Fed. Ins. Co. v. Northfield Ins. Co.
| Decision Date | 22 September 2014 |
| Docket Number | CIVIL ACTION NO. H-14-262 |
| Parties | FEDERAL INSURANCE COMPANY, Plaintiff, v. NORTHFIELD INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Southern District of Texas |
In this insurance dispute, Plaintiff Federal Insurance Company ("Federal") and Defendant Northfield Insurance Company ("Northfield") have filed cross-motions for summary judgment.1 See Northfield Insurance Company's Motion for Summary Judgment [Doc. # 27] ("Northfield's Motion"); Plaintiff's Motion for Partial Summary Judgment and Memorandum of Law [Doc. # 28] ("Federal's Motion"). The parties have filed responses and replies for each summary judgment motion. SeeDocs. # 29, # 31, # 33, and # 34. The motions are ripe for decision. Having considered the parties' submissions, all matters of record, and applicable legal authorities, the Court concludes that both Northfield's Motion should be granted in part, that Federal's Motion should be denied, and that judgment should be entered in favor of Northfield.
This suit is brought by one insurance company, Federal, against another, Northfield, regarding the duty to defend their common insured, Bryan C. Wagner, in a suit brought in Harris County, Texas, by ExxonMobil Corporation ("ExxonMobil") (the "Texas Suit"). In the Texas Suit, ExxonMobil alleges that Wagner and three other defendants (the "Wagner Group")2 are contractually required to defend and indemnify ExxonMobil against claims asserted in three other lawsuits filed in Louisiana state courts (collectively, the "Louisiana Lawsuits"). Federal currently is defending Wagner against the claims in the Texas Suit, subject to a full and complete reservation of rights. Northfield has refused a defense to Wagner in the Texas Suit. In the case at bar, Federal seeks a declaratory judgment that Northfield is required to defend Wagner in the Texas Suit and to reimburse a portion of the fees and expensesincurred by Federal in defending Wagner.
In the Texas Suit, ExxonMobil brings a breach of contract claim and seeks declaration of its rights under an Assignment, Bill of Sale, and Quitclaim ("Assignment") executed in 1994 between ExxonMobil and the Wagner Group.3 ExxonMobil seeks defense and indemnity by the Wagner Group regarding all claims asserted against ExxonMobil in the Louisiana Lawsuits, as well as assumption by Wagner of all ExxonMobil's obligations regarding the properties involved in the Louisiana Lawsuits. The Petition states that the Louisiana Lawsuits, filed in 2006 and 2007, allege environmental damage arising from oil and gas operations, including damage from abandoned open wells and to ground water and aquifers.
ExxonMobil alleges in its Petition that, under the Assignment, the Wagner Group agreed to release, defend, and indemnify ExxonMobil against all liabilities connected to the subject property.4 This indemnity expressly included claims by thirdparties for property damage, including damages connected to or arising from plugging and abandoning wells, removal or modification of pipelines or other facilities, or restoration of the surface.5 The ExxonMobil Petition alleges that the Wagner Group is obligated under the Assignment to indemnify and hold ExxonMobil harmlessagainst claims for environmental damage, including "claims arising from ExxonMobil's alleged negligence, strict liability, and any obligation to comply with environmental statutes." Petition, at 5, ¶ 11. See id. at 7, ¶ 15. ExxonMobil cites to Article 21 of the Assignment, in which the Wagner Group agreed to "ACCEPT ALL RESPONSIBILITY AND LIABILITY FOR THE ENVIRONMENTAL CONDITION OF THE ASSIGNED PROPERTY," including costs to "CLEANUP OR REMEDIATE" in accordance with applicable law, and agreed to indemnify, defend, and hold harmless ExxonMobil "FROM ANY AND ALL CLAIMS, CAUSES OF ACTION, . . . LOSSES, AND LIABILITIES WHATSOEVER IN CONNECTION WITH THE ENVIRONMENTAL CONDITION OF THE ASSIGNED PROPERTY OR OTHER PROPERTY AFFECTED THEREBY . . .". Id. at 4-5, ¶ 11 (quoting Assignment).6
Wagner had insurance policies with both Federal and Northfield. Federal (as well as Pacific Indemnity, the original Plaintiff in this suit) issued policies covering Wagner Oil Company over a seven year period, from 2003 through 2010. See Letter dated March 16, 2011, from Chubb Group of Insurance Companies to Wagner (Exhibit C-1 to Northfield's Motion) ("Reservation of Rights Letter"). Northfield issued to Wagner Oil Company a general liability policy effective for one year, from January 31, 1999 through January 31, 2000. See Commercial General Liability Policy No. NN100227 (Exhibit A to Northfield's Motion) ("Policy" or "Northfield Policy").7 It is this latter insurance contract that is in issue.
