Mumford & Miller Concrete, Inc. v. Marinis Bros., Inc.

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
MUMFORD & MILLER CONCRETE, )
INC., )
)
Plaintiff, )
) C.A. No. N14C-06-160-RRC
v. )
)
MARINIS BROS., INC., )
NAUTILUS INSURANCE COMPANY, )
JOHN L. BOONE, CHERYL BOONE, )
)
Defendants. )
Submitted: January 20, 2015
Decided: April 16, 2015
Upon Defendant Nautilus Insurance Company’s Motion for Judgment on the Pleadings
Regarding Claims by Mumford & Miller Concrete, Inc.
GRANTED.
Upon Defendant Nautilus Insurance Company’s Motion for Judgment on the Pleadings
Regarding Cross-Claim Against Marinis Bros., Inc.
GRANTED.
MEMORANDUM OPINION
Susan L. Hauske, Esquire, Tybout, Redfearn & Pell, Wilmington, Delaware, Attorney
for Plaintiff Mumford & Miller Concrete, Inc.
Gary W. Alderson, Esquire, Elzufon Austin Tarlov & Mondell, P.A., Wilmington,
Delaware, Attorney for Defendant Marinis Bros., Inc.
Marc S. Casarino, Esquire, White and Williams, LLP, Wilmington, Delaware, Attorney
for Defendant Nautilus Insurance Company.
1
Cynthia H. Pruitt, Esquire, Doroshow Pasquale Krawitz & Bhaya, Wilmington,
Delaware, Attorney for Defendants John Boone and Cheryl Boone.
COOCH, R. J.
I. INTRODUCTION
This declaratory judgment action, and cross claim asserting breach of
contract, stems from a personal injury claim for injuries sustained while John
Boone, a Plaintiff in the underlying action, was working as an employee of
Defendant Marinis Bros., Inc. Mr. Boone suffered injuries when, while
performing sandblasting work, he was allegedly struck and pinned beneath a piece
of heavy machinery. Defendant Nautilus Insurance Company has filed a Motion
for Judgment on the Pleadings regarding the Claims by Plaintiff Mumford &
Miller Concrete, Inc. and a second Motion for Judgment on the Pleadings
regarding the Cross-Claim against Defendant Marinis. The issue at the heart of
both motions is whether the policy issued by Defendant Nautilus to Defendant
Marinis provides coverage for each distinct set of claims.
For the reasons set forth below, Defendant Nautilus Insurance Company’s
Motion for Judgment on the Pleadings Regarding Claims by Mumford & Miller
Concrete, Inc. is GRANTED. Defendant Nautilus Insurance Company’s Motion
for Judgment on the Pleadings Regarding Cross-Claim against Marinis Bros., Inc.
is GRANTED.
II. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
A. Factual Background and Procedural History
The instant action, commenced by Plaintiff Mumford, “seeks a declaration
that Defendant Nautilus is obligated to defend and/or indemnify [Plaintiff
Mumford] in the underlying litigation[,]” and further seeks a declaration that
Marinis breached the subcontractor agreement between Marinis and Mumford.1
The underlying action, John Boone, et al. v. Mumford & Miller Concrete, Inc., et
al.,2 alleges significant personal injuries sustained while Mr. Boone was working
as an employee of Defendant Marinis, a subcontractor of Plaintiff Mumford and
Miller.
1
See generally Complaint for Declaratory Relief, D.I. #1 (Jun. 17, 2014).
2
C.A. No. N14C-03-036 RRC.
