Giant Eagle, Inc. v. Am. Guarantee & Liab. Ins. Co.

• Decision Date: 09 November 2020
• Docket Number: 2:19-cv-00904-RJC
• Citation: Giant Eagle, Inc. v. Am. Guarantee & Liab. Ins. Co., 499 F.Supp.3d 147 (W.D. Pa. 2020)
• Parties: GIANT EAGLE, INC. and HBC Service Company, Plaintiffs, v. AMERICAN GUARANTEE AND LIABILITY INSURANCE COMPANY and XL Specialty Insurance Company, Defendants. American Guarantee and Liability Insurance Company, Third-Party Plaintiff, v. Old Republic Insurance Company, Third-Party Defendant. XL Specialty Insurance Company, Third-Party Plaintiff, v. Old Republic Insurance Company, Third-Party Defendant.
• Court: U.S. District Court — Western District of Pennsylvania

499 F.Supp.3d 147

GIANT EAGLE, INC. and HBC Service Company, Plaintiffs,

v.AMERICAN GUARANTEE AND LIABILITY INSURANCE COMPANY and XL Specialty Insurance Company, Defendants.

American Guarantee and Liability Insurance Company, Third-Party Plaintiff,

v.Old Republic Insurance Company, Third-Party Defendant.

XL Specialty Insurance Company, Third-Party Plaintiff,

v.Old Republic Insurance Company, Third-Party Defendant.

2:19-cv-00904-RJC

United States District Court, W.D. Pennsylvania.

Signed November 9, 2020

Scott D. Livingston, Marcus & Shapira, Pittsburgh, PA, Bernard P. Bell, Pro Hac Vice, Brian G. Friel, Pro Hac Vice, Tab R. Turano, Pro Hac Vice, Tae E. Andrews, Pro Hac Vice, Miller Friel PLLC, Washington, DC, for Plaintiffs.

Amy R. Paulus, Pro Hac Vice, Michael L. Duffy, Pro Hac Vice, Clausen Miller PC, Chicago, IL, Phillip R. Earnest, Pietragallo Gordon Alfano Bosick & Raspanti LLP, Pittsburgh, PA, for Third-Party Defendant.

Louis A. Bove, Ronald (Rex)F. Brien, Jr., Bodell Bove LLC, Philadelphia, PA, W. Joel Vander Vliet, Pro Hac Vice, Michael M. Marick, Pro Hac Vice, Karen M. Dixon, Pro Hac Vice, Skarzynski Marick & Black LLP, Chicago, IL, Alan T. Silko, Silko & Associates, P.C., Bridgeville, PA, Bruce W. McCullough, Pro Hac Vice, Bodell Bove, LLC, Wilmington, DE, for Defendant/Third-PartyPlaintiffAmerican Guarantee and Liability Insurance Company.

Jessica L. Silko, Alan T. Silko, Silko & Associates, P.C., Bridgeville, PA, John Grossbart, Pro Hac Vice, Keith Moskowitz, Pro Hac Vice, Dentons US LLP, Chicago, IL, Matthew A. Meyers, Robert E. Dapper, Jr., Burns White LLC, Pittsburgh, PA, Samantha Wenger, Samantha Wenger, Pro Hac Vice, Dentons US LLP, Kansas City, MO, Roy Xiao, Pro Hac Vice, Atlanta, GA, for Defendant/Third-PartyPlaintiffXL Specialty Insurance Company.

OPINION

Robert J. Colville, United States District JudgeBeforethe Court is the Motion for Partial Summary Judgment on the Duty to Defend (ECF No. 75) filed by PlaintiffsGiant Eagle, Inc. and HBC Service Company(collectively, "Giant Eagle").In this declaratory judgment action, Giant Eagle seeks a declaration that DefendantsAmerican Guarantee and Liability Insurance Company("AGLIC") and XL Specialty Insurance Company("XL") owe Giant Eagle a duty to defend and coverage with respect to multiple lawsuits pending against Giant Eagle in the action captioned In re Nat'l Prescription Opiate Litig. , No. 2804(N. D. Ohio)("Opioid MDL").Compl.¶¶ 1-2, ECF No. 46.The Opioid MDL plaintiffs seek to recover damages from Giant Eagle for harm allegedly caused by Giant Eagle's distribution and sale of prescription opioids.Id.Giant Eagle avers that, to date, AGLIC has "denied coverage and refused outright to defend or indemnify Giant Eagle" in the underlying lawsuits, and that "XL, after simply ignoring Giant Eagle's multiple requests for a defense for six months, issued a reservation of rights without assuming a defense."Id.at ¶ 2.

In its Motion, Giant Eagle seeks partial summary judgment declaring that AGLIC and XL have a duty to defend Giant Eagle in four cases(the "underlying lawsuits")¹ that have been transferred to the Opioid MDL.Br. in Supp. 1, ECF No. 76.AGLIC and XL collectively oppose Giant Eagle's Motion for Partial Summary Judgment, and Third-Party DefendantOld Republic Insurance Company("Old Republic"), against whom AGLIC and XL have each filed a Third-Party Complaint (ECF Nos. 41 and 43), also opposes Giant Eagle's Motion.This Court has jurisdiction in this matter pursuant to 28 U.S.C. § 1332and28 U.S.C. § 1367.Giant Eagle's Motion has been fully briefed, and is ripe for disposition.

