Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Onebeacon Insurance Co. v. U.S. Foods, Inc.

United States District Court, N.D. Illinois, Eastern Division

June 25, 2014

ONEBEACON INSURANCE COMPANY f/k/a CGU INSURANCE COMPANY f/k/a GENERAL ACCIDENT INSURANCE COMPANY OF AMERICA, Plaintiff/Counter-Defendant,
v.
U.S. FOODS, INC. f/k/a U.S. FOODSERVICE, INC., Defendant/Counter-Plaintiff/Third-Party Plaintiff,
v.
THE INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA, Third-Party Defendant.

MEMORANDUM OPINION AND ORDER

RUBÉN CASTILLO, Chief District Judge.

Plaintiff OneBeacon Insurance Company ("OneBeacon") filed this action on August 26, 2013, seeking a declaratory judgment that it is entitled to reimbursement of a workers' compensation claim and a disability benefits claim it paid to an employee of Defendant U.S. Foods pursuant to an employer's liability insurance policy OneBeacon issued to U.S. Foods. (R. 1, Compl.) OneBeacon also seeks a declaration that U.S. Foods breached the terms of the insurance policy. ( Id. ) On October 4, 2013, U.S. Foods filed a third-party complaint against The Insurance Company of the State of Pennsylvania ("ICSP") seeking indemnification for any amount for which the Court finds U.S. Foods liable to OneBeacon. (R. 23, Third-Party Compl.) U.S. Foods moved for summary judgment on October 28, 2013. (R. 32, U.S. Foods' Mot. Summ. J.) OneBeacon filed its cross-motion for summary judgment on December 5, 2013. (R. 52, One Beacon's Mot. Summ. J.) U.S. Foods filed the present motion on December 27, 2013, asking the Court to stay ruling on OneBeacon's motion for summary judgment to allow for additional discovery. (R. 63, U.S. Foods' Rule 56(d) Mot.) U.S. Foods contends that it needs to conduct additional discovery to properly contest OneBeacon's summary judgment motion and to prove its affirmative defense. ( Id. ) For the reasons stated below, U.S. Foods' motion is granted.

BACKGROUND AND PROCEDURAL HISTORY

OneBeacon is an insurance company incorporated in Pennsylvania, with its principal place of business in Minnetonka, Minnesota. ( Id. ¶ 1.) ICSP is a Pennsylvania corporation with its principal place of business in New York, New York. (R. 49, ICSP's Answer ¶ 11.) U.S. Foods is a foodservice distributor incorporated in Delaware, with its principal place of business in Rosemont, Illinois. (R. 58, OneBeacon's Rule 56.1 Resp. ¶ 2.) On December 23, 1997, JP Foodservice, a separate, unrelated entity, acquired U.S. Foods, and eventually began operating under the name U.S. Foods. (R. 69, U.S. Foods' Reply to its Rule 56(d) Mot. at 5; R. 69-3, Ex. 2, U.S. Foods' S.E.C. Filing.)

OneBeacon issued a workers' compensation and employer's liability insurance policy to U.S. Foods ("OneBeacon Policy") for the period of April 1, 1997 to April 1, 1998. (R. 58, OneBeacon's Rule 56.1 Resp. ¶ 6.) Subsequently, Discover-Re, an insurance provider that is not a party to this suit, provided U.S. Foods with a workers' compensation and employer's liability insurance policy beginning April 1, 1998 until April 1, 1999. (R. 54, OneBeacon's Facts ¶ 16; R. 63-1, Ex. 7, Apr. 30, 2013 Cracco E-Mail at 112.) In addition, ICSP issued JP Foodservice a workers' compensation and employer's liability insurance policy ("ICSP Policy") for the period of July 1, 1997 to July 1, 1998. (R. 49, ICSP's Answer ¶ 1; R. 63, U.S. Foods' Rule 56(d) Mot. at 6; see R. 63-1, Ex. 4, ICSP Activity Notes.)

