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Westport Ins. Corp. v. VN Hotel Group, LLC

United States District Court for the Middle District of Florida, Orlando Division

December 8, 2010, Decided; December 9, 2010, Filed

Case No. 6:10-cv-222-Orl-28KRS

Opinion

 [*1339]  ORDER

This is a declaratory judgment action regarding insurance coverage. The parties dispute whether Plaintiff Westport Insurance Corporation ("Westport") must defend and indemnify Defendants VN Hotel Group, LLC ("VN Hotel") and Choice Hotels International, Inc. ("Choice") (collectively, "Named Insureds") in two underlying lawsuits 1 alleging that three individuals  [*1340]  contracted Legionnaires' disease from the spa tub and guest room showers of the Quality Suites hotel ("Quality Suites") located at 7400 Canada Avenue in Orlando, Florida.

The case is now before the Court on Westport's Motion for Summary Judgment seeking a declaration that Westport has no duty to defend or indemnify the Named Insureds in connection with the Cooper and Walker Suits. (Doc. 44). All named Defendants have filed responses in opposition. (Docs. 47, 49, 50, 58). In addition, Choice and VN Hotel have submitted Cross Motions for Partial Summary Judgment seeking a declaration that Westport has a duty to defend them in connection with the Cooper and Walker Suits. (Docs. 47, 58). Westport has filed a reply to the Defendants' responses to the Motion and a response opposing the Cross Motions for Partial Summary Judgment. (Doc. 59).

Having considered these submissions and the evidentiary support attached thereto, the Court concludes that Westport has a duty to defend the Named Insureds in connection with the Cooper and Walker Suits and that it is premature to determine whether Westport has a duty to indemnify.

I. Undisputed Facts

Westport issued a commercial general liability insurance policy, number WCP137008238801 ("Policy"), to VN Hotel and Choice for the Quality Suites, effective from February 2, 2008 to February 2, 2009. (Doc. 44-4 at 3, 5;  [**4] Doc. 44-5 at 50 2). The Policy obligates Westport to defend and indemnify VN Hotel and Choice against claims of bodily injury or property damage, subject to several conditions and exclusions from coverage. (Doc. 44-5 at 20).

The plaintiffs in the Cooper and Walker Suits allege that they were guests at the Quality Suites while the Policy was in effect and that during their stay they contracted Legionnaires' disease. (Doc. 47-1 ("Cooper TAC") ¶¶ 11,19-20; Doc. 47-2 ("Walker SAC") ¶¶ 18-19). According to the underlying complaints, VN Hotels and Choice negligently maintained the hotel's potable water and plumbing systems, causing an accumulation of Legionella bacteria in the water. (Cooper TAC ¶¶ 22-25, 32-35, 76-79, 86-89; Walker SAC ¶¶ 50-60, 79-89). Plaintiffs in the Cooper and Walker Suits allege that, as a consequence thereof, they were infected with Legionnaires' disease when they inhaled and ingested heated water vapor from the guest room showers and hotel spa tub. (Cooper TAC ¶¶ 17-20; Walker  [**5] SAC ¶¶ 32-40).

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761 F. Supp. 2d 1337 *; 2010 U.S. Dist. LEXIS 140914 **

WESTPORT INSURANCE CORPORATION, Plaintiff, -vs- VN HOTEL GROUP, LLC, CHOICE HOTELS INTERNATIONAL, INC., V.J. CHUKKAPALLI, WALTER COOPER, ELIZABETH COOPER, ANDREW WHEATLEY, VALERIE WALKER, AS PERSONAL REPRESENTATIVE OF THE ESTATE OF PAUL WALKER, DECEASED, Defendants.

Subsequent History: Judgment entered by Westport Ins. Corp. v. VN Hotel Group, LLC, 2011 U.S. Dist. LEXIS 117215 (M.D. Fla., Oct. 11, 2011)

Affirmed by Westport Ins. Corp. v. VN Hotel Group, LLC, 2012 U.S. App. LEXIS 22187 (11th Cir. Fla., Oct. 25, 2012)

CORE TERMS

pollutants, Insureds, bacteria, Hotel, consumption, Suits, summary judgment, coverage, Fungi, duty to defend, contaminants, tub, spa, hot tub, insurance policy, complaints, bodily injury, guests, notice, shower, solid, vapor, heat, duty to indemnify, cross motion, declaration, contracted, indemnify, disease, no duty

Civil Procedure, Summary Judgment, Entitlement as Matter of Law, General Overview, Appropriateness, Insurance Law, Claim, Contract & Practice Issues, Policy Interpretation, Question of Law, Judgments, Declaratory Judgments, Supporting Materials, Discovery Materials, Opposing Materials, Motions for Summary Judgment, Cross Motions, Policy Cancellation, Denial & Nonrenewal, Notice Requirements, Plain Language, Evidence, Burdens of Proof, Allocation, Exclusions, Ambiguous Terms, Construction Against Insurers, Entire Contract, Liability & Performance Standards, Good Faith & Fair Dealing, Duty to Defend, Pleadings, Complaints, Claims Made Policies, Technical Constructions & Meanings, Indemnification