Fireman's Fund Ins. Co. v. St. Paul Fire & Marine Ins. Co.

• Decision Date: 19 April 2016
• Docket Number: Civil Action No. 3:12–cv–0851,No. 3:16–cv–0641,3:16–cv–0641
• Citation: 182 F.Supp.3d 793
• Parties: Fireman's Fund Insurance Company, Plaintiff, v. St. Paul Fire & Marine Insurance Company and Travelers Indemnity Company, Defendants. Steven Cohen Productions, Ltd., and St. Paul Fire and Marine Insurance Company, Plaintiffs, v. Lucky Star, Inc., Defendant.
• Court: U.S. District Court — Middle District of Tennessee

182 F.Supp.3d 793

Fireman's Fund Insurance Company, Plaintiff,

v.St. Paul Fire & Marine Insurance Company and Travelers Indemnity Company, Defendants.

Steven Cohen Productions, Ltd., and St. Paul Fire and Marine Insurance Company, Plaintiffs,

v.Lucky Star, Inc., Defendant.

Civil Action No. 3:12–cv–0851

No. 3:16–cv–0641

United States District Court, M.D. Tennessee, Nashville Division.

Filed April 19, 2016

Anthony Dipietra, Gene A. Weisberg, Leon Gladstone, Gladstone Weisberg, ALC, Los Angeles, CA, Edward Jason Ferrell, Gordon C. Aulgur, Brewer, Krause, Brooks, Chastain & Burrow, Nashville, TN, for Plaintiff.

Brent S. Usery, Marc O. Dedman, Spicer Rudstrom, PLLC, Nashville, TN, for Defendants.

MEMORANDUM OPINION

KEVIN H. SHARP, Chief Judge, United States District Court

Before the Court in this consolidated action are three motions: the motion for summary judgment filed by plaintiffs Steven Cohen Productions, Ltd. ("SCP") and St. Paul Fire & Marine Insurance ("St.Paul") in June 2015 in Steven Cohen Productions, Ltd. v. Lucky Star, Inc., No. 3:16–cv–0641 (ECF No. 79) (the "Nevada Action") when that action was still pending in the United States District Court for the District of Nevada; the motion for summary judgment filed by defendants St. Paul and Travelers Indemnity Company in February 2015 in Fireman's Fund Insurance Co. v. St. Paul Fire & Marine Insurance Co., No. 3:12-cv-0851 (the "Declaratory Judgment Action"); and the motion for summary judgment filed in February 2015 by plaintiff Fireman's Fund Insurance Company ("Fireman's Fund"), also in the Declaratory Judgment Action. The Nevada Action was transferred to this district effective March 23, 2016 and reassigned to the undersigned on March 31, 2016. The two actions were consolidated by order entered on April 12, 2016 (ECF No. 129).¹ The parties will be referred to herein by name or initials rather than by party designation, in an attempt to avoid unnecessary confusion.

All the summary-judgment motions have been fully briefed and are ripe for review. The record is replete with statements of facts, responses to statements of facts, additional facts, responses to the additional facts, and numerous declarations, affidavits, depositions and deposition excerpts in support of the parties' statements. Also in the record are a set of joint stipulations and copies of all the written contracts that are or might be relevant to the resolution of this case.

For the reasons set forth herein, the motions filed by SCP and St. Paul will be granted, and the motion filed by Fireman's Fund will be denied in its entirety.

I. STATEMENT OF UNDISPUTED FACTS

Although the parties dispute how to interpret some of the facts, the actual facts themselves are basically undisputed.

On August 13, 2011, the country music band Sugarland was about to perform an outdoor concert at the Indiana State Fairgrounds in Indianapolis. Just before Sugarland was scheduled to go on stage, fifty-mile-per-hour wind gusts from an approaching thunderstorm hit the stage, causing the temporary roof structure to collapse. The "Stage Collapse," as the parties refer to the incident, resulted in several deaths and injuries to spectators. The personal injuries are not the subject of this lawsuit. The Stage Collapse also caused the destruction of equipment used by Sugarland in its concerts. The Nevada Action is a breach of contract action between the insured parties regarding liability for the damage to the equipment caused by the Stage Collapse. The Declaratory Judgment Action was filed to settle a dispute between the insured parties' insurance companies regarding which of them should be responsible, in what amount, for covering the equipment destroyed during the Stage Collapse.

Lucky Star, Inc. ("Lucky Star"), the defendant in the Nevada Action, does business as the country music band, Sugarland. SCP, the plaintiff/subrogor in the Nevada Action, is in the business of providing equipment and personnel for live concert productions. Lucky Star engaged SCP for the purpose of providing production design and lighting equipment (hereafter, the "Leased Equipment"), lighting services, video reinforcement, and other related services in connection with Sugarland's "Incredible Machine" tour (the "Tour"). The Tour had two "legs," one running from spring 2010 to October 2010 and the second running from spring 2011 to October 2011. SCP and Lucky Star executed a written Agreement for Services ("2010 Services Agreement") in connection with the 2010 leg of the Tour. (ECF No. 61.) The 2010 Services Agreement, by its terms, is to be governed by Nevada law. It went into effect in March 2010. It did not have an express termination date but, based on the payment schedule incorporated as Exhibit C to the 2010 agreement, apparently was intended only to cover the 2010 leg of the Tour. The Leased Equipment was itemized in Exhibit A to the 2010 Services Agreement.

