Noble Eagle Sales, LLC d/b/a Shooter's Choice v. Mesa Underwriters Specialty Insurance Company

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
NOBLE EAGLE SALES, LLC d/b/a )
SHOOTER’S CHOICE, A Delaware )
Limited Liability Company, )
) C.A. No. K22C-03-022 RLG
Plaintiff, )
)
MESA UNDERWRITERS )
SPECIALTY INSURANCE )
COMPANY, SELECTIVE )
INSURANCE COMPANY OF )
AMERICA, a New Jersey Corporation, )
WILLIAMS INSURANCE AGENCY, )
INC., a Delaware Corporation, )
MCSWEENY AGENCY, LLC, a New )
Jersey limited liability company, )
ANTHONY DIMARZO, and SETH )
COSTELLO. )
)
Defendants. )
Submitted: February 2, 2024
Decided: June 4, 2024
MEMORANDUM OPINION AND ORDER
Upon Defendant’s Motion for Summary Judgment – DENIED.
Upon Plaintiff’s Cross Motion for Partial Summary Judgment – GRANTED.
Catherine M. Cramer, Esquire, Baird Mandalas Brockstedt & Federico, LLC,
Wilmington, Delaware. Attorney for Plaintiff.
William T. Mandia, Esquire (argued) and Joelle E. Polesky, Esquire, Stradley,
Ronon, Stevens & Young, LLP, Wilmington, Delaware. Attorneys for Defendants
MESA Underwriters Specialty Insurance Company and Selective Insurance
Company of America.
GREEN-STREETT, J.
1
I. Introduction
Plaintiff, Noble Eagle Sales, LLC d/b/a Shooter’s Choice (“Noble Eagle”),
operates a shooting range in Dover, Delaware.1 A patron of that shooting range used
one of the range’s guns to commit suicide.2 His family and estate subsequently sued
Noble Eagle.3 Noble Eagle previously obtained insurance coverage from Defendant,
Mesa Underwriters Specialty Insurance Company (“MUSIC”), and requested
coverage for the lawsuit under that policy.4 MUSIC denied coverage, citing an
exclusion within the insurance policy.5 Noble Eagle filed the instant action to
compel MUSIC to defend and indemnify Noble Eagle.6 Following discovery, the
parties filed cross motions for summary judgment, seeking a decision from this
Court on whether MUSIC must defend and indemnify Noble Eagle.7
The core of both parties’ arguments centers on an exclusion found within the
insurance policy excluding coverage for bodily injuries caused by sporting
1
Compl. at 2, D.I. 1.
2
Id. at 10.
3
See Aanal Patel, et al., Plaintiffs, v. Shooter’s Choice, Inc., et al., Defendants, C.A. No. K21C-
04-025 RLG.
4
Def.’s Mem. in Supp. of Mot. for Summ. J. at 1, D.I. 76.
5
Id.
6
Compl. at 3, D.I. 1.
7
Opening Br. in Supp. of Pl.’s Mot. for Summ. J. at 4, D.I. 77.
2
equipment rented by Noble Eagle.8 Noble Eagle argues the exclusion does not
clearly define “sporting equipment,” rendering the exclusion ambiguous as to
whether a firearm falls within the exclusion.9 It posits that, as the law requires
interpreting an ambiguous insurance exclusion against the insurer, the insurance
policy should be construed against MUSIC.10
MUSIC contends that the exclusion’s plain meaning clearly conveys what it
excludes, and thus cannot be ambiguous.11 Absent any ambiguity, MUSIC asserts
the exclusion must be applied and enforced in this case.12 For the reasons outlined
below, the Court finds the term “sporting equipment” is ambiguous. Thus, the
sporting equipment rental exclusion cannot be enforced in the context of this specific
case. Accordingly, Plaintiff’s Motion for Summary Judgment is GRANTED, and
Defendant’s Motion for Summary Judgment is DENIED.
8
Id. at 6.
9
Id. at 16.
10
Id. at 14-15.
11
Def.’s Mem. in Supp. of Mot. for Summ. J. at 14-15, D.I. 76.
12
Id.
