National Fire Insurance Company of Hartford v. Travelers Property Casualty Company of America et al, No. 3:2013cv00458 - Document 47 (S.D. Cal. 2015)
Court Description: ORDER denying Plaintiff's 32 Amended Motion for Partial Summary Judgment; granting Defendant's 34 Amended Motion for Summary Judgment. Court dismisses Pla's action with prejudice. Signed by Judge Cynthia Bashant on 1/22/2015. (jah)
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1 2 3 4 5 6 7 8 9 10 11 UNITED STATES DISTRICT COURT 12 SOUTHERN DISTRICT OF CALIFORNIA 13 14 NATIONAL FIRE INSURANCE COMPANY OF HARTFORD, 15 Plaintiff, 16 17 v. 19 TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, and DOES 1 through 20, inclusive, 20 Case No. 13-cv-458 BAS (JLB) ORDER: (1) GRANTING DEFENDANT’S AMENDED MOTION FOR SUMMARY JUDGMENT (ECF 34) (2) DENYING PLAINTIFF’S AMENDED MOTION FOR PARTIAL SUMMARY JUDGMENT (ECF 32) Defendants. 18 21 22 This matter is before the court on cross motions for summary judgment 23 brought by Plaintiff National Fire Insurance Company of Hartford and Defendant 24 Travelers Property Casualty Company of America. 25 below, the court GRANTS Defendant’s motion and DENIES Plaintiff’s motion. 26 I. BACKGROUND For the reasons set forth 27 Plaintiff filed a Complaint on February 26, 2013 in California Superior 28 Court against Defendant, alleging that Defendant owed an equitable contribution to –1– 13-cv-458 BAS (JLB) 1 the settlement paid and attorneys’ fees accrued by Plaintiff during Plaintiff’s 2 coverage of a personal injury. ECF 1. The facts underlying the Complaint, and the 3 First Amended Complaint filed March 6, 2013, are undisputed for purposes of the 4 summary judgment. The cross-motions instead rest on dueling interpretations of 5 contracts between the insurers and their insureds. 6 Plaintiff’s insured, Coastline, owned and operated a Wendy’s franchise in 7 Ramona, California. Joint Statement of Stipulated Facts (“SF”) No. 24, ECF 13. 8 SSA, Defendant’s insured, was a Distributor to Coastline. Id. SSA’s employee, 9 Tony Muro, injured himself when he slipped and fell while making a delivery to 10 Coastline’s Wendy’s. In November 2009, he slipped on grease or oil that Coastline 11 negligently allowed to leak out of the trash. SF No. 14. Plaintiff, as Coastline’s 12 commercial general liability insurer, defended the action and then settled it in 13 October of 2011. 14 Muro filed his suit on September 16, 2010. On December 27, 2010, 15 Coastline tendered the defense and indemnity of the action to SSA, on behalf of 16 Coastline and Plaintiff, pursuant to the Distributorship Agreement. SF No. 25. 17 Travelers reviewed the tender and the policy and determined it owed no coverage 18 because Coastline “is not named, nor does it qualify as an Additional Insured.” SF 19 No. 27. As a result, after Plaintiff settled the underlying suit, Plaintiff filed this suit 20 against Defendant alleging Plaintiff is owed an equitable contribution to the 21 indemnity and defense, pursuant to the Distributorship Agreement. 22 23 24 25 26 27 28 Paragraphs 10 and 19 of the Distributorship agreement are implicated in this dispute: [Paragraph 10: “Insurance”]—At all times during the term of this Agreement and any renewal or extension terms, Distributor shall maintain and keep in force and effect for Distributor, the Wendy's System, Wendy's and its affiliates, subsidiaries, and Franchisees within the Territory, with all collectively named as additional insureds, comprehensive general liability and product liability insurance coverage against all claims arising out of the performance by Distributor of its obligations pursuant to this Agreement including, –2– 13-cv-458 BAS (JLB) 4 but not limited to, its negligence or wrongful conduct, and against all claims occurring as a result of the use, delivery or other utilization of any product, or sold, delivered or transferred by Distributor pursuant to this Agreement. Said insurance shall have minimum limits of liability of Ten Million Dollars ($10,000,000.00) per occurrence, or as may otherwise reasonably be agreed by the parties from time to time. 5 Plaintiff contends that this agreement, between Coastline as Franchisee and SSA as 6 Distributor, requires SSA to provide “comprehensive general liability . . . coverage 7 against all claims . . . not limited to, its negligence or wrongful conduct[.]” 1 2 3 8 Defendant cites to Paragraph 19(a) of the Distributorship Agreement, which 9 states in pertinent part that “Distributor agrees to indemnify, defend, and save 10 harmless the [Franchisees] against any and all claims, losses, damages, liability, or 11 liens to the extent arising out of the negligent performance or non-performance by 12 Distributor of any of its obligations . . . ; however such indemnification shall not 13 include any loss, damage, injury, liability or claim or lien arising from injury or 14 damage to the extent caused by the negligence, wrongful acts or omissions of 15 Wendy’s or its subsidiaries, affiliates.” 