348 F. Supp. 3d 585
United States District Court2018Background
- Peacemaker National Training Center, LLC and Peacemaker Properties, LLC operate a commercial shooting range and were sued by Ben and Diane Goldstein in West Virginia and Virginia for a noise nuisance seeking injunctive relief and, if injunctions are not complied with, monetary relief to abate noise.
- Liberty Mutual ("Liberty") issued consecutive commercial general liability policies to Peacemaker and filed this declaratory-judgment action seeking a ruling that it has no duty to defend or indemnify under Coverage A (bodily injury/property damage) or Coverage B (personal/advertising injury).
- Liberty moved for summary judgment; Peacemaker opposed and cross-moved on duty-to-defend; Liberty replied. The court addressed coverage and related counterclaims on summary judgment.
- The policies define "bodily injury" to include mental injury only if it is the direct result of physical bodily injury, and define "property damage" as physical injury to tangible property or loss of use of tangible property.
- The Goldsteins' complaints primarily seek injunctive relief (limits on hours and decibel levels) and allege interference with the quiet use/enjoyment of property and emotional distress; they do not allege physical injury to person or property.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Coverage A "bodily injury" is implicated | Liberty: no bodily injury alleged; policy limits mental injury coverage to that caused by physical bodily injury | Peacemaker: Goldsteins alleged deprivation of "physical, mental and emotional well-being" and stress/anxiety | Held: No bodily injury alleged; mental anguish not covered absent physical manifestation; Coverage A not triggered |
| Whether Coverage A "property damage" (loss of use) is implicated | Liberty: nuisance/loss of quiet enjoyment is a burden, not physical damage | Peacemaker: loss of use occurs with interruption of normal use; noise interferes with property use | Held: Noise nuisance is a burden, not tangible property damage or loss-of-use covered by the policy; Coverage A not triggered |
| Whether allegations arise from an "occurrence" (accident) | Liberty: plaintiffs' harms were not accidental or unforeseen | Peacemaker: argued lack of notice and that operation may have been accidental/unknown | Held: Peacemaker knew of noise/hours issues and acted intentionally; harms not from an "occurrence" as defined; no coverage |
| Whether Coverage B (personal/advertising injury — "invasion of right of private occupancy") applies | Liberty: Coverage B requires insured be owner/landlord of claimant's property; not applicable | Peacemaker: did not advance a persuasive Coverage B theory | Held: Coverage B inapplicable because Peacemaker is not owner/landlord of Goldsteins' property |
| Whether Liberty acted in bad faith, breached contract, or engaged in unfair claim practices by denying coverage | Liberty: denial was reasonable after investigation and declaratory action | Peacemaker: contended denial/unfair practices and bad faith | Held: Counterclaims fail as a matter of law; Liberty reasonably investigated and properly sought declaratory relief; no breach or bad faith |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard)
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment/genuine issue inquiry)
- Erie R. Co. v. Tompkins, 304 U.S. 64 (state substantive law governs in diversity)
- State ex rel. Nationwide Mut. Ins. Co. v. Wilson, 236 W. Va. 228 (duty to defend broader than duty to indemnify)
- State Auto. Mut. Ins. Co. v. Alpha Eng’g Servs., Inc., 208 W. Va. 713 (insurer’s duty to defend only when underlying claim could impose liability for covered risk)
- Horace Mann Ins. Co. v. Leeber, 180 W. Va. 375 (insurer must defend all claims if some fall within coverage)
- Keffer v. Prudential Ins. Co. of Am., 153 W. Va. 813 (clear policy terms given plain meaning)
- Cherrington v. Erie Ins. Prop. & Cas. Co., 231 W. Va. 470 (purely mental/emotional harm without physical manifestation not "bodily injury")
- One Gateway Assocs. v. Westfield Ins. Co., 184 F. Supp. 2d 527 (injunctive relief/quiet-enjoyment nuisance not necessarily covered as property damage)