Whitt Mach., Inc. v. Essex Ins. Co.

• Decision Date: 14 April 2009
• Docket Number: No. 1:08-CV-00439.,1:08-CV-00439.
• Parties: WHITT MACHINE, INC., Plaintiff, v. ESSEX INSURANCE CO., Defendant.
• Court: U.S. District Court — Southern District of Ohio

631 F.Supp.2d 927

WHITT MACHINE, INC., Plaintiff, v. ESSEX INSURANCE CO., Defendant.

No. 1:08-CV-00439.

United States District Court, S.D. Ohio, Western Division.

April 14, 2009.

COPYRIGHT MATERIAL OMITTED

James Papakirk, Todd J. Flagel, Flagel & Papakirk LLC, Cincinnati, OH, for Plaintiff.

David Laurence Eidelberg, Columbus, OH, Richard D. Sweebe, Ulmer & Berne LLP, Cleveland, OH, for Defendant.

OPINION AND ORDER

S. ARTHUR SPIEGEL, Senior District Judge.

This matter is before the Court on Plaintiff's Motion for Partial Summary Judgment (doc. 10), the Affidavit of Angela Whitt Snarski (doc. 11), Defendant's Response in Opposition (doc. 13), and Plaintiff's Reply (doc. 16). Also before the Court is Defendant's Motion for Partial Summary Judgment (doc. 12), Defendant's Factual Stipulations (doc. 9), Plaintiff's Response in Opposition (doc. 14), and Defendant's Reply (doc. 15). The Court has reviewed all of these documents in arriving at its decision. For the reasons indicated herein, the Court DENIES Plaintiff's Motion for Partial Summary Judgment and GRANTS Defendant's Motion for Partial Summary Judgment.

I. Background

Plaintiff Whitt Machine, Inc. ("Whitt"), owns real property and improvements located at 800/806 Central Avenue, Middletown, Ohio (the "Building") (doc 9). Plaintiff obtained insurance policy number 1CJ7894 (the "Policy") from Defendant Essex Insurance Co. ("Essex") for the Building (Id.). The Policy was in full force and effect from February 16, 2007, through February 16, 2008, and covered, among other casualties, losses due to fire (Id.).

At issue in this case are three provisions of the Policy. The first involves the Policy's Limits of Insurance provision, which provides in relevant part:

C. LIMITS OF INSURANCE

The most we [Defendant] will pay for loss or damage in any one occurrence is the applicable Limit of Insurance shown in the Declarations.

* * *

The limits applicable to the Coverage Extensions and the Fire Department Service Charge and Pollutant Clean Up and Removal Additional Coverages are in addition to the Limits of Insurance. Payments under the following Additional Coverages will not increase the applicable Limit of Insurance:

* * *

2. Debris Removal; but if:

a. The sum of direct physical loss or damage and debris removal expense exceeds the Limit of Insurance; or

b. The debris removal expense exceeds the amount payable under the 25% limitation in the Debris Removal Additional Coverage;

we will pay up to an additional $10,000 for each location in any one occurrence under the Debris Removal Additional Coverage.

(Id.). The Declarations section of the Policy sets a $600,000 limit of insurance for the Building (Id.).

The second Policy provision at issue is "Additional Coverages." The Policy provides:

4. Additional Coverages

a. Debris Removal

(1) We will pay your expense to remove debris of Covered Property caused by or resulting from a Covered Cause of Loss that occurs during the policy period. The expenses will be paid only if they are reported to us in writing within 180 days of the date of direct physical loss or damage.

(2) The most we [Defendant] will pay under this Additional Coverage is 25% of:

(a) The amount we [Defendant] pay for the direct physical loss of or damage to Covered Property; plus

(b) The deductible in this policy applicable to that loss or damage.

But this limitation does not apply to any additional debris removal limit provided in the Limits of Insurance section.

(Id.)

The final Policy provision at issue is an endorsement entitled "Change in Conditions Endorsement" ("Endorsement"). The pertinent language is as follows:

ATTACHED TO AND FORMING PART OF POLICY NO. 1CJ7894 CHANGE IN CONDITIONS ENDORSEMENT

Please read carefully as this changes coverage under you policy.

* * *

Property Pollution Exclusion

This policy does not cover loss or damage caused directly or indirectly by the release or discharge or dispersal of toxic or hazardous substances, contaminants, or pollutants. Nor will we cover the loss of removal, disposal, decontamination or replacement of insured property which has been contaminated by toxic or hazardous substances, contaminates [sic] or pollutants and by law or civil authority must be restored, disposed of or decontaminated. Such loss is excluded regardless of any other cause or event that contributes concurrently or in any way sequence to the loss.

