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Baldwin v. Wittle

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

September 6, 2017

BRANDON L BALDWIN, Plaintiff,
v.
MICHAEL WITTLE, Defendants.

          ORDER

          Hon. Jane Magnus-Stinson, Chief Judge United States District Court

         Pending before the Court are two Motions to Dismiss addressing an indemnification issue that is collateral to Plaintiff Brandon Baldwin's claims. Mr. Baldwin's claims arise from an incident at a Menards store where Defendant Benjamin Polley, a private security officer working for Defendant Blue Line LP Inc. (“Blue Line”), allegedly attempted to stop Mr. Baldwin for stealing.

         As relevant to the pending Motions, Mr. Baldwin alleges that two employees working for Defendant Menard, Inc. (“Menards”) defamed Mr. Baldwin. Mr. Baldwin alleges that, on the day of the incident, a Menards employee falsely told Mr. Polley that Mr. Baldwin had stolen from Menards. Mr. Baldwin also alleges that, on the day after the incident, a Menards employee told an acquaintance of Mr. Baldwin that Mr. Baldwin had stolen from Menards. Menards, in turn, alleges that Mr. Polley observed Mr. Baldwin in the Menards over security cameras and set the whole incident in motion by telling Menards employees that Mr. Baldwin had stolen from Menards and demanding that Mr. Baldwin stop as he was trying to leave the parking lot. Menards filed a Crossclaim Complaint against Blue Line, [Filing No. 15 at 9-10], and a Third-Party Complaint against Scottsdale Insurance Company (“Scottsdale”), [Filing No. 15 at 11-12], seeking a declaration that Blue Line and Scottsdale must defend and indemnify Menards for Mr. Baldwin's defamation claims.

         Blue Line and Scottsdale (collectively, “Defendants”) now move to dismiss Menards' claims, arguing that Menards' Crossclaim and Third-Party Complaints fail to state a claim. [Filing No. 24 (Blue Line Motion to Dismiss); Filing No. 41 (Scottsdale Motion to Dismiss).] Scottsdale additionally argues that it is entitled to arbitrate Menards' claims. For the following reasons, the Court DENIES Defendants' Motions.

         I.

         Legal Standard

         Under Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss a claim that does not state a right to relief. The Federal Rules of Civil Procedure require that a complaint provide the defendant with “fair notice of what the . . . claim is and the grounds upon which it rests.” Erickson v. Pardus, 551 U.S. 89, 93 (2007) (quoting Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007)). In reviewing the sufficiency of a complaint, the Court must accept all well-pled facts as true and draw all permissible inferences in favor of the plaintiff. See Active Disposal Inc. v. City of Darien, 635 F.3d 883, 886 (7th Cir. 2011). A Rule 12(b)(6) motion to dismiss asks whether the complaint “contain[s] sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). The Court may not accept legal conclusions or conclusory allegations as sufficient to state a claim for relief. See McCauley v. City of Chicago, 671 F.3d 611, 617 (7th Cir. 2011). Factual allegations must plausibly state an entitlement to relief “to a degree that rises above the speculative level.” Munson v. Gaetz, 673 F.3d 630, 633 (7th Cir. 2012). This plausibility determination is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id.

         II.

         Background

         The following facts are drawn from Mr. Baldwin's Complaint and Menards' Crossclaim and Third-Party Complaints.[1] They are accepted as true for the purposes of deciding Defendants' Motions to Dismiss.

         A. Menards Incident

         Underlying Menards' indemnification claims are the claims brought by Mr. Baldwin, the Plaintiff in this matter, stemming from a March 2015 incident with Menards management; Mr. Polley, a security officer for Blue Line; and Defendant Michael Wittle (“Officer Wittle”), a police officer who responded to the scene. [Filing No. 1.] On March 17, 2015, Mr. Polley observed Mr. Baldwin shopping at a Menards store over closed circuit television and believed that Mr. Baldwin was attempting to steal from the store. [Filing No. 1 at 1-3.] In fact, Mr. Baldwin had paid for his merchandise and had a receipt to show for it. [Filing No. 1 at 8.]