On December 12, 2001, Dominic Ruberstell filed an Application for Adjustment of Claim with the Illinois Workers' Compensation Commission ("IWCC") against U.S. Foods, seeking damages for nerve injuries sustained in the course of his employment on or about December 16, 1998. (R. 58, OneBeacon's Rule 56.1 Resp. ¶ 14.) The parties agree, although it is unclear from the record, that Ruberstell was likely an employee of JP Foodservice at the time of the accident, not U.S. Foods. (R. 54, OneBeacon's Facts ¶ 18; R. 63, U.S. Foods' Rule 56(d) Mot. at 6 n.5.) On or about November 22, 2004, an IWCC arbitrator convened a hearing to resolve Ruberstell's claims. (R. 58, OneBeacon's Rule 56.1 Resp. ¶ 15.) The arbitrator found that Ruberstell's condition was causally connected to his employment and that he was entitled to temporary total disability benefits through the date of the hearing and permanent total disability benefits from U.S. Foods. ( Id. ¶ 16.) On July 7, 2006, after U.S. Foods filed a Petition for Review, the IWCC amended Ruberstell's injury date from December 16, 1998, to January 16, 1998, and remanded the matter to the arbitrator to determine whether the statute of limitations had expired prior to Ruberstell filing his claim. ( Id. ¶¶ 17-18.) On or about June 23, 2008, the arbitrator found that Ruberstell's claim was not time-barred and the permanent total disability award was reinstated. ( Id. ¶ 19.) The IWCC affirmed the arbitrator's decision on September 23, 2009. ( Id. ¶ 20). U.S. Foods appealed the ruling to the Circuit Court of LaSalle County and ultimately to the Illinois Appellate Court for the Third District; both affirmed the IWCC's decision. U.S. Food Service v. Ill. Workers' Comp. Comm'n, No. 3-11-0373WC, 2012 IL App (3d) 110373 WC-U (Ill.App.Ct. 3d Dist. Nov. 2, 2012).

After Ruberstell filed his claim alleging an injury date of December 16, 1998, U.S. Foods first provided timely notice to Discover-Re, its insurer for the policy period encompassing the injury date. (R. 54, OneBeacon's Facts ¶ 16; R. 63, U.S. Foods' Rule 56(d) Mot. at 5.) Discover-Re provided U.S. Foods with a defense in Ruberstell's suit until the IWCC amended the injury date to January 16, 1998, which fell outside Discover-Re's policy coverage period. (R. 54, OneBeacon's Facts ¶ 16; R. 63, U.S. Foods' Rule 56(d) Mot. at 5.) U.S. Foods alleges that it then provided timely notice to ICSP pursuant to the ICSP Policy. (R. 63, U.S. Foods' Rule 56(d) Mot. at 5.) U.S. Foods further alleges that on or about June 10, 2010, it tendered Ruberstell's claims to ICSP, and ICSP defended the claims for nearly three years, a contention that ICSP denies. (R. 49, ICSP's Answer ¶ 2.) U.S. Foods alleges that on March 1, 2013, without warning, ICSP refused to further defend U.S. Foods against Ruberstell's claims, a contention that ICSP also denies. ( Id. ¶ 4.) ICSP offers a different version of events: it alleges that U.S. Foods failed to provide timely notice because it did not notify ICSP of Ruberstell's claims until May 25, 2010, more than three years after the IWCC amended Ruberstell's injury date. ( Id. at 11, 16.) ICSP also alleges that because it maintained a policy with JP Foodservice rather than U.S. Foods, it owes U.S. Foods no duty to indemnify against Ruberstell's claims. ( Id. at 15.)

After learning of ICSP's refusal to continue defending the Ruberstell suit, U.S. Foods tendered Ruberstell's claims to OneBeacon for indemnification of the award against it on or about April 25, 2013. (R. 58, OneBeacon's Rule 56.1 Resp. ¶ 7.) OneBeacon alleges that this was the first notice it had received from U.S. Foods regarding Ruberstell's claims. (R. 54, OneBeacon's Facts ¶ 24.) OneBeacon alleges that it wanted to further investigate Ruberstell's claims before paying him, but U.S. Foods advised OneBeacon that it should pay Ruberstell immediately in order to avoid incurring statutory penalties for late payment. ( Id. ¶ 25.) OneBeacon acquiesced, issuing payment to Ruberstell on behalf of U.S. Foods in the amount of $604, 227.57 on May 10, 2013. ( Id. ; R. 58, OneBeacon's Rule 56.1 Resp. ¶ 8.) OneBeacon subsequently submitted a letter to U.S. Foods reiterating that OneBeacon paid the Ruberstell award only to avoid statutory penalties and that it reserved the right to dispute whether it was indeed liable to pay Ruberstell's claims.[1] (R. 54, OneBeacon's Facts ¶ 25; R. 58, OneBeacon's Rule 56.1 Resp. ¶ 10.) Since making the initial payment to Ruberstell, OneBeacon has made and continues to make lifetime permanent total disability payments in the amount of $606.33 per week, as well as payments for Ruberstell's medical care that totaled $10, 177.00 as of April 25, 2013. (R. 58, OneBeacon's Rule 56.1 Resp. ¶ 9; R. 54, OneBeacon's Facts ¶ 32.)

