Emp'rs Ins. Co. of Wausau v. Jennie V's Seafood, LLC, Civil Action No. 12–2961.

• Decision Date: 04 September 2013
• Docket Number: Civil Action No. 12–2961.
• Citation: 970 F.Supp.2d 509
• Parties: EMPLOYERS INSURANCE COMPANY OF WAUSAU v. JENNIE V'S SEAFOOD, LLC and Atain Specialty Insurance Company.
• Court: U.S. District Court — Eastern District of Louisiana

970 F.Supp.2d 509

EMPLOYERS INSURANCE COMPANY OF WAUSAU

v.JENNIE V'S SEAFOOD, LLC and Atain Specialty Insurance Company.

Civil Action No. 12–2961.

United States District Court, E.D. Louisiana.

Sept. 4, 2013.

H. Minor Pipes, III, Catherine Fornias Giarrusso, Susan Muller Rogge, Barrasso, Usdin, Kupperman, Freeman & Sarver, LLC, New Orleans, LA, for Plaintiff.

Matthew D. Monson, Donald John Latuso, Jr., Monson Law Firm, Mandeville, LA, Ethan N. Penn, Brent Joseph Carbo, Musgrave, McLachlan & Penn, LLC, New Orleans, LA, for Defendant.

ORDER AND REASONS

SARAH S. VANCE, District Judge.

Before the Court is the Motion for Summary Judgment of defendant Jennie V's Seafood, LLC (“Jennie V's”).¹ For the following reasons, the Court DENIES defendant's motion.

I. BACKGROUND

Bon Secour Fisheries, Inc., a seafood processor and wholesale distributor located in Alabama,² holds a commercial general liability insurance policy with plaintiff Employers Insurance Company of Wausau.³ On September 20, 2007, Bon Secour entered into a contract with Jennie V's, a seafood harvester located in Louisiana, under which Jennie V's agreed to maintain certain insurance coverage for Bon Secour and to defend and indemnify Bon Secour against certain claims.⁴ The agreement is a standard document drafted by Bon Secourfor use in its business dealings that was executed by the parties in Louisiana.⁵ It provides in relevant part:

2. Seller [Jennie V's] agrees to defend, indemnify, and hold harmless Buyer [Bon Secour] ... (individually, an “indemnitee”) from all actions, suits, claims, demands, and proceedings (“Claims”) and any judgments, damages, losses, debts, liabilities, penalties, fines, costs and expenses (including reasonable attorneys' fees) resulting therefrom whether arising out of contract, tort, strict liability, misrepresentation, violation of applicable law and/or any cause whatsoever:

....

(III) brought ... against any Indemnitee for the recovery of damages for the injury, illness and/or death of any person, or loss or damage arising out of or alleged to have arisen our [sic] of (a) the delivery, sale, resale, labeling, use of [sic] consumption of any product, or (b) the negligent acts or omissions of Seller; provided, however, that Seller's indemnification obligations hereunder shall not apply to the extent that Claims are caused by the negligence of the Buyer.

Seller's agreement to maintain and provide insurance on behalf of Buyer under Paragraph 3 is a result of the requirement for indemnity and defense outlined in this paragraph....

3. Seller agrees to maintain in effect insurance coverage with reputable insurance companies covering ... commercial general liability, including product liability and excess liability, all with such limits as are sufficient in Buyer's reasonable judgment, to protect Seller and Buyer from the liabilities insured against by such coverages.... Buyer shall be named as an additional insured ... with respect to the commercial general liability policy including products liability.⁶

According to Employers, Jennie V's holds a commercial general liability insurance policy with Atain Specialty Insurance Company.⁷ Employers alleges that this policy (the “Atain policy”) contains provisions extending coverage to entities with which Jennie V's contractually agreed to provide commercial general liability insurance.⁸ Under the contract described above, this group would include Bon Secour.

On September 29, 2009, Annie and Walter Lindsey filed suit against Bon Secour and Jennie V's, among others, in Tennessee state court.⁹ In this lawsuit, captioned Annie Delois Lindsey & Walter Lindsey v. The Lucky Bamboo, Inc. et al. (the “ Lindsey lawsuit”), the plaintiffs alleged that Annie Lindsey became seriously ill after consuming allegedly tainted raw oysters supplied by Bon Secour and obtained from either Jennie V's or another seafood harvester named as a defendant, Prestige Oysters, Inc.¹⁰ The Lindseys brought claims against the defendants for breach of express and implied warranties, product liability, violations the Tennessee Consumer Protection Act, negligence, and negligent or fraudulent misrepresentation. ¹¹

After the Lindseys filed this lawsuit, Employers and Bon Secour requested that Jennie V's defend and indemnify Bon Secourunder the contract between the two entities.¹² Jennie V's declined to do so, contending that the Lindsey lawsuit arose out of Bon Secour's negligence and was therefore not covered by the contract.

