Valley Forge Ins. Co. v. Hartford Iron & Metal, Inc.
| Decision Date | 07 December 2015 |
| Docket Number | CAUSE NO. 1:14-CV-006-RLM-SLC |
| Court | U.S. District Court — Northern District of Indiana |
| Parties | Valley Forge Insurance Company, Plaintiff, v. Hartford Iron & Metal, Inc. and Alan B. Goldberg (dba Hartford Metal & Iron), Defendants. |
Jan M. Michaels, Steven Schulwolf, Thomas D. Ferguson, Michaels Schulwolf & Salerno PC, Chicago, IL, Philip E. Kalamaros, Hunt Suedhoff Kalamaros LLP, Saint Joseph, MI, Barry C. Cope, Bingham Greenebaum Doll LLP, Indianapolis, IN, for Plaintiff.
Mark E. Shere, Shere Law & Associates, Colleen F. Shere, Indianapolis, IN, for Defendants.
Robert L. Miller, Jr.
Plaintiff and counterclaim defendant Valley Forge Insurance Company sued Hartford Iron & Metal, Inc. and Alan B. Goldberg, seeking damages for breach of contract and declaratory judgment regarding the parties' rights and obligations under a series of insurance policies and settlement agreements. This matter is before the court on Valley Forge's motion for partial summary judgment. (Doc. No. 93). The motion concerns only the claims for declaratory relief: Valley Forge seeks a declaration that it has the right to control both the defense and the remediation of the Hartford Iron site free from interference by Hartford Iron.1 Also before the court are Valley Forge's motion for clarification of the court's ruling denying a preliminary injunction (Doc. No. 95), Hartford Iron's
motion for leave to file supplemental exhibits to its summary judgment response (Doc. No. 274), and Hartford Iron's motion to seal one of its proposed supplemental exhibits (Doc. No. 276).
For the reasons that follow, Valley Forge is not entitled to summary judgment on its declaratory relief claims.
Because Valley Forge's motion seeks only partial summary judgment, it isn't necessary to recite in detail the evidence regarding storm water discharges at the Hartford Iron site and the remediation efforts thus far.
This litigation arises from environmental contamination at a Hartford City, Indiana metal scrap yard. Hartford Iron operates the scrap yard, and Valley Forge provided several general liability insurance policies covering it. These insurance policies2 provide that Valley Forge has the right and duty to investigate, defend, and settle covered liability claims against Hartford Iron, and that:
(Doc. No. 94-3, Section IV(2)).
In August 2006, the Indiana Department of Environmental Management (“IDEM”) found that the scrap yard wasn't in compliance with environmental regulations and issued a Notice of Violation to Hartford Iron. Valley Forge initially agreed to defend Hartford Iron, but disputes soon arose between the parties. In 2009, IDEM and Hartford Iron entered into an Agreed Order concerning investigation and remediation at the site, and Valley Forge and Hartford Iron entered into their first settlement agreement allocating responsibility for complying with the IDEM order.
Within two years the parties were again at odds about how to remediate the scrap yard, and Hartford Iron filed suit in state court against Valley Forge and the attorney Valley Forge had hired as Hartford Iron's
defense counsel in the IDEM action. Environmental violations at the site continued, and the EPA issued Hartford Iron a Notice of Intent to File Civil Administrative Complaint. IDEM also issued a Remediation Request in April 2012 requiring Hartford Iron to submit a plan to reduce the discharge of PCBs from the site. Hartford Iron submitted a plan in July 2012.
The parties reached a second settlement agreement in December 2012. Both sides agreed to release all coverage, malpractice, and bad faith claims they might have had against each other to that point, and Valley Forge agreed to make an immediate payment to resolve all past damages and defense costs. As relevant to the summary judgment motion, the 2012 agreement establishes that: (1) Valley Forge may immediately appoint new defense counsel subject to Hartford Iron's
approval, which can't be unreasonably withheld. The new defense counsel will defend against the EPA and IDEM claims, supervise the environmental consultant, and represent Valley Forge's interests in prompt and cost effective remediation; (2) Valley Forge may immediately replace the former environmental consultant with August Mack. August Mack will immediately begin work to control storm water discharges, and will implement (at Valley Forge's expense) any future remediation plans ultimately required and approved by IDEM or the EPA; (3) Valley Forge must defend and indemnify Hartford Iron as to the EPA penalty already imposed; (4) Valley Forge must defend and indemnify Hartford Iron with respect to the EPA and IDEM claims, and will “control the defense of these matters”; (5) Hartford Iron must “cooperate with Valley Forge, defense counsel, and August Mack” in implementing the remediation plan; and (6) August Mack and defense counsel must copy Hartford Iron on all correspondence relating to work at the site.
