Travelers Prop. Cas. Co. of Am. v. TT Club Mut. Ins.

TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, Plaintiff, v. TT CLUB MUTUAL INSURANCE LTD., Defendant.

TT CLUB MUTUAL INSURANCE LTD. Counterclaimant, v. TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, Counterclaim Defendant.

No. CV419-231

United States District Court, S.D. Georgia, Savannah Division

March 31, 2022

ORDER

WILLIAM T. MOORE, JR. UNITED STATES DISTRICT JUDGE.

Before the Court is Plaintiff/Counterclaim Defendant Travelers Property Casualty Company of America's Motion for Summary Judgment (Doc. 25), and Defendant/Counterclaimant TT Club Mutual Insurance's Motion for Summary Judgment (Doc. 30). Both motions have been opposed. (Docs. 31, 38) For the following reasons, both motions are GRANTED IN PART and DENIED IN PART.

BACKGROUND^[1]

I. THE UNDERLYING LAWSUITS

This declaratory judgment action and the resulting counterclaims involve a priority of coverage dispute between two insurers regarding settlement payments made as a result of a serious motor vehicle accident. (Doc. 25, Attach. 2 at ¶ 1; Doc 31, Attach. 1 at ¶ 1.) The underlying accident occurred on May 19, 2015, when a Georgia Freightways employee fell asleep at the wheel of his tractor-trailer while driving along Interstate-16 in Pooler, Georgia, and crashed into several vehicles. (Doc. 30, Attach. 10 at ¶ 1; Doc. 39 at ¶ 1.) The collision killed five people and seriously injured a sixth. (Doc. 30, Attach. 10 at ¶ 2; Doc. 39 at ¶ 2.)

Six lawsuits (the "Underlying Lawsuits") were filed in the State Court of Chatham County on behalf of the individuals killed or injured in the accident. (Doc. 30, Attach. 10 at ¶ 7; Doc. 39 at ¶ 7.) The Underlying Lawsuits initially included as defendants the truck driver; Georgia Freightways; and Great West Casualty Company ("Great West"), the motor carrier insurer for Georgia Freightways. (Doc. 30, Attach. 10 at ¶ 8; Doc. 39 at ¶ 8.) The plaintiffs in the Underlying Lawsuits later added CMA-CGM (America), LLC ("CMA"), a transportation and shipping company, as a defendant under the theory that CMA was liable for the accident because CMA had loaned or leased the intermodal container chassis involved in the accident to Georgia Freightways. (See, e.g., Doc. 30, Attach. 1 at 75-76; Doc. 30, Attach. 10 at ¶¶ 5, 9 Doc. 39 at ¶¶ 5, 9.)

Great West initially defended CMA in the Underlying Lawsuits pursuant to a $1, 000, 000 policy issued by Great West to Georgia Freightways ("the Great West Policy"). (Doc. 25, Attach. 2 at ¶3; Doc. 31, Attach. 1 at ¶ 3; Doc. 30, Attach. 3 at 4.) In addition to the coverage provided by the Great West Policy, CMA was insured under three policies relevant to this action. Travelers issued two of the policies: a Travelers Marine General Liability policy, policy number ZOL-14R96169-14ND, with a $1, 000, 000 liability limit (the "MGL Policy") and a Travelers Bumbershoot Policy, policy number ZOB-14R96157-14ND, with a $10, 000, 000 liability limit (the "Bumbershoot Policy").^[2] (Doc. 25, Attach. 2 at ¶ 6; Doc. 31, Attach. 1 at ¶ 6.) TT Club issued the third relevant policy, a TT Club policy, certificate number 93572/2014/001, with a $30, 000, 000 limit ("TT Club Policy").^[3](Doc. 25, Attach. 2 at ¶ 6; Doc. 31, Attach. 1 at ¶ 6.)

Due to the severity of the claims in the Underlying Lawsuits, TT Club agreed to participate with Great West in CMA's defense, believing that the TT Club Policy would likely be reached if the Great West policy were the only other coverage available to CMA. (Doc. 30, Attach. 10 at ¶ 23; Doc. 30, Attach. 3 at 4.) At the time, TT Club contends it believed that the Great West policy was the only other insurance available to CMA. (Doc. 30, Attach. 10 at ¶ 22; Doc. 39 at ¶ 22.) TT Club agreed to pay 45 percent of the legal costs incurred during CMA's defense, with Great West paying the remaining 55 percent. (Doc. 30, Attach. 10 at ¶ 24; Doc. 39 at ¶ 24.)

