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Star Insurance Co. v. Progressive Specialty Insurance Co.

United States District Court, M.D. Alabama, Northern Division

June 7, 2017

STAR INSURANCE COMPANY, Plaintiff,
v.
PROGRESSIVE SPECIALTY INSURANCE COMPANY, Defendant.

          MEMORANDUM OPINION AND ORDER

          David A. Baker United States Magistrate Judge

         This matter arises from an insurance contribution declaratory judgment action in which Star Insurance Company ("Star") and Progressive Specialty Insurance Company ("Progressive") each seek reimbursement of monies paid in settlement of underlying litigation against their mutual insured, Gilow Wood, Inc. ("Gilow Wood"), for Gilow Wood's liability arising from an automobile accident. Before the Court are the parties' respective motions for summary judgment. (Docs. 21 & 23). The motions have been fully briefed and orally argued before this court. For the reasons stated herein, Star's motion for summary judgment is DENIED, and Progressive's motion for summary judgment is GRANTED.

         I. JURISDICTION

         The parties bring their respective claims pursuant to 28 U.S.C. § 2201 and Rule 57, Fed. R. Civ. P., and subject matter jurisdiction is conferred by 28 U.S.C. § 1332(a)(1). The parties do not dispute venue or personal jurisdiction, and there are adequate allegations in the Complaint (Doc. 1) and Answer and Counterclaim (Doc. 5). On March 15, 2017, the parties consented to Magistrate Judge Jurisdiction for all matters pursuant to Rule 73, Fed. R. Civ. P., and 28 U.S.C. § 636(c). (Docs. 33 & 34). On March 16, 2017, this matter was reassigned to the undersigned Magistrate Judge "to conduct all proceedings and order the entry of a final judgment" by United States District Judge Myron H. Thompson. (Doc. 35).

         II. SUMMARY JUDGMENT STANDARD OF REVIEW

         Under Federal Rule of Civil Procedure 56, summary judgment is proper "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 judgment as a matter of law." See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Chapman v. AI Transport, 229 F.3d 1012, 1023 (11th Cir. 2000). The party asking for summary judgment always bears the initial responsibility of informing the court of the basis for its motion, and identifying those portions of the pleadings or filings which it believes demonstrate the absence of a genuine issue of material fact. Celotex, Ml U.S. at 323. Once the moving party has met its burden, Rule 56 requires the nonmoving party to go beyond the pleadings and, by its own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial. Celotex, Ml U.S. at 324. "Where 'the adverse party does not respond, summary judgment, if appropriate, shall be entered against the adverse party.' Fed.R.Civ.P. 56(e) (emphasis added). Thus, summary judgment, even when unopposed, can only be entered when 'appropriate.'" United States v. One Piece of Real Prop. Located at 5800 SW 74th Ave., Miami, Fla., 363 F.3d 1099, 1101 (11th Cir. 2004).

         The substantive law will identify which facts are material and which are irrelevant. Chapman, 229 F.3d at 1023; Anderson v. Liberty Lobby, Inc., Ml U.S. 242, 248 (1986). All reasonable doubts about the facts and all justifiable inferences are resolved in favor of the non-movant. See Chapman, 229 F.3d at 1023; Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993). When opposing a motion for summary judgment, however, the nonmovant can no longer rest on mere allegations, but must set forth evidence of specific facts. See Lewis v. Casey, 518 U.S. 343 (1996) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)). A dispute is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, Ml U.S. at 248; Chapman, 229 F.3d at 1023. "If the evidence [presented by the nonmoving party to rebut the moving party's evidence] is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249 (internal citations omitted).

         Although there are cross-motions for summary judgment, each party must still establish the lack of genuine issues of material fact and that it is entitled to judgment as a matter of law. See Chambers & Co. v. Equitable Life Assur. Soc. of the U.S., 224 F.2d 338, 345 (5th Cir. 1955); Matter of Lanting, 198 B.R. 817, 820 (Bankr. N.D. Ala. 1996). The court will consider each motion independently, and in accordance with the Rule 56 standard. See Matsushita Elec. Indus. Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986). "The fact that both parties simultaneously are arguing that there is no genuine issue of fact, however, does not establish that a trial is unnecessary thereby empowering the court to enter judgment as it sees fit." Citizens Bank and Trust v. LPS Nat. Flood, LLC, 51 F.Supp.3d 1157, 1168-69 (N.D. Ala. 2014); see also Culpepper v. Inland Mortg. Corp., 243 F.R.D. 459, 463 n. 1 (N.D. Ala. 2006) (quoting Wright, Miller & Kane, Federal Practice and Procedure § 2720, at 327-28 (3d ed. 1998)) (same).

         III. BACKGROUND AND FACTS

         Gilow Wood was incorporated in Alabama in 1995. (Doc. 21-1 at 14). Although Gilow Wood was originally incorporated with a third party, at all times material to this matter, Gilow Wood was exclusively owned and operated by Charles R. Owens, Sr., and Charles R. Owens, Jr. (Doc. 21-1 at 3). "Gilow Wood is a timber dealership, " (Doc. 23-4 at 4), in the business of negotiating the sale of timber from landowners to various mills, and contracting with pulpwood haulers to do the actual harvesting and hauling of the timber. (Doc. 23-4 at 16-18).

         CR Owens Pulpwood, Inc., ("Owens Pulpwood") is a timber harvesting and hauling corporation owned by Charles R. Owens, Sr., and Charles R. Owens, Jr. (Doc. 23-4 at 14-15). All the timber harvesting brokered by Gilow Wood is contracted to Owens Pulpwood for harvesting and hauling, but Owens Pulpwood occasionally hauls for other companies. (Doc. 23-4 at 29-30). Owens Pulpwood employs a number of workers for its hauling crew, including Larry Savage, a pulpwood truck driver. (Doc. 23-4 at 37, 66).

         Star issued a Commercial General Liability policy ("the Star policy") to Gilow Wood which was in force at the time of the underlying accident. (Doc. 23-10). The Star policy included an exclusion of coverage for "Aircraft, Auto or Watercraft, " ("the auto exclusion"):

"Bodily injury" or "property damage" arising out of ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft owned or operated by or rented or loaned to any Insured. Use includes operation and "loading or unloading, "
This exclusion applies even if the claims against Insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the "occurrence" which caused the "bodily injury" or "property damage" involved the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft that ...

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