U.S. Fire Ins. Co. v. Vanderbilt University
| Decision Date | 27 January 2000 |
| Docket Number | No. 3:99-0048.,3:99-0048. |
| Citation | 82 F.Supp.2d 788 |
| Parties | UNITED STATES FIRE INSURANCE COMPANY, Plaintiff, v. VANDERBILT UNIVERSITY, Vanderbilt University Medical Center, St. Paul Fire & Marine Insurance Company, St. Paul Mercury Insurance Company, Defendants. |
| Court | U.S. District Court — Middle District of Tennessee |
H. Buckley Cole, Greenebaum, Doll & McDonald PLLC, Nashville, TN, Brian S. Martin, Robert A. Shults, Janis H. Detloff, Sheinfeld, Maley & Kay, P.C., Houston, TX, for U.S. Fire Ins. Co.
H. Lee Barfield, II, William N. Ozier, Joseph F. Welborn, III, Bass, Berry & Sims, Nashville, TN, Gino J. Benedetti, Gregg W. Mackuse, Miller, Alfano & Raspanti, P.C., Philadelphia, PA, George Bow McGugin, Watkins, McGugin, McNeilly & Rowan, Nashville, Bethany K. Culp, Elliott M. Flies, Oppenheimer, Wolff & Donnelly LLP, St. Paul, MN, for Vanderbilt University, Vanderbilt University Medical Center, St. Paul Fire & Marine Ins. Co., St. Paul Mercury Ins. Co.
The following motions are before the court: (1) St. Paul's Motion to Dismiss Complaint and/or for Summary Judgment (Docket No. 20); (2) Vanderbilt's Motion to Dismiss and/or for Summary Judgment (Docket No. 59); (3) U.S. Fire's and Vanderbilt's Cross-Motions for Summary Judgment on the Issue of Notice (Docket Nos. 50, 80); (4) U.S. Fire's Motion for Summary Judgment on the Issue of Exhaustion (Docket No. 97); (5) U.S. Fire's Motion for Review of Magistrate Judge Griffin's June 14, 1999 Order (Docket No. 36); and (6) U.S. Fire's Motion for Leave to Amend its Complaint (Docket No. 119). Oral argument was held on October 12, 1999.
In 1994, a class action suit was filed against numerous defendants, including Vanderbilt University, Vanderbilt University Medical Center and the Rockefeller Foundation by certain class representatives, Craft v. Vanderbilt University, 3:94-0090 (Judge Nixon). In that action, the plaintiffs alleged that the Vanderbilt defendants had conducted the "Tennessee Vanderbilt Nutrition Project" ("TVNP") in which approximately 829 pregnant women were given a liquid containing radioactive iron between September 1945 and May 30, 1947 without their knowledge or consent. (Docket No. 12, Ex. C at 1) The plaintiffs further alleged that the Vanderbilt defendants had conducted a follow-up study from 1964 to 1969 during which the participants in the TVNP were interviewed. (Docket No. 12, Ex. C at 1) Upon completion of the follow-up study, the Vanderbilt defendants published an article in the American Journal of Epidemiology in 1969, reporting that there was a possible relationship between fetal exposure to radioactive iron and the incidence of childhood cancers. (Docket No. 62, Ex. 5 at 9-10; Docket No. 91, Ex. A at 724)
After the filing of the Craft litigation, Vanderbilt tendered the defense of the litigation to St. Paul and requested indemnification for all amounts that St. Paul was obligated to pay under insurance policies issued to Vanderbilt. After discovery was conducted, it became apparent that the St. Paul insurance policies could not be located by either Vanderbilt or St. Paul.1 St. Paul initially refused to defend or indemnify Vanderbilt, in part because Vanderbilt had not demonstrated that St. Paul had issued any insurance policies for the relevant time period. (Docket No. 12, Ex. D at 1-2)
In March 1998, Vanderbilt located some documentary evidence that St. Paul had provided insurance coverage at least for the years 1954-56, 1957-58, 1958-61, 1961-63, 1965-1966, 1967-70. (Docket No. 12, Ex. D at 2; Docket No. 91, Ex. D) U.S. Fire provided excess insurance to Vanderbilt beginning in 1965 through at least 1971. (Docket No. 91, Ex. D)
On May 27, 1998, the parties to the Craft litigation settled the class action suit for approximately $10 million. (Docket No. 12, Ex. C) As part of that settlement, the Rockefeller Foundation agreed to pay the Craft plaintiffs $900,000. Vanderbilt was responsible for the remaining $9.1 million of the Craft settlement.
