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Assunta, Inc. v. Penn-America Insurance Co.

January 7, 2010

ASSUNTA, INC., DOING BUSINESS AS BOGIES, PLAINTIFF,
v.
PENN-AMERICA INSURANCE COMPANY,*FN1 DEFENDANT.



The opinion of the court was delivered by: Gary L. Sharpe District Court Judge

MEMORANDUM-DECISION AND ORDER

I. Introduction

Plaintiff Assunta brought this action against defendant Penn-America, alleging that Penn-America is obligated to defend and indemnify Assunta in an underlying personal injury action brought by third-party Robert Gloria. (See generally Dkt. No. 1:2.) Pending are Assunta's motion for summary judgment, (Dkt. No. 5), and Penn-America's cross-motion for summary judgment, (Dkt. No. 12).Both parties seek a declaratory judgment under FED. R. CIV. P. 57 regarding Penn-America's obligations to Assunta. For the reasons that follow, Assunta's motion is denied and Penn-America's cross-motion is granted.

II. Background

Assunta, Inc. is a domestic corporation organized and existing under New York State law with its principal place of business in New York. (See Pl. Compl. ¶ 1, Dkt. No. 1:2.) Assunta owns and operates Bogies, a tavern located in Albany, New York. (See Pl. SMF ¶ 1, Dkt. No. 9.) Penn-America Insurance Company is organized and domiciled in the State of Pennsylvania. (See Notice of Removal ¶ 6, Dkt. No. 1.) Penn-America issued a commercial general liability insurance policy to Assunta, the named insured, covering Bogies' premises for the period of August 27, 2005, to August 27, 2006. (See id. at ¶ 2.)

Under the insurance policy, coverage is excluded for damages that arise from an "assault," "battery," or "physical altercation" occurring on Bogies' premises.*fn2 (McWilliams Aff., Ex. A at 81, Dkt. No. 18:2.) The policy defines "physical altercation" as "a dispute between individuals in which one or more persons sustain bodily injury arising out of the dispute." (Id.) The policy also provides a liquor liability exclusion, according to which Assunta is not entitled to coverage for:

"Bodily injury" or "property damage" for which [Assunta] may be held liable by reason of (1) [c]ausing or contributing to the intoxication of any person; (2) [t]he furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or (3) [a]ny statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages. (McWilliams Aff., Ex. A at 82, Dkt. No. 18:2.)

The policy requires Assunta to notify Penn-America about any "'occurrence' or an offense which may result in a claim... as soon a[s] practicable...." (McWilliams Aff., Ex. A at 16, Dkt. No. 18:2.) Moreover, whenever "a claim is made or 'suit' is brought against [the] insured," Assunta is required to notify Penn-America "as soon as practicable." (Id. at 16.) And upon receiving "any demands, notices, summonses or legal papers received in connection with the claim or 'suit,'" Assunta must "[i]mmediately send... copies" to Penn-America. (Id.)

On June 2, 2006, third-party Robert Gloria brought an action in New York State Supreme Court, Suffolk County, for injuries allegedly sustained as a result of Assunta's negligence. (See Gloria Compl., Dkt. No. 1:2.) Gloria alleged that he was injured in an altercation while a patron of Assunta's club on December 9, 2005. In his first cause of action, Gloria claimed that Assunta breached its duty owed to Gloria by causing and creating a dangerous condition in the club.*fn3 (See id. at ¶¶ 40-57.) In his second cause of action, Gloria alleged that Assunta violated N.Y. GEN. OBLIG. LAW §§ 11-101 and 11-103 by failing to adequately monitor its patrons and by serving alcoholic beverages to already intoxicated patrons. (See id. at ¶ 60-61.) Third, Gloria claimed that Assunta had a "conscious objective" to engage in the actions and conduct alleged, which thereby caused severe emotional distress. (See id. at ¶ 65.)

According to Assunta, it first became aware of the Gloria incident after March 6, 2006, when it received a letter from Gloria's counsel. (See Pl. SMF ¶ 6, Dkt. No. 9 (citing Pl. Ex. 4, Dkt. No. 6:2).) Assunta responded to Gloria's counsel on March 10, 2006. (See Pl. Ex. 5, Dkt. No. 6:2.) Assunta notified Penn-America of the incident on April 18, 2006.*fn4 (See Def. Mem. of Law at 13, Dkt. No. 19; see also Pl. SMF ¶ 7, Dkt. No. 9.) Penn-America issued a disclaimer to Assunta on April 25, 2006, disclaiming coverage with regards to the Gloria dispute. (See Pl. Resp. SMF ¶ 7, Dkt. No. 20; see also Def. SMF ¶ 27, Dkt. No. 15.)

On March 9, 2009, Assunta filed suit against Penn-America in New York State Supreme Court, Albany County, seeking a declaratory judgment under N.Y. C.P.L.R. § 3001 that Penn-America was obligated to defend and indemnify Assunta in the Gloria action. (See Assunta Compl. ¶¶ 5, 12, Dkt. No. 1:2.) Assunta first notified Penn-America of Gloria's underlying suit when it served Penn-America with the summons and complaint for the coverage action on March 17, 2009. (See Def. SMF ¶ 28, Dkt. No. 15; see also Pl. Resp. SMF ¶ 7, Dkt. No. 20.) On March 19, 2009, Penn-America sought removal of this action to the United States District Court for the Northern District of New York based on diversity jurisdiction under 28 U.S.C. § 1332(a)(1). (See Dkt. No. 1.) The present action was removed to this court on March 26, 2009.*fn5

III. Standards of Review

A. Summary Judgment

The standard for the grant of summary judgment is well established, and will not be repeated here. For a full discussion of the standard, the court refers the parties to its previous opinion in Bain v. Town ...


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