Thursday, April 27, 2017

Torts -- Negligence -- Automobile accident -- Sovereign immunity -- Indian tribes -- An indemnification provision cannot, as a matter of law, extend sovereign immunity to individual employees who would otherwise not fall under its protective cloak


26 Fla. L. Weekly Fed. S549aTop of Form

Torts -- Negligence -- Automobile accident -- Sovereign immunity -- Indian tribes -- In an ordinary negligence action brought against a tribal employee in his individual capacity, the employee, not the tribe, is the real party in interest and the tribe's sovereign immunity is not implicated -- That an employee was acting within scope of his employment at time the tort was committed is not, on its own, sufficient to bar a suit against that employee on basis of tribal sovereign immunity -- An indemnification provision cannot, as a matter of law, extend sovereign immunity to individual employees who would otherwise not fall under its protective cloak

BRIAN LEWIS, et al., Petitioners v. WILLIAM CLARKE. U.S. Supreme Court. Case No. 15-1500. Argued January 9, 2017 -- Decided April 25, 2017. On Writ of Certiorari to the Supreme Court of Connecticut.

Syllabus 

Petitioners Brian and Michelle Lewis were driving on a Connecticut interstate when they were struck from behind by a vehicle driven by respondent William Clarke, a Mohegan Tribal Gaming Authority employee, who was transporting Mohegan Sun Casino patrons. The Lewises sued Clarke in his individual capacity in state court. Clarke moved to dismiss for lack of subject-matter jurisdiction, arguing that because he was an employee of the Gaming Authority -- an arm of the Mohegan Tribe entitled to sovereign immunity -- and was acting within the scope of his employment at the time of the accident, he was similarly entitled to sovereign immunity against suit. He also argued, in the alternative, that he should prevail because the Gaming Authority was bound by tribal law to indemnify him. The trial court denied Clarke's motion, but the Supreme Court of Connecticut reversed, holding that tribal sovereign immunity barred the suit because Clarke was acting within the scope of his employment when the accident occurred. It did not consider whether Clarke should be entitled to sovereign immunity based on the indemnification statute.

Held:

1. In a suit brought against a tribal employee in his individual capacity, the employee, not the tribe, is the real party in interest and the tribe's sovereign immunity is not implicated. Pp. 5-8.

(a) In the context of lawsuits against state and federal employees or entities, courts look to whether the sovereign is the real party in interest to determine whether sovereign immunity bars the suit, see Hafer v. Melo, 502 U.S. 21, 25. A defendant in an official-capacity action -- where the relief sought is only nominally against the official and in fact is against the official's office and thus the sovereign itself -- may assert sovereign immunity. Kentucky v. Graham, 473 U.S. 159, 167. But an officer in an individual-capacity action -- which seeks “to impose individual liability upon a government officer for actions taken under color of state law,” Hafer, 502 U.S., at 25 -- may be able to assert personal immunity defenses but not sovereign immunity, id., at 30-31. The Court does not reach Clarke's argument that he is entitled to the personal immunity defense of official immunity, which Clarke raised for the first time on appeal. Pp. 5-7.

(b) Applying these general rules in the context of tribal sovereign immunity, it is apparent that they foreclose Clarke's sovereign immunity defense. This action arises from a tort committed by Clarke on a Connecticut interstate and is simply a suit against Clarke to recover for his personal actions. Clarke, not the Gaming Authority, is the real party in interest. The State Supreme Court extended sovereign immunity for tribal employees beyond what common-law sovereign immunity principles would recognize for either state or federal employees. Pp. 7-8.

2. An indemnification provision cannot, as a matter of law, extend sovereign immunity to individual employees who would otherwise not fall under its protective cloak. Pp. 8-12.

(a) This conclusion follows naturally from the principles discussed above and previously applied to the different question whether a state instrumentality may invoke the State's immunity from suit even when the Federal Government has agreed to indemnify that instrumentality against adverse judgments, Regents of Univ. of Cal. v. Doe, 519 U.S. 425. There, this Court held that the indemnification provision did not divest the state instrumentality of Eleventh Amendment immunity, and its analysis turned on where the potential legal liability lay, not from whence the money to pay the damages award ultimately came. Here, the Connecticut courts exercise no jurisdiction over the Tribe or Gaming Authority, and their judgments will not bind the Tribe or its instrumentalities in any way. Moreover, indemnification is not a certainty, because Clarke will not be indemnified should the Gaming Authority determine that he engaged in “wanton, reckless, or malicious” activity. Mohegan Tribe Code §4-52. Pp. 8-10.

(b) Courts have extended sovereign immunity to private healthcare insurance companies under certain circumstances, but those cases rest on the proposition that the fiscal intermediaries are essentially state instrumentalities, and Clarke offers no persuasive reason to depart from precedent and treat a lawsuit against an individual employee as one against a state instrumentality. Similarly, this Court has never held that a civil rights suit under 42 U.S.C. §1983 against a state officer in his individual capacity implicates the Eleventh Amendment and a State's sovereign immunity from suit. Finally, this Court's conclusion that indemnification provisions do not alter the real-party-in-interest analysis for sovereign immunity purposes is consistent with the practice that applies in the contexts of diversity of citizenship and joinder. Pp. 10-12.

320 Conn.706, 135 A. 3d 677, reversed and remanded.

SOTOMAYOR, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, BREYER, ALITO, and KAGAN, JJ., joined. THOMAS, J., and GINSBURG, J., filed opinions concurring in the judgment. GORSUCH, J., took no part in the consideration or decision of the case.

__________________

JUSTICE SOTOMAYOR delivered the opinion of the Court.

Indian tribes are generally entitled to immunity from suit. This Court has considered the scope of that immunity in a number of circumstances. This case presents an ordinary negligence action brought against a tribal employee in state court under state law. We granted certiorari to resolve whether an Indian tribe's sovereign immunity bars individual-capacity damages actions against tribal employees for torts committed within the scope of their employment and for which the employees are indemnified by the tribe.

We hold that, in a suit brought against a tribal employee in his individual capacity, the employee, not the tribe, is the real party in interest and the tribe's sovereign immunity is not implicated. That an employee was acting within the scope of his employment at the time the tort was committed is not, on its own, sufficient to bar a suit against that employee on the basis of tribal sovereign immunity. We hold further that an indemnification provision does not extend a tribe's sovereign immunity where it otherwise would not reach. Accordingly, we reverse and remand.

I

A

The Mohegan Tribe of Indians of Connecticut traces its lineage back centuries. Originally part of the Lenni Lenape, the Tribe formed the independent Mohegan Tribe under the leadership of Sachem Uncas in the early 1600's. M. Fawcett, The Lasting of the Mohegans 7, 11-13 (1995). In 1994, in accordance with the petition procedures established by the Bureau of Indian Affairs, the Tribe attained federal recognition.1 See 59 Fed. Reg. 12140 (1994); Mohegan Const., Preamble and Art. II.

As one means of maintaining its economic self-sufficiency, the Tribe entered into a Gaming Compact with the State of Connecticut pursuant to the Indian Gaming Regulatory Act, 102 Stat. 2467, 25 U.S.C. §2701 et seq. The compact authorizes the Tribe to conduct gaming on its land, subject to certain conditions including establishment of the Gaming Disputes Court. See 59 Fed. Reg. 65130 (approving the Tribal-State Compact Between the Mohegan Indian Tribe and the State of Connecticut (May 17, 1994)); Mohegan Const., Art. XIII, §2; Mohegan Tribe Code 3-248(a) (Supp. 2016). The Mohegan Tribal Gaming Authority, an arm of the Tribe, exercises the powers of the Mohegan Tribe over tribal gaming activities. Mohegan Const., Art. XIII, §1; Mohegan Tribe Code §2-21.

Of particular relevance here, Mohegan law sets out sovereign immunity and indemnification policies applicable to disputes arising from gaming activities. The Gaming Authority has waived its sovereign immunity and consented to be sued in the Mohegan Gaming Disputes Court. Mohegan Const., Art. XIII, §1; Mohegan Tribe Code §3-250(b). Neither the Tribe nor the Gaming Authority has consented to suit for claims arising under Connecticut state law. See Mohegan Const., Art. IX, §2(t); Mohegan Tribe Code §3-250(g); see also Blatchford v. Native Village of Noatak, 501 U.S. 775, 782 (1991) (observing that Indian tribes have not surrendered their immunity against suits by States). Further, Mohegan Tribe Code §4-52 provides that the Gaming Authority “shall save harmless and indemnify its Officer or Employee from financial loss and expense arising out of any claim, demand, or suit by reason of his or her alleged negligence . . . if the Officer or Employee is found to have been acting in the discharge of his or her duties or within the scope of his or her employment.” The Gaming Authority does not indemnify employees who engage in “wanton, reckless or malicious” activity. Mohegan Tribe Code §4-52.

