Westfield Ins. Co. v. William B. Burford Printing Co.

Decision Date15 June 2020
Docket NumberNo. 1:18-cv-03685-SEB-MJD,1:18-cv-03685-SEB-MJD
Parties WESTFIELD INSURANCE COMPANY, Plaintiff, v. WILLIAM B. BURFORD PRINTING COMPANY, INC., W.D.H. Enterprises, Inc. d/b/a the Furniture Mart, Defendants. William B. Burford Printing Company, Inc., Counter-Claimants, v. Westfield Insurance Company, Counter-Defendants.
CourtU.S. District Court — Southern District of Indiana

Linda L. Vitone, Stephen Charles Wheeler, Fisher Maas Howard Lloyd & Wheeler, P.C., Indianapolis, IN, for Plaintiff/Counter-Defendants.

Andrea Kochert Townsend, Plews Shadley Racher & Braun LLP, Indianapolis, IN, Frederick D. Emhardt, Emhardt Law LLC, Carmel, IN, for Defendant/Counter-Claimants William B. Burford Printing Company, Inc.

Linda L. Vitone, Stephen Charles Wheeler, Fisher Maas Howard Lloyd & Wheeler, P.C., Indianapolis, IN, for Defendant Westfield Insurance Company.

Brent W. Huber, Robert Jorczak, Ice Miller LLP, Indianapolis, IN, for Defendant W.D.H. Enterprises, Inc.

ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT

SARAH EVANS BARKER, JUDGE

Now before the Court is Defendant/Counter-Claimant William B. Burford Printing Company's ("Burford Printing") Motion for Partial Summary Judgment, as well as Plaintiff/Counter-Defendant Westfield Insurance Company's ("Westfield") Cross-Motion for Summary Judgment. For the reasons set forth herein, Burford Printing's Motion for Summary Judgment is DENIED, and Westfield's Cross-Motion is GRANTED.

Background
I. Procedural Background

This matter involves an insurance coverage dispute arising out of a lawsuit filed by Defendant WDH Enterprises, Inc. d/b/a The Office Furniture Mart ("OFM") against Defendant Burford Printing to recover costs incurred by OFM resulting from environmental contamination on OFM's property, which it purchased from Burford Printing. Plaintiff Westfield initiated this declaratory judgment action in our Court on November 26, 2018, basing jurisdiction on 28 U.S.C. § 1332. Westfield seeks a declaration that it has no duty to defend Burford Printing in the proceedings currently pending in Marion Superior Court (Indiana) nor a duty to indemnify Burford Printing. On April 9, 2019, Burford Printing filed its counterclaim, alleging that Westfield had committed a breach of contract by denying coverage and declining to defend Burford in the state court litigation.1

II. Factual Background

The following facts are undisputed unless specifically noted.

On May 17, 1995, Burford Printing agreed to sell the property located at 3448 Shelby Street, Indianapolis, Indiana (the "Property") to Wesley Hawk, the owner of OFM. [Dkt. 71, at 2; Dkt. 77, at 6]. On July 13, 1995, Burford Printing and Mr. Hawk closed the sale of the property. [Id. ]. Title was transferred to Mr. Hawk by virtue of a corporate warranty deed. [Id. ]. Burford Printing agreed to finance the sale of the Property, and Mr. Hawk executed an installment promissory note evidencing the loan, which was secured by a mortgage executed by Mr. Hawk in favor of Burford Printing as the mortgagee. The parties agree that Burford Printing was thus the mortgage holder on the property as of July 13, 1995. [Id. ]. Importantly, and a fact about which there is no dispute, Burford Printing never leased the property to Mr. Hawk.2 [Dkt. 70, at 2; Dkt. 77, at 12-14, 23; Dkt. 79, at 1].

That same day, July 13, 1995, Westfield issued a Commercial Package Policy, Policy No. CWP 3 697 388 (the "Policy"), to Mr. Hawk to provide insurance coverage on the Property, effective July 13, 1995 through July 13, 1996. On July 13, 1996, the Policy was renewed for an additional year (the "Renewal"). [Dkt. 71, at 2; Dkt. 77, at 7]. The Policy and Renewal are collectively referred to here as the "Policies" unless context requires otherwise. On the Declarations page of the Policies, Mr. Hawk is listed as the "Named Insured." [Dkt. 1-3, at 11; Dkt. 1-4, at 8].

The Policies consist of two coverage parts, a Commercial Property ("CP") Coverage Part and a Commercial General Liability ("CGL") Coverage Part as well as numerous forms and endorsements. [Dkt. 77, at 4]. At issue here is the CGL Coverage Part, which, in sum, imposes a duty upon Westfield to defend the "insured" against any lawsuit seeking damages to which the insurance may apply and to indemnify the "insured" for "any sums that [it] becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which [the Policies] apply." [Dkt. 1-3, at 53; Dkt. 1-4, at 50]. Section II of the Policies, entitled "WHO IS AN INSURED," provides that the term "insured" includes any individual listed as the named insured in the Declarations (i.e., Mr. Hawk), and various other categories of individuals (such as Mr. Hawk's employees or legal representatives), none of whom are applicable here or to Burford Printing. [Dkt. 1-3, at 57-58; Dkt 1-4, at 54-55; Dkt. 77, at 9-10].

