Biro v. Alea London Limited

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 08-1535
BARBARA REESE,
Plaintiff,
and
BRIAN BIRO,
Defendant – Appellant,
v.
ALEA LONDON LIMITED,
Defendant - Appellee.
No. 08-1536
BARBARA REESE,
Plaintiff - Appellant,
v.
ALEA LONDON LIMITED,
Defendant - Appellee,
and
BRIAN BIRO,
Defendant.
Appeals from the United States District Court for the District
of South Carolina, at Columbia. Cameron McGowan Currie,
District Judge. (3:07-cv-01402-CMC)
Submitted: April 22, 2009 Decided: May 22, 2009
Before WILKINSON and GREGORY, Circuit Judges, and HAMILTON,
Senior Circuit Judge.
Affirmed by unpublished per curiam opinion.
Claude E. Hardin, Jr., James B. Richardson, Jr., Palmer Freeman,
Jr., Columbia, South Carolina, for Appellants. Peter H.
Dworjanyn, COLLINS & LACY, P.C., Columbia, South Carolina, for
Appellee.
Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
These appeals arise from a Complaint filed by
Appellant Barbara Reese against Appellant Brian Biro in a South
Carolina Court of Common Pleas. The Complaint alleged that Biro
was hired to conduct a training seminar for the employees of the
company where Reese was employed. During the seminar, Biro
importuned Reese to break a wooden board with her bare hands.
After Reese failed on her first two tries, Biro brought Reese
before the assembled group of 200 to 300 of her coworkers and
told her that she must try again. Reese protested, but was
strongly encouraged to participate in the demonstration by Biro,
who led the assembled group to chant Reese’s name until she
agreed to a final attempt. As a result of this third attempt,
Reese suffered severe injuries and nerve damage to her hand,
requiring medical care and resulting in long-term impairment.
Biro admitted liability for Reese’s injuries, but
contended that Appellee Alea London Ltd. (“Alea”) had issued a
commercial liability policy to him (“the Policy”), which he
asserted covered Reese’s injury. The Policy provided liability
coverage for “bodily injury” caused by an “occurrence.” The
Policy contained several exclusions, limiting the extent of
Biro’s coverage. The first exclusion at issue here
(“Participants Exclusion”) reads, in pertinent part:
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EXCLUSION - PARTICIPANTS
This Insurance does not apply to “bodily injury,”
“personal injury” or medical payments to “any person”
while practicing for or participating in any circus,
concert, demonstration, event, exhibition, race,
rodeo, show, contest or any activity of an athletic or
sports nature for the events shown in this Schedule.
The Participants Exclusion also defines the term “any person”:
“Any person” shall include but is not limited to
animal handlers, announcers, attendants, clowns,
contestants, entertainers, mechanics, musicians,
officials, participants, singers, speakers, stage
crews, stock contractors, vendors or their employees,
any person employed by or doing volunteer work for you
or on your behalf, or any person involved in the
promotion, sponsoring or production of the event
designated in the Schedule.
The second exclusion at issue here (“Professional
Services Exclusion”) reads as follows:
EXCLUSION – DESIGNATED PROFESSIONAL SERVICES
This endorsement modifies insurance provided under the
following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
SCHEDULE
Description of Professional Services:
1. MOTIVATIONAL SPEAKER
* * *
With respect to any professional services shown in the
Schedule, this Insurance does not apply to “bodily
injury”, “property damage”, “personal injury” or
“advertising injury” due to the rendering or failure
to render any professional service.
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Based on these exclusions, Alea denied coverage to Biro for the
allegations contained in the Complaint. Reese then brought a
declaratory judgment action against Alea and Biro, seeking a
declaration that the Policy provided coverage for her injuries.
Alea removed the declaratory judgment action to the United
States District Court for the District of South Carolina. Biro
joined Reese’s declaratory judgment claim.
