The U.S. Court of Appeals for the Eighth Circuit, reversing a district court's decision, has ruled that a conference center was not entitled to additional insured coverage for injuries suffered by a child attending Bible camp where her injuries did not arise out of her use of property leased by the camp sponsor.
The Case
Student Life, an affiliate of the Southern Baptist Convention, used Windermere Baptist Conference Center, located on the shores of Missouri's Lake of the Ozarks, to host its camps. Student Life rented group lodging and conference rooms from Windermere and, in return, campers had access to Windermere's common spaces and some of its recreational areas, including the swimming pool, miniature golf course, and hiking trails.
A few recreational areas – including the “Edge,” Windermere's ropes and zipline course – were not freely available to campers. Rather, to access the Edge, campers had to make separate arrangements and pay an additional fee.
Karlee Richards and her youth group attended a Student Life Bible camp. During their free time one afternoon, they arranged to use the Edge. In addition to scheduling a specific time with Windermere and paying the entrance fee, the campers had to submit a permission and release form signed by a parent. Midway through the course, a Windermere employee allegedly forgot to reconnect Karlee Richards' harness to the zipline's tether, and she fell 50 feet to the ground.
Litigation ensued between Windermere and the Richards family, and Windermere asked Student Life's insurer, Great American Alliance Insurance Company, to indemnify it as an additional insured under Student Life's general liability insurance policy.
Great American refused on the ground that the accident did not “ar[ise] out of the . . . use of . . . premises leased” to Student Life.
Great American filed a declaratory judgment action in the U.S. District Court for the Western District of Missouri. The district court ruled that Windermere was covered by Student Life's policy, and Great American appealed to the Eighth Circuit.
The Great American Policy
The Great American insurance policy covered Windermere as an additional insured only if its liability:
ar[ose] out of the ownership, maintenance[,] or use of that portion of the premises leased to [Student Life].
The Eighth Circuit's Decision
The Eighth Circuit reversed, holding that Karlee Richards' zipline accident did not arise out of the use of premises that Windermere “leased to” Student Life.
In its decision, the circuit court explained that the “common understanding” of a “lease” (which was not defined in the policy) was a “contract by which one conveys” property for a certain period of time “for a specified rent or compensation.”
The Eighth Circuit added that, combining this definition with the specific terms of the policy, the only “premises” Windermere “conveyed” to Student Life were the conference rooms and the lodging specified in the contract. “Their contract did not mention any other areas,” the circuit court said, much less give Student Life a “right [to] exclusive possession” of them, which was “the hallmark of a lease.”
The circuit court found that the Edge “was no exception.” The circuit court observed that the Edge was off-limits to any campers who did not make special arrangements in advance, including Karlee Richards and her youth group. The Edge was “at all times under the control of Windermere's employees” and Student Life “not only lacked exclusive possession of the Edge, it had no right to possession of it at all.”
The Eighth Circuit was not persuaded by Windermere's argument that even if it did not lease the Edge, its liability still “ar[ose] out of” Student Life's lease of the conference rooms and lodging. It ruled that, under applicable Missouri law, the phrase “arising out of” required something less than proximate cause but something more than a simple “but-for . . . temporal and spatial relationship,” which was all that was present in this case.
According to the circuit court, Karlee Richards' accident only “arose out of” Student Life's use of the leased premises in the sense that she would not have used the Edge but for her attendance at Bible camp. Nothing about the “use” of these areas had caused the accident or made it more likely to occur, the circuit court added. The connection, it ruled, was only a “temporal and/or spatial” one,” not one “originating from” or “having its origin in” Student Life's use of the leased premises.
The circuit court concluded that Windermere's potential liability for Karlee Richards' injuries could not possibly have “aris[en] out of the . . . use of . . . the premises leased” to Student Life, and it ordered entry of summary judgment in favor of Great American.
The case is Great American Alliance Ins. Co. v. Windermere Baptist Conference Center, Inc., No. 17-3635 (8th Cir. July 29, 2019). Attorneys involved include: For Great American Alliance Insurance Company, Plaintiff – Appellant: Kenneth Raymond Goleaner, John S. Sandberg, Sandberg & Phoenix, Saint Louis, MO; William Michael Hart, Julia J. Nierengarten, Charles E. Spevacek, Meagher & Geer, Minneapolis, MN. For Windermere Baptist Conference Center, Inc., Defendant – Appellee: Amber J. Simon, Lauren E. Tucker McCubbin, Lisa A. Weixelman, Polsinelli, PC, Kansas City, MO. For Jeremy Richards, Karlee Richards, Defendants – Appellees: Glenn Russell Gulick Jr., Glenn R. Gulick, Jr. Law Office, Joplin, MO; Patrick M. Martucci, Johnson & Vorhees, Joplin, MO.
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].