16 17 Under SSA’s policy with Defendant, “Additional Insureds” and “Named Insureds” are entitled to differing coverage: 18 Omnibus Named Insureds: 19 The Named Insured included any and all past, present or hereafter formed or acquired subsidiary companies, firms, corporations, limited liability corporations, joint ventures or organizations which are owned, financially controlled, under management control; or for which you are obligated to provide insurance. This supersedes any reference in the policy to newly acquired organizations. 20 21 22 23 24 Travelers Ins. Policy 1010, ECF 13. 25 Additional Insured: 26 Any persons or entity with whom you have agreed in a written contract, executed prior to loss to name as an additional insured, but only for the limits agreed to in such contract or the limits of insurance of this policy, whichever is less. 27 28 . –3– 13-cv-458 BAS (JLB) 1 2 3 WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule as an insured but only with respect to liability arising out of your acts or omissions. 4 Travelers Ins. Policy 1066. 5 II. LEGAL STANDARD 6 Summary judgment is appropriate on “all or any part” of a claim if there is 7 an absence of a genuine issue of material fact and the moving party is entitled to 8 judgment as a matter of law. Fed.R.Civ.P. 56; see also Celotex Corp. v. Catrett, 9 477 U.S. 317, 322 (1986) (“Celotex”). A fact is material when, under the 10 governing substantive law, the fact could affect the outcome of the case. See 11 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); see also Freeman v. 12 Arpaio, 125 F.3d 732, 735 (9th Cir. 1997). A dispute about a material fact is 13 genuine if “the evidence is such that a reasonable jury could return a verdict for the 14 nonmoving party.” Anderson, 477 U.S. at 248. One of the principal purposes of 15 Rule 56 is to dispose of factually unsupported claims or defenses. See Celotex, 477 16 U.S. at 323–24. 17 The moving party bears the initial burden of establishing the absence of a 18 genuine issue of material fact. See Celotex, 477 U.S. at 323. “The burden then 19 shifts to the nonmoving party to establish, beyond the pleadings, that there is a 20 genuine issue for trial.” 21 (9th Cir. 2006) (citing Celotex, 477 U.S. at 324). Miller v. Glenn Miller Prods., Inc., 454 F.3d 975, 987 22 “When the party moving for summary judgment would bear the burden of 23 proof at trial, it must come forward with evidence which would entitle it to a 24 directed verdict if the evidence went uncontroverted at trial. In such a case, the 25 moving party has the initial burden of establishing the absence of a genuine issue 26 of fact on each issue material to its case.” C.A.R. Transportation Brokerage Co., 27 Inc. v. Darden Restaurants, Inc., 213 F.3d 474, 480 (9th Cir. 2000) (quoted by 28 Miller, 454 F.3d at 987). –4– 13-cv-458 BAS (JLB) 1 “In contrast, when the non-moving party bears the burden of proving the 2 claim or defense, the moving party can meet its burden by pointing out the absence 3 of evidence from the non-moving party. The moving party need not disprove the 4 other party's case.” Miller, 454 F.3d at 987 (citing Celotex, 477 U.S. at 325). 5 “Thus, ‘[s]ummary judgment for a defendant is appropriate when the plaintiff fails 6 to make a showing sufficient to establish the existence of an element essential 7 to[his] case, and on which [he] will bear the burden of proof at trial.’ ” Miller, 454 8 F.3d at 987 (quoting Cleveland v. Policy Management Sys. Corp., 526 U.S. 795, 9 805–06 (1999) (internal quotations omitted)). 10 A genuine issue at trial cannot be based on disputes over “irrelevant or 11 unnecessary facts[.]” See T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n, 12 809 F.2d 626, 630 (9th Cir. 1987). Similarly, “[t]he mere existence of a scintilla of 13 evidence in support of the nonmoving party's position is not sufficient.” Triton 14 Energy Corp. v. Square D. Co., 68 F.3d 1216, 1221 (9th Cir. 1995) (citing 15 Anderson, 477 U.S. at 252).1 The party opposing summary judgment must “by [his 16 or her] own affidavits, or by the ‘depositions, answers to interrogatories, and 17 admissions on file,’ designate ‘specific facts showing that there is a genuine issue 18 for trial.’ ” Celotex, 477 U.S. at 324 (quoting Fed. R. Civ. P 56(e)). That party 19 cannot “rest upon the mere allegations or denials of [his or her] pleadings.” 20 Fed.R.Civ.P. 56(e). 21 The Court is not obligated “to scour the records in search of a genuine issue 22 of triable fact.” Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996) (citing 23 Richards v. Combined Ins. Co., 55 F.3d 247, 251 (7th Cir. 1995)). “[T]he district 24 court may limit its review to the documents submitted for the purposes of summary 25 judgment and those parts of the record specifically referenced therein.” Carmen v. 26 27 28 1 See also Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (if the moving party meets this initial burden, the nonmoving party cannot defeat summary judgment by merely demonstrating “that there is some metaphysical doubt as to the material facts”). –5– 13-cv-458 BAS (JLB) 1 San Francisco Unified Sch. Dist., 237 F.3d 1026, 1030 (9th Cir. 2001). 2 When making its determination, the Court must view all inferences drawn 3 from the underlying facts in the light most favorable to the nonmoving party. See 4 Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). 