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American Southern Insurance Co. v. Williamson

United States District Court, S.D. Mississippi, Northern Division

April 14, 2015

GEORGE RANDY WILLIAMSON, et al., Defendants.


DANIEL P. JORDAN, III, District Judge.

This declaratory-judgment action is before the Court on Plaintiff American Southern Insurance Company's Motion for Summary Judgment [64] and Amended Motion for Summary Judgment [75], along with Defendant George Randy Williamson's Motion to Strike the Affidavit of Judy Nall [60]. For the reasons that follow, the motions for summary judgment are granted, and the motion to strike is denied as moot because the Court did not consider the evidence.

I. Facts and Procedural History

Plaintiff American Southern issued commercial general-liability policy No. GL508006 ("the Policy") to Donald Nall d/b/a Nallmark Electrical Contractors for the policy period running from February 6, 2010, through February 6, 2011. In April 2010, Defendant George Randy Williamson was seriously injured while assisting Nall in an electrical-contracting job on the premises of Mississippi Carbonic, LLC, a dry-ice facility. Williamson suffered significant burns to his face, head, hands, and arms, and was in a coma for approximately two months following the accident.

Nall died of unrelated causes in August 2012, and an estate was opened in Rankin County Chancery Court in April 2013. Immediately thereafter, Williamson sued the Nall Estate and others in Hinds County Circuit Court for damages resulting from the April 2010 incident. In October 2013, the Nall Estate demanded a defense from American Southern. In response, American Southern filed this declaratory-judgment action against Williamson, the Nall Estate, and Nallmark Electrical Contractors, LLC, seeking a declaration as to its coverage obligations. Compl. [1]. Following the close of discovery, American Southern moved for summary judgment. The Court has personal and subject-matter jurisdiction and is prepared to rule.

II. Standard

Summary judgment is warranted under Rule 56(a) of the Federal Rules of Civil Procedure when evidence reveals no genuine dispute regarding any material fact and that the moving party is entitled to judgment as a matter of law. The rule "mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

The party moving for summary judgment "bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact." Id. at 323. The nonmoving party must then "go beyond the pleadings" and "designate specific facts showing that there is a genuine issue for trial.'" Id. at 324. Conclusory allegations, speculation, unsubstantiated assertions, and legalistic arguments are not an adequate substitute for specific facts showing a genuine issue for trial. TIG Ins. Co. v. Sedgwick James of Wash., 276 F.3d 754, 759 (5th Cir. 2002); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc) (per curiam); SEC v. Recile, 10 F.3d 1093, 1097 (5th Cir. 1993) (per curiam).

III. Analysis

American Southern offers four reasons to hold that the Policy affords no coverage for the underlying litigation: (1) Nall released American Southern from all liability resulting from the April 2010 accident; (2) Nallmark Electrical Contractors, LLC, did not exist at the time of the occurrence and was not an insured under the Policy; (3) Williamson was Nall's employee, thereby triggering the Employer's Liability Exclusion; and (4) in the alternative, Williamson was an employee of an independent contractor, triggering the Independent Contractors' Employees Exclusion. As discussed below, the Court agrees that Nallmark Electrical Contractors, LLC, was not an insured under the Policy and that Williamson was Nall's employee when the injury occurred. It is not, therefore, necessary to analyze the remaining arguments.

A. Nallmark Electrical Contractors, LLC

American Southern argues that it does not owe Nallmark Electrical Contractors, LLC, any duties under the Policy because that legal entity did not exist until September 23, 2011-more than a year after the accident-and was not a named insured under the Policy. American Southern is correct. The Policy lists as its insured "DONALD NALL DBA NALLMARK ELECTRIC CONTRACTORS, " and Nall and his then-existing sole proprietorship are the only parties entitled to any duties under the Policy. Policy [76-2] at 3; see also id. (describing the form of the business as an "Individual"); id. at 12 (defining "insured" and explaining that if the insured is designated in the declarations as an individual, the individual and the individual's spouse "are insureds, but only with respect to the conduct of a business of which you are the sole owner"). A limited liability company "is not a partnership and is recognized as a separate legal entity apart from its individual members." Taylor v. Hartford Cas. Ins. Co., No. 2:09-cv-231 KS-MTP, 2010 WL 5158634, at *8, 999 (S.D.Miss. Dec. 14, 2010). American Southern's motion is granted as to Nallmark Electrical Contractors, LLC.

B. Williamson's Employment Status

The parties' main dispute concerns Williamson's employment status. American Southern argues that Williamson was Nall's employee so that his claims are excluded under the Policy's Employer's Liability Exclusion. The significant policy provisions are as follows:

1. Insuring Agreement
a. We 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. We will have the right and duty to defend the insured against any "suit" seeking those damages. However we will have no duty to defend the insured against any "suit" seeking damages for "bodily injury" or "property damage" to which this insurance does not apply....
2. Exclusions
This insurance does not apply to:
e. Employer's Liability "Bodily injury" to:
(1) An "employee" of the insured arising out of and in ...

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