2
Defendant Nautilus contends that both motions should be granted in its favor
as there is no coverage under the Policy it issued to Defendant Marinis for either
claim at issue. Plaintiff Mumford argues that the Motion regarding the claims
against it should be denied because the Policy issued by Nautilus provides
coverage in this case. Defendant Marinis contends that the Motion regarding its
cross claim should likewise be denied because the motion is untimely, but also
because coverage exists for the claim. Defendants John and Cheryl Boone take no
position on the motions and did not participate in the briefing. 3
B. Relevant Insurance Contract Provisions:
Defendant Nautilus issued a Commercial General Liability Policy and an
Excess Insurance Policy to Defendant Marinis (“the Policies”). At issue in this
matter is interpretation of the primary CGL policy. The language of the primary
policy issued by Defendant Nautilus to Defendant Marinis provides in pertinent
part:
COVERAGE A BODILY INJURY AND PROPERTY DAMAGE
LIABILITY
1. Insuring Agreement
a. We will pay those sums that the insured becomes legally
obligated to pay as damages because of bodily injury or
property damaged in excess of the deductible or self-insured
retention, if any, to which this insurance applies. We will have
the right and duty to defend the insured against any suit
seeking those damages. However, we will have no duty to
defend the insured against any suit seeking damages for bodily
injury or property damage to which this insurance does not
apply. We may, at our discretion, investigate any occurrence
and settle any claim or suit that may result.
b. This insurance applies to bodily injury and property damage
only if:
(1) The bodily injury or property damage is caused by an
occurrence that takes place in the coverage territory. 4
The relevant definitions in the primary policy are as follows:
“Occurrence” means an accident, including continuous or repeated
exposure to substantially the same general harmful conditions.
3
See Ltr. from Cynthia H. Pruitt, Esquire, D.I. #27 (Dec. 9, 2014).
4
Nautilus Commercial Liability Policy Issued to Defendant Marinis Bros., Exhibit 1 to
Defendant Nautilus’s Answer and Cross-Claim, D.I. #8 (Aug. 21, 2014).
3
“Bodily Injury” means physical injury, sickness, disease, mental
anguish, or emotional distress, sustained by any person, including
death resulting from any of these at any time.
“Property Damage” means (a) physical injury to tangible property,
including resulting loss of use of that property . . . (b) loss of use of
tangible property that is not physically injured . . . . 5
The section of the blanket endorsement attached to the primary policy is
listed here in relevant part:
SECTION III – WHO IS AN INSURED is amended to include as an
insured, with respect to Coverage A, B, and D, any person(s) or
organization(s) when you and such person(s) or organization(s) have
agreed in a written contract or written agreement that such person(s) or
organization(s) be added as an additional insured on your policy. Such
written contract or written agreement must be in effect prior to the
performance of your work which is the subject of such written contract
or written agreement.
Such additional insured status applies only:
1. Under COVERAGE A BODILY INJURY AND PROPERTY
DAMAGE LIABILITY and COVERAGE B PERSONAL AND
AVERTISING INJURY LIABILITY for claims or suits resulting
from:
a. Your work performed for such person(s) or organization(s) in
the performance of your ongoing operations for the additional
insured . . . . 6
III. THE PARTIES’ CONTENTIONS
A. Defendant Nautilus’ Motion against Mumford & Miller:
i. Defendant Nautilus’ Contentions:
Defendant Nautilus argues that the Policies issued to Marinis Bros. by Nautilus
trigger Nautilus’s duty to defend Mumford & Miller only if Mumford & Miller
5
Id.
6
Id.
4
qualifies as an “additional insured” under the Policies.7 Defendant Nautilus asserts
that the Additional Insured Blanket Endorsement provides coverage to Mumford &
Miller “only if the allegations against Mumford & Miller in the Boone litigation
resulted from Marinis Bros.’ work on the Project.”8
To determine whether the allegations against Mumford in the underlying
case “resulted from” Marinis Bros.’ work, Defendant Nautilus argues this Court
should follow two Delaware cases, Pacific Ins. Co. v. Liberty Mut. Ins. Co. and
Premcor Ref. Grp., Inc. v. Matrix Serv. Indus. Contractors, Inc., cases that held
there must be “meaningful linkage” between two conditions imposed in an
insurance contract.9 Defendant Nautilus contends that in this case, there must be
“meaningful linkage” between Marinis Bros.’ work on the Project and the
allegations against Mumford and Miller in the Boone litigation, and further
contends that here, there is no such meaningful linkage.
