Aspen Am. Ins. Co. v. Interstate Warehousing, Inc.

• Decision Date: 13 March 2019
• Docket Number: Case No. 1:14-CV-383
• Parties: ASPEN AMERICAN INSURANCE CO., as subrogee of Eastern Fish Company, Plaintiff, v. INTERSTATE WAREHOUSING, INC., Defendant.
• Court: U.S. District Court — Northern District of Indiana

372 F.Supp.3d 709

ASPEN AMERICAN INSURANCE CO., as subrogee of Eastern Fish Company, Plaintiff,

v.INTERSTATE WAREHOUSING, INC., Defendant.

Case No. 1:14-CV-383

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

Signed March 13, 2019

Timothy S. McGovern, Swanson Martin & Bell LLP, Chicago, IL, for Plaintiff.

Bruce D. Jones, Keenan Charles Fennimore, Keith A. Gaston, Sally R. Hubbard, Cruser Mitchell Novitz Sanchez Gaston & Zimet LLC, Indianapolis, IN, for Defendant.

OPINION AND ORDER

William C. Lee, Judge U.S. District Court

This matter is before the Court on cross-motions for partial summary judgment. Defendant Interstate Warehousing filed its "Motion for Partial Summary Judgment as to the Enforceability of the Limitation of Liability Contract Clause and Plaintiff's Spoliation of Evidence Claims" on August 29, 2018 (ECF 35), to which Plaintiff Aspen American Insurance filed a response on October 29, 2018 (ECF 42) and Interstate filed a reply on December 12, 2018 (ECF 48). Aspen filed its motion for partial summary judgment on October 29, 2018 (ECF 40), to which Interstate filed a response on December 26, 2018 (ECF 51) and Aspen filed a reply on January 9, 2019 (ECF 53). For the reasons explained below, Defendant Interstate's motion is GRANTED in part and DENIED in part, and Plaintiff Aspen's motion is DENIED.¹

I. Background

Interstate Warehousing owns and operates "cold storage warehouses throughout the United States." Plaintiff's Memorandum in Support of Motion for Partial Summary Judgment (ECF 41), p. 1. Eastern Fish Company sells and distributes frozen seafood and contracted to store some of its products–about $ 2.5 million worth–in Interstate's cold-storage warehouse in Hudsonville, Michigan. Id. , pp. 1-2. The frozen seafood was then distributed to grocery stores for sale to consumers. Id. , p. 1. On March 8, 2014, part of the roof of Interstate's Hudsonville warehouse collapsed due to heavy snow, "subjecting the temperature-sensitive products within the Warehouse to temperature damage."Id. , p. 2. After the roof collapse "[t]he Michigan Department of Agriculture seized [Eastern Fish's inventory] from Interstate."

Id. Aspen states that "[weeks later, Interstate hired a contractor to haul the Food Products away and have them disposed [of] so that Interstate could satisfy its own obligations to the government related to the seizure of the Food Products." Id. , p. 3. Aspen "paid Eastern Fish for [its] loss in return for subrogation rights." Id. Aspen brought this suit to recoup its money, contending that the loss of Eastern Fish's products was Interstate's fault. Aspen contends that Interstate knew or should have known that the warehouse in Hudsonville was structurally unable to handle the weight of excessive snow and therefore Interstate should be made to pay the loss incurred by Eastern Fish as a result of what Aspen alleges was a preventable incident. Interstate, however, insists that "Eastern Fish ... and Defendant entered into a warehouse contract and rate quotation ... which contained a standard, industry-wide used, liability and limitation of damages provision ... which limits the liability for damages claimed in Plaintiff's Complaint to approximately $ 128,400, if Defendant is found legally liable." Defendant's Memorandum in Support of Motion for Partial Summary Judgment (ECF 36), p. 1. Interstate also insists that the roof collapse was the result of an "Act of God, occurring without the fault of Interstate." Defendant's Response in Opposition (ECF 51), p. 8.

Interstate argues that the limitation of damages provision included in its contract with Eastern Fish is valid and enforceable, and the company seeks summary judgment on that issue. Id. Interstate also seeks summary judgment on Aspen's "claims of spoliation of evidence and intentional spoliation of evidence [because they] are not recognized independent causes of action under either Indiana or Michigan laws[.]" Id.² Aspen argues that Interstate cannot limit its liability because the actions of its employees and agents before and after the roof collapse constituted "breach of bailment, conversion and gross negligence." Plaintiff's Memorandum in Support (ECF 41), p. 3. Aspen maintains it is entitled to judgment as a matter of law on those three claims and that the Court should award Plaintiff more than $ 2.6 million for the loss of its food products, nearly $ 8 million in treble damages, and several hundred thousand more in prejudgment interest, costs and attorneys' fees. Id. , pp. 24-25.