3
II. Factual and Procedural Background
Noble Eagle operates a business in Dover, Delaware comprised of a shooting
range and a retail firearms store.13 Patrons of the shooting range can rent firearms,
safety glasses, and ear plugs, as well as purchase ammunition for use in the shooting
range.14 When a patron rents time in the shooting range, she is not charged until she
has completed her session and exited the range.15
Noble Eagle purchased a commercial general liability insurance policy from
MUSIC covering the shooting range and firearm store (the “Policy”), effective April
15, 2020 through April 15, 2021.16 The premium payment Noble Eagle paid for the
year Policy totaled $13,502.27.17 The Policy covers, among other things, bodily
injuries that occur at the shooting range.18
On April 24, 2020, Aniket Patel procured a firearm from Noble Eagle, entered
the shooting range, and used the firearm to commit suicide.19 On April 27, 2020,
13
Opening Br. in Supp. of Pl.’s Mot. for Summ. J. at 5, D.I. 77.
14
Id.
15
Tr. of Oral Arg. at 5, D.I. 84.
16
Opening Br. in Supp. of Pl.’s Mot. for Summ. J. at 5, D.I. 77.
17
Id. at 6.
18
Id.
19
Id. at 5.
4
Noble Eagle filed a claim under the Policy, seeking defense and indemnity.20
MUSIC denied Noble Eagle’s claim.21 Although the Policy covered bodily injuries
occurring at Noble Eagle’s business, MUSIC cited an exclusion within the policy as
grounds to deny coverage.22 The “Rental of Sporting Equipment Exclusion” (the
“Rental Exclusion”) reads:
In consideration of the premium charged, it is understood
and agreed that this policy specifically excludes and does
not extend to or provide coverage, indemnity, or defense
costs for bodily injury or property damage arising out of
the use of sporting equipment rented out by the insured,
the insured’s employees or other persons on the insured’s
premises. Sporting equipment, for the purpose of this
endorsement, does not include golf or tennis equipment.23
Mr. Patel’s estate and family filed suit against Noble Eagle on April 23, 2021,
asserting claims of negligence, wrongful death, negligent entrustment, and negligent
training and supervision.24 After being served with the complaint, Noble Eagle
renewed its request for MUSIC to provide defense and indemnity against those
claims.25 MUSIC again denied coverage, asserting that, “as Shooter’s Choice is a
20
Opening Br. in Supp. of Pl.’s Mot. for Summ. J. at 8, D.I. 77.
21
Id.
22
Id.
23
Def.’s Mem. in Supp. of Mot. for Summ. J. at 4, D.I. 76.
24
First Am. Compl. at 13, D.I. 48.
25
Def.’s Mem. in Supp. of Mot. for Summ. J. at 4, D.I. 76.
5
business that rents firearms for the sport of target shooting, the Rental of Sporting
Equipment Exclusions applies to bar coverage.”26
Noble Eagle then filed the instant action, seeking clarity and a declaration
from the Court regarding MUSIC’s defense and indemnity obligations to Noble
Eagle.27 The parties filed cross motions for summary judgment, asking this Court to
determine if the Rental Exclusion of the Policy bars coverage in this case. Both
parties agree that the only remaining dispute between them is disagreement
regarding the Policy’s terms and conditions.
III. Parties’ Contentions
Noble Eagle raises two arguments in its motion for summary judgment. First,
it argues the Rental Exclusion does not clearly define the term “sporting
equipment.”28 Absent a definition of one of the key terms of the exclusion, Noble
Eagle posits the exclusion translates ambiguously regarding its application to
firearms generally – and, more specifically, the firearm used in Mr. Patel’s case.29
26
Id. at 5.
27
Id. at 4.
28
Opening Br. in Supp. of Pl.’s Mot. for Summ. J. at 16, D.I. 77.
29
Id.
6
If the Court deems the Rental Exclusion ambiguous, Noble Eagle contends Delaware
law requires construing the meaning of the Rental Exclusion against MUSIC.30
Second, Noble Eagle argues Mr. Patel did not rent the firearm.31 Noble Eagle
did not charge Mr. Patel, or his estate, for use of the firearm.32 Noble Eagle never
received any payment for allowing Mr. Patel to borrow the gun, and the gun has not
been returned to Noble Eagle.33 Noble Eagle maintains that, given those facts, no
rental occurred.34 Thus, it contends the Rental Exclusion cannot apply.35
MUSIC counters that the Rental Exclusion precludes coverage because it
clearly and unambiguously applies to the firearm used by Mr. Patel.36 MUSIC
emphasizes the “plain and ordinary” definition of sporting equipment encompasses
the firearm at issue in this case.37 As the Rental Exclusion lacks ambiguity, and
applies to any injury arising from a rented firearm, MUSIC asserts the Rental
30
Id.
31
Id. at 18.
32
Id.
33
Id.
