United States District Court, S.D. West Virginia, Charleston Division
MEMORANDUM OPINION AND ORDER
R. GOODWIN, UNITED STATES DISTRICT JUDGE
suit began as a declaratory action to declare the rights of
the parties under competing insurance obligations: the terms
in the Master Supply Service Agreement (“MSSA”)
[ECF No. 92-3] and the Berkley Policies [ECF Nos. 92-5 and
92-6]. Not. Removal [ECF No. 1]. In a published opinion, I
found that “[t]he Berkley policy . . . limits its
coverage to “the lesser of: (a) the coverage and/or
limits of this policy; or (b) the coverage and/or limits
required by [the MSSA].” 217 F.Supp.3d 904, 914 (S.D.
W.Va. 2016). Consequently, I found that the policy's
coverage is limited to the lesser terms provided by the MSSA.
Id. at 915.
before the court are cross-motions for summary judgment [ECF
Nos. 190 and 192]. The remaining issue before the court
involves the interpretation of the indemnity provision in the
MSSA. For the reasons that follow, the defendants' Motion
[ECF No. 192] is GRANTED and the
plaintiff's Motion [ECF No. 190] is
Energy LLC (“HG”) operates oil and gas wells in
West Virginia, and Stric-Lan Companies LLC
(“Stric-Lan”) provides certain well-site services
for HG. HG and Stric-Lan laid out this agreement for services
in their Master Service and Supply Agreement. See
MSSA [ECF No. 92-3]. In addition to the well-site services,
the MSSA requires Stric-Lan to procure insurance and name HG
as an “additional insured” under that insurance
policy. Id. at 8. The MSSA also establishes defense
and indemnity obligations under certain circumstances for
both HG and Stric-Lan. Id. at 10-11. Pursuant to its
obligations under the MSSA, Stric-Lan contracted with Berkley
National Insurance Company (“Berkley”) to provide
coverage and named HG as an additional insured.
The Kunz Incident
coverage dispute arises out of a personal injury lawsuit
involving Stric-Lan employee Tyler Kunz (“Kunz
Litigation”). While working for Stric-Lan at the HG
site, Mr. Kunz lit a cigarette near a natural-gas hazard,
resulting in an explosion and significant injury to himself.
Following his injury, Mr. Kunz sued HG and Stric-Lan,
alleging that HG was negligent in maintaining its workplace
and that Stric-Lan was liable under West Virginia's
deliberate intent statute. Pursuant to the terms of the MSSA
and insurance policy, HG sought defense in the Kunz
Litigation from Stric-Lan and Berkley. Both refused to defend
or indemnify HG. As a result, Arch Insurance Company
(“Arch”) and Steadfast Insurance Company
(“Steadfast”), companies providing separate
insurance policies for HG, paid for the defense and
settlement of the Kunz Litigation.
Stric-Lan and Berkley refused to defend HG, Arch and
Steadfast brought this suit to determine (1) whether the
Berkley insurance policy provided “additional
insured” coverage for HG in the Kunz Litigation and (2)
whether the Berkley policy provided primary, non-contributory
coverage for the defense and settlement of the Kunz
November 11, 2016 Memorandum Opinion & Order
31, 2016, and June 6, 2016, the parties cross-moved for
summary judgment, and on November 11, 2016, I ruled on those
motions in a published opinion. See Steadfast Ins. Co. v.
Berkley Nat'l Ins. Co., 217 F.Supp.3d 904 (S.D.
