Arrow Electronics, Inc. v. Aetna Casualty & Surety Company, et al, No. 2:2017cv05247 - Document 283 (C.D. Cal. 2021)
Court Description: FINAL JUDGMENT by Judge John F. Walter. IT IS SO ORDERED, ADJUDGED AND DECREED that final judgment is entered in favor of Plaintiff Arrow and against Defendant Liberty Mutual as set forth above. The Clerk is directed to enter final judgment as set forth above and to close this case. (MD JS-6, Case Terminated). (iv)
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Arrow Electronics, Inc. v. Aetna Casualty & Surety Company, et al Doc. 283 1 2 JS-6 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA – WESTERN DIVISION 10 11 12 13 14 15 16 17 18 19 20 21 ARROW ELECTRONICS, INC., a New York Corporation, v. CASE NO. 2:17-cv-05247-JFW-JEMx FINAL JUDGMENT Plaintiff, AETNA CASUALTY & SURETY COMPANY n/k/a TRAVELERS CASUALTY & SURETY COMPANY a/k/a ST. PAUL TRAVELERS, a Connecticut Corporation, LIBERTY MUTUAL INSURANCE COMPANY, a Massachusetts Corporation, Defendants. 22 23 This lawsuit was filed by Arrow Electronics, Inc. (“Arrow”) against its 24 insurers, Liberty Mutual Insurance Company (“Liberty Mutual”) and Travelers 25 Casualty & Surety Company (“Travelers”). Arrow’s operative First Amended 26 Complaint (Docket No. 117) asserts claims for breach of contract and declaratory 27 judgment in connection with costs Arrow has incurred and is incurring to 28 JUDGMENT 1 Dockets.Justia.com 1 investigate and remediate an industrial site in Huntsville, Alabama (“Huntsville 2 Site”). 3 On May 22, 2018, this Court entered judgment in favor of Liberty Mutual 4 and Travelers and awarded costs. (Docket No. 142.) This decision was reversed 5 by the Ninth Circuit, which remanded for further proceedings, with costs on 6 appeal awarded to Arrow. (Docket No. 154.) 7 On May 8, 2020, the Court ruled on the parties’ renewed motions for 8 summary judgment, finding in favor of Arrow regarding the remaining defenses to 9 coverage raised by the insurers. (Docket No. 218.) This ruling established, as a 10 matter of law, that Arrow is entitled to coverage from Liberty Mutual and 11 Travelers under each of the disputed policies with respect to investigation and 12 remediation costs Arrow incurred and to be incurred at the Huntsville Site. A 13 remaining issue was how Arrow’s costs would be allocated among the various 14 applicable policies and any periods during which Arrow lacked insurance. 15 Arrow subsequently settled with Travelers. (Docket No. 232.) Liberty 16 Mutual and Arrow entered into several stipulations narrowing the disputes 17 between them. (Docket Nos. 250-4, 250-5, 250-6.) These parties then filed 18 motions on the remaining issue in dispute in the case – allocation of amounts 19 incurred for remediation. (Docket Nos. 249, 250.) 20 On March 18, 2021, the Court ruled on additional motions the Court 21 permitted the parties to file with respect to allocation of remediation costs. The 22 Court held that allocation would be governed by the pro rata approach without 23 application of the “unavailability rule.” (Docket No. 268.) Therefore, all relevant 24 issues relating to liability have been decided by this Court. 25 As such, in accordance with this Court’s rulings and the parties’ stipulations 26 (Docket Nos. 218, 268, 250-4, 250-5, 250-6), final judgment is hereby entered in 27 favor of Arrow and against Liberty Mutual with respect to the claims for breach of 28 JUDGMENT 2 1 contract and declaratory judgment asserted in Arrow’s First Amended Complaint 2 (Docket No. 117). The Court found Arrow’s investigation and remediation costs 3 in connection with the Huntsville Site—both amounts incurred in the past, and 4 those to be incurred the future—are within the coverage of the Liberty Mutual 5 insurance policies at issue in this lawsuit, and that Liberty Mutual must pay its 6 allocated share of defense and indemnity costs, subject to principles of pro rata 7 allocation by time on the risk (without application of the “unavailability rule”). 