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Ayala v. Butler University

United States District Court, S.D. Indiana, Indianapolis Division

October 17, 2018

CHRISTIAN AYALA, a/k/a JOHN DOE, Plaintiff,
v.
BUTLER UNIVERSITY, JAMES M. DANKO, LEVESTER JOHNSON, STACIE COLSON PATTERSON, ANNE FLAHERTY, SALLY CLICK, ERIN MCCLUNEY, ROBERT PADGETT, and MARTHA DWIZLIK, Defendants. UNITRIN PREFERRED INSURANCE COMPANY, Intervenor Plaintiff,
v.
PRIVILEGE UNDERWRITERS, INC, Intervenor Defendant.

          ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT

          TANYA WALTON PRATT, JUDGE

         This matter is before the Court on cross-motions for partial summary judgment filed pursuant to Federal Rule of Civil Procedure 56 by Intervenor Plaintiff Unitrin Preferred Insurance Company (“Unitrin”) (Filing No. 128) and Intervenor Defendant Privilege Underwriters, Inc. (“PURE”) (Filing No. 132). Unitrin and PURE, two insurance companies, seek declaratory judgment regarding their contractual duties to defend Jane Smith, a now terminated defendant in this civil rights and defamation action. For the following reasons, the Court denies Unitrin's Motion for Partial Summary Judgment and grants PURE's Motion for Partial Summary Judgment.

         I. BACKGROUND

         In the fall of 2014, Plaintiff Christian Ayala (“Ayala”) was a fulltime, freshman undergraduate student at Defendant Butler University (“Butler”) in Indianapolis, Indiana. He was an excellent student, maintaining a “B” grade point average (Filing No. 13 at 2, 9).

         At approximately midnight on Saturday, April 18, 2015, Ayala decided to attend a party with some friends. While at the party, Ayala approached Jane Smith, a fellow Butler student, and began talking with her. Ayala and Jane Smith began dancing together and eventually left the party together around 2:00 a.m. on Sunday, April 19, 2015. Jane Smith informed her girlfriends that she was going back to her own dormitory room. However, Ayala and Jane Smith actually went to Ayala's dorm room where they engaged in sexual activity. After engaging in sexual activity, there was a knock on the bedroom door. Ayala opened the door, whereupon Jane Smith's friend saw her unclothed and demanded to know why she had lied about going back to the dorm. Jane Smith was humiliated and embarrassed, so she told her friend that she had been sexually assaulted by Ayala. Id. at 9-13.

         Butler began an investigation of the alleged sexual assault on April 20, 2015, but before the investigation even began, Jane Smith's father exerted pressure on Butler to expel Ayala. Id. at 13. Defendant Martha Dwizlik (“Dwizlik”), a Butler employee, conducted the investigation of the allegation. Sometime later, Dwizlik acknowledged being told by Jane Smith that Jane Smith allowed Ayala to undress her without any objection while they were in his dorm room. Id. at 14.

         A university grievance hearing was held against Ayala on May 14, 2015. Id. at 15. At the grievance hearing, “‘JANE SMITH' herself testified that she never said or did anything to indicate to Plaintiff, either before or during their physical contact, that she was not consenting to same.” (Filing No. 13 at 2 (emphasis in original).) The overwhelming evidence presented at the hearing was that the sexual activity between Ayala and Jane Smith was consensual. However, the grievance panel placed the burden on Ayala to prove his innocence, and the panel decided that the proper outcome was to expel Ayala from Butler. Ayala attempted to reverse the panel's decision through Butler's administrative appeals process, but his efforts were unavailing. Id. at 2-4. No grievance proceedings were ever initiated against Jane Smith. Id. at 2.

         The alleged non-consensual sexual activity occurred on April 19, 2015; the panel convened a one-day hearing on May 14, 2015; and Ayala was “served with the Final Determination letter on May 18, 2015, which informed him of the Panel's decision and the sanction imposed by the school.” Id. at 5. The panel recommended expulsion. After being expelled from Butler, Ayala suffered emotional distress and applied to attend various other universities. His applications were rejected by seven universities because of his expulsion from Butler. Id. at 6.

