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Mt. Hawley Insurance Co. v. McKinley, Inc.

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

November 19, 2019

Mt. Hawley Insurance Company, Plaintiff,
v.
McKinley, Inc., et al., Defendants.

          OPINION & ORDER GRANTING MOTION TO TRANSFER VENUE

          SEAN F. COX UNITED STATES DISTRICT JUDGE.

         This case involves a commercial general liability insurance policy issued by Plaintiff Mt. Hawley Insurance Company (“Mt. Hawley”) to Defendant McKinley, Inc. (“McKinley”) that was effective from May 1, 2014 to May 1, 2015. Defendant Castleton Corner Owners Association (“the Association”) is alleged to be an “also insured” under the policy. Mt. Hawley seeks a declaration that Michigan law applies to the policy and that the policy does not provide coverage to either McKinley or the Association in connection with a lawsuit filed in Indiana. McKinley and the Association filed a Counter Complaint asserting two counts: 1) Count I, seeking a declaratory judgment in their favor (that Indiana law applies and that there is coverage under the policy); and 2) Count II, alleging that Mt. Hawley breached the insurance contract.

         The matter is currently before the Court on Defendants' Joint Motion For Transfer of Venue Pursuant to 28 U.S.C. § 1404(a). The Court concludes that oral argument is not necessary and shall decide the motion without a hearing. Local Rule 7.1(f). The pending motion asks this Court to transfer this action to the United States District Court for the Southern District of Indiana, Indianapolis Division. It is undisputed that this case could have been filed in that court. Defendants contend that the action should be transferred there for the convenience of parties and witnesses. For the reasons set forth below, the Court shall GRANT the motion and transfer this case.

         BACKGROUND

         The following facts are relevant for purposes of Defendants' pending Motion to Transfer Venue.

         Plaintiff Mt. Hawley, the insurance company, is an Illinois Corporation with its principal place of business in Illinois. Defendants contend, and Mt. Hawley does not dispute, that it was not licensed to sell insurance in Michigan. The insurance policy at issue in this case was placed through a surplus line broker, R-T Specialty, of West Palm Beach, Florida. (ECF No. 33-2).

         The insurance policy at issue is a commercial general liability insurance policy issued by Mt. Hawley to McKinley, that was effective from May 1, 2014 to May 1, 2015. McKinley is the primary named insured on the policy. The Association is alleged to be an “also insured” under the policy.

         McKinley is a Michigan corporation with its principal place of business in Michigan. During the relevant times (ie., when the insurance policy was obtained and when the incident at issue occurred), McKinley owned or managed residential and commercial properties in several different states, including Michigan, Illinois, Florida, Indiana, Texas, Georgia, Virginia, Arizona, and Ohio. (Affidavit of Tina Cox). McKinley insured those properties, and the legal entities owning those properties, on the Mt. Hawley insurance policy.

         The Association is an Indiana corporation with its principal place of business in Indiana. The Association was formed in order to provide for the maintenance and administration of various pieces of real property located in Indianapolis, Indiana. (Compl. at ¶ 12; Assoc.'s Answer at ¶ 12; Defs.' Br.; Tina Cox Affidavit 2).

         An entity called Conroad Associates, L.P. (“Conroad”) owns certain real property in Indianapolis, Indiana (“the Conroad Property”). Conroad is a member of the Association and the Conroad Property constitutes a portion of the Association Property. (Compl. at 13; Assoc.'s Answer at 13).

         In 2008, the Association entered into a Real Estate Management Agreement with McKinley. Under that agreement, McKinley provided services for the common areas and lift station of the Association's property in Indiana. (Tina Cox Affidavit). McKinley had a property manager named Curtis Pitts handling on-site duties at the Conroad Property. That property manager provided services that included inspections of the sewer lift and arranging for repairs and maintenance of the lift station. Curtis Pitts is a resident of Indiana and is no longer employed by McKinley. (Id.).

         On or about February 14, 2015, there was an incident involving a sewer lift station that serviced the Conroad Property, which allegedly damaged the Conroad Property and its commercial tenant.

         Conroad sued McKinley and the Association in Indiana state court, seeking recovery for claimed damages (“the Conroad Lawsuit'). The Conroad Lawsuit was filed in the Marion County Superior Court.

         McKinley then tendered the suit to Mt. Hawley, and also made a demand to the Association to indemnify McKinley. Defendants state that “[f]our years after McKinley tendered the suit to Mt. Hawley - and approximately two months before the case went to trial - Mt. Hawley issued a letter to McKinley and [the Association] denying coverage to them for the Conroad Lawsuit.” (Defs.' Br. at 7).

         On May 14, 2019, Mt. Hawley filed this action against Defendants McKinley and the Association, based on diversity jurisdiction. Mt. Hawley's Complaint for Declaratory Judgment states that this is an action for declaratory judgment “to determine and resolve questions of actual controversy concerning the availability and scope of insurance coverage, if any, for McKinley and [the Association] under a commercial general liability insurance policy issued by Mt, Hawley” to McKinley. (Compl. at 1-2). Mt. Hawley seeks a declaration that Michigan law applies to the policy at issue and that its insurance policy does not provide coverage to either McKinley or the Association in connection with the lawsuit filed in Indiana.

         As to coverage, Mt. Hawley's Complaint alleges that numerous policy exclusions may apply such that there is no coverage for the Conroad Lawsuit. The Complaint includes the allegation that there is no coverage because a pollution exclusion provision applies, but it also includes many others. (See Compl. at 16-19).

         Along with their Answer and Affirmative Defenses, McKinley and the Association filed a Counter Complaint asserting two counts: 1) Count I, seeking a declaratory judgment in their favor (that Indiana law applies and that there is coverage under the ...


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