General Mills Inc. v. Liberty Ins. Underwriters, 2:06-cv-315.

• Decision Date: 08 August 2007
• Docket Number: No. 2:06-cv-315.,2:06-cv-315.
• Citation: 498 F.Supp.2d 1088
• Parties: GENERAL MILLS INC., Plaintiff, v. LIBERTY INSURANCE UNDERWRITERS INC., Defendant.
• Court: U.S. District Court — Southern District of Ohio

498 F.Supp.2d 1088

GENERAL MILLS INC., Plaintiff, v. LIBERTY INSURANCE UNDERWRITERS INC., Defendant.

No. 2:06-cv-315.

United States District Court, S.D. Ohio, Eastern Division.

August 8, 2007.

William J. Pohlman, Vorys Sater Seymour & Pease, Columbus, OH, Rolf E. Gilbertson, Zelle, Hofmann, Voelbel, Mason

& Gette LLP, Minneapolis, MN, for Plaintiff.

David L. Lester, Ulmer & Berne, Cleveland, OH, for Defendant.

OPINION & ORDER

FROST, District Judge.

This matter comes before the Court for a Motion for Partial Summary Judgment (Doc. # 30) filed by Plaintiff General Mills Inc. ("Plaintiff"), a memorandum in opposition (Doc. # 33) filed by Defendant Liberty Insurance Underwriters Inc. ("Defendant"), and a reply. (Doc. # 34.) Also before the Court is Defendant's Motion for Summary Judgment (Doc. # 31), a memorandum in opposition ("Doc.# 32"), and a reply. (Doc. # 35.) For the reasons that follow, the Court grants Plaintiff's Motion (Doc. # 30), and denies Defendant's motion. (Doc. # 31.)

A. Findings of Fact

Plaintiff is a corporation engaged in the business of manufacturing and marketing food products throughout the world. It owns and operates a manufacturing facility in Wellston, Ohio. Defendant is a corporation with its principal place of business in New York, New York. Defendant is engaged in the business of selling insurance policies and is licensed to transact insurance business in the State of Ohio. Liberty Insurance Corporation insured Plaintiff for employers' liability on a first-level basis. Additionally, Defendant provided umbrella excess insurance to Plaintiff.

This action arises out of a severe bodily injury to Plaintiffs employee, Anthony Smith ("Smith"), at its Wellston, Ohio plant. Smith and his family initiated an action in this Court against Plaintiff alleging a substantial certainty intentional tort. Following discovery, Plaintiff settled the Smiths' claims for an amount in excess of its first-level policy of liability insurance that provided coverage for employers' liability. The parties do not dispute that the provisions of the first-level policy provided coverage for substantial certainty intentional torts. Accordingly, Liberty Insurance Corporation paid Plaintiff the limits of the first-level policy. Defendant, has taken the position, however, that its Umbrella Policy does not provide coverage for Smiths' claims made against Plaintiff with respect to the excess amount.

Defendant's Umbrella Policy, with liability limits of $ 25,000,000 and no self-insured retention, provides that it will pay on behalf of the insured those sums in excess of the underlying policy that the insured becomes legally obligated to pay by reason of liability imposed by law because of bodily injury that takes place during the policy period and is caused by an occurrence. Moreover, the Umbrella Policy specifically states that Liberty Insurance Corporation's first-level policy with Plaintiff is the underlying policy.

Two provisions of Defendant's Umbrella Policy, Exclusion A and Exclusion Q, are at issue here. Exclusion A provides as follows: this insurance does not apply to: A. "`[b]odily injury' or `property damage' expected or intended from the standpoint of the [i]nsured.'" The parties do not dispute that under Exclusion A, there is no coverage for substantial certainty intentional torts. Exclusion Q states in pertinent part as follows:

This insurance does not apply to ... Q. The following items 1 through 4, except to the extent that such insurance is provided by a policy listed in the Schedule of Underlying Insurance, and for no broader coverage than is provided by such policy:

1. Liability of any employee with respect to`'bodily injury,' `property damage,' `personal injury' or `advertising injury' or to you or another employee of the same employer insured in the course of such employment. ...

4. `Bodily injury' to: a. an employee of any `insured' arising out of and in the course of: i. employment by any `insured;' or performing duties relating to the conduct of any `insured's' business. ...

