Western World Ins. Company v. Markel American Ins. Company

"Haunted houses may be full of ghosts, goblins, and guillotines, but it’s their more prosaic features that pose the real danger." When the flashlight Tyler Hodges used in connection with taking tickets at an Oklahoma City haunted house began flickering and then died, he ventured inside the house in search of a replacement. To navigate, Mr. Hodges used the light of his cell phone. An actor complained that the light dampened the "otherworldly atmosphere" of the house, Mr. Hodges turned it off and made his way to the freight elevator, where the spare flashlights were stored. When he reached the elevator, Mr. Hodges lifted the wooden gate across the entrance and stepped in, not seeing that the elevator car was not there. Mr. Hodges sued Brewer Entertainment, the haunted house’s operator, for various torts. Brewer held two insurance polities, one with Western World Insurance Company, and the other with Markel American Insurance Company. Brewer quickly looked to them to defend the lawsuit and ultimately pay any award. For its part, Western World had excluded from its haunted house coverage “any claim arising from chutes, ladders, . . . naked hangman nooses, . . . trap doors . . . [or] electric shocks.” Because the policy did not specifically exclude "blind falls down elevator shafts," the company admitted coverage and proceeded to defend Mr. Hodges’s suit. Markel however, balked, refusing to defend or pay any claim. Western World sued to have Markel contribute to the costs of defending Mr. Hodges' suit. The district court agreed with Markel, and entered summary judgment in its favor. Upon review of the record, the Tenth Circuit found that Markel's escape clause was not enough for it to avoid contributing to defending Mr. Hodges' suit. The Court reversed the grant of summary judgment in Markel's favor and remanded the case for further proceedings.