Koppers Performance Chemicals Inc. v. The Travelers Indem. Co.
| Decision Date | 18 April 2022 |
| Docket Number | Civil Action 2:20-cv-2017-RMG |
| 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. |
| Court | U.S. District Court — District of South Carolina |
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. (“Plaintiff” or “Koppers”)'s motion for partial summary judgment (Dkt. No. 103). Also before the Court is Defendant Argonaut-Midwest Insurance Company (“Argo”)'s motion for summary judgment (Dkt. No. 104) and Argo's motion to strike (Dkt No. 124). For the reasons stated below, the Court grants Argo's motion for summary judgment, denies as moot Argo's motion to strike, and denies Plaintiff's motion for partial summary judgment.
This is a declaratory judgment action and breach of contract action filed by Plaintiff against various insurance companies including Argo. (Dkt. No. 1).
From June 1, 1979 through December 1, 1982, Argo issued insurance policies (the “Argo Policies”) to “Osmose Wood Preserving Co. of America, Inc., and Griffin Forest Industries, Inc., DBA Hawaii Wood Preserving Co., and DBA Osmose Pacific, Inc., a Subsidiary.” (Dkt. No. 1046) (Dkt. No. 104-7); (Dkt. No. 104-8); (Dkt. No. 104-9); (Dkt No. 103-1 at 3-4). The 1979 Argo Policy was issued pursuant to an application submitted by Triad Insurance Agency in Honolulu, Hawaii. (Dkt. No. 104-6 at 1) (“Producer: Triad Insurance Agency, Inc., 345 Queen St., Suite 900, Honolulu, Hawaii”); see also (Dkt. No. 104-10); (Dkt. No. 123-2 ¶ 8).
On November 24, 2014, Philip Riley sued Plaintiff and others through a verified complaint (the “Original Complaint”) in the Charleston County Court of Common Pleas, No. 2014CP107249 (the “Underlying Action”). (Dkt. 104-13 ¶ 10) (suing “Koppers Performance Chemicals, Inc. f/k/a/ Osmose Wood Preserving Co. of America”). “Osmose Wood Preserving Co. of America, Inc.” is Kopper's former name. (Dkt. No. 103-2 at 187:20-188:23). Therein, Riley alleged that, at all relevant times, he was a citizen of and resided in South Carolina, (Dkt. No. 104-13 ¶ 1), and that Plaintiff manufactured “the wood treatment chemicals” at issue in the Underlying Action-namely chromated copper arsenate (“CCA”), (Id. ¶ 24). The Original Complaint alleged that Riley, while working “in the fence-making industry, ” used lumber treated with CCA, (Id. ¶¶ 23-26), and, developed cancer because of that exposure.
Roughly two years later, around December 23, 2016, Plaintiff tendered the Original Complaint to Argo. (Dkt. No. 104-15); (Dkt. No. 104-16) (acknowledging receipt of the tender by email dated December 29, 2016); (Dkt. No. 103-1 at 8) (“Koppers sought a defense and indemnity from Argonaut under the Policy on December 23, 2016.”). Around this time, Plaintiff provided Argo one page from Riley's deposition, (Dkt. No. 1-2), wherein Riley testified that the “timeframe that I'm talking about” was “from '78 to '92, you know, when I was-from the time of being born until we stopped working with” CCA in 1992, (Dkt. No. 116 at 8).
By letter dated June 22, 2017, Argo denied coverage of the Underlying Action. (Dkt. No. 104-18). Argo denied coverage because it determined that Plaintiff was not a named insured under the Argo Policies. (Id. at 1-3). On June 23, 2017, Argo provided further documentation to Plaintiff supporting its coverage position. (Dkt. No. 104-19).
On August 31, 2017, Riley filed an amended complaint in the Underlying Action. (Dkt. No. 109-14). It is undisputed that prior to initiating this lawsuit, Plaintiff did not tender the amended complaint to Argo. (Dkt. No. 117 at 8).