After Defendant denied coverage under the Umbrella Policy to Plaintiff in the Smiths' action, Plaintiff filed the instant Complaint (Doc. # 2). Plaintiff seeks a declaratory judgment requesting that this Court declare that under Ohio law that Defendant is obligated pursuant to its Umbrella Policy to provide coverage to Plaintiff for the excess amount awarded in the Smiths' action. This requested coverage includes indemnification for the portion of the Smiths' settlement not previously paid pursuant to the underlying policy plus Plaintiffs costs incurred in defense of the Smiths' action. Plaintiff also seeks damages as the result of Defendant's alleged breach of its contractual obligations in an amount in excess of $ 75,000. Plaintiff now moves for partial summary judgment with respect to its desired declaratory relief. The motions have been fully briefed and are ready for disposition.

B. Standard of Review

Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The initial burden of showing the absence of any such "genuine issue" rests with the moving party: it must inform the district court of the basis for its motion, and identify those portions of "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any," which it believes demonstrate the absence of a genuine issue of material fact. Fed. R. Civ P. 56(e).

The burden then shifts to the non-moving party who "must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (quoting Fed.R.Civ.P. 56(e)). The non-moving party cannot rest on its pleadings or merely reassert its previous allegations. Fed.R.Civ.P. 56(e). It is insufficient "simply [to] show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Rather, Rule 56(e) "requires the nonmoving party to go beyond the [unverified] pleadings" and present some type of evidentiary material in support of its position. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

In viewing the evidence, the Court must draw all reasonable inferences in favor of the non-moving party, who must set forth specific facts showing that there is a genuine issue of material fact for trial. Muncie Power Prods., Inc. v. United Techs. Auto., Inc., 328 F.3d 870, 873 (6th Cir.2003) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)); Hamad v. Woodcrest Condo. Ass'n, 328 F.3d 224, 234 (6th Cir.2003). A genuine issue of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." See Muncie, 328 F.3d at 873 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). Consequently, the central issue is "`whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'" Hamad, 328 F.3d at 234-35 (quoting Anderson, 477 U.S. at 251-52, 106 S.Ct. 2505).

The Court must therefore grant a motion for summary judgment if Plaintiff, who has the burden of proof at trial, fails to make a showing sufficient to establish the existence of an element that is essential to his case. See Muncie, 328 F.3d at 873 (citing Celotex Corp., 477 U.S. at 324, 106 S.Ct. 2548.) However, in ruling on a motion for summary judgment, "a district court is not ... obligated to wade through and search the entire record for some specific facts that might support the nonmoving party's claim." Inter Royal Corp. v. Sponseller, 889 F.2d 108, 111 (6th Cir. 1989).

C. Discussion

Plaintiff argues that the terms of Defendant's Umbrella Policy are directly in conflict. Specifically, Plaintiff contends that Exclusion A purportedly excludes the substantial certainty employer intentional tort coverage that is provided in the underlying policy. Plaintiff does not dispute that solely under Exclusion A, there is no coverage for substantial certainty employer intentional torts. Notwithstanding Exclusion A, Plaintiff argues that Exclusion Q provides substantial certainty employer intentional tort coverage. Thus, Plaintiff claims that Exclusion Q is not only an exclusion. Rather, Plaintiff argues that Exclusion Q is also a grant of follow-form coverage with respect to employer's liability coverage. Plaintiff references Exclusion Q's plain language purporting to adopt the same coverage as the underlying policy.¹ Plaintiff also cites to the deposition of John Trees ("Trees"), a Claims Specialist for Defendant who made the coverage determinations on Defendant's behalf, to support its claim that but for Exclusion A, Exclusion Q provides coverage for substantial certainty intentional torts. Plaintiff acknowledges that Defendant's Umbrella Policy contains a qualifier that the policyholder should read the entire policy carefully to determine his or her rights, duties, and what is covered. Plaintiff emphasizes, however, that the Umbrella Policy, specifically Exclusion Q, lacks any qualifications such as that it provides the same coverage as under the first-level policy "except as" otherwise excluded. Thus, according to Plaintiff, Exclusion A and Exclusion Q are in direct conflict. Plaintiff posits that this Court should resolve the ambiguity by construing the Umbrella Policy against Defendant and in favor of Plaintiff, the insured. Moreover, Plaintiff argues that solely with respect to...