34
Id.
35
Id.
36
Def.’s Mem. in Supp. of Mot. for Summ. J. at 11, D.I. 76.
37
Id.
7
Exclusion bars coverage.38 MUSIC further contends that Mr. Patel clearly rented
the firearm, and to interpret his transaction with Noble Eagle differently would allow
Noble Eagle to invalidate the Rental Exclusion at will.39
IV. Standard of Review
This Court grants summary judgment if “there is no genuine issue as to any
material fact and … the moving party is entitled to a judgment as a matter of law.”40
“Where cross motions for summary judgment are filed on a particular issue and
neither party argues the existence of a genuine issue of material fact thereon, the
Court may consider the motions as a stipulation for decision on the record submitted
by the parties.”41 “The standard for summary judgment is not altered because the
parties have filed cross-motions for summary judgment.”42 The Court must still
determine if any genuine factual disputes exist.43
38
Id.
39
Id. at 19.
40
Sycamore Partners Mgmt., L.P. v. Endurance Am. Ins. Co., 2021 WL 4130631, at *9 (Del. Super.
Sept. 10, 2021) (internal quotations omitted) (quoting Del. Super. Ct. Civ. R. 56(c)).
41
Id. (citing Del. Super. Ct. Civ. R. 56(h)).
42
Total Care Physicians, P.A. v. O’Hara, 798 A.2d 1043, 1050 (Del. Super. 2001) (internal
quotations omitted) (quoting Haas v. Indian River Vol. Fire Co., 2000 WL 1336730, at *3 (Del.
Ch. Aug. 14, 2000)).
43
United Vanguard Fund, Inc. v. TakeCare, Inc., 693 A.2d 1076, 1079 (Del. 1997).
8
V. Discussion
As a threshold matter, the Court finds no material facts remain in dispute.
Both parties agree with the timeline of events leading to Mr. Patel’s death, and
neither party disputes that the Policy covered the date in question. The only issue
remaining before the Court concerns whether the Rental Exclusion bars coverage in
the instant case. Given there are no material facts in dispute, summary judgment is
appropriate at this stage.44
A. The Standard for Insurance Contract Interpretation
This Court’s “interpretation of a contract must rely on a reading of all
pertinent provisions of the policy as a whole, and not on any single passage in
isolation.”45 “Contracts are to be interpreted in a way that does not render any
provision illusory or meaningless.”46 Clear and unambiguous contract terms are
given their plain meaning, and the Court cannot “destroy or twist policy language
under the guise of construing it.”47 Ambiguity exists within a contract “when the
provisions in controversy are reasonably or fairly susceptible of different
44
Del. Super. Ct. Civ. R. 56(c).
45
O’Brien v. Progressive N. Ins. Co., 785 A.2d 281, 287 (Del. 2001).
46
Id. (internal quotations omitted) (quoting Sonitrol Holding Co. v. Marceau Investissements, 607
A.2d 1177, 1183 (Del. 1992)).
47
Rhone-Poulenc Basic Chemicals Co. v. Am. Motorists Ins. Co., 616 A.2d 1192, 1195 (Del.
1992).
9
interpretations[,] or may have two or more different meanings.” 48 If the Court can
determine the meaning of a contract from “knowledge of the simple facts on which,
from the nature of language in general, its meaning depends,” the Court must find
the contract unambiguous.49
When ambiguity does exist, “the language of an insurance contract [must] be
construed most strongly against the insurance company that drafted it.”50 Further,
“contracts should be read to accord with the reasonable expectations of a reasonable
purchaser.”51 To avoid its duty to defend the insured, “the insurer must demonstrate
that the allegations of the underlying complaints are solely and entirely within
specific and unambiguous exclusions from coverage.”52 The burden lies with the
insurer to show an exclusion unambiguously applies in a particular case to bar
coverage.53 Thus, MUSIC must show the Rental Exclusion unambiguously applies.
48
Id.49
Id.50
Id. (citing Steigler v. Insurance Company of North America, 384 A.2d 398, 400 (Del. 1978)).
51
Id. (citing Steigler, 384 A.2d at 401).
52
Nat’l Union Fire Ins. Co. of Pittsburgh, PA. v. Rhone-Poulenc Basic Chemicals Co., 1992 WL
22690, at *8 (Del. Super. Jan. 16, 1992).
53
Smith v. Liberty Mut. Ins. Co., 201 A.3d 555, 571 (Del. Super. 2019).
