In Marks v. Scottsdale Insurance Co., __ F.3d __, 2015 WL 3940854 (4th Cir. June 29, 2015), US Court of Appeals for the Fourth Circuit, applying Virginia law, affirmed a summary judgment order holding that the general liability insurer of a recreational hunting club had no duty to defend or indemnify one of the club’s members in a lawsuit that arose from a hunting accident on club-leased land.
One of the hunt club’s members, while hunting deer on land leased to the club, accidentally shot the plaintiff, who was driving by the property on an adjacent highway. Id. at *1. The plaintiff sued the club member, alleging negligence and gross negligence, since the shooter took a position 75 yards from the highway, knew or should have known that his gun would shoot further than 75 yards, and shot in the direction of the highway. Id. The plaintiff then filed a separate suit against the club’s general liability insurer, seeking a declaration that the insurer had a duty to defend and indemnify the club member. Id. at *2.
While the policy listed only the hunt club as a named insured, an “Additional Insured” endorsement extended coverage to “any of [the club’s] members, but only with respect to their liability for [the club’s] activities or activities they perform on [the club’s] behalf.” Id. at *1. The plaintiff conceded that the second clause did not reach the hunting expedition, but argued that the first clause – referring to member liability for club activities – applied because hunting was one of club’s principal “activities.” Id. at *3. Alternatively, he argued that the clause is at least ambiguous and must be construed in his favor. Id. The parties filed cross-motions for summary judgment, and a magistrate judge ruled in favor of the insurer. Id. at *2.
The Fourth Circuit affirmed. It concluded, consistent with the rulings of other federal courts addressing identical policy language, that “liability for [the club’s] activities” unambiguously restricted coverage to situations involving a club member’s alleged vicarious liability for the actions of the club as a corporate entity. Id. at *3. It added that the endorsement modified the policy to cover club members “only with respect to” the listed activities, making clear that the policy was not intended to cover every member pursuit at the club. Id.
The court then applied Virginia’s “eight corners rule,” assessing the allegations in the underlying complaint to determine whether they fell within the scope of the policy’s coverage. Id. at *4. Here, the allegations focused solely on the “recreational pursuits” of a club member, and did not seek to hold that individual vicariously liable for the club’s activities. Id. Because it was clear that the insurer would not be liable for any judgment against the club member, the court affirmed, as a matter of law, that the insurer had no duty to defend or indemnify the club member in the underlying negligence action. Id. at *5. The court left open – and expressed no opinion regarding – the question of whether the endorsement might extend to a situation in which a club member participated in a group activity organized or sponsored by the club itself, such as an annual picnic or official club breakfast. Id. at n.3.
Marks demonstrates that coverage under a recreational club’s general liability policy is not necessarily triggered simply because an accident is caused by a club member or occurs on club premises. Rather, policy language referring to member liability “for [a club’s] activities” is “the language of vicarious liability” and does not extend coverage to a member’s personal recreational activities.