United States District Court, S.D. Indiana, Indianapolis Division
Jane Magnus-Stinson, Chief Judge United States District Court
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.
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.
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
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.”
following facts are drawn from Mr. Baldwin's Complaint
and Menards' Crossclaim and Third-Party
Complaints. They are accepted as true for the purposes
of deciding Defendants' Motions to Dismiss.
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.]
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
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.]
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
Relevant Legal Relationships
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. [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
[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.]
Line, in turn, contracted with Scottsdale to add Menards as
an additional insured to its general liability insurance
policy (the “Insurance
Policy”). [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.]
Menards' Claims Against Blue Line &
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.]
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 ...