November 1, 2017
from the United States District Court for the Southern
District of Illinois. No. 15-cv-0442-MJR-SCW - Michael J.
Reagan, Chief Judge.
Manion, Kanne, and ROVNER, Circuit Judges.
2014, we held that West Side Salvage, Inc. was solely liable
for the injuries that three workers suffered in a grain-bin
explosion. We also held that West Side was liable for $3
million in property damage to the bin, which was owned by
ConAgra Foods, Inc.
Side had an $11 million excess insurance policy with RSUI
Indemnity Company. West Side sued RSUI, alleging that RSUI
breached its duty to settle ConAgra's property-damage
claim. The district court granted summary judgment to RSUI.
West Side appeals. We affirm.
2010, ConAgra discovered a hot grain bin-a bin with rising
grain temperatures that poses a risk of fire and explosion-at
its Chester, Illinois facility. It hired West Side to fix the
problem, but the grain bin exploded while West Side was
working on it. The explosion caused severe burns and injuries
to three workers and damaged the bin. The injured workers
sued West Side and ConAgra, and ConAgra filed a cross-claim
against West Side for property damage to the bin.
Side had a $1 million primary insurance policy with Colony
Insurance and an $11 million excess insurance policy with
RSUI. At the outset of the explosion litigation, Colony
tendered its limits and removed itself from the case. But a
Colony-hired attorney continued to represent West Side
through trial after West Side received reservation letters
from RSUI. The letters reflected RSUI's position that
ConAgra's property-damage claim against West Side may
potentially fall outside of coverage. Relevant to this
appeal, West Side's policy with RSUI includes a
damage-to-property clause, which excludes certain
property-damage claims from coverage.
parties tried but never reached a settlement in the explosion
litigation. After a jury trial, West Side and ConAgra were
found liable for the workers' injuries, and West Side was
found liable for the property damage to ConAgra's grain
West Side and ConAgra appealed, and in Jentz v. ConAgra
Foods, Inc., 767 F.3d 688 (7th Cir. 2014), we reversed
the personal-injury judgment as to ConAgra and held that West
Side was solely liable for the workers' injuries. We
affirmed the judgment against West Side on ConAgra's
property-damage claim. This left West Side with significantly
greater liability than what its insurance policies covered.
we decided Jentz, West Side filed a complaint in
district court, arguing that RSUI should have settled the
explosion-litigation claims within policy limits and breached
its duty to settle in not doing so. The district court
dismissed that action without prejudice. After we decided
Jentz, West Side and RSUI privately settled West
Side's claim that RSUI should have settled the injured
workers' claims within policy limits. But that settlement
did not address the property-damage claim. Instead, West Side
filed the action from which this appeal was taken, alleging
that RSUI breached its duty to settle the property-damage
claim within policy limits.
moved for summary judgment, advancing two arguments. It
principally argued that the insurance policy doesn't
cover the property-damage claim, in part because there is a
damage-to-property exclusion in the policy that applies. It
argued in the alternative, though, that even if the claim is
covered by the insurance policy, West Side could not present
evidence that RSUI breached its duty to settle. The district
court rejected the first argument but accepted the second.
The court reasoned that an insurer only has a duty to settle
when there is an offer to settle all claims against the
insured at the same time that there is a reasonable
likelihood the insured will face liability ...