Danny Ray Marks and Timothy B Johnson v Scottsdale Insurance Company (2015) H&FLR 2015-35
United States Court of Appeals (Fourth Circuit)
29 June 2015
Coram: Hamilton, Sen. Cir. J.; Gregory and Harris, Cir. JJ.
Appearing for the Appellant (Marks): John Janney Rasmussen (of Insurance Recovery Law Group).
No appearance for the Plaintiff (Johnson).
Appearing for the Appellee: Mr John Becker Mumford (of Hancock, Daniel, Johnson & Nagle)
Catchwords: Virginia – insurance law – coverage – hunting – hunt club – members – vicarious liability.
Facts: Mr Johnson was a member of the Northumberland Hunt Club. On 3 January 2013 he was hunting on land leased by the club which was adjacent to a roadway. He fired a shot which struck and injured Mr Marks, a passing motorist.
Marks commenced proceedings in negligence against Johnson and the Club in a Virginia court. He issued separate proceedings against the Scottsdale, seeking a declaration that that company was obliged to defendant and indemnify Johnson. The relevant insurance company covered the Club and “any of [its] members, but only with respect to their liability for [the Club’s] activities or activities they perform on [the Club’s] behalf”.
Scottsdale successfully aplied to transfer the matter to a federal court, which found that Scottsdale was not obliged to defend or indemnify Johnson: Marks and Johnson v Scottsdale Ins. Co. (US Dist. Ct for E.D. Va, Novak Mag.J., 30 July 2014, unreported). Mr Marks appealed.
Held: Dismissing the appeal,that –
1. Virginia law requires the contract’s words to be given their “ordinary and customary meaning”.
Salzi v Va Farm Bureau Mut. Ins. Co, 556 SE.2d 758 (Va. 2002), followed.
2. Coverage of liability for “the Club’s activities” restricts coverage to the member’s vicarious liability for activities the club as an entity undertakes (for example, entering contracts or buying or selling property). Members are however not covered with respect to their actions “during in connection with the club’s activities”. In this case, no facts were alleged against Johnson which (if proved)would render Scottsdale liable to defend or indemnify him.
Lenox v Scottsdale Ins. Co. (US Dist Ct for Dist of NJ, Chesler Mag.J., 5 May 2005, unreported); CACI International Inc v St Paul Fire and Marine Ins. Co., 566 F.3d 150 (4th Cir., 2009), followed.
The Court’s judgment is available here.