The opinion of the court was delivered by: Matthew F. Kennelly, District Judge
(modified August 14, 2009)
MEMORANDUM OPINION AND ORDER*fn1
Plaintiffs Egan Marine Corporation and Service Welding and Shipbuilding, LLC have sued Great American Insurance Company of New York, alleging breach of the ocean marine pollution liability insurance policy that the insurer issued to plaintiffs and breach of the insurer's duty of good faith and fair dealing. Great American has asserted a counterclaim, seeking declaratory relief that it is not liable for certain of Egan Marine's defense costs in a separate lawsuit. Great American has moved for judgment on the pleadings or for summary judgment on all of its claims. Egan Marine and Service Welding have moved for summary judgment on both of its claims. For the reasons set forth below, the Court grants plaintiffs' motion in part and denies it in part. The Court also grants Great American's motion in part and denies it in part.
Because the parties have filed cross-motions for summary judgment, the Court "construe[s] the evidence and all reasonable inferences in favor of the party against whom the motion under consideration is made." Crews v. City of Mt. Vernon, 567 F.3d 860, 864 (7th Cir. 2009) (citing Calvin v. Home Loan Ctr. Inc., 531 F.3d 526, 528 (7th Cir. 2008)).
Great American issued a liability insurance policy to Service Welding, naming Egan Marine as an additional insured. The policy contains a schedule of vessels identifying the Lisa E, a tugboat, and EMC 423, a barge, both owned by Egan Marine. Service Welding paid $2,594 for $5,000,000 of insurance coverage relating to the Lisa E and $6,552 for $5,000,000 of insurance coverage relating to the EMC 423. Section B states that
[c]overage applies to all Vessels listed on the Declarations Page or on the Schedule of Vessels listed on the Declarations Page or on the Schedule of Vessels page, for incidents that occur during the effective period of this policy... Subject to all EXCLUSIONS and LIMITATIONS in Sections C and D, and subject to all the terms and conditions in the Policy, We will indemnify You for the following ten coverages
1. OPA90 (Federal) - Removal costs and expenses paid by You under Section 1002 of OPA90 (33 U.S.C. Section 2702), for which liability would have been imposed under the laws of he United States if You had not voluntarily undertaken the removal of oil....
3. OPA90 - Your costs and expenses You have paid either in avoiding or mitigating the liability in 1. OPA90 (Federal)... as described above.
5. Miscellaneous Spill Liability - Costs and expenses paid by You to mitigate liabilities for incidents where such occurrences are insured by this policy, but subject to our WRITTEN EXPRESSED PRE-APPROVAL.
6. Defense Costs - Costs and expenses paid by You to investigate and pursue a legal defense against claims or liabilities insured by this Policy. This coverage will terminate upon payment of judgments [sic] or settlements which exhaust the amount ...