Specifically, Defendant Nautilus argues that the fact that complaint in the
Boone litigation neither names Marinis Bros. nor attributes any wrongdoing
whatsoever to Marinis Bros. is fatal to a finding that there is “meaningful linkage.”
Moreover, Defendant Nautilus argues that “Mr. Boone’s mere presence on the job
site as an employee of Marinis Bros. does not create a meaningful linkage between
Marinis Bros.’ work on the Project and the allegations against Mumford &
Miller.”10
Because it argues there is no “meaningful linkage,” Defendant Nautilus argues
that Mumford & Miller cannot show that the allegations in the Boone litigation
“resulted from” Marinis Bros.’ work as allegedly required by the contractual
language of the Policies. Defendant Nautilus further argues that if Mumford & Miller
cannot show that the allegations in the Boone litigation “resulted from” Marinis
Bros.’ work, then Mumford & Miller cannot be considered an “additional insured,”
any duty to defend is not triggered, and this Court should deny coverage. 11
ii. Plaintiff Mumford and Miller’s Contentions:
Plaintiff Mumford contends that it should be considered an “additional
insured” under the Policies. Plaintiff agrees with Defendant Nautilus and argues that
7
Def. Nautilus’s Mot. for J. on the Pleadings Regarding Claims by Mumford & Miller Concrete,
Inc. at 4, D.I. #25 (Dec. 3, 2014) (hereinafter “Def. Nautilus’s Mot. against Mumford”).
8
Def. Nautilus’s Mot. against Mumford at 4.
9
Pacific Ins. Co. v. Liberty Mut. Ins. Co., 956 A.2d 1246, 1257 (Del. 2008); Premcor Ref. Grp.,
Inc. v. Matrix Serv. Indus. Contractors, Inc., 2009 WL 960567, at *7-8 (Del. Super. Mar. 19,
2009)
10
Def. Nautilus’s Mot. against Mumford at 2-7.
11
See id.
5
coverage should be afforded to Mumford & Miller if the claim or suit resulted from
Marinis Bros.’ work for Plaintiff Mumford. Plaintiff disputes Defendant Nautilus’s
interpretation of Premcor, and argues that “[t]he omission of any allegations against
Defendant Marinis does not preclude coverage in this matter.” 12
Plaintiff argues further that both Premcor and Pacific can be distinguished on
their facts because in both cases, the insurance contracts required a meaningful link
between the additional insured and the named insured’s liability. 13 Plaintiff contends
that here, unlike Premcor and Pacific, all that is required is a meaningful link
between Defendant Marinis’s work on the project, irrespective of any link arising out
of the March 8, 2012 incident, and the allegations against Plaintiff Mumford in the
underlying complaint. Plaintiff argues that it is of no consequence that John Boone
alleged no liability on the part of Defendant Marinis in the underlying complaint.
Finally, Plaintiff points out that per Premcor, the duty to defend and the duty to
indemnify are distinct, and the factual record must be further developed before the
issue of the duty to indemnify can be considered. 14
B. Defendant Nautilus’ Motion against Marinis Bros.:
i. Defendant Nautilus’ Contentions:
Defendant Nautilus argues that Marinis is not entitled to coverage for the
breach of contractual obligations claim brought against Marinis by Plaintiff
Mumford in the declaratory action. Specifically, Defendant Nautilus argues that
coverage only exists for bodily injury and property damage due to an occurrence.
