Hartford Cas. Ins. Co v. Winston Co. Inc

Decision Date16 November 2010
Docket Number09 C 5088,09 C 5176
CourtU.S. District Court — Northern District of Illinois

Judge George M. Marovich

After a fire at a warehouse, two insurance companies filed separate suits against defendants Winston Company, Inc. ("Winston") and Jacobson Transportation Company, Inc. ("Jacobson"). The Court consolidated the two cases, because they arise out of the same fire. In the first case, 09-cv-5088, plaintiff Hartford Casualty Insurance Co. ("Hartford"), as subrogee of Mattpak, Inc. ("Mattpak"), filed negligence claims against Winston and Jacobson.1 In the second case, 09-cv-5176, plaintiff Westfield Insurance Co. ("Westfield"), as subrogee of F&M Building Partnership ("F&M"), filed negligence claims against Winston and Jacobson.2 In the second case, defendant Winston filed a cross-claim for contribution against defendant Jacobson.

Before the Court are: (1) Jacobson's motion for summary judgment as to Hartford's negligence claim against it; and (2) Jacobson's motion for summary judgment as to Westfield's negligence claim against it and as to Winston's cross-claim for contribution. The Court is ruling on these motions in the same memorandum opinion because most of the facts and arguments are the same. For example, Jacobson's statement of facts with respect to Hartford was nearly identical to its statement of facts with respect to Westfield. Both Hartford and Westfield conceded most of the facts in Jacobson's statement of fact as to the motion applicable to them. Winston filed a one-paragraph response in which it adopted the responses of Hartford and Westfield to Jacobson's motions against them. For the reasons set forth below, the Court grants Jacobson's motion for summary judgment in case 09-cv-5088. The Court grants in part and denies is part Jacobson's motion for summary judgment in case 09-cv-5176.

I. Background

Local Rule 56.1 outlines the requirements for the introduction of facts parties would like considered in connection with a motion for summary judgment. The Court enforces Local Rule 56.1 strictly. Facts that are argued but do not conform with the rule are not considered by the Court. For example, facts included in a party's brief but not in its statement of facts are not considered by the Court because to do so would rob the other party of the opportunity to show that such facts are disputed. Where one party supports a fact with admissible evidence and the other party fails to controvert the fact with citation to admissible evidence, the Court deems the fact admitted. See Ammons v. Aramark Uniform Services, Inc., 368 F.3d 809, 817-818 (7th Cir. 2004). This does not, however, absolve the party putting forth the fact of its duty to support the fact with admissible evidence. Asserted "facts" not supported by deposition testimony, documents, affidavits or other evidence admissible for summary judgment purposes are not considered by the Court. At the summary judgment stage, it does not suffice to rely on complaint allegations. Nor is it enough for either party to say a fact is disputed. The Court considers a fact disputed only if both parties put forth admissible evidence of his or its version of the fact.

The following facts are undisputed as to all parties to these motions unless otherwise noted.

On June 5, 2008, a fire destroyed some portion (perhaps all-it is not clear from the parties' submissions) of a warehouse located at 2900-2950 Commerce Street in Franklin Park, Illinois. The warehouse was owned by plaintiff Westfield's subrogor, F&M. During the relevant time, plaintiff Hartford's subrogor, Mattpak, leased at least a portion of the warehouse. After the fire, the fire department determined that the fire was caused by spontaneous combustion of Oxy-Kem, a product which Mattpak was storing within its portion of the warehouse.

Oxy-Kem is a cleaning product produced by Winston, which is a defendant in this suit but is not a party to these motions. The primary ingredient of Oxy-Kem is sodium percarbonate. Sodium percarbonate's decomposition is catalyzed by water and heat. A problem with the decomposition of sodium percarbonate is that it produces a lot of heat and oxygen and, thus, can cause fire. The amount of heat that is required to cause sodium percarbonate to self-heat depends on the quantity of sodium percarbonate, such that larger packages have lower heat thresholds than do smaller packages.

The June 2008 fire was not the first time Oxy-Kem had been involved in a warehouse fire. Winston, the maker of Oxy-Kem, experienced a fire involving Oxy-Kem at its warehouse in 2006. After the 2006 fire, Winston changed procedures in an attempt to avoid fire. First, Winston hired a night guard to check Oxy-Kem packaging for signs, such as heat or brown spots, of a chemical reaction. In addition, Winston reduced the time for blending a batch of Oxy-Kem, because it suspected that the blending might have created heat and lead to a reaction.

