Caci Intern. v. St. Paul Fire and Marine Ins. Co.

• Decision Date: 14 July 2008
• Docket Number: No. 1:08cv249 (LMB/TRJ).,1:08cv249 (LMB/TRJ).
• Court: U.S. District Court — Eastern District of Virginia
• Parties: CACI INTERNATIONAL, et al., Plaintiffs, v. ST. PAUL FIRE AND MARINE INSURANCE COMPANY, Defendant.

567 F.Supp.2d 824

CACI INTERNATIONAL, et al., Plaintiffs, v. ST. PAUL FIRE AND MARINE INSURANCE COMPANY, Defendant.

No. 1:08cv249 (LMB/TRJ).

United States District Court, E.D. Virginia, Alexandria Division.

July 14, 2008.

COPYRIGHT MATERIAL OMITTED

Justin F. LaVella, Esq., Kelley Drye & Warren LLP, Washington, DC, for Plaintiffs.

Walter J. Andrews, Esq., Brian J. Gerling, Esq., Reginald M. Skinner, Esq., Hunton & Williams LLP, McLean, VA, for Defendant.

MEMORANDUM OPINION

LEONIE M. BRINKEMA, District Judge.

Plaintiffs CACI International, Inc., CACI Inc.—Federal, CACI Premier Technology, Inc., and CACI N.V. (collectively "CACI") filed this declaratory judgment action against defendant St. Paul Fire and Marine Insurance Company ("St. Paul"), seeking a declaration that, under its general commercial insurance policy, St. Paul is obligated to defend CACI in two pending lawsuits brought by Iraqi nationals claiming that they were abused and tortured by CACI employees. St. Paul has denied any duty to defend or indemnify CACI, arguing that the insurance policy expressly denies coverage for the conduct alleged in those lawsuits.

The parties have filed cross motions for summary judgment on the issue of St. Paul's duty to defend. For the reasons stated below, CACI's motion for summary judgment will be denied and St. Paul's motion for summary judgment will be granted.

Background

CACI, a Delaware company with its principal place of business in Virginia, provides logistical, engineering, technological, and professional support to the United States government. St. Paul, a Minnesota corporation with its principal place of business in Minnesota, provides property and casualty insurance to individuals and businesses.

On March 31, 2003, St. Paul issued a twelve month "Commercial General Liability Protection" policy to CACI. Coverage was capped at $1 million for each event, and $2 million for all claims. See Coverage Summary, Policy No. TE09001851 March 31, 2003. The policy also obligated St. Paul to defend CACI against any claim or suit for covered injury or damage. See Commercial General Liability Protection, at 3, Policy No. TE09001851, March 31, 2003. On March 31, 2004, CACI renewed the policy for an additional twelve months. The scope of coverage was not changed. See Coverage Summary, Policy No. TE09002030, March 31, 2004. The provisions of the two policies are identical in all material respects.

In May 2003, CACI acquired the assets of Premier Technology Group, Inc., a company specializing in the provision of intelligence support and information technology to the United States government. See Billings Decl. ¶¶ 5, 7. The company became a wholly-owned subsidiary of CACI and was renamed CACI Premier Technology, Inc. ("CACI Premier"). Id. ¶ 7

Pursuant to two contracts issued in August 2003, CACI Premier agreed to provide interrogators and screeners to assist with military intelligence operations in Iraq. Id. ¶ 10. A third contract was awarded in December 2003. Id. Under these contracts, interrogators and screeners were deployed to various locations in Iraq, including the Abu Ghraib prison. Id. ¶ 11.

In late April 2004, the news media began airing reports of detainee abuse at the Abu Ghraib prison. On May 10, 2004, CACI notified its insurance broker of its potential involvement in the detainee abuse. See Stewart Decl. ¶ 6. On May 13, 2004, this information was relayed to St. Paul. Id. ¶ 7.

On June 9, 2004, a group of former detainees alleging abuse by CACI employees at the Abu Ghraib prison and the Buka prison filed a class-action suit against CACI and its subsidiaries in the United States District Court for the Southern District of California.¹ In their complaint, plaintiffs allege that CACI interrogators committed numerous acts of abuse, including spraying naked detainees with cold water during the winter months, tying their hands behind their backs and leaving them naked on the floor, sometimes in the presence of dogs, and ordering them to stand naked in a room with the opposite sex. Plaintiffs also allege that CACI interrogators placed detainees outside during the summer months with their hands tied behind their backs; hit detainees with electric cables and stun guns; electrocuted detainees' penises, anuses, and tongues; sodomized detainees with sticks; forced detainees to masturbate and engage in sexual acts; kicked and hit detainees on their heads, backs, stomachs, and genitals; placed hoods over detainees for extended periods of time, causing them to become disorientated and suffer breathing problems; placed flexi-cuffs around detainees' wrists for extended periods of time, causing skin lesions; deprived detainees of food, water, and sleep; forced detainees to stand in stress positions—hands above head, standing on one leg, crouching, etc.—for hours or days; hung detainees from the ceiling by their hands; and threatened to kill members of detainees' families. See Complaint, Al Rawi v. Titan Corp., No. 04-1143 (S.D. Cal. June 9, 2004) ("the Saleh complaint"). The civil action was transferred to this district pursuant to 28 U.S.C. § 1404, see Saleh v. Titan Corp., 361 F.Supp.2d 1152 (S.D.Cal.2005), and finally to the United States District Court for the District of Columbia. See Order [61], Al Rawi v. Titan Corp., No. 05-427 (E.D.Va. Jan. 13, 2006).

