Selective Insurance Company of South Carolina, Plaintiff-Appellant,
Target Corporation, Defendant-Appellee.
November 4, 2016
from the United States District Court for the Northern
District of Illinois, Eastern Division. No. 13-cv-5910 -
Elaine E. Bucklo, District Judge.
Flaum and Kanne, Circuit Judges, and MAGNUS-Stinson, District
MAGNUS-STINSON, District Judge.
Selective Insurance Company of South Carolina
("Selective") filed a declaratory judgment action,
asking the district court to declare that it owed no duty to
defend or indemnify Defendant- Appellee Target Corporation
("Target") in a lawsuit initiated by customer
Angela Brown, who sued Target after a fitting room door fell
on her. The district court granted summary judgment in favor
of Target, finding that Target was an additional insured on a
commercial general liability insurance policy (the
"Policy") that the door supplier, Harbor
Industries, Inc. ("Harbor"), had with Selective.
The district court further held that Selective had both a
duty to defend and indemnify Target for the entire cost
Target incurred settling the Brown litigation. Selective
appealed the district court's decision and, for the
reasons that follow, we affirm.
December 17, 2011, Angela Brown was injured at a Target store
in Gurnee, Illinois, when a fitting room door came off its
hinges and fell on her. She sued Target in Illinois state
court on February 14, 2012, and Target removed the case to
federal court. In her complaint, Ms. Brown alleged that
Target was negligent for failing to maintain and repair the
fitting room door and failing to warn her that the fitting
room door was in an unreasonably dangerous and hazardous
condition. Target filed a third-party complaint against
Harbor-the company that Target had contracted to supply the
fitting rooms at the Gurnee store-seeking contribution and
indemnification. Discovery during the Brown litigation
revealed that the same fitting room door fell on another
Target customer approximately one week before it fell on Ms.
Brown. Ultimately, both Target and Harbor settled with Ms.
tendered its defense of Ms. Brown's lawsuit to Selective
on May 7, 2012, claiming that it was an additional insured on
Harbor's Policy with Selective because of a contract with
Harbor. On July 30, 2013, Selective filed the underlying
declaratory judgment action against Target in Illinois state
court, and Target removed it to federal court on the basis of
parties filed cross-motions for summary judgment, and the
district court granted summary judgment to Target after
finding in its favor on three issues. First, the district
court found that Target was an additional insured on
Harbor's Policy with Selective because of the interaction
between a Supplier Qualification Agreement ("Supplier
Agreement") that required Harbor to designate Target as
an additional insured and their Program Agreement for the
fitting rooms. Second, the district court found that
Selective had a duty to defend Target because Ms. Brown's
allegations fell within the scope of the Policy, since they
could reasonably be read to assert a bodily injury caused in
whole or in part by Harbor's product. Third, the district
court found that Target had settled the lawsuit with Ms.
Brown in reasonable anticipation of liability and, thus,
Selective had a duty to indemnify Target for costs incurred
defending and settling the Brown litigation. Final judgment
was entered in favor of Target in the total amount of $714,
450.24. Selective now appeals.
judgment is appropriate where there are no genuine issues of
material fact and the movant is entitled to judgment as a
matter of law. Fed.R.Civ.P. 56(a). We review de novo
a district court's decision on cross-motions for summary
judgment. Calumet River Fleeting, Inc. v. Int'l Union
of Operating Eng'rs, Local 150, AFL-CIO, 824 F.3d
645, 647 (7th Cir. 2016) (citations omitted). "The
general standards for summary judgment do not change: with
cross summary judgment motions, we construe all facts and
inferences therefrom in favor of the party against whom the
motion under consideration is made." Id. at
647-48 (citations and quotations omitted). Because we are
only considering whether it was proper for the district court
to grant summary judgment in favor of Target, we resolve any
factual disputes in Selective's favor.
subject matter jurisdiction over this dispute is based on the
parties' diversity of citizenship. 28 U.S.C. § 1332.
Federal courts deciding state law claims under diversity
jurisdiction apply the forum state's choice of law rules
to select the applicable state substantive law. McCoy v.
Iberdrola Renewables, Inc., 760 F.3d 674, 684 (7th Cir.
2014) (citations omitted). If no party raises a choice of law
issue to the district court, "the federal court may
simply apply the forum state's substantive law."
Id. Although Selective correctly points out that
there is a Minnesota choice-of-law provision in one of the
contracts at issue, it admits that Target and Selective have
both argued the insurance coverage issues under Illinois law.
Thus, we will continue to apply Illinois law to this case.
The Contracts at Issue
contracts are relevant to addressing the parties'
arguments-Target and Harbor's Supplier Agreement, which
was executed in April 2001; Target and Harbor's Program
Agreement for the fitting rooms, which was executed in April
2009; and Harbor and Selective's Policy, which was in
effect when Ms. Brown was injured on December 17, 2011.
and Harbor executed the Supplier Agreement in April 2001. It