10
B. Noble Eagle rented the firearm to Mr. Patel
The Court first turns to Noble Eagle’s assertion that, as it never collected any
money from Mr. Patel, the transaction involving the firearm does not qualify as a
rental.54 Noble Eagle correctly notes the Rental Exclusion fails to define the term
“rented out.”55 Noble Eagle argues a rental requires an exchange of money.56 As
Mr. Patel never paid for the use of the firearm, Noble Eagle asserts no rental
occurred.57
“The Delaware Supreme Court has instructed courts to use dictionary
definitions as a guide when determining the plain meaning of undefined contract
terms.”58 Merriam-Webster defines “rented” as “to grant the possession and
enjoyment of in exchange for rent; to take and hold under an agreement to pay
rent.”59 Noble Eagle does not dispute that, had Mr. Patel walked out of the shooting
range alive, he would have owed an obligation to pay for the time he spent
54
Pl.’s Opening Br. in Supp. of Pl.’s Mot. for Summ. J. at 18, D.I. 77.
55
Id.56
Id.57
Id.58
Harper v. State Farm Mut. Auto. Ins. Co., 2022 WL 17494200, at *3 (Del. Super. Dec. 8, 2022).
59
Rented, MERRIAM-WEBSTER.COM, https://www.merriam-webster.com/dictionary/rented (last
visited Apr. 16, 2024).
11
possessing the firearm.60 Noble Eagle generated a receipt for the transaction, listing
a charge of $15.00 for “range gun rental.”61 Noble Eagle also confirmed it made the
voluntary decision not to pursue Mr. Patel’s estate to recover the money owed for
the gun rental.62
The transaction between Mr. Patel and Noble Eagle involving the firearm
unquestionably fits into the definition of “rented out.” Once Mr. Patel incurred the
obligation to pay for possessing the firearm, a rental occurred. Noble Eagle’s choice
not to charge Mr. Patel’s estate does not transform the transaction into something
other than a rental. Finding otherwise would allow Noble Eagle to circumvent
Policy exclusions by choosing not to charge rent following any incident that may
otherwise trigger an exclusion. Accordingly, for the purposes of applying the Rental
Exclusion, the firearm in this case qualifies as “rented out.”
C. The Policy is ambiguous as to whether a firearm falls under
“Sporting Equipment”
The Court must next determine if the firearm rented out by Noble Eagle
unambiguously falls into the category of “sporting equipment” as outlined by the
Rental Exclusion. Noble Eagle admits their shooting range sometimes hosts
60
Tr. of Oral Arg. at 26, D.I. 84.
61
Def.’s Mem. in Supp. of Mot. for Summ. J. at 18, D.I. 76.
62
Id.; see also Tr. of Oral Arg. at 12, D.I. 84.
12
shooting sports, and concedes firearms can be “sporting equipment.”63 As the Policy
does not define “sporting equipment,” Noble Eagle asserts reasonable minds could
differ as to when a firearm qualifies as “sporting equipment.”64 Noble Eagle argues
firearms are not always “sporting equipment,” and that the distinction balances on
the firearm’s intended use at that particular time.65 Noble Eagle lists several other
uses for firearms at their shooting range, including training by law enforcement,
prospective buyers testing a gun, and gun safety training.66 It posits that, when
firearms are used in those contexts, firearms are not “sporting equipment.”67 As Mr.
Patel did not use the firearm to participate in sports shooting, Noble Eagle contends
the firearm he used cannot be considered “sporting equipment” under the Rental
Exclusion.68
MUSIC’s position centers on the fact that Noble Eagle only rents out “guns,
protective eyewear, and earplugs.”69 MUSIC argues that, if firearms are not
63
Tr. of Oral Arg. at 12, D.I. 84.
64
Id.65
Id.66
Id.67
Id.68
Id.69
Id. at 6.
13
categorized as “sporting equipment,” the Rental Exclusion becomes
“meaningless.”70 As firearms often function as equipment for shooting sports,
MUSIC maintains the Rental Exclusion clearly and unambiguously includes
firearms within its definition of “sporting equipment.”71
Neither side disputes that firearms can be used as sporting equipment.
Additionally, the parties do not dispute that Mr. Patel’s use of the firearm does not
qualify as a sport. The core question the Court must answer hinges on whether
firearms are always – definitionally – sporting equipment. Guided by Delaware
decisional law, the Rental Exclusion can only be enforced if the sole reasonable
interpretation of “sporting equipment” encompasses all firearms Noble Eagle rents
out, regardless of the purpose for which the customer rents the firearm.
