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Vol. 6, Iss. 6
July 12, 2017

Is Denying A Service Dog Entry Into A Restaurant A Covered “Wrongful Eviction?”

A really good coverage case is when there are two schools of thought on an issue – one that favors the insurer and one that favors the insured – and the court is in the position of having to decide which camp to join. Think absolute pollution exclusion. Pre-tender defense costs. Insurability of punitive damages. And so many more.

That’s what Grand China Buffet v. State Auto Property & Casualty Company, No. 16-159 (N.D.W.V. May 26, 2017) is about. Scott Ullom alleged that he and his friend were refused entry into Grand China Buffet and Grill because he had a service dog. Despite advising the restaurant employee that the dog was not a pet but, rather, provided assistance, the employee still allegedly “frantically wave[d] both hands above his head and in front of his face, and yelled ‘the dog cannot come in, the dog cannot come in.’”

Ullom sued Grand China Buffet, under West Virginia statutes and constitutional laws, alleging that he has hearing and other physical impairments that require him to use a service dog, prosthetic foot and wheelchair. Ullom alleged emotional distress, embarrassment, and humiliation.

Grand China sought coverage from State Auto under its commercial general liability policy. State Auto initially undertook Grand China’s defense and then withdrew it. Grand China filed a declaratory judgment action. State Auto filed a motion for summary judgment.

The court had no trouble concluding that no coverage was owed to Grand China, under coverage A of the commercial general liability policy, because the Ullom complaint did not allege “bodily injury.” The court explained that “[i]n West Virginia, it is well-settled that purely mental or emotional harm that . . . lacks physical manifestation does not fall within a definition of ‘bodily injury,’ . . . which is limited to ‘bodily injury, sickness, or disease.’ . . . Here, the Subject Policy defines ‘bodily injury’ as ‘bodily injury, sickness or disease’. In light of clearly established West Virginia precedent, Ullom’s underlying claims for statutory violations, ‘emotional distress, embarrassment, [and] humiliation,’ without more, do not fall within this definition. Ullom simply has not alleged any physical manifestation of these purely mental or emotional harm[s].”

The more challenging, and interesting, issue was whether coverage was owed under the “personal and advertising injury” section of the commercial general liability policy, specifically, for the “wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies, committed by or on behalf of its owner, landlord or lessor.”

The competing arguments of the parties were simple: To State Auto, “[b]ecause Ullom was not a tenant and had no possessory interest in the restaurant, the underlying complaint [did] not trigger coverage for ‘wrongful eviction.’” Grand China argued that “‘eviction’ is reasonably susceptible to more than one meaning, including ‘to force someone to leave a place,’ and would encompass Ullom’s allegations.”

Noting that West Virginia’s highest court has not squarely addressed the scope of “wrongful eviction,” for purposes of “personal and advertising injury” coverage, the Grand China court looked to dictionaries and cases from other jurisdictions, which went both ways. Some courts interpreted “wrongful eviction” narrowly, to “an individual’s possessory interest in real property,” and some broadly, to “the removal of a person who has an understood right to be in a place from which she is ultimately removed.”

On one hand, the court noted, the split of authority is a coin on the scale for a finding of ambiguity: “[T]he Supreme Court of Appeals has noted that a provision in an insurance policy may be deemed to be ambiguous if courts in other jurisdictions have interpreted the provision in different ways.”

However, the Grand China court also noted that “differing interpretations do not establish that the language at issue necessarily is ambiguous if a term’s ordinary meaning is otherwise clear.” And that’s the dictate the court used to keep going and hold that “the Subject Policy provides the clarifying language necessary to avoid ambiguity. Not every allegation of ‘eviction’ is a covered personal injury; rather, the Subject Policy provides coverage only for ‘wrongful eviction from . . . a room, dwelling or premises that a person occupies’. Thus, although if considered in isolation, ‘eviction’ may carry a number of possible meanings, the plain language of the Subject Policy clearly signals the requirement that Ullom be wrongly deprived of occupation.”

But the court noted that the complaint did not allege any possessory interest in Grand China that gave Ullom a right to occupy the restaurant. Rather, he simply alleged “that Grand China wrongfully denied him the right to be served with certain accommodations required by West Virginia law, namely the presence of his service dog.” Thus, the insurer’s motion for summary judgment was granted.

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