Since the 2012 settlement, both the storm water discharge violations and the parties' disputes over control of the defense have continued, and each side blames the other for the failure to achieve adequate remediation at the site. Hartford Iron takes the position that August Mack's remediation efforts have been insufficient, and actually increased rather than abated the discharge of harmful chemicals into the groundwater. Valley Forge argues that August Mack's remediation plans could have worked well, but were frustrated by Hartford Iron's
failure to cooperate in denying August Mack employees unfettered access to the scrap yard.
Valley Forge filed this suit against Hartford Iron in January of 2014, seeking damages for breach of the 2012 agreement as well as a declaratory relief regarding Hartford Iron's
obligations under the agreement. The breach of contract claim alleges that Hartford Iron has failed to cooperate with Valley Forge and August Mack as required by the 2012 agreement, and that this failure to cooperate caused the ongoing storm water discharges and increased the costs of remediating the site. Valley Forge also sought a preliminary injunction that would prevent Hartford Iron from withholding its consent to the appointment of new defense counsel at Valley Forge's expense. The court denied the preliminary injunction motion on March 9, 2015. (Doc. No. 58).
A district court must grant summary judgment if “the pleadings, depositions, answers to the interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c)
; see also Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A genuine issue of material fact exists whenever “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, 91 L.Ed.2d 202 (1986). In deciding whether a genuine dispute exists as to any material fact, a court must view all the evidence and draw all reasonable inferences in favor of the non-moving party. See Weber v. Univ. Research Assoc., Inc. , 621 F.3d 589, 592 (7th Cir.2010). The existence of an alleged factual dispute, by itself, won't defeat a summary judgment motion; “instead, the nonmovant must present definite, competent evidence in rebuttal,” Parent v. Home Depot U.S.A., Inc. , 694 F.3d 919, 922 (7th Cir.2012), and “must affirmatively demonstrate, by specific factual allegations, that there is a genuine issue of material fact that requires trial.” Hemsworth v. Quotesmith.com, Inc. , 476 F.3d 487, 490 (7th Cir.2007). It isn't appropriate for the court to judge the credibility of the witnesses or evaluate the weight of the evidence; the only question on summary judgment is “whether there is a genuine issue of fact.” Gonzalez v. City of Elgin , 578 F.3d 526, 529 (7th Cir.2009). Summary judgment is “not a dress rehearsal or practice run; it is the put up or shut up moment in a lawsuit, when a party must show what evidence it has that would convince a trier of fact to accept its version of events.” Hammel v. Eau Galle Cheese Factory , 407 F.3d 852, 859 (7th Cir.2005) (internal citations omitted).
There are unquestionably disputes of material fact regarding the remediation efforts so far, the storm water discharges from the scrapyard, and who is responsible for the site's ongoing noncompliance with environmental regulations. None of these disputes is material to the declaratory relief claims. Actual overruns of storm water don't affect the legal issue presented in the summary judgment motion: whether, as a matter of law, Valley Forge retains the right to control the defense of the IDEM proceeding under the insurance policies and settlement agreements after filing this complaint.
motions to supplement and to seal
Before reaching the merits of Valley Forge's motion for summary judgment, the court must address the pending motions to supplement and to seal. On November 23, 2015, Hartford Iron filed its second motion3 for leave to file supplemental exhibits regarding summary judgment. (Doc. No. 274). The motion seeks to submit fifteen additional exhibits that didn't exist or hadn't been produced at the time Hartford Iron filed its summary judgment response, including further noncompliance reports from IDEM and communications regarding the remediation plan proposed by Hartford Iron's
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