDGMENT for Nationwide and against the Frosts.

         I. Factual Background

         David Frost purchased a Premier Businessowners Policy from Nationwide for the period of July 15, 2015 to July 15, 2016. (Doc. 1 at ¶ 11). David Frost is the only Named Insured in the policy. (Doc. 1-1 at 6-7). The policy defines “you” and “your” as referring “to the Named Insureds shown in the Declarations.” (Doc. 1-1 at 14).

         The policy provides, in relevant part, that Nationwide would defend and indemnify an insured against claims for “‘bodily injury' . . . caused by an ‘occurrence' that takes place in the ‘coverage territory.'” (Doc. 1-1 at 56). But, to trigger this obligation, the insured must notify Nationwide “as soon as practicable of an ‘occurrence' . . . that may result in a claim.” (Doc. 1-1 at 72). The policy defines “insured” to include David Frost and his spouse, “but only with respect to the conduct of a business of which [Mr. Frost, the named insured, was] the sole owner.” (Doc. 1-1 at 69).

         The Frosts jointly own commercial property in Leesburg, Alabama, where several businesses lease space. (Doc. 42-2; Doc. 42-3 at 19:18-20:20). Neither of the Frosts incorporated a business to own the property and both Mr. and Mrs. Frost are parties to the commercial leases. (Doc. 42-3 at 14:6-14, 15:9-12). Mrs. Frost also owns Daymaker Salon, which operates without a lease on the same property. (Doc. 42-3 at 20:15-16).

         On June 9, 2016, Mrs. Frost, in her individual capacity, had a “yard sale” at the Leesburg property, selling “clothes, shoes, [and] stuff [she] was trying to get rid of.” (Doc. 42-3 at 30:5- 14). For this yard sale, Mrs. Frost set up tables on the sidewalk in front of Daymaker Salon, but the salon was not otherwise involved with the yard sale. (Doc. 42-3 at 30:21-23, 32:17-19).

         Defendant Norma Jean Sartin attended the yard sale and fell in the parking lot, suffering a severe cut to her arm and a broken shoulder. Mrs. Frost witnessed the fall, saw Ms. Sartin's cut, and offered to call 911. (Doc. 42-3 at 40:19-41:3). Ms. Sartin declined the offer, and no one called 911. (Doc. 42-3 at 29:21-22). Mrs. Frost did not learn of the severity of Ms. Sartin's injuries until almost two weeks later, when Ms. Sartin's daughter came in for a salon appointment and told Mrs. Frost that Ms. Sartin had broken her shoulder. (Doc. 42-3 at 39:17- 40:1). The Frosts did not notify Nationwide of the accident when it occurred, nor two weeks later when they learned how severe the injury was.

         On September 12, 2017, about fifteen months after the incident, Ms. Sartin filed suit against Daymaker Salon, the Frosts, and multiple fictitious defendants responsible for the property in the Cherokee County Circuit Court, alleging premises liability based on the conditions that caused her fall. (Doc. 1 at ¶ 27; Doc. 1-2 at 2, ¶ 9). Upon receiving notice of the complaint, Mr. Frost immediately notified Nationwide, marking the first notice of the incident Nationwide received. (Doc. 1 at ¶ 29).

         Nationwide subsequently filed this lawsuit seeking declaratory judgment that it has no obligation to indemnify the Frosts under the policy. The complaint raises three arguments: first, the Frosts breached the policy by failing to provide Nationwide notice as required under the policy's terms; second, Nationwide is not required to indemnify Mrs. Frost with respect to any business not solely owned by Mr. Frost; and, third, Ms. Sartin's claims fall within the exclusions to the policy. (Doc. 1 at ¶¶ 31-33). Plaintiff Nationwide now moves for summary judgment, arguing that no genuine issue of material fact exists as to its theories. Nationwide asserts, among other things, that the policy was not triggered because the Frosts do not qualify as covered insureds for the incident at issue, as Ms. Sartin's fall did not occur as part of the conduct of a business of which Mr. Frost is the sole owner. (Doc. 42 at 8-9; Doc. 44 at 2-3).

         II. Standard of Review

         Summary judgment allows a trial court to decide cases when no genuine issues of material fact are present and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56. When a district court reviews a motion for summary judgment, it must determine two things: whether any genuine issues of material fact exist, and whether the moving party is entitled to judgment as a matter of law. Id.

         The moving party “always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (quoting Fed.R.Civ.P. 56).

         Once the moving party meets its burden of showing the district court that no genuine issues of material fact exist, the burden then shifts to the non-moving party “to demonstrate that there is indeed a material issue of fact that precludes summary judgment.” Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). Disagreement between the parties is not significant unless the disagreement presents a “genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986). ...