(Article from Insurance Law Alert, June 2017)
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Addressing a matter of first impression under West Virginia law, a federal district court ruled that an insurer had no duty to defend or indemnify claims alleging that a restaurant wrongfully refused service to a disabled individual because such conduct does not constitute a “wrongful eviction” under the policy. Grand China Buffet & Grill, Inc. v. State Auto Property & Casualty Co., 2017 WL 2129307 (May 16, 2017).
Scott Ullom sued Grand China Buffet for statutory and constitutional violations based on the restaurant’s refusal to allow Ullom and his service dog into the restaurant. The complaint sought damages for emotional distress, embarrassment and humiliation. Grand China Buffet thereafter sought a declaration that State Auto, its general liability insurer, was obligated to defend and indemnify the underlying claims. Finding no coverage under the policy, the court granted State Auto’s summary judgment motion.
The court ruled that Ullom’s claims do not allege “wrongful eviction” under the Personal and Advertising Liability section of the policy. Although “eviction” is not defined, the court concluded that it requires the underlying plaintiff to have a legal right to be on the premises from which he was evicted (such as a tenant). The court reasoned that language referring to “a room, dwelling or premises that a person occupies” indicates an intent to limit the scope of eviction to situations in which the plaintiff has a right of occupation. Because Ullom had no possessory interest in Grand China Buffet that gave him a right to occupy the restaurant, there is no coverage under the “wrongful eviction” provision. As the court noted, courts in other jurisdictions have issued mixed decisions in this context.
The court also concluded that the complaint does not allege bodily injury under the policy. Under West Virginia law, purely mental or emotional harm that lacks physical manifestation does not generally constitute bodily injury for coverage purposes when the definition of “bodily injury” is limited to “bodily injury, sickness, or disease.”