Carolina Cas. Ins. Co. v. Liberty Mut. Fire Ins. Co.
| Decision Date | 17 October 2022 |
| Docket Number | Civ. 2:18-cv-04813 (WJM) |
| Parties | CAROLINA CASUALTY INSURANCE COMPANY, Plaintiff, v. LIBERTY MUTUAL FIRE INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — District of New Jersey |
This is a declaratory judgment action between insurers. Carolina Casualty Insurance Company (“CCIC” or “Plaintiff”) seeks reimbursement from Liberty Mutual Fire Insurance Company (“Liberty” or “Defendant”) for a settlement reached between CCIC and its insured, Allegheny Plant Services (“APS”), following a judgment in excess of CCIC's policy limits. Liberty has moved for summary judgment and CCIC has cross moved for summary judgment. ECF Nos. 64, 66. Having reviewed the parties' submissions the Court decides the motions without oral argument. See Fed.R.Civ.P. 78(b); L. Civ. R. 78.1(b). For the reasons set forth below, CCIC's motion is DENIED and Liberty's motion is GRANTED.
On January 18, 2007, APS employee Robert Whitmore was hauling goods in a tractortrailer on behalf of Rand-Whitney Container Newtown LLC (“Rand-Whitney”) in Maywood, New Jersey. Plaintiff's Statement of Material Facts (“Pl.'s SMF”) ¶¶ 4, 6; Pl.'s Ex. E.[1]Pursuant to a 2003 agreement between APS and Rand-Whitney (the “Transportation Agreement”), the tractor-trailer that Whitmore was operating was leased by Rand-Whitney from Ryder Truck Rental, Inc. (“Ryder”). Defendant's Statement of Material Facts (“Def's SMF”) ¶ 8; Def.'s Ex. C at 2, ¶ 11. While driving the tractor-trailer (the “Ryder Vehicle”) east on Essex Street, Whitmore attempted to turn left at an intersection and onto the entrance ramp for Route 17. Pl.'s Ex. E. John Kozlik, a Yellow Corporation[2] truck driver in the course of his employment, waved Whitmore into the intersection. Def.'s SMF ¶ 5. Upon making the left turn, Whitmore collided into an automobile traveling westbound on Essex Street (the “Accident”). Pl.'s Ex. E. The automobile was occupied by the operator, Robert J. Curley (“Curley”), and his passenger, Louis Capurso (“Capurso”). Def.'s SMF ¶ 4.
At the time of the Accident, APS was insured by CICC under a commercial transportation insurance policy (“CCIC Policy”). Pl.'s SMF ¶ 1. The CCIC Policy provided commercial automobile liability coverage in the amount of $1,000,000 per occurrence. Id. Likewise, Rand-Whitney was insured by Liberty under a business auto policy at the time of the Accident (“Liberty Policy”). Pl.'s SMF ¶ 2. On October 29, 2007, Rand-Whitney provided a telephone report of the Accident to Liberty. Pl.'s Ex. T. Liberty's record of the telephone report lists the claimant as Robert Curley. Id.
On or about December 19, 2008, Capurso commenced a lawsuit (the “Capurso Action”) in the Superior Court of New Jersey asserting negligence claims against Whitmore, APS, Rand-Whitney, Robert Curley, and fictitious parties. Pl.'s Ex. M; Pl.'s SMF ¶ 22.
Prior to the commencement of the lawsuit, the record reflects that Capurso's attorney also contacted Ryder about the Accident in February 2007, but Ryder replied that Capurso would need to pursue his claim with Liberty directly since Rand-Whitney elected to provide their own liability insurance. Pl.'s Ex. G. Liberty was ultimately contacted but told CICC in December 2007 that they were “closing [their] file because the claim should be handled by Carolina Casualty per [their] insured” and that “Claimant's attorney was directed to Liberty incorrectly by Ryder.” Pl.'s Ex. N. In addition to sending the paperwork they received for Capurso's claim to CICC, they also let CCIC know that they had “been told that [Curley had] a bodily claim too.” Pl.'s Ex. N.
Accordingly, after the Capurso Action was filed, Liberty sent a tender letter to CICC, who in turn accepted the tender in March 2009 and confirmed that CICC would defend Rand-Whitney, Whitmore, and APS. Pl.'s Exs. O, V. Specifically, CCIC noted that they “instructed defense council [sic] to answer [on Rand-Whitney's] behalf and handle their defense in this matter” and that an answer on Rand-Whitney's behalf had already been filed. Pl.'s Ex. O. Ultimately, CCIC settled the Capurso Action and secured a release for Rand-Whitney and the other defendants. Def.'s SMF ¶ 12. After paying to settle the Capurso Action and pay Curley for property damage to his automobile, the CICC Policy was reduced to a balance of $894,681.82. Def.'s Ex. N ¶ 5. On or around April 7, 2009, Liberty closed its file for the Capurso Action for a second time. Def.'s Resp. to Pl.'s SMF ¶ 39.
