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Wells Cargo, Inc., A Corporation v. Transport Insurance Company

July 31, 2012

WELLS CARGO, INC., A CORPORATION, PLAINTIFF,
v.
TRANSPORT INSURANCE COMPANY, A CORPORATION, DEFENDANT.



The opinion of the court was delivered by: B. Lynn WINMILLChief U.S. District Court Judge

MEMORANDUM DECISION AND ORDER

INTRODUCTION

The Court has before it Plaintiff Wells Cargo, Inc.'s Motion for Partial Summary Judgment, or Alternatively for Declaratory Relief, Regarding Retrospective Premium Endorsement (Dkt. 124), Transport Insurance Company's Motion for Partial Summary Judgment Regarding Retrospective Premium (Dkt. 125), Plaintiff's Motion to Stay (Dkt. 133), and Plaintiff's Motion to Strike Declaration of Expert Witness James A. Robertson, or in the Alternative for Leave to Make a Supplemental Submission in the Event Any Expert Testimony is Allowed (Dkt. 142). The Court heard oral argument on the motions on May 15, 2012. The Court then allowed supplemental briefs, which were fully submitted to the Court by June 8, 2012. The Court now issues its decision.

BACKGROUND

The United States Forest Service brought a CERCLA action arising out of environmental pollution and contamination at the North Maybe Mine in Southeast Idaho. Plaintiff Wells Cargo is a party to the CERCLA action because it conducted mining operations at the mine from 1965 to 1967. Wells Cargo seeks coverage from Transport Insurance under several policies Transport issued to Wells Cargo between 1961 and 1985. Wells Cargo seeks a declaration that Transport is required to defend and indemnify it for the CERCLA action, as well as an award of damages for breach of contract.

The Court and the parties agreed to phase the litigation. During phase I, the parties resolved the missing policy issue through stipulation. Next, the Court addressed three issues: (1) whether Transport has a duty to defend Wells Cargo in the underlying environmental proceeding under the Transport policies; (2) whether the amounts associated with and paid in connection with the Remedial Investigation and Feasibility Study ("RI/FS") constitute defense costs or indemnity costs under the terms of the Transport policies; and (3) the applicable law that will be applied to the two foregoing issues. The Court determined that Idaho law applies, that Transport does have a duty to defend Wells Cargo, and that RI/FS costs are defense costs.

The Court and the parties then agreed to address whether the case should be stayed, and the interpretation of the retrospective premium endorsements attached to the Transport insurance policies. Those issues are now before the Court.

LEGAL STANDARD

1. Summary Judgment Legal Standard

Summary judgment is appropriate where a party can show that, as to any claim or defense, "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). One of the principal purposes of the summary judgment "is to isolate and dispose of factually unsupported claims . . .." Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). It is "not a disfavored procedural shortcut," but is instead the "principal tool[ ] by which factually insufficient claims or defenses [can] be isolated and prevented from going to trial with the attendant unwarranted consumption of public and private resources." Id. at 327. "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). There must be a genuine dispute as to any material fact - a fact "that may affect the outcome of the case." Id. at 248.

The evidence must be viewed in the light most favorable to the non-moving party, and the Court must not make credibility findings. Id. at 255. Direct testimony of the non-movant must be believed, however implausible. Leslie v. Grupo ICA, 198 F.3d 1152, 1159 (9th Cir. 1999). On the other hand, the Court is not required to adopt unreasonable inferences from circumstantial evidence. McLaughlin v. Liu, 849 F.2d 1205, 1208 (9th Cir. 1988).

When cross-motions for summary judgment are filed, the Court must independently search the record for factual disputes. Fair Housing Council of Riverside County, Inc. v. Riverside Two, 249 F.3d 1132, 1136 (9th Cir. 2001). The filing of cross-motions for summary judgment - where both parties essentially assert that there are no material factual disputes - does not vitiate the court's responsibility to determine whether disputes as to material fact are present. Id.

The moving party bears the initial burden of demonstrating the absence of a genuine dispute as to material fact. Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001)(en banc). To carry this burden, the moving party need not introduce any affirmative evidence (such as affidavits or deposition excerpts) but may simply point out the absence of evidence to support the nonmoving party's case. Fairbank v. Wunderman Cato Johnson, 212 F.3d 528, 532 (9th Cir.2000).

This shifts the burden to the non-moving party to produce evidence sufficient to support a jury verdict in her favor. Id. at 256-57. The non-moving party must go beyond the pleadings and show "by her affidavits, or by the depositions, answers to interrogatories, or admissions on file" ...


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