United States District Court, S.D. Indiana, Indianapolis Division
DAVE'S DETAILING, INC. d/b/a THE ALLEN GROUPE, Plaintiff,
CATLIN INSURANCE COMPANY, INC., Intervening Plaintiff,
XL SPECIALTY INSURANCE COMPANY, Defendant
For DAVE'S DETAILING, INC., doing business as THE ALLEN GROUP, Plaintiff: S. Andrew Burns, COX SARGEANT & BURNS PC, Indianapolis, IN.
For XL SPECIALTY INSURANCE COMPANY, Defendant: Donald Ross Andersen, PRO HAC VICE, GORBY PETERS & ASSOCIATES LLC, Atlanta, GA; Douglas B. Bates, STITES & HARBISON, LLP, Jeffersonville, IN.
For CATLIN INSURANCE COMPANY, INC., Intervenor Plaintiff: Lewis S. Wooton, Richard K. Shoultz, LEWIS WAGNER LLP, Indianapolis, IN.
ENTRY ON XL SPECIALTY INSURANCE COMPANY'S SUPPLEMENTAL MOTION FOR SUMMARY JUDGMENT AND DAVE'S DETAILING, INC. AND CATLIN INSURANCE COMPANY, INC.'S SUPPLEMENTAL CROSS-MOTION FOR SUMMARY JUDGMENT
RICHARD L. YOUNG, Chief United States District JUDGE.
Plaintiff, Dave's Detailing, Inc. d/b/a The Allen Groupe (" TAG" ), brought this action against former liability insurer, XL Specialty Insurance Company (" XL Specialty" ), to recover losses incurred in a lawsuit in Nevada (the " Nevada Lawsuit" ). Intervening Plaintiff, Catlin Insurance Company, Inc. (" Catlin" ), insured TAG throughout
the Nevada Lawsuit. XL Specialty and Catlin previously filed cross-motions for summary judgment. The court denied both motions. Based on newly discovered evidence, all parties now file supplemental cross-motions for summary judgment. For the reasons set forth below, the court GRANTS XL Specialty's supplemental motion for summary judgment and DENIES Catlin and TAG's respective motion.
A. Nevada Lawsuit
On April 5, 2010, Appearance Group, Inc. (" Appearance Group" ) filed an action in Nevada State Court against TAG and its employees, asserting tort and breach of contract claims related to the actions of a former Appearance Group employee, Jeffery R. Groth, who later worked for TAG. (Compl. ¶ 9). XL Specialty provided a Commercial General Liability Aviation Insurance Policy (" XL Policy" ) to TAG for the period from January 17, 2009 to January 17, 2010. ( Id. at ¶ 8). Catlin provided similar insurance for the policy period of January 17, 2010 through January 17, 2011 (" Catlin Policy" ).
On August 3, 2010, Catlin's claims supervisor, Robert M. Kern, sent XL Specialty a copy of the First Amended Complaint from the Nevada Lawsuit. (Declaration of Richard Imbrogno (" Imbrogno Decl." ), Ex. A). Kern noted that Catlin was defending TAG and its employees in the suit and demanded that XL Specialty tender a defense and indemnify TAG based on its prior policy. ( Id.). Kern provided neither the Original Complaint nor any other information regarding the case. On December 13, 2010, TAG's outside counsel made a written demand upon XL Specialty for defense and indemnity under the XL Policy. (Compl., Ex. B).
On January 6, 2011, XL Specialty agreed to provide a defense to TAG in the Nevada Lawsuit " because certain allegations in the First Amended Complaint which could be read to allege defamation are potentially covered bye the policy issued by XL to [TAG]." (Imbrogno Decl., Ex. B). In particular, XL Specialty stated that the allegations in paragraph 84 of the First Amended Complaint may potentially be covered in the personal injury section of Coverage B since they may involve publication of material that slanders, libels, or disparages. ( Id.). This allegation states: " Groth falsely informed Appearance Group customers and/or other third parties that Appearance Group was going to shut down its Clark County operations." (Nevada Amend. Compl. ¶ 84).
Despite XL Specialty's agreement to provide a defense, it also noted that this defense was subject to a reservation of rights and that several policy exclusions may apply to this defamation claim, including actions that involve willful violations or knowledge of their falsity. (Imbrogno Decl., Ex. B). Additionally, XL Specialty stated that although it would offer a defense to the defamation allegations, it disclaimed coverage for all other causes of action because they were not even potentially covered under the XL Policy. ( Id.).
After agreeing to defend the Nevada Lawsuit, XL Specialty learned that the Original Complaint in the action included two additional causes of action not in the First Amended Complaint: (1) " Business Disparagement against Groth" ; and (2) " Commercial Defamation Per Se against Groth." (Nevada Orig. Compl., Seventeenth and Eighteenth Cause of Action; Imbrogno Decl., Ex. D). XL Specialty also ...