On June 22, 2018, notice of the Underlying Lawsuits was tendered to Travelers for the defense and indemnity of CMA. (Doc. 30, Attach. 10 at ¶ 32; Doc. 39 at ¶ 32.) In response, Travelers issued a reservation of rights letter to CMA. (Doc. 30, Attach. 10 at ¶ 33; Doc. 39 at ¶ 33.) Travelers' letter acknowledged that the MGL Policy provided coverage for the Underlying Lawsuits under its Non-Owned and Hired Auto Endorsement but stated that the "coverage is solely excess of and does not contribute with any other insurance which may be applicable to the loss that is covered by the Endorsement." (Doc. 1, Attach. 2 at 6.) Travelers also informed CMA that the "Bumbershoot Policy is excess over the Primary Non-Owned and Auto Coverage." (Id.) Additionally, Travelers requested that CMA's assigned defense counsel include Travelers on their mailing list for all further updates on the Underlying Lawsuits. (Id. at 7.) Travelers maintained communications with CMA's defense counsel through the pendency of the Underlying Lawsuits; however, Travelers did not formally participate in CMA's defense and did not pay any of the defense costs incurred in CMA's defense. (Doc. 30, Attach. 10 at ¶¶ 36-37, 48; Doc. 39 at ¶¶ 36-37, 48.)

On September 10, 2019, representatives for Travelers and TT Club attended a global mediation of the Underlying Lawsuits. (Doc. 30, Attach. 10 at ¶ 38; Doc. 39 at ¶ 38.) The Underlying Lawsuits settled at mediation for $6, 000, 000 (the "Settlement"), with Great West paying the first $1, 000, 000.^[4] (Doc. 30, Attach. 10 at SI 39; Doc. 39 at ¶ 39.) TT Club and Travelers agreed to fund the remaining $5, 000, 000 in equal shares while reserving their respective rights to seek contribution from the other. (Doc. 30, Attach. 10 at ¶ 40; Doc. 39 at ¶ 40.)

II. PROCEDURAL HISTORY

On September 13, 2019, Travelers filed its Petition for Declaratory Judgment in this Court pursuant to 28 U.S.C. § 2201. (Doc. 1.) Travelers petitions the Court for a judgment declaring that the TT Club Policy is primary and applicable before either of Travelers' policies and that Travelers is entitled to contribution of any amounts paid towards the Settlement. (Id. at ¶ 28.) Alternatively, Travelers seeks a judgment declaring that the MGL Policy and TT Club Policy are co-primary and share funding of the Settlement on a pro-rata basis, with Travelers entitled to recover amounts paid to fund the Settlement in excess of the total applicable to the MGL Policy. (IcL at ¶ 29.) In response, TT Club brings counterclaims against Travelers for contribution and/or indemnity from Travelers for the amounts TT Club paid to fund the Settlement and the amounts TT Club paid in defense of CMA in the Underlying Lawsuits. (Doc. 12 at SISI 28, 32.) Now, the parties have brought cross-motions for summary judgment on these claims. (Docs. 25, 30.)

STANDARD OF REVIEW

According to Federal Rule of Civil Procedure 56(a) "[a] party may move for summary judgment, identifying each claim or defense- or the part of each claim or defense-on which summary judgment is sought." Such a motion must be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The "purpose of summary judgment is to 'pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial[.]'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp. 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986) (quoting Fed.R.Civ.P. 56(e) advisory committee's note to 1963 amendment). Summary judgment is appropriate when the nonmoving party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). The substantive law governing the action determines whether an element is material. DeLong Equip. Co. v. Wash. Mills Abrasive Co., 887 F.2d 1499, 1505 (11th Cir. 1989).

As the Supreme Court explained:

[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.

Celotex, 477 U.S. at 323, 106 S.Ct. at 2553 (quotation marks omitted). The burden then shifts to the nonmoving party to establish, by going beyond the pleadings, that there is a genuine issue concerning facts material to its case. Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). The Court must review the evidence and all reasonable factual inferences arising from it in the light most favorable to the nonmoving party. Matsushita, 475 U.S. at 587-88, 106 S.Ct. at 1356. However, the nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Id. at 586, 106 S.Ct. at 1356 (citations omitted). A mere "scintilla" of evidence or simply conclusory allegations will not suffice. See, e.g., Tidwell v. Carter Prods., 135 F.3d 1422, 1425 (11th Cir. 1998). Nevertheless, where a reasonable fact finder may "draw more than one inference from the facts, and that inference creates a genuine issue of material fact, then the court should refuse to grant summary judgment." Barfield v. Brierton, 883 F.2d 923, 933-34 (11th Cir. 1989) (citing Samples v. City of Atlanta, 846 F.2d 1328, 1330 (11th Cir. 1988)).

When a court considers cross-motions for summary judgment, the standard of review "does not differ from the standard applied when one party files a motion, but simply requires a determination of whether either of the parties deserves judgment as a matter of law on the facts...