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Velsicol Chemical LLC v. Westchester Fire Insurance Co.

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

March 6, 2017

VELSICOL CHEMICAL, LLC, Plaintiff,
v.
WESTCHESTER FIRE INSURANCE COMPANY, as successor in interest to INTERNATIONAL INSURANCE COMPANY, Defendant.

          MEMORANDUM OPINION AND ORDER

          JOHN W. DARRAH United States District Court Judge

         Plaintiff Velsicol Chemical, LLC (“Velsicol”) filed a Complaint, alleging breach of contract against Defendant Westchester Fire Insurance Company (“Westchester”). Defendant filed a Motion for Partial Summary Judgment [49] of Counts III through XVI of Plaintiff's Complaint. For the reasons set forth below, Defendant's Motion [49] is granted in part and denied in part.

         LOCAL RULE 56.1

         Local Rule 56.1(a)(3) requires the moving party to provide “a statement of material facts as to which the party contends there is no genuine issue for trial.” Ammons v. Aramark Uniform Servs., 368 F.3d 809, 817 (7th Cir. 2004). Local Rule 56.1(b)(3) requires the nonmoving party to admit or deny every factual statement proffered by the moving party and to concisely designate any material facts that establish a genuine dispute for trial. See Schrott v. Bristol-Myers Squibb Co., 403 F.3d 940, 944 (7th Cir. 2005). A nonmovant's “mere disagreement with the movant's asserted facts is inadequate if made without reference to specific supporting material.” Smith v. Lamz, 321 F.3d 680, 683 (7th Cir. 2003). In the case of any disagreement, the nonmoving party must reference affidavits, parts of the record, and other materials that support his stance. Local Rule 56.1(b)(3)(B). To the extent that a response to a statement of material fact provides only extraneous or argumentative information, this response will not constitute a proper denial of the fact, and the fact is admitted. See Graziano v. Vill. of Oak Park, 401 F.Supp.2d 918, 936 (N.D. Ill. 2005). Similarly, to the extent that a statement of fact contains a legal conclusion or otherwise unsupported statement, including a fact that relies upon inadmissible hearsay, such a fact is disregarded. Eisenstadt v. Centel Corp., 113 F.3d 738, 742 (7th Cir. 1997). Pursuant to Local Rule 56.1(b)(3)(C), the nonmovant may submit additional statements of material facts that “require the denial of summary judgment.”

         A district court is entitled to expect strict compliance with Rule 56.1; substantial compliance is not enough. Ammons, 368 F.3d at 817. “When a responding party's statement fails to dispute the facts set forth in the moving party's statement in the manner dictated by the rule, those facts are deemed admitted for purposes of the motion.” Curtis v. Costco Wholesale Corp., 807 F.3d 215, 218 (7th Cir. 2015) (quoting Cracco v. Vitran Express, Inc., 559 F.3d 625, 632 (7th Cir. 2009)).

         BACKGROUND

         The following facts are taken from the parties' statements of undisputed material facts submitted in accordance with Local Rule 56.1.

         Velsicol is a limited-liability company with its principal place of business in Rosemont, Illinois. (Compl. ¶ 4.) Prior to September 30, 2008, Velsicol was known as Velsicol Chemical Corporation and was a Delaware corporation with its principal place of business in Rosemont, Illinois. (Compl. ¶ 4.)

         Velsicol purchased insurance policy number 523 2388653 (the “Policy”) from International Insurance Company (“International”). The Policy covered the period of January 1, 1983, through January 1, 1986. (Compl. ¶ 17.) Velsicol was a subsidiary of Northwest Industries, Inc. at the time it purchased the Policy. Northwest Industries, Inc. sold Velsicol to Velsicol's current management in or about 1986. Northwest Industries, Inc. subsequently changed its name to Fruit of the Loom, Inc. (Compl. ¶ 5.)

         Westchester is a Pennsylvania corporation that transacted business within the state of Illinois at all times relevant to this case. (Dkt. 64, ¶ 5.) Pursuant to the terms of an Assumption and Indemnity Reinsurance Agreement, Westchester assumed responsibility for the Policy in 1993. (Id. ¶ 3.)

         On or about October 15, 1998, Velsicol was joined as a plaintiff in an action pending in the Circuit Court of Cook County, Illinois (“Illinois State Court Action”). (Id. ¶ 6.) In the Illinois State Court Action, Velsicol alleged claims for declaratory judgment and/or breach of contract against, among others, International. (Id. ¶ 7.) Velsicol sought defense and indemnity coverage under the Policy as to numerous sites, including certain sites at issue in this case. (Id. ¶ 8.) On July 25, 2006, International filed a motion for summary judgment in the Illinois State Court Action. (Id. ¶ 9.) International argued that Velsicol failed to provide timely notice of certain claims to International and that this failure resulted in a breach of the notice provision in the Policy. (Id.) On October 19, 2006, the trial court in the Illinois State Court Action granted International's motion for summary judgment. (Id. ¶ 10.) Velsicol did not appeal the ruling and voluntarily dismissed its claims against International on January 15, 2008. (Id. ¶ 11.) On that same date, an order was entered, stating that all claims and counterclaims between Velsicol, and International, among others, were voluntarily dismissed without prejudice. (Id. ¶ 12.) Westchester was not a named party in the Illinois State Court Action and International did not file any pleading relating to the Assumption and Indemnity Reinsurance Agreement. (Dkt. 1, ¶ 4.)

         Velsicol and International also entered into a tolling agreement, effective January 15, 2008, which stated that “the Parties, after dismissal without prejudice, shall have one year following date of dismissal of the [l]awsuit, in which to re-file the [l]awsuit.” (Dkt. 64, ¶ 13.) The tolling agreement also stated that the one-year period could only be extended by a written agreement signed by all of the parties. (Id.) Velsicol did not file a lawsuit in the Circuit Court of Cook County, Illinois against International during the period from January 15, 2008, through January 15, 2009. (Id. ¶ 14.) The parties did not enter into a written extension of the tolling agreement. (Id. ¶ 15.) On March 25, 2015, Velsicol filed this Complaint against Westchester. Claims pertaining to many of the sites giving rise to this case were also at issue in the Illinois State Court Action. (Id. ¶ 19.)

         LEGAL STANDARD

         Summary judgment is appropriate when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56. Courts deciding summary judgment motions must view facts “in the light most favorable to the nonmoving party only if there is a ‘genuine' dispute as to those facts.” Scott v. Harris,550 U.S. 372, 380 (2007). A genuine dispute as to any material fact exists if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The moving party has the initial burden of establishing that there is no genuine dispute as to any material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party meets this burden, “[t]he nonmoving party must point to specific facts showing that there is a genuine issue for trial.” Stephens v. Erickson, 569 F.3d 779, 786 (7th Cir. 2009). Factual disputes do “not preclude summary judgment when the dispute does not involve a material ...


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