Federal, which currently is defending Wagner in the Texas Suit, here seeks a declaratory judgment against Northfield that Northfield also has a duty under the Policy to defend Wagner against ExxonMobil's claims in the Texas Suit. The parties have cross-moved for summary judgment.
Rule 56 of the Federal Rules of Civil Procedure mandates the entry of summary judgment who fails to make a sufficient showing of the existence of an element essential to the party's case, and on which that party will bear the burden at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc); see also Baton Rouge Oil and Chem. Workers Union v. ExxonMobil Corp., 289 F.3d 373, 375 (5th Cir. 2002). Summary judgment "should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a); Celotex, 477 U.S. at 322-23; Weaver v. CCA Indus., Inc., 529 F.3d 335, 339 (5th Cir. 2008).
For summary judgment, the initial burden falls on the movant to identify areas essential to the non-movant's claim in which there is an "absence of a genuine issue of material fact." Lincoln Gen. Ins. Co. v. Reyna, 401 F.3d 347, 349 (5th Cir. 2005). The moving party, however, need not negate the elements of the non-movant's case. See Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir. 2005). The moving party may meet its burden by pointing out "'the absence of evidence supporting the nonmoving party's case.'" Duffy v. Leading Edge Prods., Inc., 44 F.3d 308, 312 (5th Cir. 1995) (quoting Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 913 (5th Cir. 1992)).
If the moving party meets its initial burden, the non-movant must go beyond the pleadings and designate specific facts showing that there is a genuine issue of material fact for trial. Littlefield v. Forney Indep. Sch. Dist., 268 F.3d 275, 282 (5th Cir. 2001) (internal citation omitted). DIRECTV Inc. v. Robson, 420 F.3d 532, 536 (5th Cir. 2006) (internal citations omitted).
In deciding whether a genuine and material fact issue has been created, the court reviews the facts and inferences to be drawn from them in the light most favorable to the nonmoving party. Reaves Brokerage Co. v. Sunbelt Fruit & Vegetable Co., 336 F.3d 410, 412 (5th Cir. 2003). A genuine issue of material fact exists when the evidence is such that a reasonable jury could return a verdict for the non-movant. Tamez v. Manthey, 589 F.3d 764, 769 (5th Cir. 2009) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The non-movant's burden is not met by mere reliance on the allegations or denials in the non-movant's pleadings. See Diamond Offshore Co. v. A&B Builders, Inc., 302 F.3d 531, 545 n.13 (5th Cir. 2002), overruled in part on other grounds by Grand Isle Shipyard, Inc. v. Seacor Marine, LLC, 589 F.3d 778 (5th Cir. 2009). Likewise, "conclusory allegations" or "unsubstantiated assertions" do not meet the non-movant's burden. Delta & PineLand Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 399 (5th Cir. 2008). Instead, the nonmoving party must present specific facts which show "the existence of a genuine issue concerning every essential component of its case." Am. Eagle Airlines, Inc. v. Air Line Pilots Ass'n, Int'l, 343 F.3d 401, 405 (5th Cir. 2003) (citation and internal quotation marks omitted). In the absence of any proof, the court will not assume that the non-movant could or would prove the necessary facts. Little, 37 F.3d at 1075 (citing Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888 (1990)).
The Court may make no credibility determinations or weigh any evidence. See Chaney v. Dreyfus Serv. Corp., 595 F.3d 219, 229 (5th Cir. 2010) (citing Reaves Brokerage Co., 336 F.3d at 412-413). The Court is not required to accept the nonmovant's conclusory allegations, speculation, and unsubstantiated assertions which are either entirely unsupported, or supported by a mere scintilla of evidence. Id. (citing Reaves Brokerage, 336 F.3d at 413).
Affidavits cannot preclude summary judgment unless they contain competent and otherwise admissible evidence. See FED. R. CIV. P. 56(c)(4) (); Love v. Nat'l Med. Enters., 230 F.3d 765, 776 (5th Cir. 2000); Hunter-Reed v. City of Houston, 244 F. Supp. 2d 733, 745 (S.D. Tex. 2003). A party's self-serving and unsupported statement in anaffidavit will not defeat summary judgment where the evidence in the record is to the contrary. See In re Hinsely, 201 F.3d 638, 643 (5th Cir. 2000).
Finally, although the Court may consider all materials in the record when deciding a summary judgment motion, "th...
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