CHISHOLM'S VILLAGE PLAZA v. TRAVELERS COMM. INS.
Docket Number | CIV 20-0920 JB/JHR |
Decision Date | 16 August 2022 |
Parties | CHISHOLM'S VILLAGE PLAZA, LLC, Plaintiff, v. TRAVELERS COMMERCIAL INSURANCE COMPANY; The Cincinnati Insurance Company; Will Burke and Burke Insurance Group, Defendants. |
Court | U.S. District Court — District of New Mexico |
621 F.Supp.3d 1195
CHISHOLM'S VILLAGE PLAZA, LLC, Plaintiff,
v.
TRAVELERS COMMERCIAL INSURANCE COMPANY; The Cincinnati Insurance Company; Will Burke and Burke Insurance Group, Defendants.
No. CIV 20-0920 JB/JHR
United States District Court, D. New Mexico
Filed August 16, 2022
Dioscoro A. Blanco, The Rudnicki Firm PLLC, Oklahoma City, Oklahoma -- and -- Thomas M. Hnasko, Julie Sakura, Hinkle Shanor LLP, Santa Fe, New Mexico, Attorneys for the Plaintiff.
Daniel E. Feinberg, Gordon Rees Scully Manuskhani, LLP, Chicago, Illinois -- and -- Jason J. Irvin, Gordon Rees Scully Manuskhani, LLP, Albuquerque, New Mexico, Attorneys for Defendant Fidelity and Guaranty Insurance Underwriters, a.k.a. Travelers Commercial Insurance Company.
Robert C. Evans, James G. Whitley, Evans & Co., Durango, Colorado -- and -- JoHanna C. Cox, Evans & Co., Farmington, New Mexico, Attorneys for Defendant The Cincinnati Insurance Company.
MEMORANDUM OPINION AND AMENDED ORDER1
JAMES O. BROWNING, UNITED STATES DISTRICT JUDGE
THIS MATTER comes before the Court on: (i) Defendant Fidelity and Guaranty
FACTUAL BACKGROUND
The Court draws the factual background from the parties' assertions of undisputed material fact in their summary judgment motion papers. See Fidelity and Guaranty Insurance Underwriters, Inc.'s Memorandum of Law in Support of its Motion for Summary Judgment on the Duty to Defend ¶¶ 1-10, at 2-5, filed February 26, 2021 (Doc. 26), and September 21, 2021 (Doc. 43)("Fidelity MSJ"); Cincinnati MSJ ¶¶ A-H, 1-9, at 1-3; Plaintiff Chisholm's Village Plaza, LLC's Memorandum in Support of Motion for Summary Judgment on Breach of the Duty to Defend ¶¶ 1-10, at 5-8, filed March 19, 2021 (Doc. 31)("Chisholm MSJ"); Plaintiff Chisholm's Village Plaza, LLC's Consolidated Response in Opposition to Defendants' Motions for Summary Judgment ¶¶ A-B, at 4-5, ¶¶ A-H,
1. The CERCLA Lawsuit.
On August 23, 2018, the City of Las Cruces and Doña Ana County filed an Amended Complaint for Damages and Declaratory Relief against Chisholm's Village and other parties4 in the CERCLA Lawsuit. See Fidelity MSJ ¶ A.1, at 2 (asserting this fact); Cincinnati MSJ ¶ A.1, at 2 (asserting this fact); Chisholm Response ¶ B.1, at 4 (admitting this fact); id. ¶ B.1, at 5 (admitting this fact). Las Cruces and Doña Ana County brought claims pursuant to CERCLA, alleging that "groundwater and land have been contaminated by maintenance operations at a former National Guard Armory and by dry cleaning operations at various locations in Las Cruces, including one that [Chisholm's Village] currently owns." Fidelity MSJ ¶¶ A.1-2, at 2 (asserting this fact); Cincinnati MSJ ¶¶ A.1-2, at 2 (asserting this fact). See Chisholm Response ¶ A.1, at 4 (admitting this fact).5 The CERCLA Lawsuit alleges specifically that Chisholm's Village and others "'released substances that are hazardous to human health and the environment into the soil and groundwater in Las Cruces,' and that such releases contributed to a plume of contaminated groundwater that the U.S. Environmental Protection Agency ('EPA') has designated as a federal Superfund site (the 'Site')." Fidelity MSJ ¶ A.2, at 2 (quoting CERCLA Complaint ¶¶ 6, 48, at 6, 14-15)(asserting this fact); Cincinnati MSJ ¶ A.2, at 2 (quoting CERCLA Complaint ¶¶ 6, 48, at 6, 14-15)(asserting this fact). See Chisholm Response ¶ A.1, at 4 (admitting this fact); id. ¶ B.1, at 5 (admitting this fact).
