Markel American Ins. Co. v. Tri-Miss Servs. Inc.
| Decision Date | 19 January 2012 |
| Docket Number | CIVIL ACTION NO: 3:10-CV-702-DPJ-FKB |
| Parties | MARKEL AMERICAN INSURANCE COMPANY PLAINTIFF v. TRI-MISS SERVICES, INC.; FIRESTONE BUILDING PRODUCTS COMPANY, INC., LLC; EUGENE FRAZIER DEFENDANTS |
| Court | U.S. District Court — Southern District of Mississippi |
This insurance-coverage dispute is before the Court on Plaintiff Markel American Insurance Company's ("Markel") Motion for Summary Judgment [30]. Defendant Tri-Miss Services, Inc. ("Tri-Miss") has responded in opposition [37]. The Court, having considered the submissions of the parties and the applicable law, finds that Markel's Motion [30] is well taken and should be granted.
As an initial matter, the Court rejects Tri-Miss's argument that Markel's motion is premature. Rule 56(b) states that "a party may file for summary judgment at any time . . . ." It is well established in the Fifth Circuit that "Rule 56 does not require that any discovery take place before summary judgment can be granted." Washington v. Allstate Ins. Co., 901 F.2d 1281, 1285 (5th Cir. 1990).
Although a party may seek summary judgment at any time, Rule 56(d) provides a safe harbor for nonmovants who can demonstrate that discovery is necessary to produce affidavits or other evidence in compliance with Rule 56(c). Here, Tri-Miss embeds a Rule 56(d) motion within its Response. But Local Uniform Civil Rule 7(b)(3)(C) of this Court provides that aresponse to a motion for summary judgment should not contain additional motions within the same filing: "[A]ny motion must be an item docketed separately from a response."
Even so, Tri-Miss failed to present the necessary information to justify Rule 56(d) relief. Aside from the lack of an affidavit or declaration supporting a Rule 56(d) motion, the rule "may not be invoked by the mere assertion that discovery is incomplete; the opposing party must demonstrate how the additional time will enable him to rebut the movant's allegations of no genuine issue of material fact." Leatherman v. Tarrant County Narcotics Intelligence & Coordination Unit, 28 F.3d 1388, 1396 (5th Cir. 1994) (quotation marks and citation omitted); Washington, 901 F.2d at 1285 (); Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986) (same).
Finally, although some factual disputes may exist, this order is decided on questions of law, and it is not apparent how additional discovery would advance Tri-Miss's case. See Fullerton v. Merlin C. Reiser & Merco, L.L.C., No. 3:08CV151 DPJ-JCS, 2008 WL 5246128, at *2 n.2 (S.D. Miss. Dec. 12, 2008) (). Nevertheless, Tri-Miss was given an extension of time to respond to the summary-judgment motion; the parties continued discovery after Markel's summary-judgment motion; Tri-Miss never sought to file a surreply or otherwise supplement the record; and the discovery deadline has now expired. The summary-judgment motion is therefore ripe for consideration.
In October 2010, Defendant Firestone Building Products Company, Inc. ("Firestone") filed suit in federal court against Tri-Miss and Eugene Frazier, Firestone's former employee. Firestone's suit ("underlying complaint") alleges that in April 2010, Frazier "admitted to taking, without permission, 13,750 pounds of copper and aluminum from [Firestone's] Jackson plant and selling the copper and aluminum to Tri-Miss Services in Jackson, Mississippi, throughout the period of September, 2009, through January, 2010." Pl.'s Mot. Summ. J. [32] Ex. A, Firestone Compl. ¶ 9. The underlying complaint goes on to state that "Tri-Miss purchased an extensive amount of copper and aluminum that was wrongfully taken from the Jackson plant by Frazier and sold to Tri-Miss," and "[t]he copper and aluminum sold to Tri-Miss totaled approximately $147,793.94." Id. ¶ 10. The underlying complaint also alleges that Tri-Miss committed the intentional tort of conversion:
12. When Tri-Miss bought the stolen copper and aluminum from Frazier, Tri-Miss became liable to Firestone for conversion. Under Mississippi law, a person who purchases or accepts the possession of stolen property is regarded as liable for the conversion thereof. In addition to Tri-Miss purchasing the goods, Tri-Miss also appropriated the copper and aluminum and used it for its own purposes. Thus, Tri-Miss has demonstrated an intent to exercise dominion and/or control over the copper and aluminum which is, in fact, inconsistent with Firestone's rights as the owner of the copper and aluminum. Given the extensive amount of copper and aluminum that Frazier presented to Tri-Miss for sale, Tri-Miss should have realized that the source of the copper and aluminum was unlawful. Thus, Tri-Miss acted in a positive way sufficient to constitute conversion and is liable to Firestone for conversion.
Before suing Tri-Miss, Firestone made a claim for these damages, and Tri-Miss soughtdefense and indemnity under its commercial general liability ("CGL") policies with Markel.1 Markel, however, concluded that it owed neither a defense nor indemnity under the policy terms. The policy provides, in pertinent part, as follows:
. . . .
. . . .
. . . .
. . . .
13. "Occurrence" means an accident, including continuous or repeated exposure to substantially the same general harmful conditions.
. . . .
17. "Property damage" means:
. . . .
Pl.'s Mot. [32] Ex. B, Policy.
Markel now seeks a declaration of non-coverage for the indemnity and defense of Tri-Miss in Firestone's underlying lawsuit. Markel has moved for summary judgment on a number of grounds, and the Court finds that at least two are dispositive: (1) whether Firestone's underlying complaint alleges damages caused by an "occurrence" and (2) whether coverage is excluded for damage to personal property in the insured's custody or control. Finally, Tri-Miss argues that even assuming the risk was not insured or was excluded, Markel's bad-faith failure to investigate Firestone's claims waived the denial of coverage.
The Court has diversity jurisdiction over the parties' dispute pursuant to 28 U.S.C. § 1332 (2006). As such, Mississippi law applies to the substantive issues. Erie R.R. v. Tompkins, 304 U.S. 64 (1938).
Summary judgment is warranted under Rule 56(a) of the Federal Rules of Civil Procedure when evidence reveals no genuine dispute regarding any material fact and that the moving party is entitled to judgment as a matter of law. The rule "mandates the entry ofsummary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that 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).
The party moving for summary judgment "bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact." Id. at 323. The non-moving party must then "go beyond the pleadings" and "designate 'specific facts showing that there is a genuine issue for trial.'" Id. at 324 (citation omitted). Conclusory allegations, speculation, unsubstantiated assertions, and legalistic arguments are not an adequate substitute for specific facts showing a genuine issue for trial. TIG Ins. Co. v. Sedgwick James of Wash., 276 F.3d 754, 759 (5th Cir. 2002); SEC v. Recile, 10 F.3d 1093, 1097 (5th Cir. 1997); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc). In reviewing the evidence, factual controversies are to be resolved in favor of the nonmovant, "but only when . . . both parties have submitted evidence of contradictory facts." Little, 37 F.3d at 1075. When such contradictory facts exist, the court may "not make credibility determinations or weigh the evidence." Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000).
"Under Mississippi law, the determination of whether a liability insurance company has a duty to defend depends upon the language of the policy." U.S. Fid. & Guar. Co. v. Omnibank, 812 So. 2d 196, 200 (Miss. 2002) (citation omitted). "The obligation of the insurer to defend isto be determined by analyzing the allegations of the complaint or declarations in the underlying action." Id. (citations omitted).
The policy covers "property damage" caused by an "occurrence."...
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