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Pacific Hide & Fur Depot v. Great American Insurance Co.

United States District Court, Ninth Circuit

October 15, 2013

PACIFIC HIDE & FUR DEPOT, a Montana corporation, n/k/a Pacific Steel & Recyling, Plaintiff,
v.
GREAT AMERICAN INSURANCE COMPANY, a Delaware corporation; and RESOLUTE MANAGEMENT INC., and NATIONAL INDEMNITY COMPANY, Defendants.

ORDER

DANA L. CHRISTENSEN, Chief District Judge.

This order resolves three extensively briefed and interrelated pending motions in this case: (1) Defendant Great American Insurance Company's motion for partial summary judgment based on the statute of limitations[1] (doc. 60); (2) Plaintiff Pacific Hide & Fur Depot's cross-motion for partial summary judgment on Defendant Great American Insurance Company's statute of limitations affirmative defense (doc. 98); and (3) Defendants National Indemnity Company and Resolute Management, Inc.'s motion to amend the September 27, 2012 scheduling order so that they may file and brief motions for summary judgment on the statute of limitations (doc. 104).

For the reasons articulated below, Great American's motion is denied, Pacific Hide's motion is granted, and National Indemnity and Resolute Management's motion is denied.

I. FACTS

From approximately 1957 to 1988, Pacific Hide & Fur Depot, Inc. ("Pacific") leased a property in Bozeman, Montana that later became known as the CMC Bozeman Asbestos Site ("Site"). Between 1957 and 1977, Pacific purchased at least eleven liability policies (doc. 35) from Great American Insurance Company ("Great American"), which are the subject of this litigation.

The Montana Department of Environmental Quality ("MDEQ") notified Pacific sometime in 1990 that it might be potentially liable for the cleanup of asbestos contamination at the Site. In a letter dated January 2, 1996, pursuant to the Comprehensive Environmental Cleanup and Responsibility Act ("CECRA"), MDEQ notified Pacific that it had been identified as a potentially liable person ("PLP") for the Site cleanup, and that "if subsequently found liable, " Pacific "will be required to reimburse MDEQ for remedial action costs incurred by the state in... implementing or in compelling Pacific... to implement remedial action...." (Doc. 63-1.) MDEQ requested Pacific's cooperation with CMC, the Site owner, but made no other requests or demands. (Doc. 63-1.)

In a letter dated September 23, 2003, MDEQ offered Pacific and the other PLPs the opportunity to conduct either an "interim or permanent remediation" of the Site, and stated that if Pacific chose not to conduct one of the remedial actions outlined in the letter, "DEQ may conduct the actions itself and recover its costs or it may issue an order or initiate a civil action requiring [Pacific] to perform the actions." (Doc. 63-5.) Pacific declined to conduct any remedial action, and exchanged several letters with MDEQ regarding Pacific's CECRA liability. For the purposes of these motions, suffice it to say that Pacific did not believe it was liable, and MDEQ disagreed.

In a letter dated March 25, 2004, counsel for Pacific notified Great American that Pacific had been identified as a PLP at the Site, and stated: "It is my understanding that the City of Bozeman has agreed to perform a voluntary cleanup at the site and is in the process of implementing a cleanup plan. It is possible that the City of Bozeman will, in the future assert a cost contribution claim against Pacific. Pacific hereby requests that Great American defend and indemnify it from all claims arising at the [Site]." (Doc. 63-12.) Pacific attached a schedule of the fourteen alleged Great American policies.

In a letter dated April 27, 2005, Great American denied Pacific's tender for defense and indemnity coverage. (Doc. 86-10.) On August 7, 2007, Pacific executed a stipulated consent judgment, under which it agreed to a 15% allocation of liability for the Site, to be paid to the City of Bozeman as the party that undertook the MDEQ-mandated site cleanup. (Doc. 86-17.) On July 13, 2010, Pacific executed an "Agreement and Release" with the City, and tendered a check for $650, 000, an amount that Pacific and the City agreed constituted Pacific's 15% allocation. (Doc. 35-7.)

Pacific filed a complaint against Great American and the other Defendants in the Montana Eighteenth Judicial District Court on May 2, 2012, alleging breach of contract and bad faith claims handling practices. (Doc. 9.) Century and Central National filed a notice of removal on June 8, 2012 (doc. 1); Great American joined the notice on the same day (doc. 2). Following the preliminary pretrial conference on September 11, 2012, the Court bifurcated this litigation, with Phase I to deal with Counts I-VI (the breach of contract and declaratory judgment claims against Great American, Century, and Central National), and Phase II to deal with the remaining Counts (the Bad Faith and Unfair Trade Practices Act Claims).

Great American moves for summary judgment, arguing that Counts I through VI of Plaintiff's amended complaint (the Phase I claims) are barred by Montana's eight year statute of limitations for actions founded upon a written instrument. MCA ยง 27-2-202.[2] In its cross-motion for summary judgment, Pacific argues that the statute of limitations had not expired by the time it filed its complaint. Not surprisingly, the point of contention between the parties, and the issue the Court must now resolve, is when the breach of contract claim accrued and the statute of limitations began to run.

Following the Court's dismissal of Century and Central National as defendants in this case, Phase II defendants National Indemnity Company and Resolute Management moved the Court to amend its scheduling order to allow them to file a summary judgment motion on the statute of limitations affirmative defense. (Doc. 104.) Pacific opposes this motion. (Doc. 108.)

II. SUMMARY JUDGMENT STANDARD

Summary judgment is proper if the moving party demonstrates "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). The movant bears the initial burden of informing the Court of the basis for its motion and identifying those portions of "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (internal quotation marks omitted).

The movant's burden is satisfied when the documentary evidence produced by the parties permits only one conclusion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986). Where the moving party has met its initial burden, the party opposing the motion "may not rest upon the mere allegations or denials of his pleading, but... must set forth specific facts ...


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