8 Therefore, Arrow is awarded damages from Liberty Mutual for breach of 9 contract as follows. Pursuant to the Further Stipulation of Uncontested Issues 10 dated September 25, 2020, the parties agreed that Arrow’s defense costs are 11 $3,528,978 (Docket No. 250-5 at ¶2). Pursuant to the Parties’ Further Stipulation 12 of Uncontested Issues dated September 25, 2020, the parties agreed that past 13 amounts incurred were reasonable and necessary (Docket No. 250-5 at ¶1). The 14 parties also agreed that defense costs would be allocated over the primary insurers 15 from 1964 to 1985 on a time-on-the-risk basis (Docket No. 250-5 at ¶ 5). The 16 parties agree that primary insurance ran from February 1, 1964 to January 1, 1986 17 (263 months). During that period, Liberty Mutual issued primary insurance to 18 Arrow from November 1, 1972 to January 1, 1986, which is 158 months. 19 Therefore, Liberty Mutual is responsible for and Arrow is hereby awarded 20 158/263 of Arrow’s stipulated past defense costs, which equals $2,120,070.43 21 (which amount Liberty Mutual has paid). 22 Pursuant to the Further Stipulation of Uncontested Issues dated September 23 25, 2020 (Docket No. 250-5), Arrow’s past indemnity costs are $2,087,545.69. In 24 the Third Stipulation Re Uncontested Issues dated February 15, 2021, the parties 25 stipulated that, if the “unavailability” rule did not apply, under principles of pro 26 rata allocation, the damages would be allocated across the period from February 27 1, 1964 to November 5, 1999, which is 429 months (Docket No. 250-6 at ¶ 9). 28 JUDGMENT 3 1 This Court ruled the “unavailability” rule does not apply (Docket No. 268). Thus, 2 Arrow’s past indemnity costs shall be allocated across the period from February 1, 3 1964 to November 5, 1999, which is 429 months. Liberty Mutual issued primary 4 insurance to Arrow for 158 of those months. Therefore, Liberty Mutual is 5 responsible for and Arrow is hereby awarded 158/429 of Arrow’s stipulated past 6 indemnity costs, which equals $768,839.06 (which amount has been paid by 7 Liberty Mutual). 8 9 On those past due amounts, under Alabama law, Arrow is entitled to prejudgment interest at a rate of 6% annually. For Arrow’s past defense and 10 indemnity costs, the parties have agreed that Arrow shall recover prejudgment 11 interest in the total amount of $1,500,000. 12 With respect to Arrow’s declaratory relief claim corresponding to its future 13 indemnity costs, based on the Court’s prior rulings,1 Arrow will submit indemnity 14 costs to Liberty Mutual and Liberty Mutual will pay its share subject to erosion of 15 the limits of the Liberty Mutual policies, as will be set forth in an agreement to be 16 entered into by the parties. 17 18 Arrow is the prevailing party and is entitled to recover costs under Fed. R. Civ. P. 54(d), which the parties have agreed is the amount of $7,000. 19 IT IS SO ORDERED, ADJUDGED AND DECREED that final judgment is 20 entered in favor of Plaintiff Arrow and against Defendant Liberty Mutual as set 21 forth above. The Clerk is directed to enter final judgment as set forth above and 22 to close this case. 23 24 Date: November 24, 2021 25 26 27 28 Hon. John F. Walter United States District Judge 1 In accordance with the parties’ Stipulation, Arrow’s “future” indemnity costs—i.e., those that will not be reduced to a sum certain as part of this Judgment—are indemnity costs billed to Arrow after August 30, 2020. JUDGMENT 4
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