On January 31, 2018, Plaintiff's counsel responded for the first to Argo's coverage determination. (Dkt. No. 104-20). The letter did not mention the amended complaint.
In March of 2018, Plaintiff settled the claims against Riley for $150, 000.00. (Dkt. No. 99 ¶ 51).
On May 27, 2020, Plaintiff initiated this action to recover costs associated with defending and settling the Underlying Action. (Dkt. No. 1).
On August 31, 2020, Argo filed an amended answer and counterclaims. (Dkt. No. 29).
On January 3, 2022, Plaintiff moved for partial summary judgment as to Argo. (Dkt. No. 103). Argo opposes. (Dkt. No. 116). Plaintiff filed a reply. (Dkt. No. 122).
On January 3, 2022, Argo moved for summary judgment. (Dkt. No. 104). Plaintiff opposes. (Dkt. No. 117). Argo filed a reply. (Dkt. No. 123).
On February 7, 2022, Argo moved to strike Plaintiff's reply to its motion for partial summary judgment. (Dkt. No. 124). Plaintiff opposes. (Dkt. No. 127). Argo filed a reply. (Dkt. No. 132).
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).
In a diversity case, a district court applies the substantive law of the forum state to resolve a plaintiff's state law claims. Erie Railroad v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); Brown v. American Broadcasting Co., 704 F.2d 1296, 1299 (4th Cir.1983). Federal courts sitting in diversity apply the forum state's choice of law rules. Francis v. Allstate Inc. Co., 709 F.3d 362, 369 (4th Cir. 2013).
South Carolina choice of law principals encompass both the traditional lex loci contractus doctrine and S.C. Code Ann. § 38-61-10. Historically, South Carolina courts followed the rule of lex loci contractus and applied the law of the state where the application for insurance was made, the policy delivered, and the contract formed. Unisun Ins. Co. v. Hertz Rental Corp., 312 S.C. 549, 436 S.E.2d 182 (S.C. App. 1993).
The legislature modified this general rule by statute in 1947-now codified as S.C. Code Ann. § 38-61-10. The statute provides that:
All contracts of insurance on property, lives, or interests in this State are considered to be made in the State and all contracts of insurance the applications for which are taken within the State are considered to have been made within this State and are subject to the laws of this State.
S.C. Code Ann. § 38-61-10. “Where this statute applies it governs as South Carolina's rule of conflicts.” Sangamo Weston, Inc. v. Nat'l Surety Corp., 307 S.C. 143, 414 S.E.2d 127, 130 (1992).
In Sangamo, the South Carolina Supreme Court considered the applicability of S.C. Code Ann. § 38-61-10 to an insurance contract. Id. At issue were insurance policies covering a South Carolina manufacturing facility that were executed outside of South Carolina by non-citizens of South Carolina. Id. The insured sought declaratory judgment to determine the scope of insurance coverage. Id. The Sangamo court first had to resolve “which state's law should be applied in interpreting these insurance contracts.” Id. at 129. Critical to this determination was the fact that the insured “property” at issue-Sangamo's manufacturing facility-was permanently located in South Carolina. Id. at 130. The court held that insuring property, lives and interests in South Carolina constitutes a significant contact with this state. Id. at 131. Thus, the court applied § 3861-10. Id.
By contrast, in Yeager v. Allstate Ins. Co., the court held that § 38-61-10 was not applicable because of an insufficient connection to South Carolina. No. 9:09-860-MBS, 2010 WL 680429 at *5 (D.S.C. Feb. 23, 2010).
There, a South Carolina accident triggered a Georgia automobile insurance policy. Id. The insured was a Georgia resident with a Georgia driver's license driving a vehicle registered in Georgia. Id. at *1. However, she was living part-time with her boyfriend across the border in Beaufort County, South Carolina. Id. Further, she worked for clients in South Carolina as a bookkeeper and filed tax returns in both Georgia and South Carolina. Id. Indeed, at the time of the accident, she was traveling from a South Carolina client's place of business to her part-time South Carolina residence. Id.
The Yeager court held that, despite the insured's...
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