B

Petitioners Brian and Michelle Lewis were driving down Interstate 95 in Norwalk, Connecticut, when a limousine driven by respondent William Clarke hit their vehicle from behind. Clarke, a Gaming Authority employee, was transporting patrons of the Mohegan Sun Casino to their homes. For purposes of this appeal, it is undisputed that Clarke caused the accident.

The Lewises filed suit against Clarke in his individual capacity in Connecticut state court, and Clarke moved to dismiss for lack of subject-matter jurisdiction on the basis of tribal sovereign immunity. See 2014 WL 5354956, *2 (Super. Ct. Conn., Sept. 10, 2014) (Cole-Chu, J.). Clarke argued that because the Gaming Authority, an arm of the Tribe, was entitled to sovereign immunity, he, an employee of the Gaming Authority acting within the scope of his employment at the time of the accident, was similarly entitled to sovereign immunity against suit. According to Clarke, denying the motion would abrogate the Tribe's sovereign immunity.

The trial court denied Clarke's motion to dismiss. Id., at *8. The court agreed with the Lewises that the sovereign immunity analysis should focus on the remedy sought in their complaint. To that end, the court identified Clarke, not the Gaming Authority or the Tribe, as the real party in interest because the damages remedy sought was solely against Clarke and would in no way affect the Tribe's ability to govern itself independently. The court therefore concluded that tribal sovereign immunity was not implicated. Id., at *2-*8. It also rejected Clarke's alternative argument that because the Gaming Authority was obligated to indemnify him pursuant to Mohegan Tribe Code §4-52 and would end up paying the damages, he should prevail under the remedy analysis. Id., at *7. The trial court reasoned that a “voluntary undertaking cannot be used to extend sovereign immunity where it did not otherwise exist.” Ibid.

The Supreme Court of Connecticut reversed, holding that tribal sovereign immunity did bar the suit. 320 Conn. 706, 135 A. 3d 677 (2016). The court agreed with Clarke that “because he was acting within the scope of his employment for the Mohegan Tribal Gaming Authority and the Mohegan Tribal Gaming Authority is an arm of the Mohegan Tribe, tribal sovereign immunity bars the plaintiffs' claims against him.” Id., at 709, 135 A. 3d, at 680. Of particular significance to the court was ensuring that “plaintiffs cannot circumvent tribal immunity by merely naming the defendant, an employee of the tribe, when the complaint concerns actions taken within the scope of his duties and the complaint does not allege, nor have the plaintiffs offered any other evidence, that he acted outside the scope of his authority.” Id., at 720, 135 A. 3d, at 685. To do otherwise, the court reasoned, would “ ‘eviscerate' ” the protections of tribal immunity. Id., at 717, 135 A. 3d, at 684 (alterations and internal quotation marks omitted). Because the court determined that Clarke was entitled to sovereign immunity on the sole basis that he was acting within the scope of his employment when the accident occurred, id., at 720, 135 A. 3d, at 685-686, it did not consider whether Clarke should be entitled to sovereign immunity on the basis of the indemnification statute.

We granted certiorari to consider whether tribal sovereign immunity bars the Lewises' suit against Clarke, 579 U.S. ___ (2016), and we now reverse the judgment of the Supreme Court of Connecticut.

II

Two issues require our resolution: (1) whether the sovereign immunity of an Indian tribe bars individual-capacity damages against tribal employees for torts committed within the scope of their employment; and (2) what role, if any, a tribe's decision to indemnify its employees plays in this analysis. We decide this case under the framework of our precedents regarding tribal immunity.

A

Our cases establish that, in the context of lawsuits against state and federal employees or entities, courts should look to whether the sovereign is the real party in interest to determine whether sovereign immunity bars the suit. See Hafer v. Melo, 502 U.S. 21, 25 (1991). In making this assessment, courts may not simply rely on the characterization of the parties in the complaint, but rather must determine in the first instance whether the remedy sought is truly against the sovereign. See, e.g., Ex parte New York, 256 U.S. 490, 500-502 (1921). If, for example, an action is in essence against a State even if the State is not a named party, then the State is the real party in interest and is entitled to invoke the Eleventh Amendment's protection. For this reason, an arm or instrumentality of the State generally enjoys the same immunity as the sovereign itself. E.g., Regents of Univ. of Cal. v. Doe, 519 U.S. 425, 429-430 (1997). Similarly, lawsuits brought against employees in their official capacity “represent only another way of pleading an action against an entity of which an officer is an agent,” and they may also be barred by sovereign immunity. Kentucky v. Graham, 473 U.S. 159, 165-166 (1985) (internal quotation marks omitted).

The distinction between individual- and official-capacity suits is paramount here. In an official-capacity claim, the relief sought is only nominally against the official and in fact is against the official's office and thus the sovereign itself. Will v. Michigan Dept. of State Police, 491 U.S. 58, 71 (1989); Dugan v. Rank, 372 U.S. 609, 611, 620-622 (1963). This is why, when officials sued in their official capacities leave office, their successors automatically assume their role in the litigation. Hafer, 502 U.S., at 25. The real party in interest is the government entity, not the named official. See Edelman v. Jordan, 415 U.S. 651, 663-665 (1974). “Personal-capacity suits, on the other hand, seek to impose individual liability upon a government officer for actions taken under color of state law.” Hafer, 502 U.S., at 25 (emphasis added); see also id., at 27-31 (discharged employees entitled to bring personal damages action against state auditor general); cf. Bivens v. Six Unknown Fed. Narcotics Agents, 403 U.S. 388 (1971). “[O]fficers sued in their personal capacity come to court as individuals,” Hafer, 502 U.S., at 27, and the real party in interest is the individual, not the sovereign.

The identity of the real party in interest dictates what immunities may be available. Defendants in an official-capacity action may assert sovereign immunity. Graham, 473 U.S., at 167. An officer in an individual-capacity action, on the other hand, may be able to assert personal immunity defenses, such as, for example, absolute prosecutorial immunity in certain circumstances. Van de Kamp v. Goldstein, 555 U.S. 335, 342-344 (2009) [21 Fla. L. Weekly Fed. S612a]. But sovereign immunity “does not erect a barrier against suits to impose individual and personal liability.” Hafer, 502 U.S., at 30-31 (internal quotation marks omitted); see Alden v. Maine, 527 U.S. 706, 757 (1996).

B

There is no reason to depart from these general rules in the context of tribal sovereign immunity. It is apparent that these general principles foreclose Clarke's sovereign immunity defense in this case. This is a negligence action arising from a tort committed by Clarke on an interstate highway within the State of Connecticut. The suit is brought against a tribal employee operating a vehicle within the scope of his employment but on state lands, and the judgment will not operate against the Tribe. This is not a suit against Clarke in his official capacity. It is simply a suit against Clarke to recover for his personal actions, which “will not require action by the sovereign or disturb the sovereign's property.” Larson v. Domestic and Foreign Commerce Corp., 337 U.S. 682, 687 (1949). We are cognizant of the Supreme Court of Connecticut's concern that plaintiffs not circumvent tribal sovereign immunity. But here, that immunity is simply not in play. Clarke, not the Gaming Authority, is the real party in interest.

In ruling that Clarke was immune from this suit solely because he was acting within the scope of his employment, the court extended sovereign immunity for tribal employees beyond what common-law sovereign immunity principles would recognize for either state or federal employees. See, e.g., Graham, 473 U.S., at 167-168. The protection offered by tribal sovereign immunity here is no broader than the protection offered by state or federal sovereign immunity.

Accordingly, under established sovereign immunity principles, the Gaming Authority's immunity does not, in these circumstances, bar suit against Clarke.2

III

The conclusion above notwithstanding, Clarke argues that the Gaming Authority is the real party in interest here because it is required by Mohegan Tribe Code §4-52 to indemnify Clarke for any adverse judgment.3

A

We have never before had occasion to decide whether an indemnification clause is sufficient to extend a sovereign immunity defense to a suit against an employee in his individual capacity. We hold that an indemnification provision cannot, as a matter of law, extend sovereign immunity to individual employees who would otherwise not fall under its protective cloak.

