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Ranburn Corp. v. Argonaut Insurance Co.

United States District Court, N.D. Indiana, LaFayette Division

March 28, 2018

RANBURN CORPORATION d/b/a RANBURN CLEANERS, Plaintiff,
v.
ARGONAUT INSURANCE COMPANY, ARGONAUT GREAT CENTRAL INSURANCE COMPANY, NATIONAL FIRE AND INDEMNITY EXCHANGE, MERIDIAN MUTUAL INSURANCE COMPANIES n/k/a STATE AUTO INSURANCE COMPANIES, Defendants.

          OPINION AND ORDER

          RUDY LOZANO, JUDGE.

         This matter is before the Court on Defendant Ranburn Corporation d/b/a Ranburn Cleaners' (“Ranburn”) Motion for Partial Summary Judgment, filed on March 29, 2017 (DE #71); Defendant Meridian Mutual Insurance Companies', n/k/a State Auto Insurance Companies (“State Auto”), Cross-Motion for Partial Summary Judgment, filed on May 26, 2017 (DE #90); Defendant Argonaut Great Central Insurance Company's (“AGCIC”) Cross-Motion for Partial Summary Judgment, filed on May 26, 2017 (DE #93); Defendant/Counter-Claimant National Fire and Indemnity Exchange's (“NIE”) Cross-Motion for Partial Summary Judgment, filed on May 26, 2017 (DE #94). For the reasons set forth below, Ranburn's motion for partial summary judgment (DE #71) is DENIED and State Auto's, AGCIC's, and NIE's cross-motions for partial summary judgment (DE #90, DE #93, and DE #94) are GRANTED. The Clerk of the Court is DIRECTED to enter a DECLARATORY JUDGMENT in favor of defendants AGCIC, NIE and State Auto declaring that AGCIC, NIE and State Auto have the right to select and retain the environmental consultant to assist in the defense of the underlying claim brought by the Indiana Department of Environmental Management against Ranburn and conduct the response action at no cost to Ranburn.

         BACKGROUND

         Ranburn filed this suit against the defendants AGCIC, NIE, and State Auto (together, “the Insurers”) to resolve a dispute as to who possesses the right to select the environmental consultant to assist in the defense of an underlying environmental claim brought by the Indiana Department of Environmental Management (“IDEM”) against Ranburn. Ranburn moves for partial summary judgment on the issue of whether the Insurers waived or otherwise forfeited their right to select Ranburn's defense team, including the environmental consultant. Each of the Insurers filed cross-motions for partial summary judgment on this issue. The motions have been fully brief and are ripe for review.

         SUMMARY JUDGMENT STANDARD

         Summary judgment must be granted when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A genuine issue of material fact exists when “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Not every dispute between the parties makes summary judgment inappropriate; “[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Id. To determine whether a genuine dispute of material fact exists, the Court must construe all facts in the light most favorable to the non-moving party and draw all reasonable inferences in that party's favor. See Ogden v. Atterholt, 606 F.3d 355, 358 (7th Cir. 2010). A party opposing a properly supported summary judgment motion may not rely on allegations in her own pleading, but rather must “marshal and present the court with the evidence she contends will prove her case.” Goodman v. Nat'l Sec. Agency, Inc., 621 F.3d 651, 654 (7th Cir. 2010). “[I]nferences relying on mere speculation or conjecture will not suffice.” Stephens v. Erickson, 569 F.3d 779, 786 (7th Cir. 2009) (citation omitted). The party with the burden of proof on an issue can obtain a summary judgment “only where the evidence is so one- sided that it points inescapably” in the movant's favor, and “every reasonable jury” would decide that the movant has met its burden of proof. Thorne v. Member Select Ins. Co., 899 F.Supp.2d 820, 824 (N.D. Ind. 2012) (citations omitted). If the non-moving party fails to establish the existence of an essential element on which he bears the burden of proof at trial, summary judgment is proper. Massey v. Johnson, 457 F.3d 711, 716 (7th Cir. 2006). “[W]hen cross-motions for summary judgment are filed, the [c]ourt must take a dual perspective: [e]ach movant has the burden of establishing the absence of any genuine issue of material fact on its own motion.” Grabach v. Evans, 196 F.Supp.2d 746, 747 (N.D. Ind. 2002) (citation and internal quotation marks omitted).

         FACTS

         The Court finds the following undisputed facts to be supported by admissible evidence in the record:

         Ranburn formerly operated the Ranburn Laundry and Cleaners facility located at 3933 Cleveland Street, Gary, Indiana (the “Site”). NIE issued insurance policies to Ranburn for the period of March 1, 1982, through March 1, 1988. (DE #92-3, ¶2.) State Auto issued insurance policies to Ranburn for the period of March 1, 1992, through March 1, 2001. (DE #92-4, ¶3.) AGCIC issued primary insurance policies to Ranburn for the period of December 27, 2003, through December 27, 2008. (DE #92-2, ¶2.) AGCIC also issued excess insurance policies to Ranburn for the period of December 27, 2005, through December 27, 2008. (Id., ¶3.)

         The insuring agreements of the Policies issued by the Insurers are nearly identical and provide in relevant part:

We will pay those sums that the insured becomes legally obligated to pay as damages because of . . . “property damage” . . . to which this insurance applies. We will have the right and duty to defend any “suit” seeking those damages. We may at our discretion investigate any “occurrence” and settle any claim or “suit” that may result.

(DE #92, ¶3; see, e.g., DE #92-2 at 13 (AGCIC policy); DE #92-4 at 57, 69 (State Auto policy); see also DE #28-1 at 26, DE #28-2 at 29 (NIE policies).)

         Duties in the Event of Occurrence, Offense, Claim or Suit

c. You and any other involved insured must. . .
(3) Cooperate with us in the investigation, or settlement of the claim or defense against the “suit”; and . . .
d. No insureds will, except at their own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent.

(DE #92, ¶3; see, e.g., DE #92-2 at 35 (AGCIC policy); DE #92-4 at 64, 74 (State Auto policy); see also DE #28-1 at 6, DE #28-2 at 12 (NIE policies).)

         In 2009, Ranburn engaged the environmental consultant Environmental Forensic Investigations, Inc. (“EFI”), to conduct environmental testing at the Site. EFI determined that onsite soil and groundwater had been impacted by the release of the dry cleaning solvent PCE. (DE #92-1 at 21.) EFI reported the release to IDEM, and IDEM issued a letter on November 4, 2009, requiring a site investigation to determine the nature and extent of the impacted soil and water (“IDEM suit”). (Id.) Ranburn notified the Insurers of the IDEM suit and requested a defense. (DE #1, ¶19). Ranburn selected its own defense counsel and environmental consultant EFI to defend the IDEM suit. (Id., ¶23, ¶64.)

         State Auto received notice of the IDEM suit on November 17, 2009. (Id.) That same day, State Auto issued its reservation of rights letter to Ranburn, which stated in part:

State Auto expressly reserves its rights to assert any term, provision, condition, limitation and/or exclusion contained in any policies of insurance issued by State Auto that may be applicable to this claim. Further, this letter and any action or inaction taken by State Auto shall not be deemed or construed to waive, alter, delete or expand any of the terms, conditions, provisions, limitations, rights, or limits of coverage of State Auto under the ...

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