On July 27, 2004, another group of plaintiffs —seven Iraqi nationals alleging that they or their late husbands had been abused at Abu Ghraib—filed a similar complaint in the United States District Court for the District of Columbia. See Complaint, Ibrahim v. Titan Corp., No. 04-1248 (D.D.C. July 27, 2004) ("the Ibrahim complaint"). In that complaint, the plaintiffs allege that

defendants and/or their agents tortured one or more of them by: beating them; depriving them of food and water; subjecting them to long periods of excessive noise; forcing them to be naked for prolonged periods; holding a pistol (which turned out to be unloaded) to the head of one of them and pulling the trigger; threatening to attack them with dogs; exposing them to cold for prolonged periods; urinating on them; depriving them of sleep; making them listen to loud music; photographing them while naked; forcing them to witness the abuse of other prisoners, including rape, sexual abuse, beatings and attacks by dogs; gouging out an eye; breaking a leg; electrocuting one of them; spearing one of them; forcing one of them to wear women's underwear over his head; having women soldiers order one of them to take off his clothes and then beating him when he refused to do so; forbidding one of them to pray, withholding food during Ramadan, and otherwise ridiculing and mistreating him for his religious beliefs; and falsely telling one of them that his family members had been killed.

Ibrahim v. Titan Corp., 391 F.Supp.2d 10, 12-13 (D.D.C.2005).²

On June 10, 2004 and August 9, 2004, St. Paul received notice of the complaints. See Stewart Decl. ¶¶ 9-10. In a reservation of rights letter dated November 3, 2004, St. Paul concluded that its insurance policy with CACI did not cover the activities alleged in the two complaints, and it declined to pay for CACI's defense to the litigation. See Morse Decl. ¶¶ 18-19. St. Paul also filed a declaratory judgment action, asserting that it had no duty to defend or indemnify CACI or its subsidiaries in connection with the lawsuits. See Complaint, St. Paul Fire v. CACI International, No. 04-1336 (E.D.Va. Nov. 3, 2004).

Pursuant to a tolling agreement, St. Paul voluntarily dismissed its declaratory judgment action without prejudice to await the outcome of CACI's motion for summary judgment. See Morse Decl. ¶¶ 21-22. On November 6, 2007, Judge Robertson denied CACI's motion. See Ibrahim v. Titan Corp., 556 F.Supp.2d 1 (D.D.C. 2007).

On March 14, 2008, CACI filed the instant declaratory judgment action against St. Paul, seeking a declaration that St. Paul is obligated to defend CACI in the two lawsuits. St. Paul filed a counterclaim requesting a contrary declaration that St. Paul has no duty either to defend or indemnify CACI under the terms of the insurance policy.

Standard of Review

Summary judgment is appropriate if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In ruling on a motion for summary judgment, a court should accept the evidence of the non-moving party, and all justifiable inferences must be drawn in that party's favor. Anderson v Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Discussion

In Virginia, an insurer's duty to defend "arises whenever the complaint alleges facts and circumstances, some of which would, if proved, fall within the risk covered by the policy." Lerner v. General Ins. Co. of Am., 219 Va. 101, 245 S.E.2d 249, 251 (1978). "This rule, sometimes referred to as the Eight Corners Rule, requires a court to compare the four corners of the insurance policy against the four corners of the underlying complaint; if any allegations may potentially be covered by the policy, the insurer has a duty to defend." Capitol Envtl. Servs., Inc. v. North River Ins. Co., 536 F.Supp.2d 633, 640 (E.D.Va.2008).

The parties raise numerous issues in support of their respective motions. St. Paul first argues that the alleged abuses by CACI interrogators—assault, electrocution, deprivation of food, etc.—are knowing and intentional acts, and that intentional acts fall outside of the insurance policy's coverage.³ In response, CACI concedes that many of the alleged acts are intentional, but it argues that the complaints also permit proof that some of the detainees' injuries were caused by negligent conduct. Because injury resulting from negligence is expressly covered by the policy, CACI insists that St. Paul's duty to defend is triggered as a matter of...