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Philadelphia Indemnity Insurance Company v. Central Terminal Restoration Corp.

United States District Court, W.D. New York

May 5, 2017

PHILADELPHIA INDEMNITY INSURANCE COMPANY, Plaintiff,
v.
CENTRAL TERMINAL RESTORATION CORPORATION, WILLIAM SHEEHAN, MARCY A. SHEEHAN, and MICHAEL A. SERRANO, Defendants.

          DECISION AND ORDER

          MICHAEL A. TELESCA, UNITED STATES DISTRICT JUDGE

         INTRODUCTION

         Plaintiff Philadelphia Indemnity Insurance Company (“plaintiff” or “PIIC”) seeks a declaratory judgment regarding its duty to defend and indemnify defendant Central Terminal Restoration Corporation (“CTRC”) in lawsuits commenced by defendants William and Marcy A. Sheehan (“the Sheehans”) and Michael A. Serrano (“Mr. Serrano”). Specifically, PIIC asks the Court to determine that its obligation to defend and indemnify CTRC exists only under a liquor liability coverage in CTRC's primary insurance policy, and not under the commercial general liability coverage part of the primary policy or under an excess policy.

         Currently pending before the Court are four motions for summary judgment, all of which were filed on November 16, 2016: Mr. Serrano's motion for summary judgment (Docket No. 32); the Sheehans' motion for summary judgment (Docket No. 33); CTRC's motion for summary judgment (Docket No. 34); and plaintiff's motion for summary judgment (Docket No. 35). For the reasons set forth below, the three motions for summary judgment filed by defendants are granted and plaintiff's motion for summary judgment is denied. Judgment shall be entered in favor of defendants and the case is closed.

         BACKGROUND

         The following facts are taken from the respective statements of fact, affidavits, and exhibits submitted by plaintiff and defendants.

         CTRC is a not-for-profit corporation formed for the purpose of stabilizing and finding a reuse for the Central Terminal Railway Station located in Buffalo, New York. CTRC held a Dyngus Day fund-raising event on April 1, 2013, at which alcohol was served and for which it obtained a temporary liquor license. The Dyngus Day fund-raising event ultimately resulted in the filing of two lawsuits against CTRC, one by Mr. Serrano (the “Serrano Lawsuit”) and one by the Sheehans (the “Sheehan Lawsuit”). Both the Serrano Lawsuit and the Sheehan Lawsuit allege that Thomas A. Gilray, Jr. (“Mr. Gilray”) was served alcohol at the Dyngus Day fund-raising event despite being visibly intoxicated or impaired by alcohol and that Mr. Gilray subsequently injured Mr. Serrano and Mr. Sheehan while operating an automobile.

         PIIC issued policy number PHPK99321 (the “Primary Policy”) to CTRC for the policy period March 20, 2013 to March 20, 2015. The Primary Policy contains a commercial general liability (“CGL”) coverage part with a $2, 000, 000 limit for each occurrence and an aggregate limit of $4, 000, 000. The Primary Policy includes both a fund-raising events endorsement, and a liquor liability coverage part with a $1, 000, 000 “common cause” limit and a $1, 000, 000 aggregate limit. PIIC also issued policy number PHUB415091 (the “Excess Policy”) to CTRC for the policy period March 20, 2013 to March 20, 2014. The Excess Policy has a limit of $1, 000, 000 for each occurrence and a $1, 000, 000 aggregate limit.

         Following filing of the Serrano and Sheehan Lawsuits, CTRC provided timely notice of the claims to PIIC, and PIIC has been providing CTRC with a defense to both lawsuits since 2013. On January 20, 2016, PIIC sent a letter to Michael Appelbaum, the attorney representing CTRC in connection with the Serrano and Sheehan Lawsuits, seeking to “explain the position of [PIIC}” with respect to CTRC's coverage. The January 20, 2016 letter states that PIIC is providing coverage only under the liquor liability coverage part of the Primary Policy, and not under the CGL coverage part or under the Excess Policy. PIIC subsequently commenced the instant action, seeking a declaration that its obligation to defend and indemnify CTRC exists only under the liquor liability coverage part to the Primary Policy.

         DISCUSSION

         I. Standard of Review

         Pursuant to Rule 56(a) of the Federal Rules of Civil Procedure, the Court will grant summary judgment if the moving party demonstrates that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. When considering a motion for summary judgment, all genuinely disputed facts must be resolved in favor of the party against whom summary judgment is sought. See Tolan v. Cotton, 134 S.Ct. 1861, 1863 (2014). If, after considering the evidence in the light most favorable to the nonmoving party, the court finds that no rational jury could find in favor of that party, a grant of summary judgment is appropriate. See Scott v. Harris, 550 U.S. 372, 380 (2007), citing Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586-587 (1986).

         II. The Competing Motions for Summary Judgment

         As noted above, there are four motions for summary judgment currently pending before the Court. Plaintiff has moved for summary judgment, arguing that no coverage exists under either the CGL coverage part of the Primary Policy or under the Excess Policy because the Sheehan and Serrano Lawsuits allege intentional acts on the part of CTRC. Mr. Serrano, the Sheehans, and CTRC have each separately moved for summary judgment, arguing that coverage exists under the plain language of both the CGL coverage part of the Primary Policy and ...


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