         On May 23, 2016, Ayala initiated this lawsuit against Butler, Jane Smith, [1] and various Butler employees who participated in his expulsion. Ayala asserted claims for civil rights violations, defamation, breach of contract, negligent infliction of emotional distress, and other tort claims (Filing No. 13). In April 2017, Unitrin filed a Motion to Intervene in this action because it had issued an insurance policy to Jane Smith's parents, Jane Smith asserted that Unitrin's coverage might be implicated, and Unitrin wanted a declaratory judgment to determine whether its policy was implicated (Filing No. 43). Smith's parents also had a homeowners and umbrella policy with PURE issued on April 29, 2015 with coverage through April 29, 2016. (Filing No. 133-1.) In September 2017, Unitrin amended its intervenor complaint to add PURE as an intervenor defendant, asserting that PURE owed a duty to defend Jane Smith against Ayala's complaint and to reimburse Unitrin for defense costs (Filing No. 78). In April 2018, Unitrin and PURE filed their cross-motions for summary judgment (Filing No. 128; Filing No. 132).

         II. SUMMARY JUDGMENT STANDARD

         The purpose of summary judgment is to “pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Federal Rule of Civil Procedure 56 provides that summary judgment is appropriate if “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Hemsworth v. Quotesmith.com, Inc., 476 F.3d 487, 489-90 (7th Cir. 2007). In ruling on a motion for summary judgment, the court reviews “the record in the light most favorable to the non-moving party and draw[s] all reasonable inferences in that party's favor.” Zerante v. DeLuca, 555 F.3d 582, 584 (7th Cir. 2009) (citation omitted). “However, inferences that are supported by only speculation or conjecture will not defeat a summary judgment motion.” Dorsey v. Morgan Stanley, 507 F.3d 624, 627 (7th Cir. 2007) (citation and quotation marks omitted). Additionally, “[a] party who bears the burden of proof on a particular issue may not rest on its pleadings, but must affirmatively demonstrate, by specific factual allegations, that there is a genuine issue of material fact that requires trial.” Hemsworth, 476 F.3d at 490 (citation omitted). “The opposing party cannot meet this burden with conclusory statements or speculation but only with appropriate citations to relevant admissible evidence.” Sink v. Knox County Hosp., 900 F.Supp. 1065, 1072 (S.D. Ind. 1995) (citations omitted).

         “In much the same way that a court is not required to scour the record in search of evidence to defeat a motion for summary judgment, nor is it permitted to conduct a paper trial on the merits of [the] claim.” Ritchie v. Glidden Co., 242 F.3d 713, 723 (7th Cir. 2001) (citations and quotation marks omitted). “[N]either the mere existence of some alleged factual dispute between the parties nor the existence of some metaphysical doubt as to the material facts is sufficient to defeat a motion for summary judgment.” Chiaramonte v. Fashion Bed Grp., Inc., 129 F.3d 391, 395 (7th Cir. 1997) (citations and quotation marks omitted).

         These same standards apply even when each side files a motion for summary judgment. The existence of cross-motions for summary judgment does not imply that there are no genuine issues of material fact. R.J. Corman Derailment Serv., LLC v. Int'l Union of Operating Eng'rs., 335 F.3d 643, 647 (7th Cir. 2003). The process of taking the facts in the light most favorable to the non-moving party, first for one side and then for the other, may reveal that neither side has enough to prevail without a trial. Id. at 648. “With cross-motions, [the Court's] review of the record requires that [the Court] construe all inferences in favor of the party against whom the motion under consideration is made.” O'Regan v. Arbitration Forums, Inc., 246 F.3d 975, 983 (7th Cir. 2001) (citation and quotation marks omitted).

         III. ...


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