Usx Corp. v. Adriatic Insurance Co.
| Decision Date | 22 March 2000 |
| Docket Number | No. Civ.A. 95-866.,Civ.A. 95-866. |
| Citation | 99 F.Supp.2d 593 |
| Parties | USX CORPORATION and Besssemer and Lake Erie Railroad Company, Plaintiffs, v. ADRIATIC INSURANCE COMPANY, et al., Defendants, v. Icarom, Formerly known as Insurance Corporation of Ireland, Additional Defendant. |
| Court | U.S. District Court — Western District of Pennsylvania |
J. Michael Jarboe, David A. Lynch, USX Corporation, Law Department, Pittsburgh, PA, James J. Restivo, Jr., Lawrence E. Flatley, Debra H. Dermody, George L. Stewart, II, Reed Smith Shaw & McClay, Pittsburgh, PA, for plaintiffs.
Bernard D. Marcus, Robert L. Allman, II, Scott D. Livingston, Marcus & Shapira LLP, Pittsburgh, PA, David B. Fawcett, Richard S. Dorfzaun, Dickie, McCamey & Chilcote, P.C., Pittsburgh, PA, Liaison Defense Council.
Plaintiffs commenced this action seeking indemnification under approximately 278 umbrella and excess policies of insurance for financial losses in excess of $593,118,296.92, which plaintiffs incurred as a result of the settlement/satisfaction of nine civil suit judgements entered against Bessemer & Lake Erie Railroad Company ("B & LE") based upon its participation in a twenty-year conspiracy to violate federal and state antitrust laws. A case management order was entered on January 14, 1997, which divided this action into four phases, the first of which was designated "discovery and dispositive motions." Case Management Order of January 14, 1997 at I(D)(1) (Document No. 100). The parties have completed all discovery pertaining to plaintiffs' claims that coverage is afforded under the policies and defendants' bases for denying those claims. Presently before the court are cross-motions for summary judgment. For the reasons set forth below, defendants' motion will be granted and plaintiffs' will be denied.
Fed.R.Civ.P. 56(c) provides that summary judgment may be granted if, drawing all inferences in favor of the non-moving party, "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law." Summary judgment may be granted against a party who fails to adduce facts sufficient to establish the existence of any element essential to that party's claim, and upon which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party bears the initial burden of identifying evidence which demonstrates the absence of a genuine issue of material fact. When the movant does not bear the burden of proof on the claim, the movant's initial burden may be met by demonstrating the lack of record evidence to support the opponent's claim. National State Bank v. Federal Reserve Bank, 979 F.2d 1579, 1582 (3d Cir.1992). Once that burden has been met, the non-moving party must set forth "specific facts showing that there is a genuine issue for trial," or the factual record will be taken as presented by the moving party and judgment will be entered as a matter of law. Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (quoting Fed.R.Civ.P. 56(a), (e)) (emphasis in Matsushita). An issue is genuine only if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
In meeting its burden of proof, the "opponent must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The non-moving party "must present affirmative evidence in order to defeat a properly supported motion" and cannot "simply reassert factually unsupported allegations." Williams v. Borough of West Chester, 891 F.2d 458, 460 (3d Cir.1989). Nor can the opponent "merely rely upon conclusory allegations in [its] pleadings or in memoranda and briefs." Harter v. GAF Corp., 967 F.2d 846 (3d Cir.1992). Likewise, mere conjecture or speculation by the party resisting summary judgment will not provide a basis upon which to deny the motion. Robertson v. Allied Signal, Inc., 914 F.2d 360, 382-83 n. 12 (3d Cir.1990). If the nonmoving party's evidence merely is colorable or lacks sufficient probative force summary judgment must be granted. Anderson, 477 U.S. at 249-50, 106 S.Ct. 2505; see also Big Apple BMW, Inc. v. BMW of North America, 974 F.2d 1358, 1362 (3d Cir.1992), cert. denied, 507 U.S. 912, 113 S.Ct. 1262, 122 L.Ed.2d 659 (1993) ().
Plaintiffs seek damages for breach of contract from each named defendant under the respective policies, subject to the monetary limits of those policies, together with pre-judgment and post-judgment interest. The alleged breach is defendants' failure to indemnify plaintiffs for the liability arising from underlying third-party actions. The third-party actions followed the indictment of B & LE for a criminal violation of the Sherman Act and its subsequent conviction of the charged crime.
