Nationwide Mut. Fire Ins. Co. v. Dillard House, Inc.

Nationwide Mut. Fire Ins. Co. v. Dillard House, Inc.

Opinion

 [*1369]  ORDER

The captioned case is before the court for consideration of plaintiff's motion for summary judgment [23-1], defendant Madeline Hecht's cross motion for summary judgment [42-1], and defendants Dillard House, Inc. and John P. Dillard's ("Dillard Defendants") cross motion for summary judgment [47-1].

I. Introduction

This insurance coverage dispute arises out of the death of defendant Hecht's husband, Stuart Hecht, on August 8, 2008. Stuart Hecht died after he and defendant Hecht vacationed at the Dillard House, a hotel and restaurant complex owned and operated by the Dillard Defendants. Shortly  [**2] thereafter, defendant Hecht, a Florida citizen, brought a diversity suit in this court against the Dillard Defendants, Georgia citizens, alleging nine counts of liability under Georgia law. ¹ That case, identified as case number 2:08-cv-186-WCO, is still be pending on the court's docket. On December 19, 2008, plaintiff filed this declaratory judgment action, seeking a ruling as to whether plaintiff may avoid liability to defend and indemnify the Dillard defendants under two insurance policies--a commercial general coverage policy ("CGL Policy") and an umbrella policy ("Umbrella Policy"). ² Hecht and the Dillard Defendants have cross-moved for summary judgment. The court held a hearing on the parties' summary judgment motions on June 25, 2009.

II. Factual Background

The factual  [**3] background of this case is straightforward and undisputed. In her amended complaint in the underlying case ("Amended Complaint"), Hecht alleges that her husband died of legionnaire's disease, which he allegedly contracted by bathing in a hot tub in "Eddie's Cottage," a standalone structure at the Dillard House. The policies provide coverage for, inter alia, liability stemming from "bodily injury" ³ that "is caused by an 'occurrence' that takes place in the 'coverage territory.'" (CGL Policy, Ex. B to Pl.'s Compl. § I.1(b)(1)); see also Umbrella Policy Insurance Agreements, Ex. C to Pl.'s Compl. § B.1). An occurrence is "an accident, including continuous or repeated exposure to substantially the same general harmful conditions." (CGL Policy, Ex. B to Pl.'s Compl. § V.13; Umbrella Policy Definitions, Ex. C to Pl.'s Compl. § C.12(a)).

 [*1370]  Both the CGL Policy and the Umbrella Policy include an exclusion ("Bacteria Exclusion") that is at the heart of this case. In relevant part, the Bacteria Exclusion in the CGL  [**4] Policy reads:

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