(Id.)

On or about May 26, 2007, a fire destroyed the Building (Id.). Plaintiff promptly notified Defendant and timely submitted claims for damage to the Building, debris removal, additional debris removal, and pollutant cleanup (Id.). Defendant paid directly to Plaintiff, and to others on its behalf, $600,000 to cover the direct physical loss of the Building (Id.). In addition, Defendant tendered to Plaintiff a check in the amount of $10,000 to discharge its obligations under the Policy's Debris Removal Additional Coverage provision (Id.). Plaintiff has not accepted the check in anticipation of the resolution of this litigation (Id.). Plaintiff paid more than $200,000 to remove debris and clean up and remove asbestos from the Building (doc. 11). Defendant refused to cover Plaintiff's asbestos removal expenses and refused to pay more than $10,000 for debris removal (doc. 10).

Plaintiff brought suit in Ohio state court alleging breach of contract and bad faith in Defendant's refusal to cover the costs of debris removal and pollutant clean up in excess of the $600,000 Defendant has paid and the $10,000 Defendant has proffered (doc. 2). Plaintiff also sought punitive damages (Id.). Defendant removed the suit to this Court based on diversity of citizenship (doc. 1). The parties have filed cross motions for partial summary judgment as to Plaintiff's breach of contract claim. Both parties have also filed motions in opposition and replies to the respective motions for partial summary judgment such that this matter is ripe for the Court's review.

II. ANALYSIS

A. The Summary Judgment Standard

A grant of summary judgment is appropriate "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; see also, e.g., Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962); LaPointe v. United Autoworkers Local 600, 8 F.3d 376, 378 (6th Cir. 1993); Osborn v. Ashland County Bd. of Alcohol, Drug Addiction and Mental Health Servs., 979 F.2d 1131, 1133 (6th Cir.1992) (per curiam). In reviewing the instant motion, "this Court must determine 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." Patton v. Bearden, 8 F.3d 343, 346 (6th Cir.1993), quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (internal quotation marks omitted).

The process of moving for and evaluating a motion for summary judgment and the respective burdens it imposes upon the movant and non-movant are well settled. First, "a party seeking summary judgment ... bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact [.]" Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); see also LaPointe, 8 F.3d at 378; Guarino v. Brookfield Township Trustees, 980 F.2d 399, 405 (6th Cir.1992); Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479 (6th Cir.1989). The movant may do so by merely identifying that the non-moving party lacks evidence to support an essential element of its case. See Barnhart v. Pickrel, Schaeffer & Ebeling Co. L.P.A., 12 F.3d 1382, 1389 (6th Cir.1993).

Faced with such a motion, the non-movant, after completion of sufficient discovery, must submit evidence in support of any material element of a claim or defense at issue in the motion on which it would bear the burden of proof at trial, even if the moving party has not submitted evidence to negate the existence of that material fact. See Celotex, 477 U.S. at 317, 106 S.Ct. 2548; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). As the "requirement [of the Rule] is that there be no genuine issue of material fact," an "alleged factual dispute between the parties" as to some ancillary matter "will not defeat an otherwise properly supported motion for summary judgment." Anderson, 477 U.S. at 247-248, 106 S.Ct. 2505 (emphasis added); see generally Booker v. Brown & Williamson Tobacco Co., Inc., 879 F.2d 1304, 1310 (6th Cir.1989). Furthermore, "[t]he mere existence of a scintilla of evidence in support of the [nonmovant's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [non-movant]." Anderson, 477 U.S. at 252, 106 S.Ct. 2505; see also Gregory v. Hunt, 24 F.3d 781, 784 (6th Cir.1994). Accordingly, the non-movant must present "significant probative evidence" demonstrating that "there is [more than] some metaphysical doubt as to the material facts" to survive summary judgment and proceed to trial on the merits. Moore v. Philip Morris Cos., Inc., 8 F.3d 335, 339-340 (6th Cir.1993); see also Celotex, 477 U.S. at 324, 106 S.Ct. 2548; Guarino, 980 F.2d at 405.

Although the non-movant need not cite specific page numbers of the record in support of its claims or defenses, "the designated portions of the record must be presented with enough specificity that the district court can readily identify the facts upon which the non-moving party relies." Guarino, 980 F.2d at 405, quoting InterRoyal Corp. v. Sponseller, 889 F.2d 108, 111 (6th Cir.1989) (internal quotation marks omitted). In...