Our holding follows naturally from the principles discussed above. Indeed, we have applied these same principles to a different question before -- whether a state instrumentality may invoke the State's immunity from suit even when the Federal Government has agreed to indemnify that instrumentality against adverse judgments. In Regents of Univ. of Cal., an individual brought suit against the University of California, a public university of the State of California, for breach of contract related to his employment at a laboratory operated by the university pursuant to a contract with the Federal Government. We held that the indemnification provision did not divest the state instrumentality of Eleventh Amendment immunity. 519 U.S., at 426. Our analysis turned on where the potential legal liability lay, not from whence the money to pay the damages award ultimately came. Because the lawsuit bound the university, we held, the Eleventh Amendment applied to the litigation even though the damages award would ultimately be paid by the federal Department of Energy. Id., at 429-431. Our reasoning remains the same. The critical inquiry is who may be legally bound by the court's adverse judgment, not who will ultimately pick up the tab.4

Here, the Connecticut courts exercise no jurisdiction over the Tribe or the Gaming Authority, and their judgments will not bind the Tribe or its instrumentalities in any way. The Tribe's indemnification provision does not somehow convert the suit against Clarke into a suit against the sovereign; when Clarke is sued in his individual capacity, he is held responsible only for his individual wrongdoing. Moreover, indemnification is not a certainty here. Clarke will not be indemnified by the Gaming Authority should it determine that he engaged in “wanton, reckless, or malicious” activity. Mohegan Tribe Code §4-52. That determination is not necessary to the disposition of the Lewises' suit against Clarke in the Connecticut state courts, which is a separate legal matter.

B

Clarke notes that courts have extended sovereign immunity to private healthcare insurance companies under certain circumstances. See, e.g., Pani v. Empire Blue Cross Blue Shield, 152 F. 3d 67, 71-72 (CA2 1998); Pine View Gardens, Inc. v. Mutual of Omaha Ins. Co., 485 F. 2d 1073, 1074-1075 (CADC 1973); Brief for Respondent 19, n. 4. But, these cases rest on the proposition that the fiscal intermediaries are essentially state instrumentalities, as the governing regulations make clear. See 42 CFR §421.5(b) (2016) (providing that the Medicare Administrator “is the real party of interest in any litigation involving the administration of the program”). It is well established in our precedent that a suit against an arm or instrumentality of the State is treated as one against the State itself. See Regents of Univ. of Cal., 519 U.S., at 429. We have not before treated a lawsuit against an individual employee as one against a state instrumentality, and Clarke offers no persuasive reason to do so now.

Nor have we ever held that a civil rights suit under 42 U.S.C. §1983 against a state officer in his individual capacity implicates the Eleventh Amendment and a State's sovereign immunity from suit.5 Federal appellate courts that have considered the indemnity question have rejected the argument that an indemnity statute brings the Eleventh Amendment into play in §1983 actions. See, e.g., Stoner v. Wisconsin Dept. of Agriculture, Trade and Consumer Protection, 50 F. 3d 481, 482-483 (CA7 1995); Blalock v. Schwinden, 862 F. 2d 1352, 1354 (CA9 1988); Duckworth v. Franzen, 780 F. 2d 645, 650 (CA7 1985). These cases rely on the concern that originally drove the adoption of the Eleventh Amendment -- the protection of the States against involuntary liability. See Hess v. Port Authority Trans-Hudson Corporation, 513 U.S. 30, 39, 48 (1994). But States institute indemnification policies voluntarily. And so, indemnification provisions do not implicate one of the underlying rationales for state sovereign immunity -- a government's ability to make its own decisions about “the allocation of scarce resources.” Alden, 527 U.S., at 751.

Finally, our conclusion that indemnification provisions do not alter the real-party-in-interest analysis for purposes of sovereign immunity is consistent with the practice that applies in the contexts of diversity of citizenship and joinder. In assessing diversity jurisdiction, courts look to the real parties to the controversy. Navarro Savings Assn. v. Lee, 446 U.S. 458, 460 (1980). Applying this principle, courts below have agreed that the fact that a third party indemnifies one of the named parties to the case does not, as a general rule, influence the diversity analysis. See, e.g., Corfield v. Dallas Glen Hills LP, 355 F. 3d 853, 865 (CA5 2003); E. R. Squibb & Sons, Inc. v. Accident & Cas. Ins. Co., 160 F. 3d 925, 936-937 (CA2 1998). They have similarly held that a party does not become a required party for joinder purposes under Federal Rule of Civil Procedure 19 simply by virtue of indemnifying one of the named parties. See, e.g., Gardiner v. Virgin Islands Water & Power Auth., 145 F. 3d 635, 641 (CA3 1998); Rochester Methodist Hospital v. Travelers Ins. Co., 728 F. 2d 1006, 1016-1017 (CA8 1984).

In sum, although tribal sovereign immunity is implicated when the suit is brought against individual officers in their official capacities, it is simply not present when the claim is made against those employees in their individual capacities. An indemnification statute such as the one at issue here does not alter the analysis. Clarke may not avail himself of a sovereign immunity defense.

IV

The judgment of the Supreme Court of Connecticut is reversed, and the case is remanded for further proceedings not inconsistent with this opinion.

It is so ordered.

JUSTICE GORSUCH took no part in the consideration or decision of this case.

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1There are currently 567 federally recognized Indian and Alaska Native entities. 81 Fed. Reg. 26826-26832 (2016); see also Native Hawaiian Law: A Treatise 303-324 (M. MacKenzie ed. 2015) (discussing the existing relationships between the U.S. Government and federally recognized tribes and other indigenous groups in the United States); F. Cohen, Handbook of Federal Indian Law §§1.01-1.07 (2012 and Supp. 2015); V. Deloria & R. DeMallie, Documents of American Indian Diplomacy: Treaties, Agreements, and Conventions, 1775-1979 (1999).

2There are, of course, personal immunity defenses distinct from sovereign immunity. E.g., Harlow v. Fitzgerald, 457 U.S. 800, 811-815 (1982). Clarke argues for the first time before this Court that one particular form of personal immunity is available to him here -- official immunity. See Westfall v. Erwin, 484 U.S. 292, 295-297 (1988). That defense is not properly before us now, however, given that Clarke's motion to dismiss was based solely on tribal sovereign immunity. See Travelers Casualty & Surety Co. of America v. Pacific Gas & Elec. Co., 549 U.S. 443, 455 (2007) [20 Fla. L. Weekly Fed. S109a].

3As noted above, the Supreme Court of Connecticut did not reach whether Clarke should be entitled to sovereign immunity on the basis of the indemnification statute. We nevertheless consider the issue fairly included within the question presented, as it is a purely legal question that is an integral part of Clarke's sovereign immunity argument and that was both raised to and passed on by the trial court. See Mitchell v. Forsyth, 472 U.S. 511, 530 (1985) (“[T]he purely legal question on which [petitioner's] claim of immunity turns is appropriate for our immediate resolution notwithstanding that it was not addressed by the Court of Appeals” (internal quotation marks omitted)).

4Our holding in Hess v. Port Authority Trans-Hudson Corporation, 513 U.S. 30 (1994), is not to the contrary. There the immunity question turned on whether the Port Authority Trans-Hudson Corporation was a state agency cloaked with Eleventh Amendment immunity such that any judgment “must be paid out of a State's treasury.” Id., at 48, 51-52 (emphasis added). Here, unlike in Hess, the damages judgment would not come from the sovereign.

5A suit against a state officer in his official, rather than individual, capacity might implicate the Eleventh Amendment. See Kentucky v. Graham, 473 U.S. 159, 165-166 (1985).

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JUSTICE THOMAS, concurring in the judgment.

I remain of the view that tribal immunity does not extend “to suits arising out of a tribe's commercial activities conducted beyond its territory.” Michigan v. Bay Mills Indian Community, 572 U.S. ___ (2014) [24 Fla. L. Weekly Fed. S765a] (dissenting opinion) (slip op., at 2); see also Kiowa Tribe of Okla. v. Manufacturing Technologies, Inc., 523 U.S. 751, 764 (1998) (Stevens, J., dissenting). This suit arose from an off-reservation commercial act. Ante, at 3. Accordingly, I would hold that respondent cannot assert the Tribe's immunity, regardless of the capacity in which he was sued. Because the Court reaches the same result for different reasons, I concur in its judgment.

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JUSTICE GINSBURG, concurring in the judgment.