Defendant Nautilus argues further that a breach of contractual obligation falls
within neither the definition for bodily injury nor property damage. Finally,
Defendant Nautilus contends that the alleged breach of contract is not an
“occurrence” under Delaware law. 15
ii. Defendant Marinis Bros.’ Contentions:
Defendant Marinis contends that the Policies provide coverage, but argues that
the coverage determination is not ripe for decision. Defendant Marinis argues that
12
Pl.’s Resp. to Def. Nautilus Ins. Co.’s Mot. For J. on the Pleadings Regarding Claims by
Mumford & Miller at ¶ 8, D.I. #28 (Dec. 10, 2014) (hereinafter “Pl. Mumford’s Resp.”).
13
See Tr. of Oral Arg. at 17-19, D.I. #40 (Feb. 3, 2015). Plaintiff argues alternatively that “at the
very minimum, there is a question of fact as to whether a meaningful link exists between
Defendant Marinis’ work and the underlying claims. . . .” Pl. Mumford’s Resp. at ¶ 12.
14
See Tr. of Oral Arg. at 21-26; See also Pl. Mumford’s Resp. at ¶¶ 9, 11.
15
See Mot. for J. on the Pleadings against Marinis Bros. at ¶¶ 7-8, D.I. #26 (Dec. 3, 2014)
6
facts critical to the coverage determination are still unknown, and as a result the
Court should deny the Motion.16 Defendant Marinis alternatively argues that
although the claim was brought as a breach of contract claim, because the claim was
brought as the result of the bodily injury claim in the underlying action, coverage
should be provided. 17
IV. STANDARD OF REVIEW
“After the pleadings are closed but within such time as not to delay the trial,
any party may move for judgment on the pleadings.” 18 “On such a motion, the
Court must accept all the complaint's well-pled facts as true and construe all
reasonable inferences in favor of the non-moving party.” 19 “The standard for a
motion for judgment on the pleadings is ‘almost identical’ to the standard for a
motion to dismiss.”20 The Court will grant a motion for judgment on the pleadings
“when no material issues of fact exist, and the moving party is entitled to judgment
as a matter of law.” 21
V. DISCUSSION
A. Nautilus’ Motion for Judgment on the Pleadings against Plaintiff
Mumford & Miller:
The motion against Plaintiff Mumford centers around two issues – first, the
duty to defend, and second, the duty to indemnify. It is well settled under Delaware
law that the determination of any duty to indemnify is “determined upon the facts that
are revealed during discovery or are ultimately [] presented at trial.”22 Conversely,
determination of the duty to defend is made at the earliest practicable time, to
“establish as early as possible the parties that will be responsible for the litigation of
the case.” 23 This Court declines to consider any issues regarding any duty to
indemnify at this time, and now takes up the duty to defend.
16
See Def. Marinis Bros. Resp. to Mot. for J. on the Pleadings against Marinis Bros., D.I. #32
(Dec. 30, 2014).
17
See Tr. of Oral Arg. at 57.
18
Del. Super. Ct. Crim. R. 12(c).
19
Blanco v. AMVAC Chem. Corp., 2012 WL 3194412, at *6 (Del. Super. Aug. 8, 2012).
20
Id.
21
Velocity Exp., Inc. v. Office Depot, Inc., 2009 WL 406807, at *3 (Del. Super. Feb. 4, 2009).
22
Premcor, 2009 WL 960567, at *12 (Del. Super. Jan. 8, 2009) (citing Pike Creek Chiropractic
Ctr., P.A. v. Robinson, 637 A.2d 418, 421 (Del. 1994)).
23
Premcor, 2009 WL 960567, at *6 (citing Amer. Ins. Group v. Risk Enter. Mgmt. Ltd., 761
A.2d 826, 829 (Del. 2000));
7
For this Court to decide whether a duty to defend exists, the Court must
compare the language of the complaint to the language of the insurance contract at
issue. 24 The Delaware Supreme Court in Pacific Ins. Co. v. Liberty Mutual Ins.