The CERCLA Lawsuit alleges that Las Cruces and Doña Ana County have "spent millions of dollars in investigating and remediating the contamination of the Site in response to EPA demands." Fidelity MSJ ¶ A.3, at 2-3 (citing CERCLA Complaint ¶¶ 8, 50, at 6-7, 15)(asserting this fact); Cincinnati MSJ ¶ A.3, at 3 (citing CERCLA Complaint ¶¶ 8, 50, at 6-7, 15)(asserting this fact). See Chisholm Response ¶ A.1, at 4 (admitting this fact); id. ¶ B.1, at 5 (admitting this fact). The CERCLA Lawsuit further alleges that Chisholm's Village and its co-defendants "have not contributed to the investigation or remediation efforts and thus, the Plaintiffs 'seek a declaration of responsibility and payment from Defendants for past, present, and future response costs incurred in response to Defendants' release of hazardous substances at and to the Site.'" Fidelity MSJ ¶ A.3, at 2-3 (quoting CERCLA Complaint ¶ 10, at 7)(asserting this fact); Cincinnati MSJ ¶ A.3, at 3 (quoting CERCLA Complaint ¶ 10, at 7)(asserting this fact). See Chisholm Response ¶ A.1, at 4 (admitting this fact); id. ¶ B.1, at 5 (admitting this fact). In the CERCLA Lawsuit, Las Cruces and Doña Ana County assert three main causes of action against Chisholm's Village: "(a) Cost Recovery Under CERCLA; (b) Contribution Under CERCLA; and (c) Declaratory Relief." Fidelity MSJ ¶ A.4, at 3 (citing CERCLA Complaint ¶¶ 52-73, at 15-19)(asserting this fact); Cincinnati MSJ ¶ A.4, at 3 (citing CERCLA Complaint ¶¶ 52-73, at 15-19)(asserting this fact). See Chisholm Response ¶ A.1, at 4 (admitting this fact); id. ¶ B.1, at 5 (admitting this fact). In the CERCLA Lawsuit, Las Cruces and Doña Ana County seek the following relief against Chisholm's Village:
(a) an award of damages reflecting the costs that Plaintiffs have incurred and will incur in response to the release or threat of release of hazardous substances; (b) a declaration that CVP is strictly, jointly and severally liable for environmental response costs incurred and to be incurred; (c) a declaration that [Chisholm's Village] is liable for costs "that Plaintiffs may incur as a result of the claims brought under 42. U.S.C. § 9609(a) and 42 U.S.C. § 9607(a) on behalf of EPA"; and (d) prejudgment interest.
Fidelity MSJ ¶ A.5, at 3 (citing CERCLA Complaint ¶¶ 52-73, at 15-19)(asserting this fact); Cincinnati MSJ ¶ A.5, at 3 (citing CERCLA Complaint ¶¶ 52-73, at 15-19)(asserting this fact). See Chisholm Response ¶ A.1, at 4 (admitting this fact); id. ¶ B.1, at 5 (admitting this fact). The CERCLA Complaint "sought to impose joint and several liability on Chisholm's for an approximately 3.5 billion gallon subterranean plume." Chisholm Response ¶ B, at 5 (asserting this fact). See Fidelity Reply/Response ¶ B, at 2 (admitting this fact); Cincinnati Reply/Response ¶ B, at 1 (admitting this fact). "In addition to seeking damages for [tetrachloroethylene ('PCE')] contamination, the [CERCLA] Complaint also sought damages against Chisholm's for the release of unidentified 'hazardous substances.'" Chisholm Response ¶ D, at 6 (asserting this fact)(citing CERCLA Complaint ¶ 33, at 7-8). See Fidelity Reply/Response ¶ D, at 3 (admitting this fact); Cincinnati Reply/Response ¶ D, at 1 (admitting this fact).
2. The Fidelity Policy.
Fidelity Insurance issued the following liability insurance policies to Chisholm's Village's "alleged predecessors": Policy No. 1MP30107954800, from October 10, 1994 to November 1, 1995; Policy No. 1MP30107954801, from November 1, 1995 to December 31, 1995; Policy No. 1MP30107954802, from December 31, 1995 to...
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