5 “Credibility determinations, the weighing of evidence, and the drawing of 6 legitimate inferences from the facts are jury functions, not those of a judge, [when] 7 he [or she] is ruling on a motion for summary judgment.” Anderson, 477 U.S. at 8 255. 9 IV. ANALYSIS 10 Equitable contribution for Muro’s negligence suit turns exclusively on the 11 interpretations of the two relevant contracts: Defendant’s contract with SSA and 12 SSA’s Distributor Agreement with Coastline. At oral argument, the parties agreed 13 that Muro’s injuries were solely caused by Coastline’s negligence. If such 14 negligence actions are covered under the terms of Defendant’s contract with SSA, 15 Defendant owes Plaintiff its equitable contribution. Therefore the threshold 16 question in this case is whether negligence actions predicated on Coastline’s acts 17 or omissions are entitled to protection under the contract terms. 18 Contracts are interpreted to give effect to the parties’ mutual intentions. 19 People ex. rel. Lockyer v. R.J. Reynolds Tobacco Co., 107 Cal.App.4th 516, 524 20 (2003). Courts first look to the plain meaning of the contract, and if the urged 21 interpretation is reasonable, looks to whether that interpretation was intended by 22 the parties. 1 Witkin, Summary of Cal. Law (9th ed. 1987) Contracts § 28, 23 summarizing Lockyer, 107 Cal.App.4th at 524. 24 In the present case, based on a reasonable reading of the language of the 25 Distributor Agreement, Coastline seems to have intended to require SSA to secure 26 general liability insurance for all causes of action, including but not limited to 27 negligence, “occurring as a result of the use, delivery or other utilization of any 28 product, or sold, delivered or transferred by Distributor pursuant to this –6– 13-cv-458 BAS (JLB) 1 Agreement.” Distributor Agreement ¶ 10. Paragraph 19 may exclude liabilities 2 “caused by the negligence, wrongful acts or omissions of Wendy’s or its 3 subsidiaries, affiliates” from indemnification. Ultimately, however, as SSA is not a 4 party to this suit, the Court looks to Defendant’s agreement with SSA to determine 5 liability in this case. While SSA may have been obligated to provide coverage to 6 Coastline for any personal injury, including those resulting from Coastline’s 7 negligence, SSA did not obtain any such insurance from Defendant. 8 Plaintiff argues that if paragraph 10 obligates SSA to provide coverage, the 9 Omnibus Named Insured clause imputes Coastline as a Named Insured. However, 10 Coastline only qualifies as an Additional Insured, for two reasons. 11 First, Coastline bargained for, and obtained, “additional insured” coverage 12 under SSA’s policy. “At all times during the term of this Agreement and any 13 renewal or extension terms, Distributor shall maintain and keep in force and effect 14 for Distributor, the Wendy's System, Wendy's and its affiliates, subsidiaries, and 15 Franchisees within the Territory, with all collectively named as additional 16 insureds[.]” D.A. ¶ 10. 17 Second, parsing the language of the Omnibus Named Insured clause shows 18 that the words “or for which you are obligated to provide insurance” modifies “any 19 and all past, present or hereafter formed or acquired subsidiary companies, firms, 20 corporations, limited liability corporations, joint ventures or organizations[.]” 21 Travelers Policy 1010. While it is torturously constructed and includes a dependent 22 clause after a semicolon, it is clear from the language, construction, and title that 23 the intent of this omnibus provision is to serve as a catch-all for subsidiary 24 companies of the insured. Since Coastline is not a subsidiary company of SSA, 25 Coastline cannot be considered a Named Insured under this contract. 26 Defendant’s contract with SSA agrees to cover Additional Insureds, such as 27 Coastline, “only for the limits agreed to in such contract or the limits of insurance 28 of this policy, whichever is less.” Travelers Ins. Policy 1066. Because the –7– 13-cv-458 BAS (JLB) 1 Additional Insured provision explicitly extends Additional Insured coverage “only 2 with respect to liability arising out of your acts or omissions[,]”coverage under this 3 provision cannot extend to liability resulting from Coastline’s negligence. Id. 4 Because Defendant only agreed to cover liability arising from SSA’s acts or 5 omissions and the injury in this case resulted exclusively from Coastline’s 6 negligent acts or omissions, Defendant owes no equitable contribution to the 7 defense or to indemnify Coastline. Accordingly, Plaintiff’s summary judgment 8 motion is DENIED, and Defendant’s is GRANTED. 9 V. CONCLUSION 10 11 12 13 14 15 Accordingly, for the foregoing reasons, the Court ORDERS the following: 1. Defendant’s motion for summary judgment is GRANTED, DISMISSING Plaintiff’s action with prejudice; and 2. Plaintiff’s motion for summary judgment is DENIED. IT IS SO ORDERED. Dated: January 22, 2015 16 17 18 19 20 21 22 23 24 25 26 27 28 –8– 13-cv-458 BAS (JLB)
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