II. Summary judgment standard

Summary judgment is appropriate when the record shows that there is "no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c) ; Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Disputes concerning material facts are genuine where the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In deciding whether genuine issues of material fact exist, the court construes all facts in a light most favorable to the non-moving party and draws all reasonable inferences in favor of the non-moving party. See id. at 255, 106 S.Ct. 2505. However, neither the "mere existence of some alleged factual dispute between the parties," id. at 247, 106 S.Ct. 2505, nor the existence of "some metaphysical doubt as to the material facts," Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986), will defeat a motion for summary judgment.

Michas v. Health Cost Controls of Ill., Inc. , 209 F.3d 687, 692 (7th Cir. 2000).

Summary judgment is not a substitute for a trial on the merits nor is it a vehicle for resolving factual disputes. Waldridge v. Am. Hoechst Corp. , 24 F.3d 918, 920 (7th Cir. 1994). Therefore, after drawing all reasonable inferences from the facts in favor of the non-movant, if genuine doubts remain and a reasonable fact-finder could find for the party opposing the motion, summary judgment is inappropriate. See Shields Enterprises, Inc. v. First Chicago Corp. , 975 F.2d 1290, 1294 (7th Cir. 1992) ; Wolf v. City of Fitchburg , 870 F.2d 1327, 1330 (7th Cir. 1989). However, if it is clear that a plaintiff will be unable to satisfy the legal requirements necessary to establish his or her case, summary judgment is not only appropriate, but mandated. See Celotex , 477 U.S. at 322, 106 S.Ct. 2548 ; Ziliak v. AstraZeneca LP , 324 F.3d 518, 520 (7th Cir. 2003). "[Speculation and conjecture" also cannot defeat a motion for summary judgment. Cooney v. Casady , 735 F.3d 514, 519 (7th Cir. 2013). In addition, not all factual disputes will preclude the entry of summary judgment, only those that "could affect the outcome of the suit under governing law." Outlaw v. Newkirk , 259 F.3d 833, 837 (7th Cir. 2001) (citation omitted).

As the Seventh Circuit has explained many times and reiterated recently, a district court's task on summary judgment is as follows:

The following common refrains in summary judgment cases are important to recall in a case with so many factual recitations:

On summary judgment a court may not make credibility determinations, weigh the evidence, or decide which inferences to draw from the facts; these are jobs for a factfinder. Rather, the court has one task and one task only: to decide, based on the evidence of record, whether there is any material dispute of fact that requires a trial. Summary judgment is not appropriate if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. We must look therefore at the evidence as a jury might, construing the record in the light most favorable to the nonmovant and avoiding the temptation to decide which party's version of the facts is more likely true. As we have said many times, summary judgment cannot be used to resolve swearing contests between litigants.

Johnson v. Advocate Health & Hosps. Corp. , 892 F.3d 887, 893 (7th Cir. 2018) (quoting Payne v. Pauley , 337 F.3d 767, 770 (7th Cir. 2003) ).

III. Discussion

A. Choice of law

When the parties filed their cross-motions for summary judgment they had not yet agreed whether Michigan or Indiana law applied to this case. The case is before this Court on diversity jurisdiction because Plaintiff Aspen "is a Texas corporation with its principal place of business located in Rocky Hill, Connecticut ... [and] Defendant, Interstate, is an Indiana corporation with a principal place of business in Fort Wayne, Indiana." Plaintiff's Memorandum in Support, p. 3. However, the events giving rise to this lawsuit occurred at Interstate's warehouse in Hudsonville, Michigan. In its brief in support of its motion for partial summary judgment, filed on August 29, 2018, Interstate stated that "[i]t has yet to be determined whether Michigan or Indiana law will apply to the facts of this matter[ ]" but added that "Defendant asserts that Michigan law applies[.]" Defendant's Memorandum in Support, p. 1. At that point, Interstate presented its arguments "under Michigan and Indiana law." Id. , p. 2. Aspen, in its memorandum in support of its own motion for partial summary judgment filed on October 29, 2018, also argued that Michigan law applies. Plaintiff's Memorandum in Support, pp. 12-15. By the time Interstate filed its reply brief in support of its motion on December 12, 2018, the parties apparently had concluded and agreed that Michigan law applies, since Interstate discusses only Michigan law in that brief. Defendant's Reply Brief (ECF 48). The final round of briefs, including Defendant's Response in Opposition (ECF 51) filed on December 26, 2018, and Plaintiff's Reply in Support (ECF 53) filed on January 9, 2019, apply and discuss only Michigan law. The Court agrees and will apply Michigan law for the reason argued by the parties. See Defendant's...