On October 13, 1981, a federal grand jury indicted B & LE and other railroads for criminal conspiracy in violation of § 1 of the Sherman Act, 15 U.S.C. § 1. On August 31, 1992, B & LE entered a plea of nolo contendere to the offense of conspiracy in restraint of trade as charged in the indictment. B & LE voluntarily entered the plea knowing it constituted a plea of guilt to the charges in the indictment and would result in a judgment of guilt as a matter of law. Transcript of July 26, 1982, Acceptance of nolo contendere Pleas in United States of America v. Bessemer & Lake Erie Railroad, Inc., et al., Criminal No. 81-396, United States District Court for the District of Columbia, at pp. 23-28, set forth in Volume I of Appendix to Defendants' Motion for Summary Judgment ("Defendants' Appendix") at pp. 82-87. The entry of the plea admitted every essential element of the offense. United States v. Bessemer & Lake Erie Railroad Co., 717 F.2d 593, 597 (D.C.Cir.1983). It likewise barred any subsequent attack of the indictment on the merits and constituted an admission of the truth of all material factual allegations therein. Id. at 597 & 599. The indictment charged a multi-faceted conspiracy to eliminate potential competition in the transportation of iron ore which was mined in Minnesota, Wisconsin and Canada, shipped across the Great Lakes and transported by the railroads from docks on the southern shore of Lake Erie to inland steel mills in Western Pennsylvania, West Virginia, Ohio and Kentucky. Id. at 594-95.
Between 1982 and 1984, five steel companies, three dock companies and five trucking companies filed civil actions against ten railroads involved in the conspiracy, including B & LE, in federal district courts in Pennsylvania, Ohio, New York and the District of Columbia.1 On April 17, 1984, the Judicial Panel on Multi-District Litigation consolidated the ten actions for pretrial proceedings at "MDL No. 587" (captioned In Re Lower Lake Erie Iron Ore Antitrust Litigation), and assigned the proceeding to the Honorable John P. Fullam of the United States District Court for the Eastern District of Pennsylvania. In May of 1989, Judge Fullam ordered the consolidated cases be tried as a consolidated action. The trial was bifurcated. The liability phase was tried between May 9 and June 18, 1989, and the jury returned verdicts against B & LE in nine of the actions.2 The damage phase was tried between June 26 and July 28, 1989, to a separate jury, and it awarded substantial damages in eight of the actions. Judgments were entered on June 17, 1989, totaling $4,457,652,953.00, exclusive of interest, costs and attorneys' fees.3 On February 27, 1991, Judge Fullam entered an opinion and order denying all post-trial motions except for one aspect of B & LE's motion which challenged an item of damage claimed by one steel company. Final judgments were otherwise entered in accordance with the damage jury's verdicts. See In re Lower Lake Erie Iron Ore Antitrust Litigation, 759 F.Supp. 219 (E.D.Pa. 1991). Appeals and cross-appeals were taken. On May 27, 1993, the United States Court of Appeals for the Third Circuit substantially affirmed the district court. See In re Lower Lake Erie Iron Ore Antitrust Litigation, 998 F.2d 1144 (3d Cir.1993). B & LE's petition for rehearing and suggestion for rehearing en banc were denied on July 26, 1993. Id. at 1185. The Supreme Court denied B & LE's petition for writ of certiorari on January 24, 1994, and plaintiffs thereafter satisfied or settled the MDL 587 judgments.
Plaintiff USX Corporation seeks indemnification under the insurance policies procured pursuant to its catastrophic liability insurance program for seven policy periods between May 12, 1977, and April 1, 1983.4 The May 12, 1977, through June 1, 1978, program included 5 layers of insurance providing $130 million of coverage in excess of a $50 million self-insured retention. The June 1, 1978, through June 1, 1979, program included six layers providing $150 million of coverage in excess of a $50 million self-insured retention. The June 1, 1979, through December 1, 1979, program included four layers providing $150 million of coverage in excess of a $50 million self-insured retention. The December 1, 1979, through December 1, 1980, program included six layers providing $275 million of coverage in excess of a $25 million self-insured retention. The December 1, 1980, through December 1, 1981, program included seven...
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