In Nautilus Ins. Co. v. Jesse James Festival, Inc., 2008 WL 4200912 (Mo.App. W.D.) the Missouri Court of Appeals, Western District, reviewed an appeal from the grant of summary judgment in favor of Nautilus Insurance Company, in its action seeking a declaratory judgment that it had no duty to defend or indemnify its insured, the Jesse James Festival Committee (“JJF”), in an action filed by appellant Gary Newlun for injuries he sustained as a result of his participation in a rodeo sponsored by JJF.

 

Nautilus moved for summary judgment contending that any one of four different provisions in its policy excluded Newlun's claim and, therefore, Nautilus had no liability. The trial court granted summary judgment in favor of Nautilus. The issue before the court of appeals was whether Nautilus had any liability under its CGL policy with regard to Newlun's claims.

 

In 1999, JJF renewed its CGL policy with Nautilus and purchased a Special Events Liability Endorsement for a rodeo to be held several months later on the JJF premises. The policy declaration was modified to include: a “Participant Exclusion” which excluded from coverage “ 'bodily injury' to any person while practicing for or participating in any sports or athletic contest or exhibition that you sponsor”; a “Liquor Liability Exclusion” which excluded from coverage “ 'bodily injury' … for which indemnitee may be held liable by reason of: (1)[c]ausing or contributing to the intoxication of any person; [or] (2)[t]he furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol”; and an “Unscheduled Events Exclusion” which excluded from coverage “ 'bodily injury' … for activities or events sponsored by the insured and not scheduled by endorsement or shown in the Declarations.”

In September, 1999, JJF and the Kearney Optimist Club sponsored a rodeo called the “Bull Bash” on the JJF property. The Bash, which was produced by Rockin' K Productions, included an event called the “Circle of Fear,” in which audience members wore a flack jacket, signed a release, and enter a chalked circle in the rodeo arena where a bull would be released. The last participant remaining in the circle would receive a cash prize.

 

Newlun attended the Bash on September 10 and participated in and won the Circle of Fear. He returned to the rodeo the next day and again participated in the Circle of Fear. That day, however, he was “butted, kicked and thrown twenty feet” by the bull and, as a result, sustained serious physical injuries.

 

Newlun brought a negligence suit against JJF and the Kearney Optimist Club for damages arising out of his participation in the event. He claimed the defendants sponsoring the event knew or should have known that it was likely to result in serious physical injury. He also alleged that the defendants plied him with beer for two hours to persuade him to participate, and, therefore, his judgment was impaired when he signed the release.

 

JJF tendered Newlun's claim to Nautilus, requesting that, under the CGL policy, Nautilus had a duty to defend and indemnify JJF against the claim. Nautilus refused to defend or indemnify, claiming any coverage for Newlun's claim first was excluded by the Participant Exclusion and the Liquor Liability Exclusion, and second was outside the Special Event Liability Endorsement.

 

Newlun's claim went to trial and although JJF did not appear, Newlun presented evidence. Newlun and JJF eventually agreed to limit recovery to “specified liability insurance coverage.”

 

Just before Newlun's cause came to trial, Nautilus filed the suit against JJF and Newlun seeking a declaratory judgment that Nautilus had no duty to indemnify or defend JJF in Newlun's action. Nautilus moved for summary judgment, pointing to the Sports Participant Exclusion, Liquor Liability Exclusion, Unscheduled Events Exclusion, and the Special Event Liability Endorsement to support its contention that it did not have a duty to indemnify or defend JJF in the underlying suit. Newlun filed a cross-motion for summary judgment.

 

The trial court granted summary judgment in favor of Nautilus and denied Newlun's motion for summary judgment.

 

In its review of the decision, the Missouri Court of Appeals first noted that Newlun did not contend that JJF had coverage for the incident under the Special Event Endorsement. The Endorsement provided coverage for a rodeo to be held September 17-19, 1999, and JJF held the rodeo a week early and did not update its coverage under the Special Event Endorsement. Accordingly, Newlun did not contend that the endorsement applied to his claim but, rather, that Nautilus was liable under the CGL policy.

 

Newlun contended that his claims were not excluded under the CGL policy, and were, therefore, covered, because he was not injured in an event “sponsored” by JJF. He contended that because the term “sponsor” was not defined in the policy the court should look to the common usage that provided “vouch for” as a definition of sponsor. Newlun then conceded that, under this definition, JJF likely sponsored the rodeo but that JJF did not “vouch for” the Circle of Fear in which Newlun was injured.

 

The court stated it could not conclude that the term “sponsor” as used in the policy was ambiguous, nor could it endorse the limited meaning Newlun gave the term. Rather, the exclusions employing the term should be given their plain meaning to determine whether they barred Newlun's claim.

 

The court explained that it would first look to the Participant Exclusion to determine whether its provisions applied to Newlun's claim. The court stated that other courts addressing similar exclusionary language had found that, to show that the insurer had no liability under the exclusion, it must establish that: (1) the event in which the individual was injured was a contest or exhibition; (2) the contest was of an athletic or sports nature; (3) the named insured sponsored the contest; and (4) the injured person was practicing for or participating in the contest at the time of the injury.

 

Here, the Circle of Fear was a contest in that Newlun was competing with others to win money by remaining within the chalk circle when all other participants were outside the circle. Also, “sport” commonly referred to physical exertion or recreation engaged in for pleasure, and participation in the Circle of Fear required physical exertion for the pleasure of the competition and the possibility of winning the prize. Further, JJF provided the funds to hire Rockin' K Productions to produce the Bash on JJF property, the Circle of Fear was an event at the Bash, and advertising posters for the Bash noted that it was “sponsored by the Jesse James Festival Committee.” Therefore, the court determined that JJF sponsored the event in which Newlun was injured and his injuries resulted from his participation in the event.

 

Thus, the court held the Participant Exclusion applied to Newlun's claim and Nautilus did not have any liability to defend and indemnify JJF in Newlun's action. Exclusion of liability under the Participant Exclusion was one of the grounds raised in Nautilus's motion for summary judgment that was granted by the trial court without explication of the basis for the grant. Accordingly, the appeals court affirmed the trial court's grant of summary judgment in favor of Nautilus.