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Smith v. The Burlington Ins. Co.

United States District Court, N.D. Oklahoma

March 30, 2018

BENJY D. SMITH, Plaintiff,
v.
THE BURLINGTON INSURANCE COMPANY, Defendant.

          OPINION AND ORDER

          James H. Payne, United States District Judge

         Before the Court are Plaintiff's Motion for Summary Judgment (Dkt. 21) and Defendant's Motion for Summary Judgment (Dkt. 25). After consideration of the briefs, and for the reasons stated below, Defendant's Motion is GRANTED and Plaintiff's Motion is DENIED.

         BACKGROUND

         This case centers on an insurance coverage dispute. The following material facts are undisputed. In 2013, Plaintiff Benjy D. Smith (“Smith”) obtained commercial general liability insurance from Defendant Burlington Insurance Company (“Burlington”). (Dkt. 25, at 2 (Burlington's Statement of Undisputed Facts, No. 5)). The Burlington policy stated on its Declarations page that Smith's “Business Description” was a “courier service.” (Dkt. 25-5 (Burlington Policy), at 3). The Declarations were expressly incorporated into the Burlington policy, stating, “These declarations together with the common policy conditions and coverage form(s) and any endorsement(s), complete the above numbered policy.” (Id.). The Burlington policy also included a “Representations” section, which stated, “By accepting this policy, you agree: (a) The statements in the Declarations are accurate and complete; (b) Those statements are based upon representations you made to us; and (c) We have issued this policy in reliance upon your representations.” (Id. at 37). Smith's policy with Burlington renewed in May 2014, extending the policy period to May 2015. (Id. at 3). The Burlington policy remained in effect through May 29, 2015. (Id.).

         Beginning in 2011, Smith operated a security service, Smith and Son Security, in addition to the courier service. (Dkt. 25, at 3, 5 (Burlington's Statement of Undisputed Facts, Nos. 12, 24)). The Burlington policy does not reference a security business or security services, Smith & Son Security, the employment of armed security guards, or the existence of any employees. (Dkt. 25-5 (Burlington Policy)). On February 4, 2015, an armed security guard hired by Smith to provide security services at a Tulsa apartment complex allegedly shot Monroe Bird III while on duty. (See Dkt. 21-2 (Petition in Magness v. Stone et al., Tulsa County No. CJ-2015-02925)). Bird later died from his injuries. On August 6, 2015, Bird's estate brought a civil case in Tulsa County District Court against Smith d/b/a Smith and Son Security for negligent hiring, retention, and supervision relating to the shooting incident. (No. CJ-2015-02925 (the “Magness Action”)).

         In this proceeding, Smith seeks a declaration that Burlington has a duty to defend and indemnify him in the Magness Action and must reimburse Smith's defense costs incurred defending himself in the Magness Action. Burlington has now filed a Motion for Summary Judgment. (Dkt. 25). Smith filed a Response in opposition (Dkt. 27), and Burlington filed a Reply (Dkt. 31). Smith also has filed a Motion for Summary Judgment with respect to Smith's claim for declaratory judgment. (Dkt. 21). Burlington filed a Response in opposition (Dkt. 23), and Smith filed a Reply (Dkt. 26). Both cross-motions are now fully briefed and ripe for review.

         DISCUSSION

         The Court's task is to construe the Burlington policy, applying Oklahoma law.[1] Summary judgment is appropriate when “there is no genuine dispute as to any material fact and the movant is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(a). A dispute is genuine if 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 (1986). A fact is material if it “might affect the outcome of the suit under the governing law.” Id. In making this determination, “[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.” Id. at 255. However, a party opposing a motion for summary judgment may not simply allege there are disputed issues of fact; rather, the party must support its assertions by citing to the record or by showing the moving party cannot produce admissible evidence to support the fact. Fed.R.Civ.P. 56(c). Thus, the inquiry for this Court is “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson, 477 U.S. at 251-52.

         I. Burlington's Motion for Summary Judgment

         In its Motion for Summary Judgment, Burlington contends its policy did not cover damages for wrongful death caused by an armed employee of Smith's security business, and the policy expressly limited coverage to Smith's courier service business. Smith argues Burlington is required to provide coverage for the Magness Action, because the policy was in effect at the time of the shooting incident, and the policy does not specifically exclude coverage for incidents pertaining to his security business.

         The Court must begin with the express terms of the policy. When the policy provisions are unambiguous and clear, the policy language is given its ordinary, plain meaning, and the policy contract is enforced so as to carry out the parties' intentions. BP America, Inc. v. State Auto Property & Casualty Ins. Co., 148 P.3d 832, 835 (Okla. 2005), as corrected (Oct. 30, 2006). The Court “may not rewrite an insurance contract to benefit either party.” Id. (citations omitted). Moreover, the Court cannot “impose coverage where the policy language clearly does not intend that a particular . . . risk should be covered.” Id. at 835-36 (citing American Economy Ins. Co. v. Bogdahn, 89 P.3d 1051, 1054 (Okla. 2004)).

         Here, the Burlington policy Declarations state that Smith is the insured for his individual business, which is described as a “courier service.” (Dkt. 25-5 (Burlington Policy), at 3). Burlington contends it would be unreasonable to construe a “courier service” to include armed-security operations. The Court agrees. The plain, ordinary meaning of a “courier” is a “messenger.” Merriam-Webster Online Dictionary, at http://www.merriam-webster.com/dictionary/ couriers (last visited Mar. 15, 2018). It follows that the plain, ordinary meaning of a “courier service” would be a business that transports goods or documents. As Burlington points out, the policy does not refer to Smith and Son, any security business, armed security operations, or employment of security guards. It would be a strained and unreasonable reading of “courier service” to include armed-security services.

         In the policy, Smith agreed that “[t]he statements in the Declarations are accurate and complete”; that “[t]hose statements are based upon representations” Smith made to Burlington; and that Burlington “issued this policy in reliance upon [those] representations.” (Dkt. 25-5, at 37). Based on this agreement, Burlington argues Smith represented and agreed that his business was a “courier service” and no armed security service was mentioned and therefore not covered.

         The Court agrees that the plain, unambiguous language of the Burlington policy indicates that no armed security service was covered by the policy. It is plain that the policy covered only Smith's courier service, because the Business Description in the policy described only a “courier service.” There is no possible reading of the “courier service” description that would cover an armed security guard business, and Smith agreed by accepting the policy that this description was “accurate and complete.” These terms are unambiguous and reasonably susceptible to only one interpretation that disfavors an expansion of coverage to an armed security guard business. See Max True Plastering Co. v. U.S. Fidelity and Guar. Co., 912 P.2d 861, 869 (Okla. 1996) (A policy term will be considered ambiguous only if it is ...


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