On the scope of tribal immunity from suit, I adhere to the dissenting views expressed in Kiowa Tribe of Okla. v. Manufacturing Technologies, Inc., 523 U.S. 751, 760 (1998) (Stevens, J., dissenting), and Michigan v. Bay Mills Indian Community, 572 U.S. ___, ___ (2014) [24 Fla. L. Weekly Fed. S765a] (THOMAS, J., dissenting) (slip op., at 1). See also id., at ___ (GINSBURG, J., dissenting) (slip op., at 1). These dissenting opinions explain why tribes, interacting with nontribal members outside reservation boundaries, should be subject to non-discriminatory state laws of general application. I agree with the Court, however, that a voluntary indemnity undertaking does not convert a suit against a tribal employee, in the employee's individual capacity, into a suit against the tribe. I therefore concur in the Court's judgment.

* * *

Civil procedure -- Summary judgment -- In absence of transcript, appellate court cannot review whether trial court abused discretion in denying request to consider untimely affidavit in opposition to motion for summary judgment


42 Fla. L. Weekly D944aTop of Form

Civil procedure -- Summary judgment -- In absence of transcript, appellate court cannot review whether trial court abused discretion in denying request to consider untimely affidavit in opposition to motion for summary judgment

LES CHATEAUX AT INTERNATIONAL GARDENS CONDOMINIUM ASSOCIATION, INC., Appellant, vs. CUEVAS & ASSOCIATES, P.A., Appellee. 3rd District. Case No. 3D15-2935. L.T. Case No. 14-3132. Opinion filed April 26, 2017. An Appeal from the Circuit Court for Miami-Dade County, Rosa I. Rodriguez, Judge. Counsel: Alba Varela, for appellant. Cuevas & Garcia, Jose H. Garcia, Danial R. Moghani and Andrew Cuevas, for appellee.

(Before SUAREZ, C.J., and ROTHENBERG and EMAS, JJ.)

(PER CURIAM.) Upon our de novo review, we affirm the trial court's entry of final summary judgment. As to the sub-claim that the trial court erred in denying appellant's request to consider its untimely affidavit in opposition to the motion for summary judgment, see Florida Rule of Civil Procedure 1.510(c) (providing that evidence in opposition to summary judgment must be served at least five days prior to the day of the hearing or delivered no later than 5:00 p.m. two business days prior to the day of the hearing), we affirm and note that, in the absence of a transcript of the proceeding at which this request was made and denied, we cannot review whether the trial court abused its discretion in this regard. See Applegate v. Barnett Bank of Tallahassee, 377 So. 2d 1150 (Fla. 1979). Finally, appellant's motion for rehearing, which was accompanied by a new affidavit, was denied by the trial court, and we find no abuse of discretion in that ruling. See Lufthansa German Airlines Corp. v. Mellon, 444 So. 2d 1066 (Fla. 3d DCA 1984); Coffman Realty, Inc. v. Tosohatchee Game Preserve, Inc., 413 So. 2d 1 (Fla. 1982) (adopting Coffman Realty, Inc. v. Tosohatchee Game Preserve, Inc., 391 So. 2d 1164 (Fla. 5th DCA 1980)).

Affirmed.

* * *

Torts -- Premises liability -- Uninvited licensee -- No error in entering judgment in favor of commercial property owner where undisputed facts showed that plaintiff entered property, including area of city's utility easement in which accident occurred, without any express or reasonably implied invitation and where record established, without genuine issue of material fact, that owner did not breach any duty it owed to plaintiff as an uninvited licensee or trespasser


42 Fla. L. Weekly D938aTop of Form

Torts -- Premises liability -- Uninvited licensee -- No error in entering judgment in favor of commercial property owner where undisputed facts showed that plaintiff entered property, including area of city's utility easement in which accident occurred, without any express or reasonably implied invitation and where record established, without genuine issue of material fact, that owner did not breach any duty it owed to plaintiff as an uninvited licensee or trespasser

DELORES ARP, Appellant, v. WATERWAY EAST ASSOCIATION, INC., a Florida non-profit corporation, W.E. ASSOCIATION, INC., a Florida non-profit corporation, WATERWAY CONDOMINIUM ASSOCIATION, INC., a Florida non-profit corporation, and CITY OF DELRAY BEACH, Appellees. 4th District. Case No. 4D16-114. April 26, 2017. Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm Beach County; Cheryl A. Caracuzzo, Judge; L.T. Case No. 502013CA015566XXXXMBAN. Counsel: Chad E. Brocato, Sr. of Murphy & Brocato, Coconut Creek, for appellant. Thomas A. Valdez and Karen M. Shimonsky of Quintairos, Prieto, Wood & Boyer, P.A., Tampa, for Appellees Waterway East Association, Inc., W.E. Association, Inc. and Waterway Condominium Association, Inc.

(TAYLOR, J.) In this premises liability action, the plaintiff, Delores Arp, appeals a final judgment entered in favor of one of the defendants, W.E. Association, Inc., following the trial court's order granting W.E. Association's motion for summary judgment. Because the plaintiff was an uninvited licensee at best, and because W.E. Association did not breach any duty it owed to her in her capacity as an uninvited licensee, we affirm.

At around 11:00 p.m. one evening, the plaintiff was injured while walking over a pathway of “paver stones” located in the area of a utility easement on property owned by W.E. Association and operated as a shopping center. The plaintiff stepped on a cracked paver stone that was “a little loose,” causing her to roll her ankle and fall. The accident occurred as the plaintiff and a companion were walking back to the plaintiff's home after taking a dinner cruise in Delray Beach.

Although the plaintiff and her companion had walked along public roads on the way to the dinner cruise, they decided to take a shortcut on the way home. To access the plaintiff's street via this “cut through,” one has to go through the shopping center's parking lot, step over a raised curb at the end of the parking lot, and then walk through a grassy area, over a short path of paver stones located next to a storm pump station, through more grass, and around a guardrail.

The “cut through” area of the property is subject to a perpetual easement in favor of the City of Delray Beach for the purpose of the installation and maintenance of public utilities. The easement contains multiple storm pumps, which are maintained by the City.

The “cut through” did not have a “No Trespassing” sign at the time of the incident. The plaintiff testified that she regularly saw other people using the “cut through.”

On the evening of the accident, the plaintiff did not visit any of the businesses in the shopping center. The reason she took the shortcut on W.E. Association's property was because she “[j]ust wanted to get home.”

The plaintiff filed a negligence action against W.E. Association and other defendants, alleging that she was an implied invitee on the property by virtue of the creation of the pathway and that she was injured as a result of the defendants' negligent maintenance of the pathway. The plaintiff later filed an amended complaint, adding the City as a defendant.

W.E. Association ultimately moved for summary judgment, arguing in relevant part that: (1) it did not breach any duty to the plaintiff, who was either a trespasser or an uninvited licensee, and (2) it had no duty to maintain an area covered by an exclusive utility easement granted to the City.

The trial court granted the motion for summary judgment, finding that there were no genuine issues of material fact. The trial court reasoned that the plaintiff “was at best a licensee” and that W.E. Association's “only duty was not to harm her willfully or wantonly.”1 The trial court later entered a final judgment in favor of W.E. Association.

On appeal, the plaintiff argues that summary judgment was improper because she was an implied invitee on the property. She claims that the paver stones were open to the public and were utilized by the public as a convenient pathway between the shopping center and the nearby residences. Alternatively, she argues that factual issues regarding her status on the property created a question for the jury. For the reasons that follow, we find the plaintiff's arguments unpersuasive.

An order granting summary judgment is reviewed de novo. Fla. Atl. Univ. Bd. of Trs. v. Lindsey, 50 So. 3d 1205, 1206 (Fla. 4th DCA 2010).

“Summary judgment is appropriate only where there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law.” Cohen v. Arvin, 878 So. 2d 403, 405 (Fla. 4th DCA 2004). “[T]he burden is upon the party moving for summary judgment to show conclusively the complete absence of any genuine issue of material fact.” Albelo v. S. Bell, 682 So. 2d 1126, 1129 (Fla. 4th DCA 1996). “[A]ll inferences must be made in favor of the non-moving party.” Cohen, 878 So. 2d at 405.

Under the common law, a visitor who enters the private property of another falls within one of three classifications: an invitee, a licensee, or a trespasser.2 Post v. Lunney, 261 So. 2d 146, 147 (Fla. 1972). “The classification of the entrant is significant because the duty of care owed by the landowner varies according to the visitor's status.” Barrio v. City of Miami Beach, 698 So. 2d 1241, 1243 (Fla. 3d DCA 1997). The only duty a landowner owes to a trespasser or uninvited licensee is “to avoid willful or wanton harm to him and, upon discovery of his presence, to warn him of any known dangers which would not be open to his ordinary observation.” Nolan v. Roberts, 383 So. 2d 945, 946 (Fla. 4th DCA 1980).

