Penn-Star Ins. Co. v. J&J Pilot Cars, LLC
| Decision Date | 22 March 2021 |
| Docket Number | Case No. 20-2433-JAR-TJJ |
| Citation | 527 F.Supp.3d 1282 |
| Parties | PENN-STAR INSURANCE COMPANY, Plaintiff, v. J&J PILOT CARS, LLC, R&H Logistics, Inc., Gary Lee Plummer and Richard R. Smith, Defendants. |
| Court | U.S. District Court — District of Kansas |
Scott D. Hofer, Kyle N. Roehler, Foland, Wickens, Roper, Hofer & Crawford, PC, Kansas City, MO, for Plaintiff.
Brian D. Jenkins, Jenkins Law, LLC, Olathe, KS, for Defendant J&J Pilot Cars, LLC.
Andrew D. Ryan, Sandberg Phoenix & von Gontard, PC, St. Louis, MO, Kathryn A. Regier, Sandberg Phoenix & von Gontard, PC, Kansas City, MO, for Defendants R&H Logistics, Inc., Richard R. Smith.
Plaintiff Penn-Star Insurance Company ("Penn-Star") brings this declaratory judgment action to determine whether it has a duty to defend and indemnify Defendants in underlying litigation pending in Wilson County, Kansas state court relating to an accident that damaged a highway overpass. Before the Court is Defendants R&H Logistics, Inc.'s and Richard R. Smith's Motions for Judgment on the Pleadings (Docs. 16, 23). Also before the Court is Plaintiff's Motion for Leave to File Sur-Reply (Doc. 34). The motions are fully briefed and the Court is prepared to rule. For the reasons explained below, Plaintiff's motion for leave to file surreply is granted; Defendants' motions for judgment on the pleadings are denied.
The standard for a motion for judgment on the pleadings under Fed. R. Civ. P. 12(c) is the same as that applied to a motion to dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6).1 To survive a motion to dismiss brought under Rule 12(b)(6), a complaint must contain factual allegations that, assumed to be true, "raise a right to relief above the speculative level" and must include "enough facts to state a claim to relief that is plausible on its face."2 "Mere ‘labels and conclusions’ and ‘a formulaic recitation of the elements of a cause of action’ are insufficient."3 The court must accept the nonmoving party's factual allegations as true and may not dismiss on the ground that it appears unlikely the allegations can be proven.4
The Supreme Court has explained the analysis as a two-step process. First, the court "must take all the factual allegations in the complaint as true, [but is] ‘not bound to accept as true a legal conclusion couched as a factual allegation.’ "5 Thus, the court must determine if the allegations are factual and entitled to an assumption of truth, or merely legal conclusions that are not entitled to an assumption of truth.6 Second, the court must determine whether the factual allegations, when assumed true, "plausibly give rise to an entitlement to relief."7 "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."8
Finally, if the Court on a Rule 12(c) motion looks to matters outside the pleadings, it generally must convert the motion to a Rule 56 motion for summary judgment.9 However, the Court may consider documents that are referred to in the complaint if they are central to the plaintiff's claim and the parties do not dispute their authenticity.10 Here, the Court considers the documents attached to the Complaint: the insurance policy and pleadings from the underlying litigation.11 The Court does not consider the photograph attached to Plaintiff's response.12
The following facts are either alleged in the Complaint or taken from the documents attached thereto. The well-pled facts alleged in the Complaint are assumed to be true for purposes of deciding this motion.
On July 19, 2019, Julie L. Lorenz, Secretary of the Kansas Department of Transportation ("KDOT"), filed a Petition for Damages against R&H Logistics, Inc. ("R&H") and Richard R. Smith (collectively, the "R&H parties"), in the District Court of Wilson County (the "Underlying Lawsuit"). The Secretary alleges that on July 19, 2017, Smith was operating R&H's 2012 Kenworth truck transporting a 13,000-gallon water tank,13 traveling westbound on U.S. 400 highway in Wilson County, Kansas under a superload permit issued by KDOT. When Smith drove under the U.S. 75 highway overpass, the top of the water tank struck the bottom of the overpass, causing damage. The Secretary alleges that the R&H parties failed to comply with the superload permit, which required R&H to exit U.S. 400 highway at the U.S. 75 highway overpass, and then re-enter U.S. 400 highway at the next westbound entrance after U.S. 75 highway. The Secretary alleges a claim for negligence with damages in excess of $900,000.
On May 29, 2020, the R&H parties filed a Third-Party Petition in the Underlying Lawsuit asserting claims against J&J Pilot Cars, LLC ("J&J") and Gary Plummer (collectively, the "J&J parties"). The R&H parties assert the load they were transporting on July 19, 2017 originated in Fort Scott, Kansas and its destination was Sawyer, Oklahoma. They allege that R&H contracted with J&J to provide escort services for R&H's superload; J&J assigned Plummer to operate the escort car, which was also assigned a permit by the Secretary. The R&H parties allege that Plummer was driving ahead of Smith and knew that the superload was required to exit at the U.S. 75 highway overpass, yet Plummer neither exited nor alerted Smith to exit, despite both vehicles being equipped with CB radios that allowed them to communicate during the trip. Therefore, the R&H parties allege that the J&J parties were negligent and proximately caused the overpass damage:
[T]he proximate cause of any damage to the US-75 Highway overpass above US-400 Highway was [the J&J parties'] failure to take the exit from US-400 Highway to bypass the US-75 Highway overpass while traveling in front of Smith and their failure to alert Smith to take the exit from US-400 Highway to bypass the US-75 overpass before Smith reached the overpass."14
Penn-Star issued Commercial General Liability ("CGL") Policy No. PAC7125381 ("the Policy"), with a policy period of February 23, 2017 to February 23, 2018, to J&J. At all relevant times, Plummer was an insured under the Policy. The Policy provides for coverage as follows:
The Policy provides an exclusion for "Aircraft, Auto Or Watercraft," which applies to:
The Policy contains several endorsements that change the Policy. The auto exclusion endorsement changes the policy by deleting the "Aircraft, Auto, Or Watercraft" exclusion "in its entirety and replac[ing] it with the following," in pertinent part:
The Policy also contains an exclusion for "Mobile Equipment," which applies to, in pertinent part, " ‘property damage’ arising out of ... [t]he transportation of ‘mobile equipment’ by an ‘auto’ owned or operated by or rented or loaned to any insured."18
Under Section V of the Policy, "auto" is defined as:
The term "property damage," is defined as "[p]hysical injury to tangible property, including all resulting loss of use of that property."20 An "occurrence" is "an accident."21 And "suit" is defined as: "a civil proceeding in which damages because of ‘bodily injury’, ‘property damage’ or ‘personal and advertising injury’ to which this insurance applies are alleged."22 "Mobile equipment" is defined as:
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