I.Factual Background & Procedural History

Unless otherwise noted, the following facts are not in dispute:²

Giant Eagle was covered by commercial general liability policies issued by Old Republic which ran from April 1, 2015 to April 1, 2016(the "2016 Old Republic Policy") and from April 1, 2016 to April 1, 2017(the "2017 Old Republic Policy")(collectively, the "Old Republic Policies").Resp. to SOF ¶ 1, ECF No. 88.Each of the Old Republic Policies provides a $1 million per occurrence limit of liability, subject to a $1 million self-insured retention ("SIR") obligation and a $1 million deductible.³Id.at ¶ 3.The Old Republic Policies define "self-insured retention" as "the amount the insured legally must pay with respect to claims or ‘suits’ to which this insurance applies."Resp. to AdditionalSOF ¶ 10, ECF No. 94.The Old Republic Policies’ SIR endorsements provide:

A.Our obligations under the Coverages of the policy to pay damages on your behalf apply in excess of the "self insured retention".The amount of the "self insured retention" is shown in the Schedule.

B.The "self insured retention" may be satisfied by any combination of the following:

1.Damages and medical expenses payable under the applicable Coverage(s).

2.Other amounts payable under the policy.

C.Amounts payable under Supplementary Payments, which include but are not limited to allocated loss adjustment expense(s)(ALAE) do not satisfy the "self insured retention".

If Supplementary Payments and/or allocated loss adjustment expense(s) are not described in the policy, Supplementary Payments and/or allocated loss adjustment expense(s) are costs associated with the investigation or settlement of any claim or "suit" against an insured and include but are not limited to defense costs, attorneys’ fees, premiums for appeal and bail bonds, prejudgment and post judgment interest, expenses incurred by the insurer, first aid expenses, and/or reasonable travel expenses incurred by the insured at our request when assisting in the investigation or settlement of any claim or "suit".

D.In addition to the Scheduled "self insured retention" you are responsible for payment of a proportion of Supplementary Payments and/or allocated loss adjustment expenses.Your proportion is equal to the ratio that the "self insured retention" amount bears to the damages and medical expenses paid.If there is no loss payment, your proportion of Supplementary Payments and/or allocated loss adjustment expenses is 100%.

E.The "self insured retention" will apply on the same basis as the Limits of Insurance (Limits of Liability) applicable to the claim or "suit" regardless of the number of persons or organizations who sustain damages.The "self insured retention" is an each and every "self insured retention" and does not have an aggregate.

F.The "self insured retention" will not reduce the applicable Limits of Insurance (Limits of Liability).

G.We do not have a duty to investigate, defend or settle any claim or "suit" for which there may be coverage under this insurance within the "self insured retention".Our right and duty to defend or settle any claim or "suit" do apply to any claim or "suit" that exceeds the "self insured retention".

You, at your own expense, must investigate, defend or settle all claims or "suits" within the "self insured retention".We retain the right to elect to join in the defense of such claims or "suits" and we will pay any expenses we incur in doing so.

Old Republic's Br. in Opp'n 3-4, ECF No. 89(emphasis omitted)(quoting App. Ex. 3at 21-22;Ex. 4 at 18-19, ECF No. 77).The Old Republic Policies’ deductible endorsements, in relevant part, provide:

A.Our obligations under the Coverages of the policy to pay damages are subject to a deductible.The deductible is shown in the Schedule.Our obligations to pay damages apply only to the amount of damages in excess of the deductible shown in the Schedule.

B.The deductible may be satisfied by any combination of the following:

1.Damages and medical expenses payable under the applicable Coverage(s).

2.Other amounts payable under the policy.

3.Amounts payable under Supplementary Payments, which include but are not limited to allocated loss adjustment expenses (ALAE):

....

X Amounts payable under Supplementary Payments, which include but are not limited to allocated loss adjustment expenses (ALAE) do not satisfy the deductible.In addition to the Scheduled deductible you are responsible for payment of Supplementary Payments and/or allocated loss adjustment expenses.

If Supplementary Payments and/or allocated loss adjustment expenses (ALAE) are not described in the policy, Supplementary Payments and/or allocated loss adjustment expenses are costs associated with the investigation or settlement of any claim or "suit" against an insured and include but are not limited to defense costs, attorneys’ fees, premiums for appeal and bail bonds, prejudgment and post judgment interest, expenses incurred by the insurer, first aid expenses, and/or reasonable travel expenses incurred by the insured at our request when assisting in the investigation or settlement of any claim or "suit".

C.The deductible will apply on the same basis as the Coverage(s) Limits of Insurance/Limit of Liability applicable to the claim or "suit" regardless of the number of persons or organizations who sustain damages.

D.The deductible amounts:

....

X Described in paragraph B.1. andB.2. will reduce the applicable Limits of Insurance/Limits of Liability.

Id. at 5-6(emphasis omitted)(quoting App. Ex. 3at 19-20;Ex. 4 at 16-17, ECF No. 77).The Old Republic Policies describe "Supplementary Payments" as follows:

1.We will pay, with respect to any claim we investigate or settle, or any "suit" against an insured we defend:

a. All expenses we incur.

b. Up to $250 for cost of bail bonds required because of accidents or traffic law violations arising out of the use of any vehicle to which the Bodily Injury Liability Coverage applies.We do not have to furnish these bonds.

c. The cost of bonds to release attachments, but only for bond amounts within the applicable limits of insurance.We do not have to furnish these bonds. d. All reasonable expenses incurred by the insured at our request to assist us in the investigation or defense of the claim or "suit", including actual loss of earnings up to $250 a day

...