American Guarantee and Liability Insurance Co. v. 1906 Co.

American Guarantee and Liability Insurance Company (“American Guarantee”) brought this diversity suit seeking a declaratory judgment that the comprehensive general liability (“CGL”) insurance policies it sold to Hattiesburg Coca-Cola Bottling Company (“Hattiesburg Coke” or “Coke”) afforded no coverage or defense for twenty-one Mississippi lawsuits alleging that, among other things, the insured’s male employee had surreptitiously videotaped female customers changing clothes in a women’s dressing room on the insured’s premises. The district court, on American Guarantee’s motion for summary judgment, ruled that the insurer had no duty to defend or indemnify Hattiesburg Coke, Richard Thomson (Coke’s chief executive officer), or John Thomson, (Coke’s alleged employee-voyeur and Richard Thomson’s son) under either Coverage A or Coverage B. (Generally speaking, Coverage A insures against accidental bodily injury and property damage liability; Coverage B insures against non-accidental, non-bodily personal injury liability). Hattiesburg Coke, Richard Thomson, and John Thomson appealed. A prior panel of this court affirmed in part, reversed in part, and remanded in part. See American Guar. & Liab. Ins. Co. v. The 1906 Co., 129 F.3d 802, 810 (5th Cir. 1997)(“American Guar. I”).*fn2 That panel affirmed the district court’s judgment denying coverage for any claims against John Thomson and claims against Richard Thomson and Hattiesburg Coke based on their alleged vicarious liability for John’s acts. That panel also affirmed the district court’s ruling that all claims against Richard Thomson and Hattiesburg Coke are excluded from coverage under the Coverage A portion of the policies. See id. However, that panel vacated the district court’s ruling that the policies excluded coverage for Richard Thomson and Hattiesburg Coke under Coverage B. See id. at 811. The panel remanded the case for new proceedings on Coverage B. After remand, on American Guarantee’s motion for summary judgment, the district court ruled that the insurer also had no duty to defend or indemnify under Coverage B. All adversely affected parties appealed, including Hattiesburg Coke’s umbrella insurer, General Star National Insurance Company. We reverse and grant motions for summary judgment against American Guarantee and in favor of Hattiesburg Coke, Richard Thomson, and General Star.*fn3

I. Facts and Procedural History