The U.S. Court of Appeals for the Tenth Circuit has affirmed a decision by a district court in Oklahoma that the insured under a commercial general liability insurance (“CGL”) policy was covered for claims asserted against his courier service but not his security business.
The Case
In 2015, an armed security guard working for Benjy Smith allegedly shot Monroe Bird III while on duty at a Tulsa, Oklahoma, apartment complex. Mr. Bird died from his injuries and his mother, Zondra Magness, brought a wrongful death action against Mr. Smith d/b/a Smith and Son Security for negligent hiring, retention, and supervision of the security guard.
Burlington Insurance Company, which had issued a commercial general liability insurance policy to Mr. Smith, denied coverage for the Magness lawsuit.
Mr. Smith then sought a declaration that Burlington had a duty under the policy to defend and indemnify him and reimburse his defense costs in the Magness action.
The parties moved for summary judgment. Burlington argued that the parties intended the policy to cover Mr. Smith with regard to only his courier service business, the only business described in the policy's declarations.
The U.S. District Court for the Northern District of Oklahoma agreed with Burlington. It concluded that the plain language of the policy unambiguously covered only Mr. Smith's courier business.
He appealed to the Tenth Circuit.
The Burlington Policy
The Burlington policy provided that:
[Burlington] will pay those sums that the insured becomes legally obligated to pay as damages because of “bodily injury” or “property damage” to which this insurance applies.
The policy defined the insured by reference to the policy's declarations:
If you are designated in the Declarations as:
1. An individual, you and your spouse are insureds, but only with respect to the conduct of a business of which you are the sole owner.
In the declarations, “Benjy D. Smith” was listed as the “Named Insured,” his “Form of Business” was designated as “Individual,” and his business was described as “Courier Service.”
The Tenth Circuit's Decision
The circuit court affirmed.
In its decision, the Tenth Circuit agreed with the district court that the policy was unambiguous: Mr. Smith was the insured, but only with respect to the conduct of a business (not his personal conduct), and that business was his courier service.
Accordingly, it concluded, the district court had properly granted summary judgment in favor of Burlington.
The case is Smith v. Burlington Ins. Co., No. 18-5040 (10th Cir. June 27, 2019). Attorneys involved include: For BENJY D. SMITH, Plaintiff – Appellant: Joseph R. Farris, Jody R. Nathan, Franden, Farris, Quillin, Goodnight & Roberts, Tulsa, OK. For THE BURLINGTON INSURANCE COMPANY, Defendant – Appellee: F. Thomas Cordell, Amanda Renee Mullins, Timothy J. Prentice, Frailey, Chaffin, Cordell Perryman Sterkel, Chickasha, OK.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].