An invitee is a visitor on the premises by invitation, either express or reasonably implied, of the owner. Wood v. Camp, 284 So. 2d 691, 695 (Fla. 1973). An “invitation” means that “the visitor entering the premises has an objectively reasonable belief that he or she has been invited or is otherwise welcome on that portion of the real property where injury occurs.” § 768.075(3)(a)1., Fla. Stat. (2011). However, erecting “No Trespassing” signs “is purely optional to a landowner,” so the absence of such signs does not mean that a landowner has impliedly invited the public on the land. Bishop v. First Nat'l Bank of Fla., Inc., 609 So. 2d 722, 725 (Fla. 5th DCA 1992).

In determining whether one attains the status of invitee, Florida courts apply the “invitation test.” Post, 261 So. 2d at 148-49. As we have explained:

[T]he invitation test bases “invitation” on the fact that the occupier by his arrangement of the premises or other conduct has led the entrant to believe that the premises were intended to be used by visitors for the purpose which this entrant was pursuing, and that such use was not only acquiesced in by the owner or possessor, but that it was in accordance with the intention and design with which the way or place was adopted or prepared.

Smith v. Montgomery Ward & Co., 232 So. 2d 195, 198 (Fla. 4th DCA 1970).

An uninvited licensee is a person who chooses “to come upon the premises solely for [his or her] own convenience without invitation either expressed or reasonably implied under the circumstances.” Wood, 284 So. 2d at 695. “An uninvited licensee is neither an invitee nor a trespasser, but rather, a legal status in between whose presence is neither sought nor forbidden, but merely permitted or tolerated by the landowner.” Bishop, 609 So. 2d at 725. For example, a visitor who entered the premises of an office building for the purpose of finding a phone to call a cab was held to be an uninvited licensee, as she “could not have reasonably believed that the owner had asked her onto its premises for a mission which so obviously served only her personal convenience and did not benefit the landlord in any way.”3 Iber v. R.P.A. Int'l Corp., 585 So. 2d 367, 369 (Fla. 3d DCA 1991).

Finally, a trespasser is a person “who enters the premises of another without license, invitation, or other right, and intrudes for some definite purpose of his own, or at his convenience, or merely as an idler with no apparent purpose, other than perhaps to satisfy his curiosity.” Post, 261 So. 2d at 147 (quoting 23 Fla. Jur. Negligence § 54 (1959)). A trespasser may be a “discovered trespasser” or an “undiscovered trespasser.” § 768.075(3)(a)2. & 3., Fla. Stat. (2011). An “undiscovered trespasser” is “a person who enters property without invitation, either express or implied, and whose actual physical presence was not detected, within 24 hours preceding the accident, by the person or organization owning or controlling an interest in real property.” § 768.075(3)(a)3., Fla. Stat. (2011). Nonetheless, when a landowner knows of the continued existence of previous trespassers over a substantial period of time, a trespasser who is injured on the land becomes elevated to the status of an uninvited licensee. Libby v. W. Coast Rock Co., Inc., 308 So. 2d 602, 604 (Fla. 2d DCA 1975).

A plaintiff's status on property may be determined as a matter of law in some cases, but in others it may present a factual question for the jury:

It may be that on the facts in a particular case the determination of the category of the plaintiff must be determined as a matter of law by the trial judge, as in other cases in this respect; other causes will present a factual issue for the jury as to whether plaintiff is invitee, licensee or trespasser under appropriate instructions.

Wood, 284 So. 2d at 696.

For example, in Bottita v. Fla. Power & Light Co., 534 So. 2d 1198, 1198-99 (Fla. 4th DCA 1988), we reversed a summary judgment in favor of Florida Power and Light, holding that the trier of fact was required to decide the status of a two-year-old child who was playing with other children near a transformer located between two of her neighbors' homes and was injured when she tripped on a transformer pad. We explained: “At the very least, we believe that the facts must be more fully developed before a judgment on the issue may be made.” Id. at 1199.

Here, the trial court properly granted summary judgment to W.E. Association. The undisputed facts established that the plaintiff was, at best, an uninvited licensee, and that W.E. Association did not breach any duty it owed to her in her capacity as an uninvited licensee. The plaintiff's reliance upon the Bottita case is misplaced, as that case is factually distinguishable and involved a record that was not “fully developed” as to the status of the claimant. By contrast, under the fully developed record of this case, the determination of the plaintiff's status may be determined as a matter of law.

The plaintiff was on W.E. Association's property late at night; she was not there to visit any of the businesses in the shopping center, and she was taking a shortcut on the property solely for her own convenience. She was on the easement area without invitation, either expressed or reasonably implied under the circumstances. Put simply, no one would reasonably believe that the area near the storm pumps was “intended to be used by visitors for the purpose which this entrant was pursuing, and that such use was . . . in accordance with the intention and design with which the way or place was adopted or prepared.” Smith, 232 So. 2d at 198.

This is not a case where the plaintiff's status on the property presents a factual question for the jury. No reasonable jury could conclude from this record that the easement area was designed as a “convenient path” for pedestrians to use to reach the shopping center. Although the property contains a short pathway of paver stones next to a storm pump station, the area plainly was not intended to be used by visitors as a walkway to and from the parking lot of the shopping center.

Contrary to the plaintiff's suggestion, the absence of a “No Trespassing” sign does not constitute an implied invitation by the owner. See Bishop, 609 So. 2d at 725. Nor can an implied invitation be inferred from the fact that others may have trespassed upon the easement area of the property over a substantial period of time. In short, the undisputed facts show that the plaintiff entered W.E. Association's property, including the area of the City's utility easement, without any express or reasonably implied invitation.

Finally, the record establishes, without genuine issue of material fact, that W.E. Association did not breach any duty it owed to the plaintiff as an uninvited licensee or trespasser. First, W.E. Association did not willfully or wantonly harm the plaintiff. Second, the property did not contain any “known dangers” that were not open to ordinary observation. The condition of the paver stones was open to ordinary observation. Moreover, even if there were concealed dangers on the property, W.E. Association was not aware of the plaintiff's presence on the property until after the incident. The duty to warn an uninvited licensee or trespasser of a concealed danger known to the owner arises only when the owner discovers the entrant's presence on the property.

For the foregoing reasons, we affirm the summary judgment in favor of W.E. Association.

Affirmed. (GERBER and KLINGENSMITH, JJ., concur.)

__________________

1The trial court did not address W.E. Association's alternative argument for summary judgment -- namely, that it owed no duty to the plaintiff because the accident occurred on a utility easement that was maintained by the City. We likewise decline to reach that issue.

2Section 768.075(3), Florida Statutes (2011), which in certain circumstances provides tort immunity to owners of real property for injuries to trespassers on the property, divides the status of entrants into slightly different categories: invitees, discovered trespassers, and undiscovered trespassers.

3Other examples abound in the case law. See, e.g., Barrio, 698 So. 2d at 1242-43 (a plaintiff who was injured during a robbery that occurred while she was visiting a closed public beach at about 3:30 a.m. was held to be an uninvited licensee because the City “neither affirmatively promotes nor discourages visitation to the beach during these early morning hours”); Morris v. Florentes, Inc., 421 So. 2d 582, 583 (Fla. 5th DCA 1982) (motorcyclist was, at best, an uninvited licensee where he was an uninvited user of a bike trail on the defendant's property, which was commonly used in the recreational operation of dirt bikes without being restricted or prohibited by the defendant).

* * *

Illinois - Homeowners policy - Declaratory Judgment - Duty to defend - Business Pursuits Exclusion - Civic or Public Activities Performed for Pay Exclusion - Summary judgment in favor of insurance company


2017 WL 1397695

Only the Westlaw citation is currently available.

United States District Court,
S.D. Illinois.
 
Patricia BEIL, Plaintiff/Counterdefendant,
v.
AMCO INSURANCE COMPANY, Defendant/Counterplaintiff,

and
Illinois Municipal League Risk Management Association and Raymond Muniz, Defendants.
AMCO Insurance Company, Crossclaim Plaintiff,
v.
Raymond Muniz, Crossclaim Defendant


MEMORANDUM AND ORDER

 

J. PHIL GILBERT, DISTRICT JUDGE

*1 This matter comes before the Court on the cross-motions for summary judgment filed by plaintiff Patricia Beil (Doc. 40) and defendant AMCO Insurance Company (“AMCO”) (Doc. 41). AMCO and defendant/crossclaim defendant Raymond Muniz have responded to Beil's motion (Docs. 45 & 47), and Beil has responded to AMCO's motion (Doc. 43). AMCO has replied to Beil's response (Doc. 49).