The reason Oxy-Kem was at the Mattpak facility on June 5, 2008 is that Mattpak had purchased the Oxy-Kem from Winston, and Winston had hired Jacobson Transportation to deliver it. Mattpak is in the business of buying items in bulk and repackaging them for distribution. The shipment of Oxy-Kem that was delivered to Mattpak on June 5, 2008 was picked up at Winston on June 4, 2008 by Duane Joy ("Joy"), a driver for defendant Jacobson Transportation.

Before Joy arrived at Winston to pick up the load of Oxy-Kem, he inspected his trailer for physical damage. Hartford and Jacobson agree that Joy found no holes in the roof, but Westfield disagrees. When Joy arrived at Winston (in Tulsa, Oklahoma), a Winston employee, Jeremiah Edwards ("Edwards"), inspected the trailer (to make sure it contained no moisture) and then loaded the Jacobson trailer with eighteen pallets of Oxy-Kem. The pallets contained 2200-pound supersacks of Oxy-Kem. Edwards signed the bill of lading.

When Joy reviewed the bill of lading, he noticed that the box for "hazmat" was checked, which suggested that the load contained hazardous materials. Jacobson had stopped hauling hazardous materials and Joy was not licensed to haul hazardous materials, so Joy called his fleet manager. Joy was told to take the load, and he did. Before leaving, Joy read Oxy-Kem's Material Safety Data Sheet ("MSDS"), which states that heat and sources of heat are conditions to avoid, that the product should not be stored at temperatures above 110 degrees Fahrenheit and that the product should be stored in a cool place. Joy sealed the trailer and did not open it until he arrived at Mattpak (in Franklin Park, Illinois) on June 5, 2008. During the trip, the weather was sunny, clear and hot. The trailer was not air conditioned, and the vents in the trailer remained closed during the trip.

Hartford's expert witness, Elizabeth Buc ("Buc"), opined that a chemical reaction of Oxy-Kem likely happened in the Jacobson trailer during the trip from Oklahoma to Illinois.3Buc based her conclusion on her calculation that the temperature in the Jacobson trailer during the trip would have been higher than the outdoor temperature and that the temperature in the trailer during the trip likely exceeded 110 degrees Fahrenheit. She also based her conclusion on the fact that brown spots were observed when the bags containing Oxy-Kem were unloaded in Illinois but were not observed when the product left Oklahoma. That suggested to Buc that a chemical reaction accelerated during the trip.

II. Summary Judgment Standard

In a diversity case, such as this one, the Court applies state substantive law and federal procedural law. Erie RR v. Tompkins, 304 U.S. 64, 78 (1938). Contrary to the arguments of Jacobson and Hartford, the summary judgment standard is procedural, and the Court will apply Federal Rule of Civil Procedure 56. See Dawn Equip. Co. v. Micro-Trak Systems, Inc., 186 F.3d 981, 986 (7th Cir. 1999).

Summary judgment should be granted when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). When making such a determination, the Court must construe the evidence and make all reasonable inferences in favor of the non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). Summary judgment is appropriate, however, when the non-moving party "fails to make a showing sufficient to establish the existence of an element essential to the party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). "A genuine issue of material fact arises only if sufficient evidence favoring the nonmoving party exists to permit a jury to return a verdict for that party." Brummett v. Sinclair Broadcast Group, Inc., 414 F.3d 686, 692 (7th Cir. 2005).

III. Discussion
A. Hartford's negligence claim against Jacobson

In Count I of its complaint, Hartford asserts that Jacobson was negligent. To make out a claim for negligence under Illinois law, a plaintiff must show "a duty owed by a defendant to that plaintiff, a breach of duty, and injury proximately caused by the breach of duty." Reynolds v. CB Sports Bar, Inc., __ F.3d _, 2010 WL 4137569, slip op. at 9 (7th Cir. Oct. 22, 2010).

If, as Hartford alleges, Jacobson owed Mattpak a duty, then Hartford has put forth sufficient evidence from which a reasonable jury could conclude, if it believed plaintiff's evidence, that Jacobson breached a duty. Hartford has put forth...

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