Alea’s answer denied coverage and included a
counter-claim seeking a declaration that the Policy did not
provide coverage for the injury giving rise to the complaint due
to the Participants and Professional Services Exclusions. Alea
then moved for summary judgment. Reese also moved for summary
judgment, arguing that neither exclusion was applicable to her
claim.
The district court granted summary judgment in favor
of Alea. The court found that, under the plain meaning of the
insurance contract, both exclusions were applicable to the
Complaint, and served to bar coverage for Reese’s claim. As
Reese was “participating in [a] . . . demonstration, . . . or
an[] activity of an athletic or sports nature,” the court held
that the Participants Exclusion applied. Reese v. Alea London
Ltd., 2008 WL 1766686, at *2 (D.S.C. April 11, 2008). Further,
the court concluded that as Biro was “leading a team-building
exercise as part of [a] seminar when he encouraged Reese to try
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to break a board with her hands[,] . . . the actions for which
Biro may be held accountable in the state court proceeding are
professional in nature.” Id. at *3. Accordingly, the court
held, the Professional Services Exclusion also served to bar
coverage. Id.
Reese raises two issues on appeal. First, she
contends that the Participants Exclusion is not applicable to
her cause of action. She argues that the exclusion applies only
to events “designated in the Schedule;” as no such Schedule is
attached, this exclusion was not part of the Policy. Even if
the Participants Exclusion was part of the Policy, Reese argues,
it did not apply in this situation, as she was not participating
in a “demonstration” or an “activity of an athletic or sports
nature” at the time of her injury.
Second, Reese contends that the Professional Services
Exclusion does not apply to her cause of action. She argues
that Biro had no professional relationship with her and was not
rendering a professional service when he encouraged her to break
the board with her hand. We reject these contentions, and
affirm.
We review a district court’s order granting summary
judgment de novo and view the facts in the light most favorable
to the nonmoving party. Bogart v. Chapell, 396 F.3d 548, 555
(4th Cir. 2005). Summary judgment is appropriate when no
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genuine issue of material fact exists and the moving party is
entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c);
see Emmett v. Johnson, 532 F.3d 291, 297 (4th Cir. 2008). The
non-movant is entitled “to have the credibility of his evidence
as forecast assumed, his version of all that is in dispute
accepted, [and] all internal conflicts in it resolved favorably
to him.” Charbonnages de France v. Smith, 597 F.2d 406, 414
(4th Cir. 1979).
Reese first contends that, as the Participants
Exclusion specifically references an “event designated in the
Schedule,” and no such Schedule exists, the Participants
Exclusion does not apply to the Policy. However, as Reese
failed to raise this issue before the district court, it is not
properly before us. See Muth v. United States, 1 F.3d 246, 250
(4th Cir. 1993) (holding that claims raised for the first time
on appeal will not be considered absent exceptional
circumstances). Accordingly, we decline to address this issue.
Next, Reese contends that, as she was not
participating in a demonstration or an activity of a sports or
athletic nature at the time of her injury, the Participants
Exclusion does not bar Biro’s coverage. In a suit based on
diversity of citizenship, the substantive law of the forum state
is controlling. Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938).
South Carolina courts employ general rules of contract
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construction when interpreting insurance policies. See Century
Indem. Co. v. Golden Hills Builders, Inc., 561 S.E.2d 355, 358
(S.C. 2002). Thus, courts will attach “plain, ordinary, and
popular meaning” to policy language. B.L.G. Enters., Inc. v.
First Fin. Ins. Co., 514 S.E.2d 327, 330 (S.C. 1999). “Insurers
have the right to limit their liability and to impose conditions
on their obligations provided they are not in contravention of
public policy or a statutory prohibition.” Id. Though coverage
exclusions found within an insurance policy are to be construed
against the insurer, see id., a court’s duty “is limited to the
interpretation of the contract made by the parties themselves
regardless of its wisdom or folly, apparent unreasonableness, or
[the parties’] failure to guard their rights carefully.’”
