The opinion
IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
HARRISON DIVISION
NATIONWIDE MUTUAL FIRE
INSURANCE COMPANY PLAINTIFF
Vv. CASE NO. 3:18-CV-3101
RICK LEMPP; MICHAELINE LEMPP;
GATORSONHOLIDAY, LLC; and
MASON MICHAELIS DEFENDANTS
OPINION AND ORDER
Now pending before the Court are a Motion for Summary Judgment (Doc. 30) and
Brief in Support (Doc. 31) filed by Plaintiff Nationwide Mutual Fire Insurance Company
(“Nationwide”). The case is a declaratory judgment action in which Nationwide contends
that it owed no duty to defend or indemnify its insureds, Defendants Rick and Michaeline
Lempp, or the Lempps’ rental property manager, separate Defendant Gatorsonholiday,
LLC (“Gators”), in connection with an underlying lawsuit proceeding in the Circuit Court of
Carroll County, Arkansas, filed by separate Defendant Mason Michaelis. The Lempps
owned a townhome on Holiday Island, Arkansas, which they rented to Michaelis and his
family to use for a family vacation in the summer of 2015. During the rental period,
Michaelis allegedly fell through some rotted boards on a deck outside the home and
sustained injuries. On July 25, 2018, he sued the Lempps, Gators, and others in state
court for negligence. See Doc. 1-1 (Carroll County complaint). In response, the Lempps
and Gators demanded that Nationwide mount a defense to the state court action on their
behalf and fully indemnify them pursuant to a tenant policy of insurance that the Lempps
had purchased from Nationwide on August 27, 2014 (Doc. 1-2). Nationwide filed its
declaratory judgment action in this Court on September 28, 2018, asserting that the policy
at issue excludes coverage for all Defendants.
On June 11, 2019, Nationwide filed its motion for summary judgment, arguing that
the tenant policy contained a Business Pursuits Exclusion that precluded coverage for
injuries arising out of the business or rental use of the property. In addition, because the
property at issue was not the actual residence of the Lempps, but instead was merely
being used as a rental property, it did not qualify as an “insured location” within the
meaning of the policy. Nationwide alternatively maintains that the Biological Deterioration
or Damage Exclusion precluded coverage for any injury arising out of such deterioration,
including “damage or decomposition, breakdown, and/or decay of man-made . . . material
due to the presence of... wet or dry rot and any byproducts or these organisms, however
produced.” (Doc. 1-2 at 30).’. Finally, it is Nationwide’s position that the Contractual
Liability Exclusion precluded any coverage for Gators arising out of any oral or written
contract Gators might have had with the Lempps.
On July 2, 2019, the Lempps filed a joint response to the motion for summary
judgment, stating that they “do not contest the motion and concede that Nationwide is
entitled to the declaratory relief sought.” (Doc. 35 at 1). Separate Defendants Gators and
Michaelis never responded to the motion.
“(T]he plain language of Rule 56(c) mandates the entry of summary judgment, after
adequate time for discovery and upon motion, against a party who fails to make a showing
sufficient to establish the existence of an element essential to that party's case, and on
1 The state court complaint asserts that Michaelis sustained injuries due to “deck boards”
that were “rotten and unsafe.” (Doc. 1-1 at 4).
which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986). Subpart (a) to Rule 56 provides that summary judgment should be
granted “if the movant shows that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law.” In considering a motion for
summary judgment, the Court must review the facts in the light most favorable to the
opposing party and give that party the benefit of any inferences that logically can be drawn
from those facts. Canada v. Union Elec. Co., 135 F.3d 1211, 1212-13 (8th Cir. 1998).
_ However, if a party fails to respond to a motion for summary judgment, the reviewing court
is still obligated to address the merits of the motion and may not rule automatically in the
movant’s favor. Soliman v. Johanns, 412 F.3d 920, 922 (8th Cir. 2005), cert. denied, 549
U.S. 865 (2006); United States v. One Parcel of Real Prop., 27 F.3d 327, 329 n. 1 (8th
Cir. 1994); Canada, 135 F.3d at 1213 (‘When a motion would be dispositive of the merits
of the cause if granted, courts should normally not treat a failure to respond to the motion
as conclusive.”).
Having reviewed Nationwide’s motion, brief, and the underlying insurance policy,
the Court finds that summary judgment is appropriate in this case. The Lempps, who are
the policyholders here, concede that Nationwide is entitled to a declaratory judgment. In
addition, the Court makes a finding that the various policy exclusions cited to by
Nationwide in its brief preclude coverage for the Lempps, Gators, and Michaelis under the
policy.
IT IS THEREFORE ORDERED that Plaintiff Nationwide Mutual Fire Insurance
Company's Motion for Summary Judgment (Doc. 30) is GRANTED, and the Court
DECLARES that Nationwide owes no coverage or defense obligations to any of the
Defendants named herein in connection with Carroll County Circuit Court case number
08 WCV-18-73, styled Mason Michaelis v. Wedgewood Place Townhouse Association,
Inc., et al. A separate judgment will enter accordingly, and this case is CLOSED.
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IT IS SO ORDERED on this_[5 ~ day of July, 2019
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PIMOTHY L. BROOKS
UNITED-STATES DISTRICT JUDGE