Co. detailed the test to apply when making coverage determinations such as this
one:
The test is whether the underlying complaint, read as a whole,
alleges a risk within the coverage of the policy. Determining
whether an insurer is bound to defend an action against its insured
requires adherence to the following principles: (1) where there is
some doubt as to whether the complaint against the insured alleges
a risk insured against, that doubt should be resolved in favor the
insured; (2) any ambiguity in the pleadings should be resolved
against the carrier; and (3) if even one count or theory alleged in
the complaint lies within the policy coverage, the duty to defend
arises. 25
In short, the policies trigger Nautilus’s duty to defend if Mumford and Miller
qualifies as an “additional insured” under the policies. There is no dispute between
the parties that the insurance contract, discussed supra, provides coverage for
Mumford and Miller as an “additional insured” if a) there is a written agreement
that Mumford be added as an additional insured to Marinis Bros.’ policies, and b)
that the allegations against Mumford in the Boone litigation “resulted from”
Marinis’ work on the project. There is similarly no dispute that Marinis Bros.
added Mumford and Miller as an additional insured on the policy issued by
Nautilus, so the Court need only decide if the allegations against Plaintiff Mumford
in the Boone litigation “resulted from” Marinis’ work on the project. 26
The phrase “resulted from” is not only unambiguous, but synonymous with
phrases such as “arising out of.” The Delaware Supreme Court in Pacific
interpreted the phrase “arising out of,” in the context of insurance policies, “to
require some meaningful linkage between the two conditions imposed in the
contract.”27 The Court in Pacific further explained that phrases such as ‘arising out
of,’ ‘flowing from,’ or ‘done in connection with,’ all require “some causal
connection to the injuries suffered, but [do] not require proximate cause in the
24
Premcor, 2009 WL 960567, at *6; See also Westfield Ins. Co., Inc. v. Miranda & Hardt
Contracting & Bldg. Servs., L.L.C., 2015 WL 1477970, at *2 (Del. Super. Mar. 30, 2015).
25
Pacific Ins. Co. v. Liberty Mut. Ins. Co., 956 A.2d 1246, 1254–55 (Del.2008) (quoting Am. Ins.
Group v. Risk Enter. Mgmt., Ltd., 761 A.2d 826, 829 (Del.2000)).
26
See Certificate of Liability Insurance, Jun. 29 2011, Exhibit C to Mumford & Miller
Complaint, D.I. #1 (Jun. 17, 2014).
27
Pacific, 956 A.2d at 1257.
8
legal sense.”28 This Court finds it reasonable to conclude that the phrase “resulted
from,” when found in an insurance contract, should require the same meaningful
linkage.
Again, case law is instructive regarding the methods by which this Court
might or might not find meaningful linkage. In Pacific, the Delaware Supreme
Court explained that meaningful linkage can be established by examining the
theories of liability set forth in the underlying complaint. 29 The Court further
explained that it could find a meaningful link by examining allegations of the
underlying complaint and drawing inferences between those allegations. 30 Plaintiff
Mumford argues that this Court should find that there is enough evidence in the
Complaint to show meaningful linkage between the allegations against Plaintiff
Mumford in the Boone litigation and Marinis’ work on the project, but this Court
disagrees.
In Premcor, this Court held although not dispositive of the duty to defend
issue, the fact that the policy holder was not named as a defendant in the
underlying complaint alone is fatal to a potential additional insured’s ability to
establish meaningful linkage. 31 As a result, the Court disagrees with Plaintiff’s
contention that it is inconsequential that Mr. Boone failed to name Defendant
Marinis in the Complaint. Plaintiff Mumford makes a valiant effort to distinguish
the instant facts from Pacific and Premcor and argues that because the contract
language is distinct in this case, coverage should be provided. While the Court
agrees with Plaintiff’s contention that the insurance contract language differs, it
cannot ignore the holding in Premcor, and finds that Marinis’ failure to be named
as a party ends the meaningful linkage analysis.32
In addition to the fact that Marinis was not named as a Defendant in the
underlying complaint (undoubtedly because the exclusivity provision in the
Workers Compensation Act prevents an injured worker from bringing a direct
action against the worker’s employer), the underlying complaint does not allege
that Boone’s injuries resulted from Marinis’ work or otherwise attribute any
wrongdoing to Marinis. Rather, the underlying complaint unambiguously alleges
that Boone’s injuries were “caused solely and exclusively by the negligence and
carelessness of [Mumford & Miller Concrete, Inc., Aecom, Inc., Aecom Technical
Services, Inc., Aecom Consult, Inc., and Aecom USA, Inc.]” 33 There are no direct
28
Id. at 1257, n. 42 (citing Fed Ins. Co. v. Tri-State Ins. Co., 157 F.3d 800, 804-05 (10th Cir.
