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Evanston Insurance Co. v. Barkandbrew

June 22, 2010

EVANSTON INSURANCE COMPANY, PLAINTIFF,
v.
BARKANDBREW, INC. D/B/A LA JOLLA BREW HOUSE; CLAUDETTE MANNIX; AND CYNTHIA KAUANUI, DEFENDANT.



The opinion of the court was delivered by: Honorable Janis L. Sammartino United States District Judge

ORDER: (1) DENYING DEFENDANTS' MOTION TO DISMISS; (2) STAYING THE ACTION PENDING RESOLUTION IN STATE COURT; and (3) DISMISSING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT WITHOUT PREJUDICE.

Presently before the Court is Barkandbrew, Inc., Claudette Mannix, and Cynthia Kauanui's (collectively, "Defendants") motion to dismiss or, in the alternative, stay the above-captioned action. (Doc. No. 27.) Also before the Court is Evanston Insurance Company's ("Plaintiff") opposition and Defendants' reply. (Doc. Nos. 31, 33.) For the reasons stated below, the Court HEREBY DENIES Defendants' motion to dismiss; (2) GRANTS Defendants' motion to stay the proceedings; and (3) DISMISSES Plaintiff's motion for summary judgment without prejudice.

BACKGROUND

The present action is an insurance coverage dispute between Evanston Insurance Company ("Plaintiff") and its insureds, BarkandBrew, Inc. and Claudette Mannix, the owners and operators of the La Jolla Brew House. The coverage dispute arises out of the underlying action currently pending in San Diego County Superior Court and set for jury trial to begin on July 23, 2010: Cynthia Kauanui v. Seth Logotaeao Cravens, et al., Case No. 37-2009-00086511-CV-PO-CTL. (hereinafter the "Underlying Action").

I. The Underlying Action

The Underlying Action was filed in state court on July 22, 2008 by Ms. Kauanui and alleges survival and wrongful death actions arising from the death of her son, Emery Kauanui Jr. (See Evanston RJN, Ex. A (original complaint).) The operative complaint in the Underlying Action, the Third Amended Complaint, alleges that, on May 24, 2007, five defendants in that action were served alcohol at the Brew House. (See id., Ex. E (Third Amended Complaint) at ¶¶ 8, 15.) Whileat the Brew House, the five defendants became belligerent and were asked to leave the bar. (Id. ¶ 16.) The five defendants did so, as did Ms. Kauanui's son Emery. (Id. ¶¶ 16, 17.) Emery "withdrew from defendants . . . and went straight home." (Id. ¶ 17.) The five defendants, however, followed Emery home "and in their drunken stupor, ended up gravely injuring him. The injuries suffered by Emery . . . in the altercation resulted in his untimely death four days later." (Id.

The Third Amended Complaint in the Underlying Action alleged six causes of action against the various defendants: (1) negligence against all defendants; (2) providing alcohol to obviously intoxicated minor against Mannix and BarkandBrew; (3) willful misconduct against all defendants; (4) battery against the five defendants; (5) wrongful death against all defendants; and (6) survival as to causes of action one through four against all defendants. (See generally id.)

II. The Present Action

The present action arises out of Plaintiff's alleged duty to defend and indemnify BarkandBrew and Mannix in the Underlying Action. Plaintiff issued a commercial general liability policy, No. ARTV001158-01 to Defendants BarkandBrew and Mannix, effective March 10, 2007 to March 10, 2008. (See Tomasevic Decl. ISO MTD, Ex. B (hereinafter "Policy").) The Policy affords General Liability coverage and Liquor Liability coverage with a limit of $1,000,000. (Id.)

An Assault and/or Battery Coverage endorsement (the "A/B Endorsement") to the Policy, however, modifies the insurance coverage under the Policy. The A/B Endorsement provides that Plaintiff will only pay $100,000, including damages and defense costs, per occurrence/common cause with a $300,000 aggregate "for claims made against [Defendants] caused by:

(1) Assault and Battery committed by any person;

(2) The failure to suppress or prevent assault and battery by any person;

(3) The failure to provide an environment safe from assault and battery or failure to warn of the dangers of the environment which ...


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