Koppers Performance Chemicals, Inc. v. The Travelers Indem. Co.
| Decision Date | 22 February 2022 |
| Docket Number | Civil Action 2:20-cv-2017-RMG |
| Court | U.S. District Court — District of South Carolina |
| Parties | Koppers Performance Chemicals, Inc., f/k/a Osmose Wood Preserving Co. of America, Inc. f/k/a Osmose Wood Preserving, Inc. f/k/a Osmose, Inc., Plaintiff, v. The Travelers Indemnity Company; Argonaut-Midwest Insurance Company d/b/a Argo Group; Insurance Company of North America d/b/a Chubb; Indemnity Insurance Company of North America d/b/a Chubb; Pacific Employers Insurance Company d/b/a Chubb; and Ace American Insurance Company d/b/a Chubb, Defendants. |
Before the Court is Plaintiff Koppers Performance Chemicals, Inc. f/k/a Osmose Wood Preserving Co. of America, Inc. f/k/a Osmose Wood Preserving, Inc. f/k/a Osmose, Inc.'s (“Plaintiff” or “Koppers”) motion for partial summary judgment on duty to defend against Defendant The Travelers Indemnity Company (“Travelers”) (Dkt. No. 101). Also before the Court is Travelers' motion for summary judgment (Dkt. No. 100) and Travelers' motion to strike (Dkt. No. 125). For the reasons stated below, the Court grants Plaintiff's partial motion for summary judgment, grants in part and denies in part Travelers' motion for summary judgement, and denies Travelers' motion to strike.
This is a declaratory judgment action and breach of contract action filed by Plaintiff against various insurance companies including Travelers. (Dkt. No. 1).
Travelers issued policy number TR-NSL-107T689-078 in effect from January 1, 1978 to January 1, 1979 (the “Policy”) to Osmose Wood Preserving of America, Inc., an entity to which Koppers is the successor in interest. (Dkt. No. 99 ¶¶ 1-2). The Policy is governed by South Carolina law. (Id. ¶ 4).
On November 24, 2014, Philip H. Riley initiated a lawsuit in South Carolina state court (the “Underlying Action”) against, inter alia, Koppers. (Id. ¶ 5); (Dkt. No. 100-4). The complaint in the Underlying Action alleged that Riley was then 35-years old, that Riley had handled wood- in an occupational context-treated with chromated copper arsenate (“CCA”), and that his exposure to CCA had caused Riley to develop cancer.
On March 16, 2016, Riley was deposed in the Underlying Action. (Dkt. No. 99 ¶ 38).
On August 24, 2016, Koppers attempted to mediate the Underlying Action with Riley. (Dkt. No. 115 at 8); (Dkt. No. 100-1 at 7).
On September 1, 2016, Koppers sought a defense and indemnity from Travelers regarding the Underlying Action. (Dkt. No. 99 ¶ 5).
On May 18, 2017, Travelers first requested and learned that Riley's date of birth was December 27, 1978. (Id. ¶¶ 33-34).
On July 18, 2017, Travelers denied Koppers coverage with respect to the Underlying Action (the “Denial Letter”). (Id. ¶ 35); (Dkt. No. 100-3) (copy of Denial Letter). “At the time that it issued the Denial, Travelers was aware of and was in possession of pages 1, 2, 3, 4, 27, 28, 34, 52, 80, 107, 118, 119 of the deposition transcript of Mr. Riley in the Underlying Action, taken March 16, 2016, including Mr. Riley's statement at page 107 that his ‘level of exposure to CCA would have been the same as [his] father's ...from '78 to '92, you know when I was - from the time of being born until we stopped working with it in 1992 - that's the timeframe that I'm talking about.'” (Dkt. No. 99 ¶ 38); (Id. ¶ 42) (“The documents in Travelers' possession relating to the Underlying Action at the time it issued the Denial Letter were the Complaint in the Underlying Action, the aforementioned pages of deposition of Mr. Riley, and the other documents produced as part of its document production (TRAV0001-0312 and TRAV0331-0768).”).
On March 23, 2018, Koppers settled the claims against it in the Underlying Action for $150, 000.00. (Id. ¶ 51).
On May 27, 2020, Koppers filed a declaratory judgment action, seeking a declaration the Policy applies to the Underlying Lawsuit. (Dkt. No. 1 at ¶ 19 et seq.). Koppers asserts a breach of contract action alleging Travelers breached the duty to defend and indemnify Koppers in the Underlying Action.
On January 3, 2022, Travelers moved for summary judgment. (Dkt. No. 100, 120). Koppers opposes. (Dkt. No. 115).