In the Craft settlement agreement, the parties agreed that the payment was to cover "any and all claims ... brought or which have been brought or may be brought against [Vanderbilt and Rockefeller Foundation] arising out of, related to, or as a result of, [Vanderbilt's and Rockefeller Foundation's] funding and/or participation of any kind or nature in the TVNP and in the follow-up study, and all the acts, omissions and/or events alleged in the Complaint or First or Second Complaint or in Pretrial Order No. 4." (Docket No. 12, Ex. C at 3)
On November 6, 1998, Judge Nixon issued an Order Approving Distribution of Settlement Fund. (Docket No. 91, Ex. C) Of the approximately $10 million in settlement funds, Judge Nixon allocated $4 million to the battery claims as a result of the administration of the radioactive iron liquid during the TVNP ($3.73 million from Vanderbilt) and $1.25 million to the claims for the wrongful death of children in the 1950s whose mothers had participated in the TVNP study.2 (Docket No. 91, Ex. C at 2-3)
On January 20, 1999, U.S. Fire filed this declaratory judgment action against Vanderbilt and St. Paul, seeking a determination of the rights and obligations of the parties pursuant to various insurance policies issued by U.S. Fire to Vanderbilt.
On February 24, 1999, St. Paul and Vanderbilt settled their dispute as to St. Paul's duty to indemnify Vanderbilt for the amounts it paid under the Craft settlement. (Docket No. 12, Ex. D) Under the terms of the St. Paul settlement agreement, St. Paul agreed to pay Vanderbilt approximately $2 million in defense costs and $2.5 million3 as indemnity under the hospital professional liability coverage for some or all4 of the policies in effect during five separate and non-consecutive years (1963-1967, 1968-1969) of the follow-up study. (Docket No. 116, Ex. 1 at 3-4) St. Paul had determined that an agreement between St. Paul and Vanderbilt that the years of the follow-up study were implicated "would likely place Vanderbilt in a favorable position with U.S. Fire and the excess coverages in effect at the time." (Docket No. 91, Ex. G at 287) Vanderbilt and St. Paul further agreed that "nothing set forth in this Settlement Agreement and Release is intended as or may be construed as an admission of coverage, fault, liability or wrongdoing of any party." (Docket No. 116, Ex. 1 at 6) Thus, beyond the general disclaimer of liability, St. Paul also disclaimed that the policies it provided to Vanderbilt actually covered the Craft claims. In return for St. Paul's payment, Vanderbilt agreed not to seek further indemnity from St. Paul "in the event that any court of competent jurisdiction determines that the payment made by St. Paul ... did not exhaust any coverage which was or may have been provided by St. Paul to Vanderbilt." (Docket No. 116, Ex. 1, at 5)
Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment may be rendered if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c).
In order to prevail, the movant has the burden of proving the absence of a genuine issue of material fact as to an essential element of the opposing party's claim. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986); Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479 (6th Cir.1989). In determining whether the movant has met its burden, the court must view the evidence in the light most favorable to the nonmoving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). If the nonmoving party, however, fails to make a sufficient showing on an essential element of the case with respect to which the nonmoving party has the burden, the moving party is entitled to summary judgment as a matter of law. See Williams v. Ford Motor Co., 187 F.3d 533, 537-38 (6th Cir.1999) (citing Celotex Corp., 477 U.S. at 322-23, 106 S.Ct. 2548).
To preclude summary judgment, the nonmoving party "is required to present some significant probative evidence which makes it necessary to resolve the parties' differing versions of the dispute at trial." Gaines v. Runyon, 107 F.3d 1171, 1174-75 (6th Cir.1997). The nonmoving party must show that "there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). To determine whether the nonmoving party has raised a genuine issue of material fact, the evidence of the nonmoving party is to be believed, and all justifiable inferences are to be drawn in his or her favor. See id. at 261, 106 S.Ct. 2505.
The court should also consider whether the evidence presents "a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Street, 886 F.2d at 1479. If the evidence offered by the nonmovant is "merely colorable," "not significantly probative," or is not enough to lead a fair-minded jury to find for the nonmoving party, the motion for summary judgment should be granted. Anderson, 477 U.S. at 249-52, 106 S.Ct. 2505.
U.S. Fire and Vanderbilt have filed cross-motions for summary judgment on the issue of notice.5 (Docket Nos. 50, 80) U.S. Fire contends that even if this court were to find that its policies were implicated by Vanderbilt's settlement in the Craft litigation, it is still not required to indemnify Vanderbilt because Vanderbilt failed to notify U.S. Fire of the events underlying the Craft litigation until ...
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