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Steadfast Insurance Company v. John Ballantine

October 25, 2012

STEADFAST INSURANCE COMPANY, PLAINTIFF,
v.
JOHN BALLANTINE, KAREN BALLANTINE, DENNIS BALTZER, PATRICIA BALTZER, DAVID CARMICHAEL, BARBARA HARDIN,
MICHAEL HARDIN, KATHY KOLLER, MICHAEL KOLLER, CARLEEN O'BRIEN, CHARLIE O'BRIEN, ROBERT PEAL, WENDY PEAL, JEREMY SCHOON, VERONICA SCHOON, ENVIRONMENTAL QUALITY MANAGEMENT, INC., AN OHIO CORPORATION AND EQ ENGINEERS, LLC, AN INDIANA LIMITED LIABILITY COMPANY, DEFENDANTS.



The opinion of the court was delivered by: Charles P. Kocoras, District Judge;

MEMORANDUM OPINION

This matter comes before the Court on Defendants' John Ballantine, Karen Ballantine, Dennis Baltzer, Patricia Baltzer, David Carmichael, Barbara Hardin, Michael Hardin, Kathy Koller, Michael Koller, Carleen O'Brien, Charlie O'Brien, Robert Peal, and Wendy Peal (collectively, "Ballantine") motion to dismiss or stay this action pursuant to Wilton/Brillhart abstention pending the outcome of a parallel state proceeding. For the reasons set forth below, Ballantine's motion is granted.

BACKGROUND

This case arises out of Plaintiff Steadfast Insurance Company's ("Steadfast") complaint which seeks a Declaratory Judgment pursuant to 28 U.S.C. §§ 2201-2202 and Interpleader pursuant to 28 U.S.C. §§ 1335, 2361 against Defendants Ballantine, Jeremy Schoon, Veronica Schoon, Environmental Management Inc., and EQ Corporation.

On August 28, 2007 an explosion and fire occurred at the Archer-Mittal steel mill in Burns Harbor, Indiana. Eight workers were ultimately injured. Seven of the eight workers are represented by the Provost Umphrey Law Firm and are referred to as the Ballantine claimants. The eighth worker, Jeremy Schoon is represented by Kenneth

J. Allen & Associates (hereinafter "Schoon").

A. State Court Case

On March 21, 2008 the Ballantine claimants filed suit in the Circuit Court of Cook County, Illinois, against multiple defendants including Environmental Quality Management Inc. and EQ Engineers LLC (collectively "EQ"). On August 28, 2008 Schoon filed his own lawsuit in Cook County against EQ. This suit was subsequently consolidated into the Ballantine claimant's suit.

Steadfast issued primary and excess insurance policies to EQ. The asserted combined policy limits for EQ's insurance policy is $10,000,000, less any defense costs. As of June 15, 2012, the remaining available limits of the Steadfast Policies were $9,629,833.80. Steadfast is defending the state court lawsuit on behalf of EQ.

B. Settlement Negotiations

On June 3, 2011 all claimants made a joint demand to settle the state case for $20 million. The $20 million demand could not be satisfied with the funds available in Steadfast's policy. On September 27, 2011, Steadfast made a global offer ("September 2011 offer") to pay the total remaining policy funds to all claimants in exchange for releasing EQ from liability. This offer left the allocation of the funds to the determination of its claimants and was contingent on the acceptance of all claimants. Steadfast asserts that the claimants did not accept the September 2011 offer based on the claimants' failure to come to an agreement on the allocation of funds.

On November 5, 2011, Schoon made a settlement demand of $2.8 million. Steadfast sought and received an extension of the deadline for responding to Schoon's demand to allow for a potential resolution of the plaintiff's allocation of funds dispute through mediation, as ordered in the state court proceeding. A mediation session concerning the allocation of funds between claimants was not held. On December 16, 2011, Ballantine made a demand for $8.5 million. In response to the demands of Ballantine and Schoon, Steadfast sent an additional offer ("December 2011 offer") to all claimants. The December 2011 offer was not contingent on all claimants' accepting the offer. Steadfast asserts that its offer of $2,762,468.89 to Schoon was accepted by email later that evening.

On December 23, 2011, Ballantine filed a motion in state court contending that all claimants had accepted the September 2011 offer and all claimants allowed for the distribution of funds to be determined through binding mediation. Ballantine argued that the September 2011 offer constituted an acceptance of the claimants' initial June 3, 2011 offer. Schoon, on the other hand, asserts they have a valid contract for ...


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