Funky 544 v. Houston Specialty Ins ( 2021 )

Case: 21-30310 Document: 00516065426 Page: 1 Date Filed: 10/22/2021
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
No. 21-30310 October 22, 2021
Summary Calendar Lyle W. Cayce
Clerk
Funky 544, L.L.C.,
Plaintiff—Appellant,
versus
Houston Specialty Insurance Company,
Defendant—Appellee.
Appeal from the United States District Court for
the Eastern District of Louisiana
USDC No. 2:20-CV-944
Before Southwick, Oldham, and Wilson, Circuit Judges.
Per Curiam:*
Funky 544, L.L.C. appeals the district court’s determination that its
insurer, Houston Specialty Insurance Company, did not have a duty to
defend it against litigation arising out of a stabbing at its bar. We AFFIRM.
*
Pursuant to 5th Circuit Rule 47.5, the court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5th Circuit Rule 47.5.4.
Case: 21-30310 Document: 00516065426 Page: 2 Date Filed: 10/22/2021
No. 21-30310
FACTUAL AND PROCEDURAL BACKGROUND
In November 2014, Shakeva Soniat and Serena Tribbit were having
drinks at a bar on Bourbon Street in New Orleans called Funky 544. Ronesha
Kelly, who at age 19 was too young to be served alcohol, had been drinking
there. She began arguing with the two women, then stabbed them both.
In January 2015, Soniat and Tribbit sued Funky 544 in state district
court for Orleans Parish, Louisiana, claiming that their injuries resulted from
Funky 544’s negligence. The bar owner had a commercial general liability
insurance policy with Houston Specialty Insurance Company. In July 2015,
five months after Funky 544 notified it of the suit, Houston Specialty de-
clined coverage.
Neither Funky 544 nor Houston Specialty ever filed a response to the
state court suit. In September 2015, the state court entered a preliminary
default against Funky 544. In January 2016, it heard the motion by the plain-
tiffs in that suit to confirm the default. In February 2016, the state court
awarded the two plaintiffs almost $580,000 for pain and suffering and almost
$55,000 for medical expenses.
In March 2020, Funky 544 sued Houston Specialty in the United
States District Court for the Eastern District of Louisiana, claiming a breach
of the insurer’s contractual and statutory duties. Houston Specialty moved
for summary judgment on those claims, arguing an exclusion in the policy
applied to Soniat and Tribbit’s claims. This exclusion applies to injuries
caused by the use of firearms or other weapons:
The following is added to the Exclusion Section of the COM-
MERCIAL GENERAL LIABILITY COVERAGE FORM and
the LIQUOR LIABILITY COVERAGE FORM:
This insurance does not apply to, “bodily injury,” “property
damage,” “personal and advertising injury,” “injury” or med-
ical expense arising out of firearms or weapons or out of any act
or omission in connection with the prevention or suppression
2
Case: 21-30310 Document: 00516065426 Page: 3 Date Filed: 10/22/2021
No. 21-30310
of firearms or weapons, including failure to warn, train or su-
pervise, whether caused by or at the instigation or direction of
the insured, his employees, patrons or any other person or fail-
ure to render aid and/or notify emergency personnel.
The policy defines “weapons” as “instruments of an offensive or defensive
nature and include but are not limited to batons, bow or crossbow, arrows,
knives, mace, stun guns, tasers, or swords.”
The district court concluded that this exclusion applies and granted
summary judgment. Funky 544 timely appealed.
DISCUSSION
We review a district court’s grant of a summary judgment de novo.
Federal Ins. Co. v. Singing River Health Sys., 850 F.3d 187, 194 (5th Cir. 2017).
Summary judgment is appropriate when the “movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law.” FED. R. CIV. P. 56(a). “The district court’s
interpretation of an insurance contract and its exclusions is a question of law
and is subject to de novo review.” Delta Seaboard Well Serv’s, Inc. v. Am.
Int’l Specialty Lines Ins. Co., 602 F.3d 340, 342–43 (5th Cir. 2010). Because
our jurisdiction is based on diversity of citizenship, we apply Louisiana’s
substantive law. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938).
In Louisiana, an insurer must provide a defense “whenever the
pleadings against the insured disclose a possibility of liability under the
policy.” Meloy v. Conoco, Inc., 504 So. 2d 833, 839 (La. 1987). Insurance
policies are interpreted according to their “plain, ordinary and generally
prevailing meaning, unless the words have acquired a technical meaning.”
Cadwallader v. Allstate Ins. Co., 848 So. 2d 577, 580 (La. 2003). It is only
3
Case: 21-30310 Document: 00516065426 Page: 4 Date Filed: 10/22/2021
No. 21-30310
where a policy is interpreted “unambiguously [to] exclude[] coverage” that
an insurer does not have a duty to defend. Meloy, 504 So. 2d at 838.
Houston Specialty argues it did not have a duty to defend Funky 544
because the weapons exclusion in the policy unambiguously covers all of
Soniat and Tribbit’s negligence claims. While Funky 544 acknowledges that
the exclusion may cover some negligence claims, it argues that the plain
language does not reach each of their negligence claims. Therefore, Houston
Specialty allegedly still had a duty to defend.
The district court described the claims of negligence in state court as
Funky 544’s failure to require patron identifications and, more generally, its
failure to prevent underage drinking. Even so, an element of each of Soniat
and Tribbit’s claims is that Funky 544’s negligence caused them to be injured
by a knife. An exclusion covering “bodily injury arising out of [] assault and
battery” applies unless the injuries are “separate and distinct” from the
physical altercation. Guste v. Lirette, 251 So. 3d 1126, 1133 (La. Ct. App.
2018). The term in this exclusion of “arising out of” the use of weapons
unambiguously provides that for coverage, an injury must be entirely separate
from those relating to the use of weapons.
One helpful state court opinion involved a suit against a Louisiana bar
and its insurer after the plaintiff was stabbed by another patron. Foquet v.
Daiquiris & Creams of Mandeville, L.L.C., 49 So. 3d 44, 45–46 (La. Ct. App.
2010). Judgment for the insurer was affirmed based on an exclusion in the
policy for “‘bodily injury,’ . . . arising out of or resulting from” the use of a
weapon. Id. at 47–49. Because the only injuries were related to the stabbing,
the claims were based on plainly excluded conduct. Id. at 48–49.
Here, every negligence claim in the state court suit derived from the
stabbing. The policy’s weapons exclusion therefore applies. AFFIRMED.
4