Glen Simon & Solaris Power Servs., LLC v. Liberty Mut. Fire Ins. Co., Case No. 4:17-cv-0152-DGK
| Decision Date | 08 December 2017 |
| Docket Number | Case No. 4:17-cv-0152-DGK |
| Court | U.S. District Court — Western District of Missouri |
| Parties | GLEN SIMON and SOLARIS POWER SERVICES, LLC, Plaintiffs, v. LIBERTY MUTUAL FIRE INSURANCE COMPANY, ASSOCIATE ELECTRIC & GAS INSURANCE SERVICES, LTD., CAPITAL ELECTRIC, INC., and KEVIN and ANITA JOHNSON, Defendants. |
ORDER DENYING MOTION TO SEVER CLAIM
This case is an insurance coverage dispute concerning an uncontested $44 million judgment entered against Solaris Power Services, LLC ("Solaris") in the Circuit Court of Jackson County, Missouri, in favor of Kevin and Anita Johnson ("the Johnsons") pursuant to Mo. Rev. Stat. § 537.065.1 The judgment arises from an accident at the General Motors Fairfax plant in Kansas City, Kansas, in which Kevin Johnson, an electrician employed by Capital Electric Construction Company, Inc.,2 ("Capital") was severely injured because of Solaris's negligence in failing to de-energize equipment on which he was working. Capital was insuredby Liberty Mutual Fire Insurance Company ("Liberty Mutual"), and Associate Electric & Gas Insurance Services, LTD. ("AEGIS"), provided excess liability insurance to Capital. Plaintiffs Glen Simons ("Simons") and Solaris (collectively "Plaintiffs") allege they were, or should have been, additional insureds under both policies, but both insurance companies wrongly denied them coverage, damaging them.
Plaintiffs subsequently filed suit in Jackson County Circuit Court to try to recover on the policies. Liberty Mutual removed to this Court.
Now before the Court is Liberty Mutual's Motion to Sever Plaintiffs' Purported Claim Against Capital Electric (Doc. 21). Finding that the dispute between Solaris and Capital arises out of the same series of occurrences as the other counts in this lawsuit, and that judicial economy weighs in favor of hearing all of these claims in one case, the motion is DENIED.
Background
The facts relevant to the pending motion are as follows.
On January 30, 2017, Plaintiffs filed a lawsuit in Jackson County Circuit Court against Liberty Mutual, AEGIS, and Kevin and Anita Johnson. Plaintiffs brought claims for breach of contract and bad faith refusal to defend and settle, alleging Plaintiffs were additional insureds under the Liberty Mutual and AEGIS insurance policies, and that they were damaged by the insurance companies' denial of coverage for Solaris. After Liberty Mutual removed this lawsuit to federal court, Plaintiffs voluntarily dismissed it. See Simon v. Liberty Mut. Fire Ins. Co., No. 4:17-cv-089-DGK (Feb. 9, 2017 W.D. Mo.).
On February 17, 2017, Plaintiffs filed the pending lawsuit in Jackson County Circuit Court. This lawsuit is almost identical to the previous one except it adds two additional claims and an additional defendant. Count V is a breach of contract claim brought by Solaris againstCapital Electric, Inc., a Texas corporation It is pled in the alternative to the other counts.3 It alleges Capital Electric, Inc. contracted with Solaris to include Solaris as an additional insured under any liability policy, and it breached this contract by failing to do so.
Standard
Fed. R. Civ. P. 20(a)(2) (emphasis added).
Additionally, Rule 21, which governs "Misjoinder and Nonjoinder of Parties" provides in relevant part that the court "may at any time, on just terms," sever any claim against a party. Fed. R. Civ. P. 21. Severance under this rule is committed to the court's sound discretion. Sprint Commc'ns. Co. L.P. v. K.L.M. Tel. Co., No. 14-06049-CV-SJ-FJG, 2014 WL 4426275, at *1 (W.D. Mo. Sept. 9, 2014). This discretion is guided by the same factors guiding a decision to transfer, including judicial economy, efficiency, and the potential for delay. Id.
The Court of Appeals has recently reiterated that the joinder of claims, parties, and remedies is "strongly encouraged," and that Rule 20 allows "all reasonably related claims for relief by or against different parties to be tried in a single proceeding." Fughum v. Allen, 626 F. App'x 653, 654 (8th Cir. 2015).
Discussion
Liberty Mutual argues Count V is misjoined to this lawsuit because it does not arise out of the same transaction, occurrence, or series of transactions or occurrences, as the other counts. Arguing in the alternative, Liberty Mutual suggests the Court should exercise its discretion to sever Count V.
The Court holds all the claims in the Petition are reasonably related such that they should be decided in the same case. The claims all concern the same central question, namely, which entities, if any, are responsible for paying the judgment in the underlying case. The Court agrees that any alleged failure by Kevin Johnson's employer to name Solaris as an additional insured is properly a part of this action. To rule otherwise would waste judicial resources as the related controversies would be resolved in piecemeal fashion by different courts.
Not joining all the claims in one action might possibly raise the risk of subjecting Solaris to inconsistent judgments. For example, suppose the Court severed Count V and then ruled Liberty Mutual did not owe coverage to Solaris because its policy required Capital to follow a certain protocol before additional insured coverage would be extended, and Capital failed to follow this protocol. Solaris could not recover against Liberty Mutual, and then would have to file a separate lawsuit against Capital alleging Capital's failure to follow the protocol breached its contract with Solaris. Capital, which was not a party to the...
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