On January 3, 2022, Koppers moved for partial summary judgment as to the duty to defend. (Dkt. No. 101, 102, 121). Travelers opposes. (Dkt. No. 114).
On February 8, 2022, Travelers moved to strike certain portions of Koppers' summary judgment materials. (Dkt. No. 125). Koppers opposes. (Dkt. No. 128).[2] The parties' respective motions are fully briefed and ripe for disposition.
To prevail on a motion for summary judgment, the movant must demonstrate that there is no genuine dispute of material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The party seeking summary judgment has the burden of identifying the portions of the “pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, [which] show that there is no genuine issue as to any material fact and that the moving part is entitled to a judgement as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 & n.4 (1986) (citing Rule 56(c)). The Court will interpret all inferences and ambiguities against the movant and in favor of the non-moving party. U.S. v. Diebold, Inc., 369 U.S. 654, 655 (1962). Where the moving party has met its burden to put forth sufficient evidence to demonstrate there is no genuine dispute of material fact, the non-moving party must come forth with “specific facts showing that there is a genuine issue for trial.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citing Rule 56(e)). An issue of material fact is genuine if the evidence is such that a reasonable jury could return a verdict in favor of the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986).
First, the Court considers whether Travelers owes Koppers a duty to defend the Underlying Action.
Under South Carolina law, “[q]uestions of coverage and the duty of a liability insurance company to defend a claim brought against its insured are determined by the allegations of the complaint.” City of Hartsville v. South Carolina Mun. Ins. & Risk Fin. Fund, 382 S.C. 535, 543 (2009) (citing C.D. Walters Const. Co. v. Fireman's Ins. Co. of Newark, N.J., 281 S.C. 593, 594 (Ct. App. 1984)). If the “underlying complaint creates a possibility of coverage under an insurance policy, the insurer is obligated to defend” its insured. Id. at 544 (citing Gordon-Gallup Realtors, Inc. v. Cincinnati Ins. Co., 274 S.C. 468 (1980)). Moreover, “[a]lthough a determination of an insurer's duty to defend is dependent upon the complaint, an analysis of this duty involves the allegations of the complaint and not the specifically identified causes of action.” Id. at 544-45. “An insurer's duty to defend may arise from facts outside of the complaint that are known to the insurer.” Id. at 545.
It is the insured's burden to establish that a claim falls within the coverage of an insurance contract. Jensen v. Selective Ins. Co. of Se., No. 4:12-cv-02133-RBH, 2013 WL 3148341, at *2 (D.S.C. June 19, 2013) (citing Gamble v. Travelers Ins. Co., 251 S.C. 98, 102 (1968)). Alternatively, the insurer shoulders the burden of establishing the exclusions to coverage and the exclusion is construed “most strongly” against the insurer. Id. (citing Boggs v. Aetna Cas. & Sur. Co., 272 S.C. 460, 252 S.E.2d 565, 568 (1979)). However, an insured party bears the burden of proving an exception to an exclusion. Ross Dev. Corp. v. PCS Nitrogen Inc., Nos. 12-2059, 12- 2454, 2013 WL 2440844, at *3 (4th Cir. June 6, 2013) (citing Helena Chem. Co. v. Allianz Underwriters Ins. Co., 357 S.C. 631, 636, 594 S.E.2d 455, 460 n.5 (2004)).
The Court finds that Travelers owed Koppers a duty of defense in the Underlying Action. As noted above, the original complaint in the Underlying Action indicated that Riley was 35 years old as of November 24, 2014, and thus born in either 1978 or 1979. The original complaint alleged that Riley was exposed to CCA in an occupational context, however, which would have put his exposure to CCA outside of the years during which the Policy was in effect. See (Dkt. No. 100-4 ¶ 23) (alleging that “[f]or years, Mr. Riley worked in the fence-making industry using treated lumber”); (Dkt. No. 115 at 7-8) (admitting as much and stating that “Mr. Riley's initial complaint filed in 2014 did not appear to allege exposure from birth, so Koppers notified its insurers providing coverage in the 1990s and 2000s.”) Nevertheless, deposition testimony available to Travelers as of July 18, 2017 indicated a possibility that Riley could have been exposed to CCA between his birth on December 27, 1978 and January 1, 1979. (Dkt. No. 100-4 at 107:10-13) (“But from '78 to '92, you know, when I was-from the time being born until we stopped working with it in 1992, that's the timeframe that I'm talking about.”). In fact, though Travelers rejected the possibility Riley was exposed to CCA as a newborn, the Denial Letter impliedly acknowledged such a conclusion was possible. (Dkt. No. 100-3 at 29) ...
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