         While in the parking lot outside of the store, Mr. Polley asked Mr. Baldwin to stop and attempted to detain him. [Filing No. 1 at 7-8.] A Menards manager likewise came outside, spoke to Mr. Baldwin, and accused Mr. Baldwin of theft. [Filing No. 1 at 8.] Mr. Baldwin protested his innocence and continued to walk to his car. [Filing No. 1 at 8.]

         Mr. Polley contacted the police. [Filing No. 1 at 8.] Officer Wittle arrived and matters quickly escalated. [Filing No. 1 at 8-10.] The encounter ended with Officer Wittle twice tasing Mr. Baldwin and cuffing Mr. Baldwin without locking the handcuffs to stop them from tightening. [Filing No. 1 at 10-11.]

         On March 18, the day following the incident, a Menards employee told an acquaintance of Mr. Baldwin that Mr. Baldwin had been caught stealing from the store. [Filing No. 1 at 11.]

         B. Relevant Legal Relationships

         During the Menards incident, Mr. Polley was employed by Blue Line, a security services provider, and was placed at Menards to provide security pursuant to a Contract for Security Services (“Security Contract”) between Menards and Blue Line.[2] [Filing No. 15-1.] Specifically, the Security Contract imposes upon Blue Line the “duty to prevent the loss of merchandise, property and shoplifter apprehension.” [Filing No. 15-1 at 1.] The Security Contract contains an indemnification clause, which provides as follows:

INDEMNIFICATION. Security [Blue Line] shall defend, indemnify and hold harmless Menards, its agents and its employees from any liability, damages, expenses, claims, demands, actions or causes of action, including attorney fees, arising out of performance of the work hereunder, whether such liability, damages, expenses, claims, demands, actions or causes of action are caused by Security [Blue Line], its subcontractors, or their agents or employees, or any persons acting on their behalf, regardless of whether such liability, damages, expenses, claims, demands, actions or causes of actions are caused in part by a party [Menards] indemnified hereunder.

[Filing No. 15-1 at 3.] The Security Contract further provided that Blue Line “shall also purchase and maintain insurance, which will protect it and Menards from claims arising out of [Blue Line]'s, its agents or employees, [sic] performance of this Agreement.” [Filing No. 5-1 at 2.]

         Blue Line, in turn, contracted with Scottsdale to add Menards as an additional insured to its general liability insurance policy (the “Insurance Policy”).[3] [Filing No. 43-2 at 25-26.] In part, the Insurance Policy insured Menards “with respect to liability for . . . ‘personal and advertising injury' caused, in whole or in part, by: 1. Your [Blue Line's] acts or omissions.” [Filing No. 43-2 at 25.] The Insurance Policy further provided that, “[i]f coverage provided to the additional insured is required by a contract or agreement, the insurance afforded to such additional insured will not be broader than that which you are required by the contract or agreement to provide for such additional insured.” [Filing No. 43-2 at 25.]

         C. Menards' Claims Against Blue Line & Scottsdale

         Based upon the provisions of the Security Contract and the Insurance Policy, Menards brought claims against Blue Line and Scottsdale, seeking a declaration that both Defendants must defend and indemnify Menards for Mr. Baldwin's defamation claims against Menards. [Filing No. 15 at 9-12.] Menards alleges that Mr. Baldwin's defamation claims arise out of Mr. Polley's duties under the Security Contract and are therefore covered by the indemnification clause. [Filing No. 15 at 9-12.] Essentially, Menards alleges that any liability that it may have from the Menards incident resulted from Mr. Polley's conduct and statements. [Filing No. 15 at 9-12.] Menards additionally seeks a declaration that Blue Line was responsible for providing liability insurance for Mr. Baldwin's claims as specified in the Security Contract. [Filing No. 15 at 10.] In lieu of answers, Defendants filed Motions to Dismiss Menards' claims against them pursuant to Rule 12(b)(6). [Filing No. 24; Filing No. 41.]

         III.

         Discussion

         Defendants make several arguments as to why Menards' claims should not proceed. First, Scottsdale argues that it is entitled to privately arbitrate Menards' claims. Second, Defendants argue that the Security Contract does not require indemnification for Mr. Baldwin's defamation claims. Finally, Blue Line argues that Menards' claim for a declaration as to Blue Line's duty to provide liability insurance either fails as a matter of law or is not yet ripe for determination. The ...


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