I. History of Case

Beil originally filed this case in the Circuit Court of the Twentieth Judicial Circuit, St. Clair County, Illinois. In the Complaint, Beil sought a declaration that AMCO, which had issued her a homeowner's insurance policy, had an obligation to defend and indemnify her in connection with a state court lawsuit brought by Raymond Muniz, Muniz v. Beil, Case No. 15-L-606, in St. Clair County. In that underlying lawsuit, Muniz alleges that Beil, a Trustee for the Village of St. Jacob, Illinois (“Village”), injured him by making false and defamatory statements about financial improprieties during Muniz's tenure as Mayor of the Village (Doc. 1-4 at 27-32). AMCO removed this case to federal court under 28 U.S.C. § 1441(a), which has original diversity jurisdiction over the controversy under 28 U.S.C. § 1332(a).1 AMCO then filed a counterclaim/crossclaim seeking a declaration that it owes Beil no duty to defend or indemnify her in connection with the Muniz lawsuit.

In the pending summary judgment motions, Beil asks for summary judgment only on her claim regarding the duty to defend; AMCO asks for summary judgment regarding its duty to defend and indemnify.

 II. Legal Standards

Summary judgment must 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.” Fed. R. Civ. P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Spath v. Hayes Wheels Int'l-Ind., Inc., 211 F.3d 392, 396 (7th Cir. 2000).

III. Facts

A. Muniz Lawsuits

The parties agree about the underlying lawsuit Muniz filed against Beil. In that lawsuit, Muniz alleged that he was the Mayor of the Village from May 2001 to May 2013 and that Beil was a Trustee of the Village from May 2011 through the time the lawsuit was filed. Muniz Compl. ¶¶ 3-4 (Doc. 11-1 at 1). Muniz alleges that Beil told a Belleville News-Democrat (“BND”) reporter that Muniz had conducted financial improprieties as Mayor and called for him to be criminally investigated. Muniz Compl. ¶ 11 (Doc. 11-1 at 3). Her statements, which Muniz alleges were false and defamatory, were the basis for an October 24, 2014, BND article. Muniz Compl. ¶ 5 (Doc. 11-1 at 2, 3). The article recounts that Beil stated she relied on a July 25, 2014, forensic audit report (“Report”) provided to the Village by an outside accounting firm. Muniz Compl. ¶ 7 (Doc. 11-1 at 2). The Report was prepared solely for use by the Village and stated that it should not be used by anyone other than the Village. Muniz Compl. ¶ 7 (Doc. 11-1 at 2). The Report was incomplete and misleading in that it named only Muniz and not others potentially responsible for certain questionable expenses, and it relied on unsubstantiated remarks from an anonymous Village resident. Muniz Compl. ¶ 7 (Doc. 11-1 at 2). It did not suggest any criminal activity or actionable wrongdoing by any party. Muniz Compl. ¶ 8 (Doc. 11-1 at 2). As a Trustee, Beil knew or should have known that the activities noted as questionable in the Report had actually been approved, some of them in votes conducted while Beil was present. Muniz Compl. ¶ 10 (Doc. 11-1 at 2-3). Beil stated she wanted to have information from the Report published in the newspaper before turning the Report over to the Madison County State's Attorney. Muniz Compl. ¶ 12 (Doc. 11-1 at 3). As a result of Beil's statements, on October 28, 2014, the BND published a cartoon depicting Muniz in prison garb reaching into a cookie jar labeled “St. Jacob.” Muniz Compl. ¶ 13 (Doc. 11-1 at 3).

 *2 The following facts are undisputed, although Muniz did not plead them in his underlying complaint. Beil received compensation for her role as Village Trustee. By law, the powers of a municipal Trustee are purely legislative. See 65 ILCS 5/3.1-45-15; 65 ILCS 5/6-4-6.
 

The Board of Trustees decided not to take any action in response to the Report. However, Beil wanted to have information about the Report published in the paper so her constituents would know about it before she approached the State's Attorney with the information. On October 22, 2014, Beil sent an email to the BND from her home using her personal computer and personal email account. The email stated, in pertinent part:

Dear Editors,

My name is Mrs. Pattie Beil. I serve as a St. Jacob Village Trustee. I hope you'll publish this Press Release calling for a public investigation by State's Attorney Tom Gibbons into what may be specific financial improprieties of former St. Jacob Mayor Mr. Raymond Muniz. I base my request for a public investigation upon an Independent Forensic Audit conducted by Auditors from Kenneth E. Loy and Company for the Village of St. Jacob.

 Thank you for your consideration in this matter.

Sincerely,

Mrs. Pattie Beil

St. Jacob Village Trustee

(Doc. 47-1 at 118).

Attached to the email was a “press release” entitled “ST. JACOB TRUSTEE CALLS FOR INVESTIGATION OF FORMER MAYOR, RAYMOND MUNIZ,” which began, “St. Jacob Village Trustee, Pattie Beil, today called on State's Attorney Tom Gibbons to investigate former St. Jacob Mayor Raymond Muniz for financial improprieties while Muniz was Mayor of St. Jacob,” and which concluded, “For further information contact: Mrs. Pattie Beil,” followed by Beil's telephone number (Doc. 47-1 at 117). A BND reporter then called Beil on her home telephone, and Beil returned the call and talked to the reporter from her home telephone. Beil did not give the Report a copy of the Report but directed her to the Village Hall to obtain a copy. Beil received no compensation specifically for her communications with the BND.

Muniz sued Beil for defamation for knowingly and maliciously making false statements about Beil to a third party that harmed Muniz (Count I), for intentional infliction of emotional distress by her defamation (Count II) and for invading Muniz's privacy by placing him before the public in a false light in a way that would be offensive to a reasonable person (Count III).

B. Insurance Policy

All parties agree that AMCO issued Beil a homeowner's insurance policy (Policy No. HA 0012437637-2) (“the Policy”) that covered the time period of the events described in the Muniz lawsuit. Coverage E of the policy provides personal liability coverage.

The Policy contains exclusions that AMCO believes apply to negate any coverage for the Muniz dispute:

“Personal injury” coverage does not apply to:

* * *

d. injury arising out of the “business” pursuits of an “insured”;

e. civic or public activities performed for pay by an “insured”.

AMCO Policy, § II—Exclusions at 19-24 (Doc. 1-4 at 4-9), as amended by Premier Homeowners Endorsement at 3-4 (Doc. 1-3 at 33-34). The Policy defines “business” as:

a. A trade. profession or occupation engaged in on a full-time, part-time or occasional basis; or

*3 b. Any other activity engaged in for money or other compensation, except the following;

1) Volunteer activities for which no money is received other than payment for expenses incurred to perform the activity....

 
AMCO Policy, Definitions at 1 (Doc. 1-3 at 35). AMCO also points to another exclusion for expected or intended injury.

Beil tendered her defense of the Muniz suit to AMCO, but AMCO declined the tender. AMCO argues that it does not have a duty to defend Beil because Counts I (defamation) and III (false light) are excluded by the “business pursuits exclusion” and the “civic or public activities performed for pay exclusion.” It further believes Count II (intentional infliction of emotional distress) does not fall within the Policy coverage or is excluded from coverage under the “expected or intended injury exclusion.” AMCO concludes that since it has no duty to defend, it cannot owe Beil the narrower duty to indemnify.

On the other side, Beil argues her communications with the BND did not constitute a “business pursuit” or a “civic or public activity” and, on the contrary, were undertaken in her personal capacity outside her role as Trustee, which is a purely legislative role. She believes her conduct falls squarely under the Policy's coverage and is not excluded.

IV. Analysis

A. Duty To Defend

All parties agree that Illinois substantive law applies to this case.

Under Illinois law, an insurer has an obligation to defend its insured in an underlying lawsuit if the complaint in the underlying lawsuit alleges facts potentially within the coverage of the insurance policy, even if the allegations end up being groundless, false or fraudulent. General Agents Ins. Co. of Am., Inc. v. Midwest Sporting Goods Co., 828 N.E.2d 1092, 1098 (Ill. 2005). To determine if the underlying suit alleges a situation potentially within the insurance coverage, the Court compares the complaint to the relevant provisions of the insurance policy. Id. This is sometimes called the “eight-corners rule” because the Court compares the “the four corners of the underlying complaint with the four corners of the policy, according both the complaint and the policy a liberal construction.” Madison Mut. Ins. Co. v. Diamond State Ins. Co., 851 F.3d 749, 2017 WL 106555, at *3 (7th Cir. 2017). The Court's focus is on what is actually alleged rather than what could have been alleged. Id. However, under certain unusual or compelling circumstances, the Court may look beyond the underlying complaint, as long as it does not determine an issue critical to the underlying lawsuit. Pekin Ins. Co. v. Wilson, 930 N.E.2d 1011, 1019, 1022 (Ill. 2010) (considering allegations in underlying counterclaim that, if true, would show that exception to coverage exclusion applies); Title Indus. Assur. Co., R.R.G. v. First Am. Title Ins. Co., No. 15-3310, 2017 WL 1314934, at *4 (7th Cir. April 10, 2017) (allowing consideration of evidence beyond the underlying pleading when the insurer files a timely declaratory judgment action).2 If any theory of recovery in the underlying lawsuit falls within the insurance coverage, the insurer will have a duty to defend. Midwest Sporting Goods Co., 828 N.E.2d at 1098.

