Everest Indem. Ins. Co. v. Jake's Fireworks, Inc.
| Decision Date | 19 November 2020 |
| Docket Number | Case No. 19-CV-2620-JAR-ADM |
| Parties | EVEREST INDEMNITY INSURANCE COMPANY, Plaintiff, v. JAKE'S FIREWORKS, INC. and Howard O. Harper, Defendants. Maxum Indemnity Company and James River Insurance Company, Intervenor Plaintiffs, v. Jake's Fireworks, Inc. and Howard O. Harper, Defendants. |
| Court | U.S. District Court — District of Kansas |
Russell F. Watters, Timothy J. Wolf, Brown & James, PC, St. Louis, MO, for Plaintiff.
Christopher Charles Confer, Karl Kuckelman, Wallace Saunders Austin Brown & Enochs Chartered, Overland Park, KS, for Defendant Jake's Fireworks, Inc.
Brian D. Johnston, Johnson, Vorhees & Martucci, Springfield, MO, Roger A. Johnson, Johnson, Vorhees & Martucci, Joplin, MO, for Defendant Howard O. Harper.
This matter concerns whether Defendant Jake's Fireworks, Inc. ("Jake's") has insurance coverage for a state court lawsuit arising from a tragic accident on August 12, 2014, in which Defendant Howard Harper ("Harper") was grievously injured. Plaintiff Everest Indemnity Insurance Company ("Everest") filed this action seeking a declaratory judgment, pursuant to 28 U.S.C. § 2201 and Fed. R. Civ. P. 56, that a commercial general-liability insurance policy it issued to Jake's, Lone Star Management, LLC ("Lone Star"), and other entities does not provide liability coverage for Harper's bodily injury claim and lawsuit filed against Jake's in the District Court of Crawford County, Kansas. Excess insurers Maxum Indemnity Company ("Maxum") and James River Insurance Company ("James River") were granted leave to intervene in this action and also seek declaratory judgment that they are not liable under commercial excess liability policies issued to Jake's.
This case is now before the Court on Everest's Motion for Summary Judgment (Doc. 19), James River's Motion for Summary Judgment (Doc. 87), Jake's Motion for Summary Judgment (Doc. 90), Maxum's Motion for Summary Judgment (Doc. 92), Harper's Motion for Summary Judgment (Doc. 95), Jake's Motion for Leave to File a Sur-Reply to Plaintiff Everest Indemnity Company's Reply in Support of its Motion for Summary Judgment (Doc. 94), and Jake's Objections to the Magistrate Judge's Order Denying Jake's Motion for Leave to Amend its Currently Pending Amended Answer and Counter-Claim to Plaintiff Everest's Complaint for Declaratory Judgment and Motion for Leave to Amend its Amended Answer and Counter-Claim to Intervenor Plaintiff Maxum Indemnity Company's Complaint for Declaratory Judgment (Doc. 100). The motions are fully briefed, and the Court is prepared to rule. For the reasons explained in detail below, Everest's, Maxum's, and James River's motions for summary judgment are granted, Jake's and Harper's motions for summary judgment are denied, and judgment is entered in favor of the insurers. Jake's motion for leave to file a sur-reply and objections the magistrate judge's order are denied as moot.
Summary judgment is appropriate if the moving party demonstrates "that there is no genuine dispute as to any material fact" and that it is "entitled to judgment as a matter of law."1 In applying this standard, the Court views the evidence and all reasonable inferences therefrom in the light most favorable to the nonmoving party.2 "There is no genuine [dispute] of material fact unless the evidence, construed in the light most favorable to the non-moving party, is such that a reasonable jury could return a verdict for the non-moving party."3 A fact is "material" if, under the applicable substantive law, it is "essential to the proper disposition of the claim."4 A dispute of fact is "genuine" if "there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way."5
The moving party initially must show the absence of a genuine dispute of material fact and entitlement to judgment as a matter of law.6 To prevail on a motion for summary judgment on a claim upon which the moving party also bears the burden of proof at trial, the moving party must demonstrate that "no reasonable trier of fact could find other than for the moving party."7 A movant who does not bear the ultimate burden of persuasion at trial need not negate the nonmovant's claim; rather, the movant need simply "point[ ] out to the court a lack of evidence for the nonmovant on an essential element of the nonmovant's claim."8
Once the movant has met its initial burden of showing the absence of a genuine dispute of material fact, the burden shifts to the nonmoving party to "set forth specific facts showing that there is a genuine issue for trial."9 The nonmoving party may not simply rest upon its pleadings to satisfy its burden.10 Rather, the nonmoving party must "set forth specific facts that would be admissible in evidence in the event of trial from which a rational trier of fact could find for the nonmovant."11 In setting forth these specific facts, the nonmovant must identify the facts "by reference to affidavits, deposition transcripts, or specific exhibits incorporated therein."12 If controverted, the facts are construed in the light most favorable to the non-movant.13 However, to successfully oppose summary judgment, the nonmovant must bring forward "more than a mere scintilla of evidence" in support of his position.14 A nonmovant "cannot create a genuine issue of material fact with unsupported, conclusory allegations."15 "Where, as here, the parties file cross-motions for summary judgment, [the court is] entitled to assume that no evidence needs to be considered other than that filed by the parties, but summary judgment is nevertheless inappropriate if disputes remain as to material facts."16
Finally, summary judgment is not a "disfavored procedural shortcut"; on the contrary, it is an important procedure "designed to secure the just, speedy and inexpensive determination of every action."17
Guided by the foregoing framework, the Court turns to the parties' statements of fact, keeping in mind that factual disputes about immaterial matters are not relevant to a summary judgment determination; rather, immaterial facts and factual averments not supported by the record are omitted.18
Jake's and multiple other businesses, including Lone Star and Firework's Leasing, LLC ("Fireworks Leasing"), are owned and controlled by the Marietta Family. Jake's business involves the import, retail sale, and wholesale distribution of 1.4G consumer fireworks. Jake's corporate representative testified that the Marietta Family decided to form Lone Star for administrative efficiency in handling human resources functions for employees of Marietta-owned ventures. Thus, Lone Star was formed in November 2011 to employ the staff and "handle all the HR things, payroll, benefits, insurance, and then ... lease out the employees back to the Marietta entities."19 Lone Star has employees provided to work for Marietta-owned entities in several states across the country in addition to Kansas, including Washington, where Jake's operates a distribution center. Jake's corporate representative estimated in 2017 that Lone Star was leasing out approximately 200 workers in multiple states. Lone Star has never held itself out as a staffing agency to provide services to the general public.
On March 1, 2012, Jake's and Lone Star entered into a Staffing Services Agreement ("SSA").20 The initial term of the SSA was for a period of one year, but the agreement provided that it would automatically renew unless either party provided written notice of termination within thirty days preceding the anniversary of its commencement. The SSA provided that Jake's 21
Under "Relationship of the Parties," the SSA provided that Lone Star was "an independent contractor and not an agent, representative or employee of [Jake's]."24 The SSA further provided that the "cost, number, duration, and function of staffing personnel provided by [Lone Star] and used by [Jake's] shall be determined by [Jake's] in its sole discretion and approval at all times."25
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