Employers also asked that Jenny V's or Atain defend and indemnify Bon Secour pursuant to the Atain policy, which plaintiff alleges should have covered Bon Secour in accordance with the contract.¹³ Atain responded that there was no additional insured provision in the Atain policy.¹⁴ Employers requested a copy of the policy, but Atain failed to provide one.¹⁵

On August 3, 2012, the Lindseys settled their claims against Bon Secour and released Bon Secour in exchange for a payment of $325,000.¹⁶ Employers paid the costs of defense for Bon Secour in the Lindsey lawsuit and funded this settlement.¹⁷ At oral argument, counsel for Jennie V's admitted that Jennie V's settled the Lindseys' lawsuit against it at approximately the same time as the Lindseys settled with Bon Secour.

On December 13, 2012, Employers sued Jennie V's and Atain for declaratory relief and for costs incurred as a result of the Lindsey lawsuit.¹⁸ Plaintiff seeks (1) a declaration that Atain owes a duty to defend and indemnify Bon Secour in the Lindsey lawsuit because Bon Secour is an additional insured under the Atain policy; (2) a declaration that Jennie V's owes a duty to defend and indemnify Bon Secour pursuant to the indemnity provisions of the agreement; and (3) reimbursement of defense costs and settlement payments from the Lindsey lawsuit from Atain and/or Jennie V's. ¹⁹ Jennie V's has filed a motion seeking summary judgment on plaintiff's claims for indemnification and reimbursement against Jennie V's. ²⁰

II. STANDARD

Summary judgment is warranted when “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(c)(2); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994). When assessing whether a dispute as to any material fact exists, the Court considers “all of the evidence in the record but refrains from making credibility determinations or weighing the evidence.” Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398 (5th Cir.2008). All reasonable inferences are drawn in favor of the nonmoving party, but “unsupported allegations or affidavits setting forth ‘ultimate or conclusory facts and conclusions of law’ are insufficient to either support or defeat a motion for summary judgment.” Galindo v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th Cir.1985); Little, 37 F.3d at 1075.

If the dispositive issue is one on which the moving party will bear the burden of proof at trial, the moving party “must come forward with evidence which would ‘entitle it to a directed verdict if the evidence went uncontroverted at trial.’ ” Int'l Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257, 1263–64 (5th Cir.1991). The nonmoving party can then defeat the motion by either countering with sufficient evidence of its own, or “showing that the moving party's evidence is so sheer that it may not persuade the reasonable fact-finder to return a verdict in favor of the moving party.” Id. at 1265.

If the dispositive issue is one on which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by merely pointing out that the evidence in the record is insufficient with respect to an essential element of the nonmoving party's claim. See Celotex, 477 U.S. at 325, 106 S.Ct. 2548. The burden then shifts to the nonmoving party, who must, by submitting or referring to evidence, set out specific facts showing that a genuine issue exists. See id. at 324, 106 S.Ct. 2548. The nonmovant may not rest upon the pleadings, but must identify specific facts that establish a genuine issue for trial. See, e.g., id. at 325, 106 S.Ct. 2548;Little, 37 F.3d at 1075 (“Rule 56 ‘mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.’ ” (quoting Celotex, 477 U.S. at 332, 106 S.Ct. 2548)).

III. DISCUSSIONA. The Parties' Arguments

The dispute in this case centers around the indemnity clause of the agreement, which provides in relevant part that Jennie V's

agrees to defend, indemnify, and hold harmless [Bon Secour] ... from all ... claims ... and any judgments, damages, losses, debts, liabilities, penalties, fines, costs and expenses (including reasonable attorneys' fees) resulting therefrom ...

....

(III) brought ... against [Bon Secour] for the recovery of damages for the injury, illness and/or death of any person, or loss or damage arising out of or alleged to have arisen ou[t] of (a) the delivery, sale, resale, labeling, use o [r] consumption of any product, or (b) the negligent acts or omissions of [Jennie V's]; provided, however, that [Jennie V]'s indemnification obligations hereunder shall not apply to the extent that Claims are caused by the negligence of [Bon Secour].²¹

Jennie V's contends that this agreement does not require it to defend and indemnify Bon Secour in connection with the Lindsey lawsuit, for two related reasons. First, Jennie V's argues that the Lindseys' injuries occurred as a result of the negligence of Bon Secour. Second, Jennie V's claims that its duty to defend and indemnify would have been triggered only after a judicial determination that Bon Secour was faultless—a...