The parties agree that Mr. Hawk paid a premium to include in addition to himself personally Burford Printing as an additional insured on the Policies, though they dispute the extent of coverage that was afforded to Burford Printing as an additional insured. The uncontested evidence nonetheless establishes that the Declarations page of the CGL Coverage Part displays as follows the General Liability Schedule of Coverage (the "Schedule"):

GENERAL LIABILITY SCHEDULE

                  PREMIUM BASIS LEGEND —
                  S = GROSS   PER $1,000  A = AREA PER 1,000 SQ. FT.  U = UNITS PER UNIT
                      SALES   PER $1,000  C = TOTAL COST PER $1,000   T = SEE CLASSIFICATION
                  P = PAYROLL PER $1,000  M = ADMISSION PER $1,000
                  RATE LEGEND —
                  PREM/OP = PREMISES AND OPERATIONS
                  PROD = PRODUCTS AND COMPLETED OPERATIONS
                  CLASIFICATION                        CODE  PREMIUM  RATE  PREMIUM
                  INDIANA                                     BASIS
                  3448 SHELBY ST
                  INDIANAPOLIS IN 46204
                        PRODUCTS/COMPLETED OPS (NOC) [...]
                  WAREHOUSES — MANUFACTURING OR 68702 A PREM/OP 22.272 $1,002
                PRIVATE BUILDINGS OR 45,000
                PREMISES — OCCUPPIED BY
                MULTIPLE INTERESTS (LESSOR'S
                RISK ONLY) — INCLUDING
                PRODUCTS AND/OR COMPLETED
                OPERATIONS
                ADDITIONAL INSD BLDG OWNER PREM/OP $100
                WM B BURFORD PRINTING CO
                FORM CG2011
                                                     [...]
                   TOTAL PREMIUM — PREMISES AND OPERATIONS          $1,002
                   TOTAL PREMIUM — ADDITIONAL INSURED BLDG OWNER $100
                                                     [...]
                

[Dkt. 1-3, at 47; Dkt. 1-4, at 44]. (emphasis added ). Immediately following the Schedule, the final page of Declarations reads:

[Dkt. 1-3, at 48; Dkt. 1-4, at 45]. As we will discuss more fully in our subsequent legal analysis, Westfield, relying on the Schedule, argues that Mr. Hawk paid a premium to add Burford Printing as an additional insured but only with respect to particular coverage, that is, the coverage included in the form identified on the Schedule—Form CG 2011. Form CG 2011 is an additional insured endorsement that operates as a modification to the CGL Coverage and provides in relevant part:

ADDITIONAL INSURED – MANANGERS OR LESSORS OF PREMISES
[...]
COMMERCIAL GENERAL LIABILITY COVERAGE PART:
1. Designation of Premises (Part Leased to You):
2. Name of Person or Organization (Additional Insured):
3. Additional Premiums

(If no entry appears above, the information required to complete this endorsement will be shown in the declarations as applicable to this endorsement.)

WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule but only with respect to liability arising out of the ownership, maintenance or use of that part of the premises leased to [Mr. Hawk] and shown in the Schedule and subject to the following exclusions:

This insurance does not apply to:
1. Any "occurrence" which takes place after [Mr. Hawk] cease[s] to be a tenant in that premises.
2. [...]

[Dkt. 1-3, at 51; Dkt. 1-4, at 48]. (emphasis added ).

Pursuant to this endorsement, Westfield argues that Burford Printing is entitled to coverage as an additional insured only to the extent it faces liability arising out of its status as a manager or lessor of insured property that was leased to Mr. Hawk. Because Burford Printing never acted as a manager or lessor and because the insured property was never leased to Mr. Hawk, Westfield maintains that Burford Printing is not entitled to any coverage under the Policies as an additional insured. Burford Printing disagrees. Burford Printing acknowledges that From CG 2011 is included as an endorsement on the Policies, agrees that this endorsement provides coverage for those who lease the insured property to the named insured, and concedes that it was not a lessor of the Property. It nonetheless disputes the contention that the additional insured premium was paid for this narrow purpose and that its rights under the Policies are thus limited. Both parties have filed motions for summary judgment in their respective favor, which are now ripe for ruling.

Discussion
I. Standard of Review

Summary judgment is appropriate where there are no genuine disputes of material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a) ; Celotex Corp. v. Catrett , 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A court must grant a motion for summary judgment if it appears that no reasonable trier of fact could find in favor of the nonmovant on the basis of the designated admissible evidence. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). We neither weigh the evidence nor evaluate the credibility of witnesses, id. at 255, 106 S.Ct. 2505, but view the facts and the reasonable inferences flowing from them in the light most favorable to the nonmovant. McConnell v. McKillip , 573 F. Supp. 2d 1090, 1097 (S.D. Ind. 2008).

Courts often confront cross motions for summary judgment because Rules 56(a) and (b) of the Federal Rules of Civil Procedure...

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