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Michigan Millers Mutual Insurance Co. v. Travelers Indemnity Co. of Connecticut

United States District Court, E.D. Michigan, Southern Division

December 6, 2016

MICHIGAN MILLERS MUTUAL INSURANCE COMPANY, Plaintiff,
v.
THE TRAVELERS INDEMNITY COMPANY OF CONNECTICUT and EMCASCO INSURANCE COMPANY, Defendants.

          Mona K. Majzoub Magistrate Judge.

          OPINION AND ORDER GRANTING DEFENDANT TRAVELERS' MOTION TO DISMISS [12] AND GRANTING DEFENDANT EMCASCO'S MOTION FOR SUMMARY JUDGMENT [13]

          LAURIE J. MICHELSON U.S. DISTRICT JUDGE

         This is an insurance dispute related to a state-court personal injury action. Pursuant to an insurance policy, Plaintiff Michigan Millers Insurance Company defended one of the entities involved in that action-Angelo's Wholesale Supplies, Inc. Michigan Millers then sued two other insurers-Defendants The Travelers Indemnity Company of Connecticut and EMCASCO Insurance Company-in state court, seeking declaratory judgment that those insurers were also obligated to contribute to the defense. The case was removed here.

         Both Defendants have moved for pre-discovery dismissal. Travelers filed a motion to dismiss, asserting that it had no policy covering the relevant Angelo's entity. (R. 12.) EMCASCO filed a motion for summary judgment, asserting that while it at one time covered the relevant Angelo's entity, the policy had expired by the time of the accident underlying the state-court case. (R. 13.) The motions are fully briefed, and the Court held oral argument on November 28, 2016. Michigan Millers' responses reflect its desire for discovery but do little to address the legal deficiencies of its claims. So for the reasons discussed, the Court agrees with Defendants that Michigan Millers' claims fail as a matter of law.

         I.

         The Court begins with Defendant Travelers Indemnity Company of Connecticut's motion to dismiss. (R. 12.)

         A.

         Plaintiff Michigan Millers alleges the following in its complaint. James Kretz suffered an injury on the job in January 2013. (R. 1, PID 11.) Kretz was installing a salt spreader underneath a truck when his co-worker Daniel Genord started the truck and accidentally ran him over. (Id.) Kretz and Genord are employees of Angelo's Wholesale Supplies. (R. 1, PID 10-11.) (The Court notes that the complaint appears to use the name “Angelo's” to at times refer to three different entities: Angelo's Wholesale Supplies, Angelo's Supplies, and Carlesimo Investments. The specific names, however, are important, as the main issue in dispute is which specific entity was insured under the relevant policies in this case.) The truck that ran over Kretz was owned or registered to another business, Tecumseh Lawn & Landscaping. (R. 1, PID 10.)

         Kretz filed a negligence lawsuit against Tecumseh in Oakland County Circuit Court in August 2014. (Id.) He alleged that he is permanently disabled because of the accident, and he sought $6.5 million in damages. (Id.) Tecumseh filed a third-party complaint against Genord and Angelo's Wholesale Supplies. (R. 1, PID 10, 34.)

         When Michigan Millers initiated this suit, Kretz's case remained pending. (R. 1, PID 9, 11.) But the parties have noted in their briefing that the underlying Kretz action was dismissed with prejudice on May 25, 2016, following a settlement. (See, e.g., R. 13-2, PID 229-30; R. 31; R. 32.)

         Michigan Millers insured an entity named “Angelo's Supplies Inc.” through a “Commercial Lines Policy.” (R. 1, PID 12.) Under that policy, with certain limitations and exclusions, Michigan Millers agreed to “pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury' or ‘property damage' to which this insurance applies.” (Id.) Michigan Millers also agreed, “[W]e will have the right and duty to defend the insured against any ‘suit' seeking those damages.” (Id.) The policy also had a provision that, in sum, stated that if the insured had other applicable insurance available, Michigan Millers would contribute equal shares if the other insurance also permitted contribution by equal shares. (R. 1, PID 15.) Furthermore, the policy stated that “[i]f the insured has rights to recover all or part of any payment we have made under [the coverage], those rights are transferred to [Michigan Millers].” (Id.) Pursuant to the policy, Michigan Millers has provided a defense to Angelo's Wholesale Supplies in the Kretz action. (R. 1, PID 16.)

         Travelers had a policy that provided coverage for worker's compensation and employer's liability to an entity named “Carlesimo Investments, ” which has the same address as Angelo's Wholesale Supplies and has the same owner or resident, Angelo Carlesimo. (R. 1, PID 16-17.) Michigan Millers asserts that Carlesimo is a holding company for Angelo's or that “[a]lternatively, ” the two are “alter egos of one another and/or are one and the same entity.” (R. 1, PID 17.)

