United States District Court, S.D. Indiana, Indianapolis Division
DIRECT ENTERPRISES, INC., OLYMPUS SEED TREATMENT FORMULATOR, INC., Plaintiffs,
SENSIENT COLORS LLC, SPECTRA COLORANTS, INC., Defendants. SENSIENT COLORS LLC, Third Party Plaintiff,
SPECTRA COLORANTS, INC., Third Party Defendant.
FINDINGS OF FACT AND CONCLUSIONS OF LAW PURSUANT TO
FEDERAL RULE OF CIVIL PROCEDURE 52
Jane Magnus-Stinson, Chief Judge
the stipulated dismissal of many claims in this action,
Third-Party Plaintiff Sensient Colors, LLC
(“Sensient”) and Third-Party Defendant
Spectra Colorants, Inc. (“Spectra”) seek
to resolve the issue of whether Spectra owes Sensient a
contractual duty to defend in the instant suit. The parties
have agreed to resolve this claim pursuant to Federal
Rule of Civil Procedure 52(a), under which the
action is tried on the facts to the Court without a jury.
Fed. R. Civ. P. 52(a). The parties have submitted
stipulated proposed findings of fact, [Filing No.
282], as well as their proposed conclusions of law,
[Filing No. 283; Filing No. 284]. The claim
is therefore ripe for the Court's resolution, and the
Court sets forth below its findings of fact and conclusions
Direct Enterprises, Inc. (“DEI”) and
Olympus Seed Treatment Formulator, Inc.
(“Olympus”) are in the business of
creating made-to-order seed treatments, which are mixtures of
fungicides, insecticides, polymers, and colorants that
farmers apply to seeds before planting. Spectra is a
manufacturer of colorants, and Sensient sells seed treatment
components. Olympus purchased colorants from Sensient, and
those colorants were manufactured by Spectra. Spectra knew
that Sensient was selling the colorants to a third-party
end-user but was never informed of the identity of that
end-user. Sensient's orders of colorants from Spectra
were done pursuant to purchase orders, which all contained
the following term:
9. INDEMNITY. Seller shall defend and save buyer harmless
against all damages, liabilities, claims, losses, costs,
expenses, penalties, or fines. including reasonable attorney
fees, arising out of our resulting in any way from any actual
or alleged defect in the goods or sendees purchased hereunder
or from any act or omissions of seller, its agents,
employees, or subcontractors with respect to such goods or
services. Seller agrees to reimburse buyer for any losses or
expense incurred or suffered by buyer, including reasonable
attorneys1 fees, for seller's failure to timely perform
any of its obligations hereunder.
purchase order does not define the terms “arising out
of or “resulting in any way from, ” and there are
no other references to the duty to defend in that document.
Third-Party Complaint, Sensient seeks declaratory relief
against Spectra, asking the Court to determine whether, and
if so, to what extent Spectra is obligated under the terms of
the purchase orders to defend Sensient and/or to reimburse
Sensient for defense costs related to defending this
action. The parties agree that, pursuant to the
terms of the parties' purchase orders, Missouri law
governs this dispute.
contracts must be construed as a whole in light of the
object, nature, and purpose of the agreement. Wilshire
Const. v. Union Elec. Co., 463 S.W.2d 903, 906 (Mo.
1971). If a contract's terms are clear and
unambiguous, courts enforce the contract according to the
plain meaning of its words. Util. Serv. & Maint.,
Inc. v. Noranda Aluminum, Inc., 163 S.W.3d 910, 913 (Mo.
2005); see also Contract Freighters,
Inc. v. J.B. Hunt Transp., 245 F.3d 660, 663 (8th Cir.
2001). It is well-settled that “though they
may be contained in a single contractual provision, a duty to
defend is independent of a duty to indemnify.”
Travelers Indem. Co. v. S.M. Wilson & Co., 2005
WL 3143779, at *2 (E.D. Mo. Nov. 23, 2005) (citing Burns
& McDonnell Eng'g Co., Inc. v. Torson Const. Co.,
Inc., 834 S.W.2d 755, 758 (Mo.Ct.App.1992) (duty to
defend is independent of duty to indemnify)).
insurance context, “[t]he duty to defend is broader
than the duty to indemnify.” McCormack Baron Mgmt.
Servs., Inc. v. Am. Guarantee & Liab. Ins. Co., 989
S.W.2d 168, 170 (Mo. 1999). The duty to defend
arises “whenever there is a potential or possible
liability to pay based on the facts at the outset of the case
and is not [dependent] on the probable liability to pay based
on the facts ascertained through trial.” Id.
The existence of the duty is determined by comparing the
language of the agreement with the allegations in the
complaint. Id. The complaint need only allege facts
that give rise to a claim “potentially” within
the agreement's coverage in order to trigger a duty to
defend. McCormack, 989 S.W.2d at 170-71;
see also Shapiro Sales Co. v. Alcoa, Inc.,
2006 WL 2228987, at *2 (E.D. Mo. Aug. 3, 2006) (“A
party has the duty to defend claims falling within the scope
of an agreement even though ultimately it may not be
obligated to indemnify an indemnitee.”).
indemnitee “need only prove that one claim is covered
to invoke [the indemnitor's] duty to defend all
claims.” United Fire & Cas. Co. v. Realty Title
Co., 2007 WL 428068, at *2 (W.D. Mo. Feb. 2, 2007)
(citing Universal Underwriters Ins. Co. v. Lou Fusz
Automotive Network, Inc., 300 F.Supp.2d 888, 893 (E.D.
Mo. 2004) (“The insurer's duty to defend arises
when there is a potential liability set forth in the
complaint ... [e]ven if some claims in the complaint are not
covered, the presence of insured claims triggers a duty to
defend.”)); see also Lampert v. State Farm
Fire & Cas. Co., 85 S.W.3d 90, 94 (Mo.Ct.App. 2002)
(finding that the existence of one potentially covered claim
gave rise to a duty to defend, “even though claims
beyond the coverage, such as the fraud claim, may also be
Court notes that the duty-to-defend legal standard described
above has largely been expounded in the insurance law
context. Here, no insurance policy is at issue, but rather a
contractually assumed duty to defend. At least regarding how
the duty to defend is triggered, courts applying Missouri law
appear to invoke the standard articulated in the insurance
context, although with no explanation as to the differing
contexts. See, e.g.,Cravens v. Smith, 610
F.3d 1019, 1028 (8th Cir. 2010) (applying standards
articulated in insurance ...