 *4 Under Illinois law, interpreting an insurance policy, even an ambiguous policy, is a matter of law. Crum & Forster Managers Corp. v. Resolution Trust Corp., 620 N.E.2d 1073, 1077 (Ill. 1993); River v. Commercial Life Ins. Co., 160 F.3d 1164, 1169 (7th Cir. 1998). In interpreting a policy, the Court must attempt to effectuate the parties' intention as expressed by the policy. Valley Forge Ins. Co. v. Swiderski Elecs., Inc., 860 N.E.2d 307, 314 (Ill. 2006). The Court should “construe the policy as a whole, taking into account the type of insurance purchased, the nature of the risks involved, and the overall purpose of the contract.” Nicor, Inc. v. Associated Elec. & Gas Ins. Servs., 860 N.E.2d 280, 286 (Ill. 2006). If the policy is unambiguous, the Court must construe it according to the plain and ordinary meaning of its terms. Valley Forge, 860 N.E.2d at 314. On the other hand, if the policy is ambiguous, the Court must construe all ambiguities in favor of the insured and against the insurer, who drafted the policy. Id. In making the comparison, the Court must give the policy and the complaint a liberal construction favor of the insured. Id. Generally, the insured bears the burden of proving the claim is covered under a policy's grant of coverage, and the insurer bears the burden of proving an exclusion applies. Addison Ins. Co. v. Fay, 905 N.E.2d 747, 752 (Ill. 2009).

The Court now turns to the question of whether the underlying Muniz complaint alleges a situation potentially covered by the Policy. The Court believes it is appropriate in this case to also consider the undisputed circumstances of Beil's service as a Trustee and the details of her communications with the BND because she relies on those facts to support her theory that she was acting in her personal capacity outside her role as a Trustee during those communications. The Court may consider those facts because they do not tend to determine an issue crucial to the underlying lawsuit.

AMCO argues that Count II, for intentional infliction of emotional distress, does not fit within the Policy's coverage or, in the alternative, falls within an exclusion from coverage. Beil has not responded to those arguments. Pursuant to Local Rule 7.1(c), the Court construes her failure to respond as an admission of the merits of AMCO's argument that Count II does not state a claim potentially covered by the Policy and therefore cannot serve as the basis for finding a duty to defend. The Court therefore turns to Count I (defamation) and Count III (false light) to see if they state claims potentially covered by the Policy.
 
1. Business Pursuits Exclusion

AMCO argues that the defense against Muniz's claims for defamation and false light are excluded from coverage by the business pursuits exclusion. Beil claims that, although her overall service as a Trustee might be a business pursuit, her conduct at issue in the Muniz suit did not arise out of that business pursuit but instead out of personal activity on personal time with personal resources outside her Trustee role. 

The business pursuits exclusion, as noted earlier, provides that the Policy's personal injury coverage does not apply to “injury arising out of the ‘business' pursuits of an ‘insured.’ ” AMCO Policy, § II—Exclusions at 19-24 (Doc. 1-4 at 4-9), as amended by Premier Homeowners Endorsement at 3-4 (Doc. 1-3 at 33-34). The Policy defines “business” to include “[a] trade, profession or occupation engaged in on a full-time, part-time or occasional basis.” AMCO Policy, Definitions at 1 (Doc. 1-3 at 35). Caselaw also establishes that “[a] business pursuit is a continuous or regular activity, done for the purpose of returning a profit.” Badger Mut. Ins. Co. v. Ostry, 636 N.E.2d 956, 959 (Ill. App. Ct. 1994). 

It is clear that Beil's overall service as a Trustee was a business pursuit, and she does not really dispute this conclusion. The job of paid municipal Trustee qualifies as a “business” under the Policy because it is an “occupation engaged in on a[n] ... occasional basis.” AMCO Policy, Definitions at 1 (Doc. 1-3 at 35). It requires oversight of certain Village functions; preparing for, attending and participating in Village Board of Trustees meetings; and making decisions regarding the governance of the Village for the health and wellbeing of its citizens. It further satisfies the interpretation of business pursuits given by caselaw. Serving as a municipal Trustee is a continuous or regular activity in that it requires performing legislative tasks, attending meetings, and performing other functions incidental to representing the interests of the citizens of the Village over a Trustee's term. The pay that Beil received satisfied the profit requirement. Indeed, municipal officers who serve for pay have been found to be engaging in an “occupation” that constituted a business pursuit for the purposes of the business pursuits exclusion. See, e.g., Metropolitan Prop. & Cas. Ins. Co. v. Stranczek, 968 N.E.2d 717, 723 (Ill. App. Ct. 2012) (insured engaged as mayor for pay was engaging in “occupation” subject to the business pursuits exception).3

*5 The critical question then becomes whether the conduct described in the Muniz lawsuit “arose out of” Beil's business pursuit. The conduct, specifically, is Beil's communications that allegedly defamed Muniz and portrayed him in a false light. Beil claims her conduct did not “arise out of” her occupation as a Trustee because it was non-legislative conduct she conducted on her own time using her own personal resources. She notes she was not required to engage in communications with the media as part of her Trustee duties. AMCO claims Beil's conduct did arise out of her occupation as a Trustee because Beil publicized information she received as a Trustee only for use by Trustees, she referred to her role as a Trustee in her email and press release, and she was motivated by the desire to inform her constituents about municipal concerns. 

The Court begins with the phrase “arising out of.” The phrase is extremely broad, although the Court should give it the most limited interpretation possible in favor of the insured when it appears in an exclusion. Maryland Cas. Co. v. Chicago & N. W. Transp. Co., 466 N.E.2d 1091, 1094 (Ill. App. Ct. 1984). “ ‘Arising out of’ has been held to mean ‘originating from,’ ‘having its origin in,’ ‘growing out of’ and ‘flowing from.’ ” Id. (quoting Western Cas. & Sur. Co. v. Branon, 463 F. Supp. 1208, 1210 (E.D. Ill. 1979)). It has also been held to mean “ ‘[t]o spring up, originate, to come into being or notice’ or ‘to come into being,’ ‘to come about: come up: take place.’ ” Allstate Ins. Co. v. Smiley, 659 N.E.2d 1345, 1351 (Ill. App. Ct. 1995) (internal citations omitted). 

There is no doubt that Beil's conduct alleged by Muniz in the underlying complaint arose out of her occupation as a Trustee, even giving the phrase “arising out of” its most narrow interpretation. The audit was conducted and the Report was prepared at the behest of the Board of Trustees while Beil was a Trustee. The auditor presented the Report to the Trustees solely for the Village's official use, and it was in her capacity as Trustee that Beil received a copy of the Report. Although it was available to the public because it was presented at a public meeting, the Report existed because the Village Trustees commissioned it, and it was created solely for the Village's use. 

More importantly, in Beil's communications with the BND, she spoke as a Trustee. In her email, she immediately identified herself as a Trustee and closed by signing off as a Trustee. This was clearly an effort to wield the authority of Trusteehood to lend credibility to the content of her press release. As for the press release itself, she described her call as a Trustee to the State's Attorney to investigate Muniz, again invoking the authority and gravitas of her office. And as a basis for her statements, she cited the Report that had been prepared solely for use by the Village.

Furthermore, Beil contacted and spoke with the BND in an effort to communicate with her constituents about official business, a crucial function of a legislative representative. She wanted them to know about possible municipal wrongdoing on which the Board of Trustees was not going to act. The fact that Beil communicated from her home using her home computer and email account does not negate the fact that, in all her communications, she spoke as a Trustee—invoking her title as a Trustee several times—about the Report prepared solely for the use of Village, and for the purpose of informing her constituents about Village business. Under no interpretation of the phrase “arising out of” could Beil's activity not have arisen out of her occupation as Trustee.

