Hazel v. Blitz United Statesa., Inc.
Decision Date | 07 November 2018 |
Docket Number | Appellate Case No. 2015-001947,Opinion No. 5604 |
Citation | 425 S.C. 361,822 S.E.2d 338 |
Court | South Carolina Court of Appeals |
Parties | Alice HAZEL, as GAL for Jacob N., Respondent, v. BLITZ U.S.A., INC., Fred's, Inc., Tiger Express Varnville LLC, and James Nix, Defendants, Of Whom Fred's, Inc. is the Appellant. and Melinda Cook, Respondent, v. Blitz U.S.A., Inc., Fred's, Inc., Tiger Express Varnville LLC, and James Nix, Defendants, Of Whom Fred's, Inc. is the Appellant. |
Matthew Clark LaFave, of Crowe LaFave, LLC, of Columbia, for Appellant.
Mark David Ball, of Peters Murdaugh Parker Eltzroth & Detrick, PA, and Kathleen Chewning Barnes, of Barnes Law Firm, LLC, both of Hampton, for Respondent.
Melinda Cook, as the mother of Jacob N., and Alice Hazel, as guardian ad litem (collectively, Respondents), brought separate actions against Fred's, Inc. to recover for injuries Jacob N. sustained when a portable gasoline container exploded. Fred's moved to permanently enjoin or stay the claims, arguing they were subject to an injunction established during bankruptcy proceedings. The circuit court denied the motion. We affirm.
Additionally, Fred's was a certificate holder on several of Blitz's insurance policies—a commercial general liability (CGL) policy, a products liability policy, and an excess liability policy.
In November 2010, Cook's five-year-old son, Jacob N., was severely burned when a plastic gas container exploded and sprayed him with fuel. The gas can in question was manufactured by Blitz and reportedly purchased from Fred's. In November 2013, Respondents commenced separate lawsuits in Hampton County, both naming Blitz and Fred's as defendants. 1
The complaints asserted claims against Blitz for products liability, strict liability, and breach of warranty, as well as against Fred's for breach of warranty, strict liability, and negligence. As to Blitz, it was alleged the gas can suffered from a defect that allowed gasoline vapors outside the spout to ignite and mix with the contents of the fuel container, causing a "flashback" explosion. As to Fred's, Respondents claimed Fred's knew of the containers' propensity to explode but continued to sell them in its stores anyway.
Prior to Respondents filing suit, however, Blitz was already facing an onslaught of potential liability from numerous incidents involving its gas cans. Consequently, in November 2011, Blitz filed for Chapter 11 Bankruptcy in the United States Bankruptcy Court for the District of Delaware (the Bankruptcy court). Through its subsequent liquidation and reorganization, Blitz and its insurers sought to settle numerous pending, and possible future, products liability and personal injury claims.
In January 2014, the Bankruptcy court issued an order (the Bankruptcy order) approving Blitz's First Amended Joint Plan of Liquidation (the Plan). The Plan established the Blitz Personal Injury Trust (the Trust), a single pool of assets from which to provide compensation for "Blitz Personal Injury Claims." The Trust ultimately yielded over one hundred-fifty million dollars paid by Wal-Mart—the largest retailer of Blitz cans—and "Participating Insurers" of Blitz. Among the Participating Insurers were the providers of the products liability policy and excess liability policy for which Fred's was a certificate holder.
The Bankruptcy order stated that the release of certain parties from liability was appropriate, "[i]n view of the substantial contribution to the [Trust]," and that Blitz and the Released Parties had "[a]n identity of interests ... such that a claim asserted against a [Released] Party gives rise to a claim against [Blitz] by contract and/or operation of the law of indemnity and/or contribution."
In order to facilitate the settlement of Blitz Personal Injury Claims, the Bankruptcy order imposed a "Channeling Injunction," defined as "an injunction ... that ... (i) permanently enjoins and channels to the [ ] Trust all Blitz Personal Injury Claims, and (ii) permanently enjoins the prosecution of all Blitz Personal Injury Claims against any Released Party." The Bankruptcy order stipulated, however, that the Channeling Injunction "shall not enjoin ... the rights of any Entity to assert any claim, debt, obligation, or liability for payment against a Non-Participating Insurer."
Following the Bankruptcy court's approval of the Plan in early 2014, Respondents filed a claim with the Trust and received $2,872,315 to settle their suit against Blitz. Respondents subsequently amended their complaint to remove all other causes of action except for a general negligence claim against Fred's. On August 26, 2014, Fred's moved to permanently enjoin or alternatively to stay the proceedings, arguing Respondents' claims were Blitz Personal Injury Claims subject to the Channeling Injunction. Additionally, Fred's contended it qualified as a Released Party under the Plan because it was a Vendor insured under a Participating Insurer policy—specifically, Blitz's products liability policy. The circuit court disagreed, finding the Plan did not operate to release and enjoin claims against a Vendor for its own independent negligence and which would be recovered from a Non-Participating Insurer.
Fred's filed a motion to reconsider, arguing the negligence claim was really a products liability claim and was therefore covered under Blitz's products liability policy. Fred's also contended it was entitled to indemnification from Blitz pursuant to the 2005 Indemnity Agreement. The circuit court denied the motion. This appeal followed.
"The party seeking an injunction has the burden of demonstrating facts and circumstances warranting an injunction." Strategic Res. Co. v. BCS Life Ins. Co. , 367 S.C. 540, 544, 627 S.E.2d 687, 689 (2006). Id . Doe v. Bishop of Charleston , 407 S.C. 128, 135, 754 S.E.2d 494, 498 (2014).
Initially, Respondents argue Fred's cannot appeal the circuit court's denial of its motion for a permanent injunction because Fred's only appealed the denial of its motion to reconsider. Respondents therefore assert the circuit court's ruling regarding the interpretation of the Bankruptcy order is the "law of the case" and the only issue properly before this court is whether the circuit court correctly ruled the negligence claim differed from a products liability claim. See Shirley's Iron Works, Inc. v. City of Union , 403 S.C. 560, 573, 743 S.E.2d 778, 785 (2013) (). Contrary to Respondents' assertion, we believe Fred's motion to reconsider encompassed its objections to the circuit court's original ruling with regard to the motion for a permanent injunction. Accordingly, we decline to construe Fred's appeal of the motion to reconsider as a failure to appeal the circuit court's order denying the motion for an injunction pursuant to the Bankruptcy order.
Turning to the merits of the appeal, Fred's argues the circuit court erred in: (1) finding Respondents' negligence claim was outside the scope of the release and Channeling Injunction, and (2) holding the claim did...
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Hazel v. Blitz U.S.A., Inc.
...enjoin Hazel's claim. Fred's appealed the denial of the injunction to the court of appeals, which affirmed. Hazel v. Blitz U.S.A., Inc. , 425 S.C. 361, 822 S.E.2d 338 (Ct. App. 2018). We granted Fred's petition for a writ of certiorari.II. AnalysisFred's motion to enjoin Hazel's claim, and ......
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