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Iowa Mutual Insurance Co. v. Hennings

October 12, 2006

IOWA MUTUAL INSURANCE COMPANY, PLAINTIFF,
v.
LARRY HENNINGS, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Jeanne E. Scott, U.S. District Judge

OPINION

This matter comes before the Court on Plaintiff Iowa Mutual Insurance Company's (Iowa Mutual) Motion for Summary Judgment Pursuant to Rule 56 of the Federal Rules of Civil Procedure and CDIL-LR 7.1(D) (d/e 48) (Motion). Iowa Mutual filed this three-count declaratory judgment action to determine its duty to defend and cover claims against Defendant Larry Hennings under three separate insurance policies. Defendants John Wells and Joy Wells, husband and wife, filed an action in state court against Defendants Hennings and John R. Brix, DVM, d/b/a Brix Veterinary Services (Brix), for injuries John Wells suffered while working for Defendant Hennings Feed and Crop Care, Inc. (Crop Care). Wells v. Brix, et al., Shelby County, Illinois, Circuit Court Case No. 2005 L 10 (Underlying Action). Hennings is the owner, and an officer and director of, Crop Care.

Iowa Mutual issued two general liability policies to Crop Care, and a farming liability policy to Hennings personally. Iowa Mutual began providing a defense to the Underlying Action under a reservation of rights. Iowa Mutual then filed this action. The Court previously entered default judgments against Defendants Hennings and Crop Care. Opinion and Judgment entered February 16, 2006 (d/e 45 & 46). Iowa Mutual now moves for summary judgment as to the other Defendants. Iowa Mutual asks the Court to declare that it has no duty to defend the Underlying Action under these three policies. John and Joy Wells, and Brix oppose the Motion.

For the reasons set forth below, the Motion is ALLOWED in part and DENIED in part. Iowa Mutual is also entitled to summary judgment against Defendants John and Joy Wells on Count I because they made a binding judicial admission that John Wells was an employee of Crop Care, and the relevant policy excluded coverage of injuries to employees. Iowa Mutual is entitled to summary judgment on Count II as to all Defendants because the injuries alleged in the Underlying Action did not occur during the coverage period of the relevant policy. The remainder of the Motion is DENIED.

JURISDICTION

Initially, John and Joy Wells question this Court's subject matter jurisdiction. Subject matter jurisdiction can be raised at any time, and the Court should resolve the jurisdictional issue before addressing the Motion. Iowa Mutual filed this case as a diversity action. Iowa Mutual is an Iowa corporation with its principal place of business in Iowa, and the Defendants are all citizens of Illinois. First Amended Complaint for Declaratory Judgment (d/e 15) (Amended Complaint), ¶¶ 2-8. John and Joy Wells question this Court's jurisdiction because the excerpts of the policies attached to the Amended Complaint indicate that an entity called Iowa Mutual Group issued the policies. See Defendant John and Joy Wells' Response and Objection to Plaintiff Iowa Mutual Insurance Company's Motion for Summary Judgment (d/e 79) at 1-4, and attached Exhibits. John and Joy Wells question whether Iowa Mutual Group is the real party in interest, and if so, whether this Court has diversity jurisdiction. See Betar v. De Havilland Aircraft of Canada, Ltd., 603 F.2d 30, 32 (7th Cir. 1979) (diversity jurisdiction is determined by the citizenship of the real party in interest).

Iowa Mutual has the burden to establish jurisdiction. Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 540 (7th Cir. 2006). Iowa Mutual has submitted the Affidavit of its Executive Vice President Tom Cole. Plaintiff Iowa Mutual Insurance Company's Reply to Defendant John and Joy Wells' Response and Objection to Plaintiff Iowa Mutual Insurance Company's Motion for Summary Judgment Pursuant to Rule 56 of the Federal Rules of Civil Procedure and CDIL-LR 7.1(D) (d/e 81), Exhibit A, Affidavit of Tom Cole. According to Cole, Iowa Mutual Group is an unincorporated association of Iowa Mutual, three other Iowa corporations and an Iowa limited liability company. Affidavit of Tom Cole, ¶ 5. Cole's Affidavit also establishes that Iowa Mutual issued the policies at issue and will pay any sums due under the policies. Affidavit of Tom Cole, ¶¶7-9. This evidence establishes that Iowa Mutual is the real party in interest, not Iowa Mutual Group. This evidence meets Iowa Mutual's burden to establish jurisdiction. See Meridian Sec. Ins. Co., 441 F.3d at 540 (requiring proof by a preponderance of the evidence). Iowa Mutual, thus, is the proper Plaintiff, not Iowa Mutual Group, and the Court has diversity jurisdiction.*fn1

STATEMENT OF FACTS

A. THE POLICIES

In December 1994, Iowa Mutual issued Commercial General Liability Policy No. CC64734GL to Crop Care (1994 Policy). The 1994 Policy was renewed annually through January 1, 2000. The 1994 Policy states:

1. Insuring Agreement

a. We will 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. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "bodily injury" or "property damage" to which this insurance does not apply. . . .

b. This insurance applies to "bodily injury" and "property damage" only if:

(1) The "bodily injury" or "property damage" is caused by an "occurrence" that takes place in the "coverage territory"; and

(2) The "bodily injury" or "property damage" occurs during the policy period.

c. Damages because of "bodily injury" include damages claimed by any person or organization for care, loss of services or death resulting at any time from the "bodily injury".

Motion, Exhibit 2, 1994 Policy Excerpts (d/e 52-53), § I, ¶ 1.*fn2 The coverage territory included all of the United States. Id., § V, ¶ 4.a. The initial policy period began on January 1, 1995, for one year. The coverage period was renewed annually until January 1, 2000.

The 1994 Policy also had the following relevant exclusions:

2. Exclusions

This insurance does not apply to:

a. Expected or Intended Injury "Bodily injury" or "property damage" expected or intended from the standpoint of the insured. . . .

e. Employer's Liability "Bodily injury" to:

(1) An "employee" of the insured arising out of and in the course of:

(a) Employment by the insured; or

(b) Performing duties related to the conduct of the insured's business; or

(2) The spouse, child, parent, brother or sister of that "employee" as a ...


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