Beil argues that her communications with the BND did not constitute a business pursuit because she was not paid for those communications. Her focus exclusively on her communications is too narrow. Such a narrow focus ignores the fact that while her powers as a Trustee were purely legislative, her role as a Trustee was much broader.4 Her communications with the BND occurred in her performance of that broader Trustee role of representing and communicating with Village citizens about administration of the Village. While such activities may not be covered by legislative privilege or immunity because they are not technically within the scope of legislative powers, Hutchinson v. Proxmire, 443 U.S. 111, 133 (1979) (considering Speech and Debate Clause of United States Constitution); Meyer v. McKeown, 641 N.E.2d 1212, 1215 (Ill. App. Ct. 1994), they are an important part, albeit a political part, of an elected representative's job, see United States v. Brewster, 408 U.S. 501, 512 (1972) (“It is well known, of course, that Members of the Congress engage in many activities other than the purely legislative activities protected by the Speech or Debate Clause. These include ... preparing ... news releases.... Although these are entirely legitimate activities, they are political in nature rather than legislative....”); Mirshak v. Joyce, 652 F. Supp. 359, 365 (N.D. Ill. 1987). Beil was, in fact, being compensated for her communication because communication with her constituents was a legitimate part of her job as Trustee, even if she was not compensated for the specific act of communicating or compelled to make such communications.

*6 Beil cites the unpublished decision in Country Mutual Insurance Company v. Molburg, No. 3-12-0364, 2013 WL 1760594 (Ill. App. Ct. 2013), in support of her argument that her conduct did not arise out of a business pursuit.

In Molburg, the insured sought coverage from her personal umbrella insurance policy for an underlying defamation lawsuit based on statements she made about her employer during and following her employment. Id. at *1. Those statements were “motivated by her personal insecurity, a desire to keep her employment, and vindictiveness” rather than financial gain. Id. at *4. Her insurance policy included a business pursuits exception. Id. at *3. The Illinois Court of Appeals held that the statements did not arise out of a business pursuit because at least some of the insured's statements were motivated by personal reasons rather than money and were not related to her employment. Id. at *4. The Molburg case is distinguishable from the case at bar. Here, Beil's statements were motivated by her desire to inform her constituents about the administration of the Village, a purpose clearly central to her occupation as a Trustee, and were done in furtherance of her service as a Trustee, for which she was compensated. Molburg is simply not persuasive to this Court.

For these reasons, the Court finds the business pursuits exclusion of the Policy excludes coverage for liability from Counts I and III of Muniz's underlying lawsuit, and AMCO therefore has no duty to defend Beil in that suit.

2. Civic or Public Activities Performed for Pay Exclusion

AMCO argues that the defense against Muniz's claims for defamation and false light are also excluded from coverage by the civic or public activities performed for pay exclusion. Again, Beil argues that her conduct was not civic or public activity performed for pay but rather unremunerated personal conduct on personal time with personal resources outside her Trustee role.
 
As noted earlier, the civic or public activities performed for pay exclusion provides that the Policy's personal injury coverage does not apply to “civic or public activities performed for pay by an ‘insured’.” AMCO Policy, § II—Exclusions at 19-24 (Doc. 1-4 at 4-9), as amended by Premier Homeowners Endorsement at 3-4 (Doc. 1-3 at 33-34). The Policy does not define “civic or public,” but courts may look to dictionary definitions to determine the plain and ordinary meaning of terms not defined in a contract. The Oxford English Dictionary defines “civic” to include “[o]f, belonging to, or relating to a city, town, borough, or other community of citizens; esp. of or relating to the administration and affairs of such a community; municipal.” Civic, Oxford English Dictionary Online (Mar. 2017),

http://www.oed.com/view/Entry/33569?redirectedFrom=civic (visited Apr. 11, 2017); see also DeBoer v. Village of Oak Park, 53 F. Supp. 2d 982, 991 (N.D. Ill.) (citing Webster's II New Riverside Univ. Dictionary 266 (1984) (defining “civic” as “of, relating to, or belonging to a city, a citizen, or citizenship”)), rev'd in part on other grounds, 86 F. Supp. 2d 804 (N.D. Ill. 1999), aff'd in part & rev'd in part on other grounds, 267 F.3d 558 (7th Cir. 2001). “Public” has a number of definitions in different contexts and usages, but the one that makes the most sense when paired with “civic” is “[o]f or relating to the people as a whole; that belongs to, affects, or concerns the community or the nation.” Public, Oxford English Dictionary Online (Mar. 2017), http://www.oed.com/view/Entry/154052?rskey=cHMj01&result=1&isAdvanced=false (visited Apr. 11, 2017); see also City of Champaign v. Madigan, 992 N.E.2d 629, 637 (Ill. App. Ct. 2013) (citing Merriam-Webster's Collegiate Dictionary 941 (10th ed. 2000) (defining “public” to include “of or relating to business or community interests as opposed to private affairs”)).

Beil's service as a Trustee is certainly a civic or public activity in that it relates to the administration and affairs of the Village and relates to, affects or concerns the community of the Village. Beil also served as a Trustee for pay. Thus, her Trustee service qualifies as a civic or public activity performed for pay under the Policy. 

*7 As discussed above, her conduct alleged in Muniz's underlying lawsuit not only arose out of her service as a Trustee, it was civic or public activity because it was communication with her constituents about Village business. Thus, the civic or public activities performed for pay exclusion of the Policy also excludes coverage for liability from Counts I and III of Muniz's underlying lawsuit. This is an alternative reason AMCO has no duty to defend Beil in that suit.

In sum, both the business pursuits exclusion and the civic or public activities performed for pay exclusion remove Beil's conduct alleged in Counts I and III of Muniz's underlying lawsuit from the Policy's coverage. Beil having already conceded that Count II does not state a claim potentially within the Policy's coverage, the Court finds that Muniz has not stated a claim against Beil in the underlying lawsuit potentially falling within the Policy's coverage. Therefore, AMCO has no duty to defend Beil in that lawsuit and is entitled to summary judgment on that issue.

2. Duty to Indemnify

The duty to defend is broader than the duty to indemnify. Pekin Ins. Co. v. Wilson, 930 N.E.2d 1011, 1017 (Ill. 2010); Outboard Marine Corp. v. Liberty Mut. Ins. Co., 607 N.E.2d 1204, 1220 (Ill. 1992). Therefore, where the Court concludes there is no duty to defend, there is necessarily no duty to indemnify. National Cas. Co. v. McFatridge, 604 F.3d 335, 338 (7th Cir. 2010). Because the Court has found AMCO has no duty to defend Beil in the Muniz lawsuit, it has no duty to indemnify her either, and it is entitled to summary judgment with respect to the duty to indemnify as well.

V. Conclusion

For the foregoing reasons, the Court: 

DENIES Beil's motion for summary judgment on the question of the duty to defend (Doc. 40);

GRANTS AMCO's motion for summary judgment on the question of the duty to defend and the duty to indemnify (Doc. 41);

DECLARES as follows:

 AMCO Insurance Company has no duty to defend or indemnify Patricia Beil under Homeowners Policy No. HA 0012437637-2, effective January 9, 2014, to January 8, 2015, with respect to any of the conduct alleged in the Complaint in Muniz v. Beil, Case No. 15-L-606, in the Circuit Court for the Twentieth Judicial Circuit, St. Clair County, Illinois; and

 DIRECTS the Clerk of Court to enter judgment accordingly.

 
IT IS SO ORDERED.

Footnotes

1   Once in federal court, Beil amended her complaint to add a new count against a new defendant, but that claim has been dismissed and is no longer in issue.

 2   “[T]here is no reason why the trial court could not consider relevant, objective, undisputed facts in deciding the duty to defend, even if those facts fall outside the pleadings of the underlying lawsuit.” Bartkowiak v. Underwriters at Lloyd's, London, 39 N.E.3d 176, 181 (Ill. App. Ct. 2015), app. denied, 48 N.E.3d 671 (Ill. 2016).

3  Beil's service as a Trustee also falls within the second prong of the definition of “business”: “Any other activity engaged in for money or other compensation, except ... [v]olunteer activities for which no money is received other than payment for expenses incurred to perform the activity....” AMCO Policy, Definitions at 1 (Doc. 1-3 at 35). As noted above, Beil received money for her service as Trustee, so she was not a volunteer even if she did not get paid specifically for communicating with her constituents.

4  In fact, Beil describes in her deposition duties of Trustees beyond strictly legislative functions such as, for example, oversight of the police department, working with the police chief, and researching grant opportunities for the Village. Beil Dep. 84:19-85:2 (Doc. 40-1 at 84-85).