United States District Court, E.D. Missouri, Eastern Division
FEDERAL INSURANCE COMPANY, And ZURICH AMERICAN INSURANCE COMPANY, Plaintiffs,
GREAT AMERICAN INSUANCE COMPANY, Defendant.
OPINION, MEMORANDUM AND ORDER
EDWARD AUTREY UNITED STATES DISTRICT JUDGE
matter is before the Court on the cross-motions for summary
judgment filed by Plaintiffs Federal Insurance Company, [Doc.
No. 64], and Zurich American Insurance Company, [Doc. No. 63]
and Defendant/ Counterclaim Plaintiff Great American
Insurance Company, [Doc. No.'s 67, 69 and 71]. For the
reasons stated below, Plaintiffs' motions will be granted
and Great American's motions will be denied.
an action seeking declaratory relief pursuant to 28 U.S.C.
§§ 2201 and 2202, for the purpose of determining
the obligations and priority of coverage for commercial
general liability Policy No. CPO 6552614-00 (the Zurich
Policy) issued by Defendant Zurich to Yarco Company, Inc.
(“Yarco”); commercial excess and umbrella
insurance Policy No. 7985-91-48 (the Federal Policy) issued
by Plaintiff Federal to Yarco; commercial general liability
Policy No. ESG0033185 (the Indian Harbor Policy) issued by
Indian Harbor to Municipal Mortgage & Equity, LLC
(“MM&E”) for the benefit of Whispering Lake; and
umbrella insurance Policy No. UM 2386960 (the Great American
Policy) issued by Defendant Great American to Distinguished
Properties Umbrella Managers, Inc. (“Distinguished
Properties”) for the benefit of Whispering Lake arising
out of the shooting death of a child by Aaron Sullivan.
Federal Policy limits are $25, 000, 000.00 per occurrence.
The Great American Policy limits are $10, 000, 000.00 per
occurrence. The Zurich Policy limits are $1, 000, 000.00 per
occurrence. The Indian Harbor Policy limits are $1, 000,
000.00 per occurrence.
1, 2007, Yarco and Whispering Lake entered into a Management
Agreement for a term of one (1) year, which was automatically
renewed for successive additional terms of (1) year each.
Whispering Lake (Owner) and Yarco (Managing Agent) entered
into a Management Agreement that included an Indemnity clause
and provided in part, as follows:
(a) Except for fraud, willful misconduct or gross negligence
on the part of the Managing Agent, the Owner shall hold and
save the Managing Agent (and Managing Agent's directors,
officers, employees, shareholders, partners and affiliates)
free and harmless from any claim, cause, proceeding, or suit
arising out of, or in connection with any actions by the
Managing Agent in accordance with this Agreement or acting
under the express or implied direction of the Owner. Subject
to the same exceptions, the Owner shall reimburse the
Managing Agent, upon demand, for all costs and expenses
(including reasonable attorney's fees) and for any monies
which the Managing Agent is required to pay in connection
therewith or shall, if requested in writing by Managing
Agent, defend promptly and diligently, at the sole expense of
the Owner, any claim, action or proceeding against the
Managing Agent which arises out of, or in connection with,
the foregoing. . .
(a) The Owner will inform the Managing Agent as to the types
and amounts of insurance to be carried with respect to the
Development and its operation, and the Owner will cause such
insurance to placed and kept in effect at all times. The
Managing Agent shall pay insurance premiums out of the
Project Operating Account, and all insurance premiums will be
treated as a Development expense….
maintained the Indian Harbor Policy as a CGL and the Great
American Policy as an Excess Policy (“Whispering Lakes
Insurance Line”). Yarco also maintained the Zurich
policy as a CGL and the Federal Policy as an Excess Policy
(“Yarco Insurance Line”).
DeMoss, mother of the B. L. (“Decedent”) sued
Aaron Sullivan in a lawsuit styled Michelle DeMoss v.
Aaron Sullivan, Case No. 1116-CV31736 in the Circuit
Court of Jackson County, Missouri (the “Underlying
Litigation or Underlying Lawsuit”). A Second Amended
Petition for Damages was filed on April 2, 2014. 21. In the
Second Amended Petition, DeMoss alleged that on July 4, 2011,
Aaron Sullivan was a pool monitor employed by Yarco at
Whispering Lake. It further alleges that Sullivan and some
friends fired shots from the apartment complex across a lake
into a wooded area. It was alleged that one of these shots
struck Decedent, an 11-year old child, resulting in her
brought claims, among others, against Yarco and Sullivan for
Negligence, Negligent failure to supervise and/or provide
appropriate security, Negligent hiring of a pool monitor and
her own claim for emotional distress.
the course of the case, a dispute arose among Federal, Indian
Harbor, Zurich and Great American over the amount of each
carrier's obligation and the order in which each
insurance policy was triggered by virtue of both the terms of