W.Va. 2016). In that Memorandum Opinion and Order, I found
that Berkley had an obligation to cover claims “to the
extent that such claims, losses, damages, injuries,
illnesses, or death are caused by the negligence (of any
degree), strict liability, or willful misconduct of the
Contractor [Stric-Lan].” I also found that Stric-Lan
and Berkley were obligated to provide primary,
non-contributory coverage for the Kunz Litigation, that
Stric-Lan and Berkley had a duty to defend HG in the Kunz
Litigation, and that Stric-Lan and Berkley's duty to
indemnify was triggered. Steadfast, 217 F.Supp.3d at
January 17, 2018, Steadfast and Arch were granted leave to
file Plaintiffs' First Supplemental and Amended Complaint
for Declaratory Relief and Civil Damages [ECF No. 142]. Among
other things, the Amended Complaint seeks the damages that
Steadfast and Arch incurred in defending and resolving the
Kunz Litigation. See Am. Compl [ECF No. 142]. On
August 13, 2018, Steadfast settled its claims with the
defendants for the amount it paid to defend the Kunz
Litigation, and the court dismissed it from this case. On
February 14, 2019, Arch, the only remaining plaintiff, moved
for summary judgment [ECF No. 190], seeking to recover the
$5, 000, 000 it advanced to settle the Kunz Litigation with
interest as well as attorney's fees and costs. On
February 14, 2019, Defendants Berkley and Stric-Lan also
filed a cross-motion for summary judgment [ECF No. 192]. The
defendants argue that the Kunz Litigation was settled purely
for the negligence of HG and not Stric-Lan. Moreover, they
argue that because Stric-Lan did not contract to cover HG for
HG's own negligence, the defendants are entitled to
judgment as a matter of law. Argument was heard on the
Motions during the pretrial conference and additional
briefing was ordered. Both parties filed supplemental briefs,
which the court has considered. The parties' second set
of cross-motions for summary judgment are now ripe for
obtain summary judgment, the moving party must show that
there is no genuine dispute as to any material fact and that
the moving party is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(a). “Facts are ‘material'
when they might affect the outcome of the case.”
Lester v. Gilbert, 85 F.Supp.3d 851, 857 (S.D. W.Va.
2015) (quoting News & Observer Publ'g Co. v.
Raleigh-Durham Airport Auth., 597 F.3d 570, 576 (4th
Cir. 2010)). “A genuine issue of material fact exists
if . . . a reasonable fact-finder could return a verdict for
the non-movant.” Runyon v. Hannah, No.
2:12-1394, 2013 WL 2151235, at *2 (S.D. W.Va. May 16, 2013)
(citations omitted); see Williams v. Griffin, 952
F.2d 820, 824 (4th Cir. 1991) (“Disposition by summary
judgment is appropriate . . . where the record as a whole
could not lead a rational trier of fact to find for the
non-movant.”). The moving party bears the burden of
showing that “there is an absence of evidence to
support the nonmoving party's case.” Celotex
Corp. v. Catrett, 477 U.S. 317, 325 (1986).
considering a motion for summary judgment, the court will not
“weigh the evidence and determine the truth of the
matter.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 249 (1986). Instead, the court will draw any
permissible inference from the underlying facts in the light
most favorable to the nonmoving party. Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88
(1986). Summary judgment is appropriate when the nonmoving
party has the burden of proof on an essential element of his
or her case and does not make, after adequate time for
discovery, a showing sufficient to establish that element.
Celotex Corp., 477 U.S. at 322-23. The nonmoving
party must satisfy this burden of proof by offering more than
a mere “scintilla of evidence” in support of his
or her position. Anderson, 477 U.S. at 252.
Conclusory allegations or unsupported speculation, without
more, are insufficient to preclude the granting of summary
judgment. See Dash v. Mayweather, 731 F.3d 303, 311
(4th Cir. 2013).
faced with cross-motions for summary judgment, the court must
review each motion separately on its own merits ‘to
determine whether either of the parties deserves judgment as
a matter of law.'” Rossignol v. Voorhaar,
316 F.3d 516, 523 (4th Cir. 2003) (quoting Philip Morris
Inc. v. Harshbarger,122 F.3d 58, 62 n.4 (1st Cir.
1997)). “When considering each individual motion, the
court must take care to ‘resolve all factual disputes
and any competing, rational inferences in the light most