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Great American E & S Insurance Co. v. Coupled Products, LLC

United States District Court, N.D. Indiana, Fort Wayne Division

July 19, 2018

GREAT AMERICAN E & S INSURANCE COMPANY, Plaintiff,
v.
COUPLED PRODUCTS, LLC Defendant.

          OPINION AND ORDER

          William C. Lee United States District Court

         After Defendant, Coupled Products, LLC's (“Coupled”) tenant abandoned its electroplating operations and left Coupled with a hazardous waste mess on its property, Coupled received a notice of violation (“NOV”) and a proposed agreed order (“PAO”) from the Indiana Department of Environmental Management (“IDEM”) demanding remediation. Coupled then sought coverage under various general liability policies issued to it by Plaintiff, Great American E & S Insurance Company's (“Great American”) over the course of a five-year period. Great American agreed to defend the claims against Coupled under a reservation of rights but, in response to the coverage request, Great American filed the instant action seeking a declaration that it owes no coverage obligations to Coupled under any of the policies it issued between 2012 - 2017.

         Presently before the Court is Great American's Motion for Summary Judgment [DE 12] filed on February 5, 2018. Defendant, Coupled responded on April 2, 2018 to which Great American replied on April 16, 2018. For the following reasons, the Plaintiff's Motion for Summary Judgment is DENIED in part and TAKEN UNDER ADVISEMENT in part. The parties shall submit additional briefing or a Renewed Motion for Summary Judgment in accordance with the directions in this Opinion and Order.

         APPLICABLE STANDARD

         Summary judgment is appropriate “if the movant shows that 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). The movant bears the initial responsibility of informing the district court of the basis of its motion, and identifying those portions of designated evidence that demonstrate the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). After “a properly supported motion for summary judgment is made, the adverse party must set forth specific facts showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986) (quotation marks and citation omitted).

         A factual issue is material only if resolving the factual issue might change the outcome of the case under the governing law. See Clifton v. Schafer, 969 F.2d 278, 281 (7th Cir. 1992). A factual issue is genuine only if there is sufficient evidence for a reasonable jury to return a verdict in favor of the non-moving party on the evidence presented. See Anderson, 477 U.S. at 248. In deciding a motion for summary judgment, the court “may not ‘assess the credibility of witnesses, choose between competing reasonable inferences, or balance the relative weight of conflicting evidence.' ” Bassett v. I.C. Sys., Inc., 715 F.Supp.2d 803, 808 (N.D. Ill. 2010) (quoting Stokes v. Bd. of Educ. of the City of Chi., 599 F.3d 617, 619 (7th Cir. 2010)). Instead, it must view all the evidence in the record in the light most favorable to the non-moving party and resolve all factual disputes in favor of the non-moving party. See Anderson, 477 U.S. at 255. Mindful of these standards, the Court turns now to the facts of the case.

         FACTUAL BACKGROUND

         The underlying facts of this action are largely undisputed and are construed as such throughout this Opinion and Order unless otherwise indicated.

         A. The Policies

         Coupled purchased a myriad of insurance policies, including products/completed operations, general liability, and excess policies from Great American between 2012 and 2017 (“the Policies”). The products/complete operations and general liability policies have nearly identical insuring language. The products/complete operations policies provide as follows:

[Great American] will pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury' or ‘property damages' within the ‘products completed operations hazard' to which this insurance applies. We will have the right and duty to defend the insured against any ‘suit' seeking those damages. However, we will have no duty to defend the insured against any ‘suit' seeking damages for ‘bodily injury' or ‘property damage' to which this insurance does not apply.

(Doc. 13-2, at 11; Doc. 13-3 at 13; Doc 13-4 at 12). With respect to the general liability policies the first sentence of the insuring clause provides, “We will pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury' or ‘property damage' to which this insurance applies.” (Doc. 13- …). The Policies further provide that coverage exists only if the “bodily injury” and “property damage” are caused by an “occurrence.” (Id.). An “occurrence” is “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” (Doc. 13-2, at 21; Doc. 13-3 at 23; Doc 13-4 at 29). “Property damage” means:

a. physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or
b. loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the ‘occurrence' that caused it…

(Id.).

         The Policies also contain numerous exclusions.[1] Relevant for purposes of the current Motion is the exclusion of coverage for “damages” to “property [the insured] own[s], rent[s] or occup[ies], including any costs or expenses incurred by [the insured] or any other person or entity, for repair, replacement, restoration or maintenance of such property, including prevention of injury to a person or damage to another's property” (hereinafter, “the Owned-Property Exclusion”).[2]

         On July 5, 2017, Coupled tendered the NOV and PAO it received from IDEM to Great American for review. In a letter dated September 19, 2017. Great American, under a reservation of rights for the general liability policies, agreed to defend Coupled against the NOV and PAO.[3]

         B. Site Operations

         From 2007 through the present, Coupled is the owner of the real property located at 2651 S. 600 E. in Columbia City, Indiana (“the Site”). Until August 28, 2015, Coupled also owned and operated the electroplating lines within the building located at the Site. However, after August 28, 2015, Coupled sold the electroplating lines and operations to a third party, HuthOne, LLC (“Huth One”). As part of that sale, HuthOne agreed to pay for all costs associated with plating, and was required to “obtain and maintain all permits, licenses and other approvals necessary for the performance of [HuthOne's] obligations under this Agreement.” Affidavit of Tina Johnson at ¶10 (hereafter “Johnson Aff. at ___”). Along with the purchase of the electroplating operations, HuthOne's president, Larry Huth, leased from Coupled the portion of the building at the Site used for electroplating. Id. at ¶11.

         One year later, on September 1, 2016, HuthOne ceased its electroplating operations and abandoned its electroplating chemicals (including products and waste) at the Site. It is these chemicals (including products and waste) that are the subject of the NOV and PAO issued to Coupled.

         C. IDEM&#39 ...


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