Merriam-Webster defines a “firearm” as “a weapon from which a shot is
discharged by gunpowder, usually used of small arms.”72 The dictionary definitions
of “sporting” and “equipment,” cited by MUSIC, do not provide clarity, other than
to suggest that anything used in a sport can be sporting equipment depending on the
70
Id. at 9.
71
Id.
72
Firearm, MERRIAM-WEBSTER.COM, https://www.merriam-webster.com/dictionary/firearm (last
visited Apr. 16, 2024); see also Gun, MERRIAM-WEBSTER.COM, https://www.merriam-
webster.com/dictionary/gun (last visited Apr. 16, 2024) (“a piece of ordnance usually with high
muzzle velocity and comparatively flat trajectory; a portable firearm; a device that throws a
projectile”).
14
context.73 The parties do not dispute that firearms function as sporting equipment at
times. A definition, however, that allows for anything conceivably used in a sport
to be classified as “sporting equipment,” and thus excluded under the Rental
Exclusion, constitutes far too broad a definition.
Thus, this Court must determine if the only reasonable interpretation of
“sporting equipment” under the Policy always includes all firearms rented out by
Noble Eagle. One reasonable interpretation certainly includes all firearms as
“sporting equipment,” as presumably all firearms can be used in some type of target-
shooting sport. Another reasonable interpretation, however, would not apply to
firearms that are much less frequently used as equipment in sport shooting. The
Court cannot determine from the plain language of the policy where to draw the line
between firearms that can be sporting equipment, and firearms that are always
sporting equipment. MUSIC, as the insurer, stood as the party best positioned to
make that delineation when drafting the Policy. MUSIC’s failure to do so renders
the Rental Exclusion’s application to firearm rentals ambiguous.
The Court also finds ambiguity regarding what shooting activities should be
considered sports under the Policy. Aside from participating in a target shooting
73
See Sporting, MERRIAM-WEBSTER.COM, https://www.merriam-webster.com/dictionary/sporting
(last visited Apr. 16, 2024) (“of, relating to, used, or suitable for sport”); see also Equipment,
MERRIAM-WEBSTER.COM, https://www.merriam-webster.com/dictionary/equipment (last visited
Apr. 16, 2024) (“the set of articles or physical resources serving to equip a person or thing such as
the implements used in an operation or activity”).
15
competition, or practicing for one, there are myriad reasons a customer may wish to
rent time with a firearm on a shooting range. Practice for self-defense; acclimating
to a new firearm; testing out a firearm to purchase; law enforcement training; and
training as part of a firearm class are all possible reasons to rent a firearm. Those
reasons do not fit unambiguously into the definition of sports, and thus the
equipment used in those activities does not fit squarely into the definition of
“sporting equipment.”
As the Rental Exclusion contains ambiguity, it must be construed most
strongly against MUSIC. The Court cannot conclude all firearms are unequivocally
and definitionally “sporting equipment.” Nor can the Court conclude all activities
that occur at a shooting range are sports. MUSIC has not carried its burden to
demonstrate the Rental Exclusion bars coverage in this case.
The record reflects and supports that MUSIC was aware, at the time of
issuance of the Policy to Noble Eagle, that Noble Eagle constituted “a business that
rents firearms for the sport of target shooting.” Noble Eagle’s reasonable
expectation – as a shooting range that paid nearly $14,000 for a liability policy – was
to insure its establishment against liability involving firearms. MUSIC, as evidenced
by the Policy language, clearly attempted some definition of “sporting equipment,”
as it carved out explicitly golf and tennis equipment.
16
While the Court levies no allegation or accusation against MUSIC, this
litigation certainly highlights the benefit to MUSIC of ambiguity. Ambiguity
amounts to broader coverage denial. This Court cannot allow MUSIC to take that
position, particularly when Delaware law dictates construal against MUSIC for
precisely this reason.
VI. Conclusion
A gun or firearm is always a weapon; foundationally, elementally, hoc est
quod est (it is what it is). A gun or firearm can morph into sporting equipment, but
does not cease to exist as a weapon – and certainly does not constitute sport
equipment definitionally. Given that the Rental Exclusion failed to bar coverage
unambiguously, Noble Eagle is entitled to coverage, defense, and indemnity for the
incident involving Mr. Patel. Accordingly, Noble Eagle’s Motion for Summary
Judgment is GRANTED and MUSIC’s Motion for Summary Judgment is
DENIED.
IT IS SO ORDERED.
17