         Travelers' policy with Carlesimo has several relevant provisions. It obligated Travelers to pay certain “sums that [Carlesimo] legally must pay as damages because of bodily injury to your employees, ” including damages “[f]or which you are liable to a third party by reason of a claim or suit against you by that third party to recover the damages claimed against such third party as a result of injury to your employee[.]” (Id.) The policy also provided, “We have the right and duty to defend, at our expense, any claim, proceeding or suit against you for damages payable by this insurance.” (R. 1, PID 18.) The policy also stated that Travelers would “not pay more than our share of damages and costs covered by this insurance and other insurance or self-insurance. Subject to any limits of liability that apply, all shares will be equal until the loss is paid.” (Id.)

         Michigan Millers' complaint states that pursuant to the Travelers' policy, “[u]pon information and belief, Travelers has been providing workers' compensation insurance coverage relating to James Kretz.” (R. 1, PID 16.) On August 29, 2013, Travelers sent a notice of non-renewal to Carlesimo, stating that Travelers would not renew the policy due to the policy's “poor loss ratio, ” which stemmed from roughly $65, 000 in worker's compensation benefits paid as a result of the January 2013 accident. (R. 1, PID 19.)

         Travelers refused to defend Angelo's Wholesale Supplies in the Kretz action, contending that entity is not insured under the relevant policy. (R. 1, PID 19.) Travelers also asserted that EMCASCO had issued a workers' compensation insurance policy to “Angelo's Wholesale Supplies” that covered the time of the accident. (Id.) Michigan Millers had not obtained a copy of that policy at the time of the complaint, so there are no specific allegations about it. (Id.) However, EMCASCO has attached a policy with named insureds Carlesimo Investments and Angelo's Wholesale Supplies to its summary-judgment reply brief, and the Court will address the details of that policy further below.

         Michigan Millers' complaint asserts nine causes of action for declaratory relief: (1) contribution from Travelers; (2) reimbursement from Travelers; (3) equitable subrogation against Travelers; (4) contractual subrogation against Travelers; (5) waiver by Travelers; (6) contribution from EMCASCO; (7) reimbursement from EMCASCO; (8) equitable subrogation against EMCASCO; and (9) contractual subrogation against EMCASCO. (R. 1, PID 19-26.)

         B.

         When a defendant moves to dismiss pursuant to Rule 12(b)(6), the plausibility standard articulated in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), governs. Under that standard, a court first culls legal conclusions from the complaint, leaving only factual allegations to be accepted as true. Iqbal, 556 U.S. at 679. The inquiry then becomes whether the remaining assertions of fact “allow[] the court to draw the reasonable inference that the defendant is liable[.]” Id. at 678. Although this plausibility threshold is more than a “sheer possibility” that a defendant is liable, it is not a “‘probability requirement.'” Id. (quoting Twombly, 550 U.S. at 556). Whether a plaintiff has presented enough factual matter to “‘nudg[e]'” his claim “‘across the line from conceivable to plausible'” is “a context-specific task” requiring this Court to “draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679, 683 (quoting Twombly, 550 U.S. at 570).

         C.

         Before reaching the merits of Travelers' motion to dismiss, two threshold issues warrant attention.

         1.

         The first issue concerns the meet and confer requirement under this district's local rules. Before filing a motion in this Court, movants must seek concurrence in the relief requested. E.D. Mich. LR 7.1(a). Consistent with the rule, Travelers' motion states, “[T]here was a conference between the attorneys on May 13, 2016 and June 1, 2016 in which Travelers' counsel explained the nature and legal basis of the relief requested in this Motion but did not obtain concurrence.” (R. 12, PID 164.)

         Michigan Millers criticizes Travelers because the purported “conferences” on those days were mere emails. (R. 17, PID 325.) For instance, on May 13, Travelers' counsel wrote that Angelo's Wholesale Supplies was not a named insured under the relevant policy, asked whether Michigan Millers would thus voluntarily dismiss the action, and noted that while Travelers had made payments to Kretz, such payments were erroneous and were suspended once Travelers realized he was not an employee of the named insured. (R. 17-3, PID 391.) Also, on June 1, Travelers' counsel indicated that Travelers planned to file a motion to dismiss and requested concurrence. (R. 17-4, PID 393.) Michigan Millers' counsel responded, “[y]ou are requesting that we consent to a motion that you have not provided, so please email the draft motion.” (Id.) Travelers indicates that it provided a copy of the motion (even though, the Court notes, the rule does not require this). (R. 21, PID 651.) Travelers also points out that its counsel had previously left a voicemail to seek concurrence before sending the May 13th email. (Id., PID 651.)

         The Court is satisfied that Travelers' attempts to seek concurrence were sufficient under Local Rule 7.1 and rejects Michigan Millers' arguments to the contrary. Michigan Millers was aware of Travelers' legal theory for refusing to defend the Kretz action-something clear from even the face of the complaint. (See R. 1, PID 19 (alleging that “Travelers contends that Angelo's is not insured under the Travelers policy”).) Moreover, given Michigan Millers' response to Travelers' motion, there is little possibility that further conference ...


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