On June 26, 2013, OneBeacon filed a complaint for declaratory judgment against U.S. Foods, seeking reimbursement of its payments to Ruberstell. (R. 1, Compl.) OneBeacon argues that it owes no obligation to U.S. Foods because U.S. Foods breached the OneBeacon Policy. (R. 58, OneBeacon's Rule 56.1 Resp. ¶ 11.) Specifically, OneBeacon argues that U.S. Foods violated its policy by failing to: (1) promptly provide notice, demands, and legal papers related to Ruberstell's claims; (2) cooperate in the investigation, settlement, and/or defense of his claims; and (3) notify OneBeacon once the matter arose. ( Id. ¶ 13.)

On August 13, 2013, discovery began with a deadline set on March 30, 2014. (R. 20, August 13, 2013 Minute Entry; R.25, October 10, 2013 Minute Entry.) On October 10, 2013, U.S. Foods filed a counterclaim against OneBeacon, seeking a declaratory judgment that OneBeacon had a duty to indemnify U.S. Foods for Ruberstell's claims. (R. 26, U.S. Foods' Answer & Counterclaim.) On October 28, 2013, U.S. Foods moved for summary judgment. (R. 32, Def.'s Mot. Summ. J.) On December 5, 2013, OneBeacon filed a cross-motion for summary judgment. (R. 52, OneBeacon's Mot. Summ. J.)

U.S. Foods filed the present action on December 27, 2013. (R. 63, U.S. Foods' Rule 56(d) Mot.) OneBeacon submitted a response on January 3, 2014, (R. 65, OneBeacon's Resp.); and U.S. Foods replied on January 21, 2014, (R. 69, U.S. Food's Reply.)

LEGAL STANDARD

Federal Rule of Civil Procedure 56(d), formerly Rule 56(f), [2] provides relief for a party opposing a motion for summary judgment that can show "for specified reasons" that it "cannot present facts essential to justify its opposition." Fed.R.Civ.P. 56(d). If a court is persuaded by a Rule 56(d) motion, it may deny the motion for summary judgment or defer considering it, allow time for further discovery, or "issue any other appropriate order." Id. The rule "is intended as a safeguard against a premature grant of summary judgment." King v. Cooke, 26 F.3d 720, 726 (7th Cir. 1994). Thus, courts construe the rule liberally and do not find violations on rigid technical grounds. Id. However, Rule 56(d) "is not a shield that can be raised to block a motion for summary judgment without even the slightest showing by the opposing party that his opposition is meritorious." Korf v. Ball State Univ., 726 F.2d 1222, 1230 (7th Cir. 1984) (quoting Lamb's Patio Theatre v. Universal Film Exchs., 582 F.2d 1068, 1071 (7th Cir. 1978)). Accordingly, a party invoking the protections of Rule 56(d) "must state the reasons why the party cannot adequately respond to the summary judgment motion without further discovery and must support those reasons by affidavit." Deere & Co. v. Ohio Gear, 462 F.3d 701, 706 (7th Cir. 2006) (citing Fed.R.Civ.P. 56(d); Grayson, 308 F.3d at 816); see also Woods v. City of Chi., 234 F.3d 979, 990 (7th Cir. 2000) (a Rule 56(d) motion can be denied if the non-movant fails to file either an affidavit or a declaration that outlines the party's reasons for needing further discovery). In its affidavit, the party must demonstrate "how postponement of a ruling on the motion will enable [it], by discovery or other means, to rebut the movant's showing of the absence of a genuine issue of fact." Korf, 726 F.2d at 1230 (quoting Lamb's Patio Theatre, 582 F.2d at ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.