Some of the Leased Equipment provided by SCP was owned by SCP, but most of the equipment was owned by a third company, Epic Production Technologies ("Epic"), which is not a party to this action, and leased by SCP from Epic for use by Lucky Star during the Tour. SCP and Epic executed a separate written Service Agreement in connection with the 2010 leg of the Tour ("2010 Epic Agreement"). (ECF No. 63.) The 2010 Epic Agreement included provisions requiring SCP to procure insurance to cover Epic's equipment during the lease term and to indemnify Epic for any damage to that equipment.

In turn, one of the specific terms of the 2010 Services Agreement between SCP and Lucky Star placed upon Lucky Star full responsibility for the risk of any damage or loss to the Leased Equipment (regardless of whether it belonged to Epic or SCP) while it was in Lucky Star's "possession." The agreement also required Lucky Star to obtain $3,258,200 in insurance coverage to protect the Leased Equipment and to name SCP as an additional insured and loss payee on the insurance policy. Specifically, this provision of the 2010 Services Agreement states:

Protection of the Equipment. Producer agrees to provide security protection and assumes full responsibility for the risk of any loss or damage to the Equipment while the Equipment is in possession of [Lucky Star]. [Lucky Star] shall provide evidence of property insurance coverage in the amount of $3,258,200 for the Equipment at all times the Equipment is in [Lucky Star's] possession. Please name Steven Cohen Productions, LTD, as the additional insured.

(2010 Services Agreement, ECF No. 61, at ¶ 12.)

Although the term "possession" was not defined in the 2010 Services Agreement, Steve Cohen of SCP testified that, in his view, the equipment his company provides for use by an artist on a tour is in the artist's "control" at all times. (Cohen Dep., ECF No. 94, at 100:10–11.) More specifically, he stated:

[W]hen an artist puts a tour together, they are in control of that equipment from the moment it leaves the depot that the equipment comes from.

Because they are the ones that make the determination on where that equipment goes, when it is used, how often it's used, and in what venues that it's used in. [sic]

So traditionally in the business, once the equipment leaves the shop ... and gets put into the trucks that are ordered and paid for by the artist, stuff gets put into the trucks, gets delivered to the venue.

And from the moment that it gets into those trucks, it's the artist's responsibility to take care of that gear.

(Id. at 100:13–101:2.) Hellen Rollens, an employee of Gellman Management, Sugarland's manager, testified that Lucky Star rented trucks that went to Epic's and the other vendors' warehouses to pick up the equipment for the Tour and transported all the equipment from "point A to point B" and, at the end of the Tour leg, returned the equipment to the vendors. (Rollens Dep., ECF No. 93–5, at 66:11–21.) To her knowledge, SCP did not have trucks out on Tour that kept the equipment. (Id. at 67:1–3.) The testimony from Cohen and Rollens, which is undisputed, strongly suggests that Lucky Star was in "possession" or control of the Leased Equipment during the 2010 Tour leg from the time it picked up the equipment in its rented trucks until it returned the equipment at the end of the Tour leg.

In any event, Lucky Star complied with ¶ 12 of the 2010 Agreement by procuring an insurance policy (the "Lucky Star Policy"), by and through its insurance broker, Frost Specialty, issued by Fireman's Fund, on which SCP was named as an additional insured and loss payee on a Commercial Articles Floater of the Inland Marine Coverage, covering the Leased Equipment scheduled in the contract in the amount of $3,258,200. (Lucky Star Policy, ECF No. 60–3, at 92.) Fireman's Fund calculated and charged a premium to Lucky Star for coverage of the Leased Equipment for the duration of the 2010 leg of the Tour, without reference to the underlying 2010 Services Agreement and without requiring any information from Lucky Star regarding other insurance that might also cover the Leased Equipment. Fireman's Fund also never requested a copy of the contract between Lucky Star and SCP.

The 2010 leg of the Tour ended in October 2010. By all accounts, the Tour was successful, and Lucky Star and SCP satisfactorily performed under the terms of the 2010 Services Agreement without controversy. It is undisputed that it was Lucky Star's intent to begin the next leg of the Tour in early 2011 with SCP again providing the same lighting equipment, video reinforcement and other related services. According to Hellen Rollens, it was always contemplated that the Tour would continue into 2011 and that, from the production side, "all would stay the same because everybody was pretty happy with the aesthetics and how things were running and the personnel." (Rollens Dep. ECF No. 93–5, at 55:2–6.) Gail Gellman of Gellman Management likewise testified that it was "understood" by all involved that the Tour would continue into 2011. By the...