C.A.N. Enters., Inc. v. S. C. Health & Human Servs. Fin. Com’n,
373 S.E.2d 584, 587 (S.C. 1988) (internal quotation marks and
citation omitted).
It is clear that Alea intended to limit its liability
through the Participants Exclusion. As noted above, the
Participants Exclusion bars coverage for injuries received by
“‘any person’ while . . . participating in any . . .
demonstration, event, . . . or any activity of an athletic or
sports nature.” One of the many definitions provided in the
Policy for the broadly defined term “any person” includes a
“participant.” At the time of her injury, Reese was attempting
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to break a board with her hand at the behest of Biro, in front
of a large audience of her coworkers, as part of a team-building
exercise. Reese referred to herself as a “participant” on
several occasions in the Complaint. Accordingly, we find that,
giving the terms of the Participants Exclusion their plain
meaning, Reese qualifies as “‘any person’ . . . participating”
under the Policy.
Next, we must determine whether the board-breaking
attempts qualified as a “circus, concert, demonstration, event,
exhibition, race, rodeo, show, contest or any activity of an
athletic or sports nature.” Where a term found within an
insurance policy is not defined in the policy, “the term should
be defined according to the ordinary and usual understanding of
the term’s significance to the ordinary person.” USAA Prop. &
Cas. Ins. Co. v. Rowland, 435 S.E.2d 879, 881-82 (S.C. Ct. App.
1993) (citing Green v. United Ins. Co. of Am., 174 S.E.2d 400,
402 (S.C. 1970)). No ordinary understanding of the terms in the
Policy would equate breaking a board as part of a team-building
exercise to participation in a circus, concert, race, rodeo,
show, or contest. Therefore, we must determine whether an
ordinary understanding of the terms “demonstration,” “event,”
“exhibition,” or “any activity of an athletic or sports nature”
would encompass the circumstances giving rise to Reese’s injury.
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Webster’s Dictionary describes “demonstration” as the
noun form of the verb “demonstrate,” for which it provides four
definitions: (1) “[t]o prove or show by evidence or reasoning;”
(2) “[t]o show or reveal;” (3) “[t]o explain, esp. by using
examples;” and (4) “[t]o make a public protest.” Webster’s II
Dictionary 194 (3d ed. 2005). Reese acknowledges in her brief
that “[t]he whole point of th[e] motivational exercise was to
teach her that she could achieve something she may have thought
beyond her abilities.” Thus, the board-breaking exercise was
clearly a demonstration, even under Reese’s own definition of
the term, as it was a “practical exhibition” of the notion that
“she could achieve something she may have thought beyond her
abilities.” Accordingly, the district court was correct in
determining that the exercise was a “demonstration” as that term
is used in the Policy.
Alternatively, the board-breaking exercise falls under
an ordinary understanding of the term “activity of an athletic
or sports nature.” Though coverage exclusions found within an
insurance policy are to be construed against the insurer,
“courts have no authority to torture the meaning of policy
language to extend or defeat coverage that was never intended by
the parties.” Diamond State Ins. Co. v. Homestead Indus., Inc.,
456 S.E.2d 912, 915 (S.C. 1995). Webster’s defines “athletic”
as “[o]f or relating to athletics or athletes” or “[o]f or
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involving physical exertion or activity.” Webster’s II
Dictionary at 46. This latter meaning is in accord with one
proposed by Reese: “[c]haracterized by or involving physical
activity or exertion; active.” Under either of these
definitions, it is clear that the board-breaking exercise
qualifies as an “activity of an athletic or sports nature” under
the Policy. Therefore, we find that the district court was
correct in determining that the Participants Exclusion precludes
coverage for Reese’s injury.
In view of this finding, we need not address Reese’s
second argument, that coverage is not precluded by the
Professional Services Exclusion. For the reasons stated above,
we affirm the judgment of the district court. We dispense with
oral argument because the facts and legal contentions are
adequately presented in the materials before the court and
argument would not aid the decisional process.
AFFIRMED
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