1998)).
29
See Pacific, 956 A.2d at 1257; See also Premcor, 2009 WL 960567, at *8.
30
See id; See also Premcor, 2009 WL 960567, at *8 (explaining holding of Pacific).
31
Premcor, 2009 WL 960567, at *8.
32
See Complaint, Boone, et al. v. Mumford & Miller Concrete, Inc. et al., C.A. No. N14C-03-036
RRC, D.I. #1 (Mar. 5, 2014) (hereinafter “Boone Complaint”).
33
Boone Complaint at ¶¶ 22-24.
9
allegations of wrongdoing on Marinis’s part, and this Court declines to infer any
such allegations.
As a result, this Court, looking at the underlying complaint on its face and
applying the well-established test articulated in Pacific and the holding of
Premcor, finds that a covered risk has not been alleged that would trigger the duty
to defend. For these reasons, Defendant Nautilus’s Motion for Judgment on the
Pleadings against Mumford & Miller is GRANTED.
B. Nautilus’ Motion for Judgment on the Pleadings against Defendant
Marinis Bros.
Defendant Nautilus argues that no coverage should be afforded to Marinis for
the breach of contractual obligations claim brought against it by Mumford and Miller
in the instant declaratory action. Defendant Marinis asserts coverage was provided
under the Policy, but could not point to a specific provision of the Policy warranting
coverage.34 Defendant Marinis then advanced the alternative argument at oral
argument that coverage should be provided because the breach of contract claim was
brought as a result of the bodily injury claim in the underlying action. Thus, Marinis
argued, because a bodily injury claim would be covered, it follows that the breach of
contract claim should be covered.35
Having reviewed the complaint, and considering all reasonable inferences, the
Court finds the breach of contract claim advanced by Plaintiff Mumford against
Defendant Marinis in the complaint for declaratory judgment is unambiguously
excluded by the Policy. The plain language of the policy provides coverage for
bodily injury and for property damage, but coverage for a breach of contract claim is
simply not provided. Moreover, Defendant’s argument that coverage should be
provided because the breach of contract claim stems from the bodily injury claim in
the underlying action is too attenuated to trigger the duty to defend. This Court finds
that there has been no covered risk alleged, and thus no duty to defend is triggered.
Defendant Nautilus’s Motion for Judgment on the Pleadings against Defendant
Marinis Bros. is GRANTED.
CONCLUSION
For the reasons stated above, Defendant Nautilus Insurance Company’s Motion
for Judgment on the Pleadings Regarding Claims by Mumford & Miller Concrete, Inc.
34
See generally Def. Marinis Bros. Resp. to Mot. for J. on the Pleadings against Marinis Bros.
D.I. #32 (Dec. 30, 2014).; See also Tr. of Oral Arg. at 51-2 (citing to Policy as a whole).
35
See Tr. of Oral Arg. at 57.
10
is GRANTED. Defendant Nautilus Insurance Company’s Motion for Judgment on the
Pleadings Regarding Cross-Claim against Marinis Bros., Inc. is GRANTED.
IT IS SO ORDERED.
______________________
Richard R. Cooch, R.J.
oc: Prothonotary
11