United States District Court, W.D. Arkansas, El Dorado Division
O. Hickey United States District Judge
the Court are cross-motions for summary judgment filed by
Plaintiff Atlantic Casualty Insurance Company
(“ACIC”) (ECF No. 32) and Defendant Potlatch Land
& Lumber, LLC (“Potlatch”) (ECF No. 35).
Responses have been filed. ECF Nos. 39, 42. The parties have
filed replies. ECF Nos. 42, 45. The Court finds that these
motions are ripe for the Court's consideration.
to a purchase order, Potlatch retained CM Sellers as a
general contractor to replace the roof on one of its
buildings at its facility in Warren, Arkansas. As part of
this purchase order, Potlatch and CM Sellers entered into a
contract titled “Terms and Conditions for Contractor
Services.” Under this contract, CM Sellers was
obligated to obtain, pay for, and keep in force primary
liability insurance coverage on which Potlatch and its
subsidiaries were named as additional insureds. CM Sellers
satisfied this contract provision with a policy of insurance,
No. LI99000557 (the “Policy”), previously
purchased from ACIC. CM Sellers was the named insured under
the Policy, and an endorsement named “Potlatch Forest
Holdings, Inc., its parent companies, subsidiaries &
affiliates” as additional insureds.
perform the roofing work under its contract with Potlatch, it
appears that CM Sellers retained Richard West d/b/a West
Construction as a subcontractor. West supplied Kyler Johnson,
his grandson, as a laborer to CM Sellers on the Potlatch roof
project. Johnson was paid by Richard West.
working on the crew that was replacing Potlatch's roof,
Johnson fell through the roof and onto the ground, sustaining
injuries from the fall. Johnson subsequently filed a
complaint against Potlatch Corporation and CM Sellers in the
Circuit Court of Ashley County, Arkansas (referred to in this
opinion as “the underlying
action”). Johnson's suit against Potlatch seeks
compensatory damages for its alleged negligence. In the
underlying action, Potlatch filed a cross-claim against CM
Sellers, alleging that it was given an express, contractual
right of indemnity against Sellers. In the present
declaratory judgment action, ACIC seeks to avoid its
obligation under the Policy to defend and indemnify Potlatch
against Johnson's claims in the underlying action. The
parties have filed cross-motions for summary judgment.
Summary Judgment Standard
judgment is only 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(a); Krenik v. Cnty. of LeSueur, 47
F.3d 953 (8th Cir. 1995). The moving party bears the burden
of showing that there is no genuine issue of material fact
and that it is entitled to judgment as a matter of law.
Enter. Bank v. Magna Bank, 92 F.3d 743, 747 (8th
Cir. 1996). The nonmoving party must then demonstrate the
existence of specific facts in the record that create a
genuine issue for trial. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 256 (1986); Krenik, 47 F.3d
motion for summary judgment, the Court must view the facts
“in the light most favorable to the nonmoving party
only if there is a genuine dispute as to those facts.”
Ricci v. DeStefano, 557 U.S. 557, 586 (2009)
(quoting Scott v. Harris, 550 U.S. 372, 380 (2007)).
A dispute is genuine if the evidence is such that it could
cause a reasonable jury to return a verdict for either party.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252
(1986). “Only disputes over facts that might affect the
outcome of the suit under the governing law will properly
preclude the entry of summary judgment.” Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986);
see Agristor Leasing v. Farrow, 826 F.2d 732 (8th
Cir. 1987). Summary judgment is particularly appropriate
where the unresolved issues are primarily legal rather than
factual. Koehn v. Indian Hills Cmty Coll., 371 F.3d
394, 396 (8th Cir. 2004); see John Deere Ins. Co. v.
Shamrock Indus., Inc., 929 F.2d 413, 417 (8th Cir. 1991)
(noting that “the interpretation and construction of
insurance policies is a matter of law, and therefore, such
cases are particularly amenable to summary judgment”).
Interpretation and Construction of an Insurance Contract
Arkansas law, which the parties agree applies in this
diversity action, the Court must give effect to the plain
meaning of unambiguous language in an insurance policy
without resort to rules of construction. Ohio Cas. Ins.
Co. v. Union Pacific R.R., 469 F.3d 1158, 1162-63 (8th
Cir. 2006) (applying Arkansas law). “If language is
ambiguous, however, [the Court] will construe the language
‘liberally in favor of the insured and strictly against
the insurer.'” Id. (quoting Elam v.
First Unum Life Ins. Co., 57 S.W.3d 165, 169 (Ark.
2001)). “Language is ambiguous if there is doubt or
uncertainty as to its meaning and it is fairly susceptible to
more than one reasonable interpretation.”
Elam, 57 S.W.3d at 167.
of insurance should receive a practical, reasonable, and fair
interpretation consonant with the apparent object and intent
of the parties in light of their general object and
purpose.” Parker v. S. Farm Bureau Cas. Ins.
Co., 292 S.W.3d 311, 315 (Ark. Ct. App. 2009).
“Different clauses of an insurance contract are read
together to harmonize all parts because it is error to give
effect to one clause over another when the two clauses are
reconcilable.” Ohio Cas., 469 F.3d at 1163.
The Court will not adopt a construction that
“neutralizes any provision of a contract” if the
Court can construe the contract to give effect to all
provisions. Id. (quoting Smith v. S. Farm Bureau
Cas. Ins. Co., 114 S.W.3d 205, 209 (Ark. 2003)).
“The insurer bears the burden of proving as a matter of
law that the insured's claim was excluded under the
policy.” State Auto. Ins. Co. v. Lawrence, 358
F.3d 982, 986 (8th Cir. 2004) (applying Arkansas law).