United States District Court, E.D. Louisiana
MALCOLM LEFLORE, ET AL.
NORFOLK SOUTHERN CORP., ET AL.
ORDER & REASONS
J. BARBIER UNITED STATES DISTRICT JUDGE
the Court are cross-motions for summary judgment filed by
Defendant/Third-Party Plaintiff Archer-Daniels Midland
Company (“ADM”) (Rec. Doc. 72)
and Third-Party Defendant Federal Insurance Company
(“Federal”) (Rec. Doc. 74).
Having considered the motions and memoranda, the record, and
the applicable law, the Court finds that ADM's motion
should be GRANTED and Federal's motion
should be DENIED.
AND PROCEDURAL BACKGROUND
litigation arises from injuries allegedly sustained by
Plaintiff Malcolm LeFlore while acting in the course and
scope of his employment with Domino Sugar Company
(“Domino”) at its railyard in Arabi, Louisiana.
Plaintiff alleges that his right foot was crushed by a
defective or unsafe railcar on or about July 16, 2018, and
requires numerous surgeries and future prosthetics. ADM owns
the railcar in question and had leased it to Defendant Total
Sweeteners, Inc., d/b/a Batory Foods (“Total
Sweeteners”) prior to the alleged incident.
Railcar Lease Agreement (“Lease”) between ADM and
Total Sweeteners required Total Sweeteners to preserve the
railcar in good condition and to defend, indemnify, and hold
ADM harmless from and against any claim arising out of Total
Sweeteners' “default” under the
Lease. The Lease also required Total Sweeteners
to maintain certain insurance coverage, including
comprehensive general liability insurance, and to name ADM as
an additional insured “in respect of risks arising out
of the condition, maintenance, use or ownership of the
[railcar].” Total Sweeteners obtained a comprehensive
general liability insurance policy (the “Policy”)
from Federal that was in effect at the time of Mr.
their Fourth Amended Complaint, Plaintiffs Malcolm LeFlore
and his wife, Peola LeFlore, asserted claims against ADM as
the owner of the railcar, Total Sweeteners as the lessee of
the railcar, and Norfolk Southern Corporation
(“Norfolk”), who allegedly serviced and delivered
the railcar to Domino prior to the incident. Plaintiffs
allege that ADM, Total Sweeteners, and Norfolk were negligent
in failing to warn Mr. LeFlore of the defective railcar,
failing to properly train and supervise Mr. LeFlore, failing
to adhere to the Safety Appliance Act and other applicable
federal regulations, and failing to properly inspect the
railcar. ADM filed a crossclaim against Total Sweeteners and
a third party claim against Federal, who filed a counterclaim
against ADM. ADM and Federal then filed the instant
cross-motions for partial summary judgment.
judgment is appropriate when “the pleadings, the
discovery and disclosure materials on file, and any
affidavits show that there is no genuine issue as to any
material fact and that the movant is entitled to judgment as
a matter of law.” Celotex Corp. v. Catrett,
477 U.S. 317, 322 (1986) (citing Fed.R.Civ.P. 56); accord
Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.
1994). When assessing whether a dispute as to any material
fact exists, a court considers “all of the evidence in
the record but refrains from making credibility
determinations or weighing the evidence.” Delta
& Pine Land Co. v. Nationwide Agribusiness Ins. Co.,
530 F.3d 395, 398 (5th Cir. 2008). All reasonable inferences
are drawn in favor of the nonmoving party, but a party cannot
defeat summary judgment with conclusory allegations or
unsubstantiated assertions. Little, 37 F.3d at 1075.
A court ultimately must be satisfied that “a reasonable
jury could not return a verdict for the nonmoving
party.” Delta, 530 F.3d at 399.
dispositive issue is one on which the moving party will bear
the burden of proof at trial, the moving party “must
come forward with evidence which would ‘entitle it to a
directed verdict if the evidence went uncontroverted at
trial.'” Int'l Shortstop, Inc. v.
Rally's, Inc., 939 F.2d 1257, 1264-65 (5th Cir.
1991). The nonmoving party can then defeat the motion by
either countering with sufficient evidence of its own, or
“showing that the moving party's evidence is so
sheer that it may not persuade the reasonable fact-finder to
return a verdict in favor of the moving party.”
Id. at 1265.
dispositive issue is one for which the nonmoving party will
bear the burden of proof at trial, the moving party may
satisfy its burden by merely pointing out that the evidence
in the record is insufficient with respect to an essential
element of the nonmoving party's claim. See
Celotex, 477 U.S. at 325. The burden then shifts to the
nonmoving party, who must, by submitting or referring to
evidence, set out specific facts showing that a genuine issue
exists. See Id. at 324. The nonmovant may not rest
upon the pleadings but must identify specific facts that
establish a genuine issue at trial. See Id. at 325;
Little, 37 F.3d at 1075.
an issue of contract interpretation. The Court must first
determine whether ADM qualifies as an “insured”
under the Policy issued by Federal to Total Sweeteners; if
the Court determines that it does, the next question is
whether the allegations in Plaintiffs' complaint are
sufficient to trigger Federal's duty to defend ADM.
See, e.g., Gilbane Bldg. Co. v. Admiral Ins.
Co., 664 F.3d 589, 594 (5th Cir. 2011). As the Lease
provides that it is “governed by the laws of the state
of Illinois, ”the Court will apply Illinois law.
Illinois law, ADM must prove by competent summary judgment
evidence that it qualifies as an insured under the Policy for
Federal to have a potential duty to defend ADM. See Pekin
Ins. Co. v. Centex Homes, 72 N.E.3d 831, 837
(Ill.App.Ct. 2017). If it does, then the Court “must
compare the allegations in the underlying complaint to the
policy language” to determine whether Federal has a
duty to defend ADM. Id. at 839 (citation omitted).
As explained by the Appellate Court of Illinois:
An insurer may not justifiably refuse to defend an action
against its insured unless it is clear from the face of the
underlying complaint that the allegations set forth in that
complaint fail to state facts that bring the case within or
potentially within the insured's policy coverage. If the
underlying complaint alleges facts within or potentially
within policy coverage, an insurer is obligated to defend its
insured even if the allegations are groundless, false or
fraudulent. In making this determination, the allegations in
the underlying complaint must be liberally construed in favor
of the insured. Where the facts alleged support multiple
theories of recovery, there is a duty to defend if any one of
those theories potentially falls within policy coverage. It
is the alleged conduct, rather than the labeling of the claim
in the complaint, that determines whether the insurer has a
duty to defend.
In certain circumstances, the court may look beyond the
underlying complaint in order to determine whether an insurer
has a duty to defend. Thus, [Illinois courts] have recognized
that it may be appropriate to consider the written agreements
between the named insured and the additional insured in
determining whether the insurer has a duty to defend an
Id. at 839-40 (internal quotation marks, brackets,
and citations omitted).
ADM Qualifies as an Insured under the Policy
contends that it qualifies as an insured under the provision
of the Policy titled “Lessors Of Equipment, ”
Persons or organizations from whom you lease equipment are
insureds; but they are insureds only with respect to the
maintenance or use by you of such equipment and only if you
are contractually obligated to provide them ...