On or about September 29, 2008, Curley commenced a personal injury lawsuit (the “Curley Action”) against APS, Whitmore, and Kozlik in the Superior Court of New Jersey. Pl.'s SMF ¶ 25; Def.'s Ex. L. Neither Rand-Whitney nor Kozlik's employer were named as defendants. Def.'s SMF ¶¶ 13, 34. CCIC retained counsel to represent APS in the Curley Action. Pl.'s SMF ¶ 26. The case proceeded to trial and on October 4, 2012, the jury awarded a verdict of $1,400,000.00 ($1,567,844.00 with interest) to Curley. Pl.'s SMF ¶ 28. 85% of the liability was apportioned to APS and Whitmore and the remaining 15% of liability was apportioned to Kozlik. Def.'s SMF ¶ 15; Def.'s Ex. L.
On January 7, 2013, the superior court entered a final judgment on the verdict against Whitmore in the amount of $894,681.82, against APS in the amount of $1,224,000.00 plus interest, and against Kozlik in the amount of $216,000.00 plus interest. Def.'s Ex. L. CCIC subsequently paid the remainder of the CCIC Policy-$894,682.82-towards the judgment. Pl.'s SMF ¶ 31; Def.'s Ex. L. On April 16, 2013, the court entered an Amended Order of Judgment stating that because APS was found to be greater than 60% responsible for the Accident, APS was liable for the full amount of the verdict, including interest and costs, under N.J.S.A. 2A:15-5.3. Pl.'s SMF ¶ 32; Def.'s Ex. L.[3] Following CCIC's payment of the remainder of its policy, the balance remaining on the judgment totaled $673,162.21 (“Excess Judgment”). Pl.'s SMF ¶ 42. APS paid the Excess Judgment. Def.'s SMF ¶ 22, Def.'s Ex. F at 32, ¶ 224.
On November 8, 2013, APS filed a lawsuit against CCIC (the “APS Action”) in the U.S. District Court for the Western District of Pennsylvania regarding CCIC's management of the Curley Action and resulting Excess Judgment. Def.'s SMF ¶ 19; Def.'s Ex. F. The case, which was ultimately transferred to this District, asserted claims of breach of fiduciary duty, breach of contract, and bad faith in violation of 42 Pa. § C.S. 8371. Def.'s SMF ¶ 19; Def.'s Ex. F at ¶ 0457-L0463. Neither Rand-Whitney nor Liberty were named as a defendant. Id. at ¶ 0424.
On or about March 29, 2017, while the APS Action was ongoing, CCIC contacted Liberty for a copy of the Liberty Policy to examine whether excess coverage from Liberty would be available “for the benefit of [APS] and [Whitmore].” Def.'s Ex. H at ¶ 0005. CCIC informed Liberty of the Excess Judgment from the Curley Action and the pending APS Action. Id. On August 9, 2017, Liberty disclaimed coverage, though they stated that “[e]ven if any coverage would have been available to APS or Whitmore assuming timely notice, then, . . . the coverage would be excess.” Def.'s Ex. I at ¶ 0550. In response to Liberty's disclaimer of coverage, CCIC's counsel asked Liberty on September 20, 2017 to re-evaluate their coverage position and invited them to a global mediation in the APS Action on September 25, 2017. Def.'s Ex. J at ¶ 0559. Liberty replied to CICC the same day, reiterating its prior coverage position and declining to attend the mediation. Def.'s Ex. J at ¶ 0653. In its letter, Liberty noted that “Allegheny Plant Services, Inc. ha[s] never requested coverage in the Curley matter from Liberty Mutual.” Id. Consequently, APS's counsel emailed Liberty on September 22, 2017 to ask for Liberty's “participat[ion] in [the September 25th] mediation in order to facilitate a settlement and [t]o extinguish [Liberty's] risk of future litigation and costs.” Def.'s Ex. K at ¶ 0140. APS's counsel continued that “[s]hould Liberty Mutual opt not to participate and the parties fail to reach a settlement on Monday, it is likely that Liberty Mutual will be pulled into this litigation in the not too distant future.” Id. APS's counsel then stated that he had “only recently learned of Liberty Mutual's involvement in the underlying claim/lawsuit” and that in the event the case was not settled on September 25th, he expected to seek leave to amend the complaint “to account for these important facts,” where “Liberty Mutual could find itself as an additional defendant” in the APS Action. Id. Liberty again declined to participate in the September 25, 2017 settlement and “st[ood] by [their] coverage position.” Id. at ¶ 0139. On October 23, 2017, CICC settled the APS Action by reimbursing APS in full for its payment of the Excess Judgment. Def.'s SMF ¶¶ 22, 29.
CCIC filed the present action against Liberty on March 29, 2018 seeking a declaratory judgment as to whether Liberty is an excess provider that is responsible for the Excess Judgment. See Compl. ¶ 1, ECF No. 1. Specifically, the complaint seeks: (1) a declaration that Liberty must provide a copy of the Liberty Policy and claims file from the Accident; (2) a declaration that Liberty must provide coverage as an excess carrier in the Curley Action; (3) an award to CCIC of the Excess Judgment plus all interest, costs, and disbursements; and (4) an award to CCIC of further relief the Court deems just and proper. See Compl. at 5. Liberty answered the complaint on June 1, 2018. See Answer, ECF No. 7. After having an...
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