Allied World Assurance Company v. Farm Bureau Property & Casualty Insurance Company, et al.

• Court: District Court, D. Arizona
• Decided: February 11, 2026
• Docket: 2:24-cv-01677
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Allied World Assurance Company, No. CV-24-01677-PHX-SMM

10 Plaintiff, ORDER

11 v.

12 Farm Bureau Property & Casualty Insurance Company, et al., 13 Defendants. 14 15 This matter is before the Court on Plaintiff’s and Defendants’ cross-motions for 16 summary judgment. (Docs. 52, 64). Plaintiff Allied World Assurance Company (“Allied 17 World”) seeks equitable contribution from Defendants Farm Bureau Property & Casualty 18 Assurance Company (“Farm Bureau”) and Western Agricultural Insurance Company 19 (“Western”) for three prior lawsuits, arising from E. Coli infections from the 20 consumption of romaine lettuce, that Plaintiff defended and settled. (Doc. 1). For the 21 following reasons, the Court denies Plaintiff’s Motion (Doc. 64) and grants Defendants’ 22 Motion (Doc. 52). 23 I. BACKGROUND 24 A. The Insurance Policies 25 Plaintiff insured Andrew Smith Company (“ASC”), a California limited liability 26 company, under an Umbrella Liability Insurance Policy, bearing Policy No. 0309-1606, 27 with a policy period of August 21, 2017, through August 21, 2018. (Docs. 53 at 1; 65 at 28 12). ASC contracted to purchase romaine lettuce from nonparties Marlatt Brothers 1 Produce, LLC (“Marlatt”) and Desert Premium Farms, LLC (“Desert Premium”). (Id. at 2 2; Id.). ASC’s grower agreements with Marlatt and Desert Premium required Marlatt and 3 Desert Premium to obtain liability insurance coverage listing ASC as an additional 4 insured “with insurance companies licensed in the State of California and acceptable to 5 ASC.” (Id.) It further required that “[t]he insurance coverages listed above, shall be 6 primary and not entitled to contribution from any insurance maintained by ASC, and shall 7 list ASC as an additional insured….” (Id.) 8 Defendants Farm Bureau and Western are not licensed to write insurance policies 9 in California. (Id.) However, Defendant Farm Bureau insured Marlatt under a Member’s 10 Choice Personal Package liability policy bearing number 7552973, with a policy period 11 of March 1, 2018, through March 1, 2019. (Id.) The policy included a “communicable 12 disease” exclusion that included, in relevant part, that “[t]here is no coverage for any 13 ‘damages’ or ‘medical expenses’ ‘arising out of’ any transmission, or threat of 14 transmission, of any communicable disease or sickness.” (Id.) 15 Defendant Western insured Desert Premium under a commercial liability policy 16 bearing number AMP 6006135 (primary) and an Umbrella Liability Policy bearing 17 number AMU 001357 (umbrella). (Id.) The primary and umbrella policies shared an 18 effective policy period of July 9, 2017, through July 1, 2018. These policies also included 19 a communicable disease exception that states that “[t]his insurance does not apply to: . . 20 .’[b]odily injury’ or ‘property damage’ arising out of the actual or alleged transmission of 21 a communicable disease.” (Id.) The umbrella policy’s exclusion states that insurance 22 does not apply to “Bodily Injury” . . . “arising out of a communicable disease by an 23 insured.” (Id.) 24 B. Liability Certificate 25 Marlatt and Desert Premium shared insurance agent Joseph Robbins (“Mr. 26 Robbins”). (Doc. 53 at 3-4). In 2017, John Boelts (“Mr. Boelts”), an owner of Desert 27 Premium, asked Mr. Robbins to purchase insurance for Desert Premium adding ASC as 28 an additional insured on Desert Premium’s liability policies. (Docs. 65 at 13; 74 at 3). 1 Mr. Robbins was an authorized representative for both Defendants and issued 2 liability insurance certificates on behalf of Defendants Farm Bureau and Western to ASC. 3 (Id.) However, Farm Bureau did not list ASC as an additional insured under Marlatt’s 4 Policy no. 7552973. (Id. at 3). The certificate issued to ASC states that “[t]his certificate 5 certifies liability is afforded” and “is issued as a matter of information only and does not 6 amend, alter or extend any of the coverages in the Farm Bureau Member’s Choice 7 Personal Package policy.” (Id.) 8 Defendant Western also issued a certificate of liability insurance” to ASC via Mr. 9 Robbins that states that ASC was “listed as additional insured” on Desert Premium’s 10 polices. (Id. at 3). However, the certificate states “[t]his certificate is issued as a matter of 11 information only and confers no rights upon the policy holder” and “does not 12 affirmatively or negatively amend extend or alter the coverage afforded by the polices 13 below.” (Id.) It further provided, “Important: If the certificate holder is an ADDITIONAL 14 INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be 15 endorsed.” (Id.) 16 Additionally, Mr. Robbins never advised Desert Premium, Western, or ASC that it 17 was not an additional insured, and Mr. Field, a senior underwriter at Defendant Farm 18 Bureau, never informed Desert Premium or ASC that it was not an additional insured. 19 (Docs. 65 at 15; 74 at 5). 20 C. Lawsuits 21 Beginning in 2018, ASC faced three personal injury lawsuits following an 22 outbreak of E. coli infections associated with the consumption of romaine lettuce, during 23 the applicable policy period. (Id. at 18; Id. at 8). The lawsuits included the Cullinan, 24 Ingberg and Ruocchio lawsuits. (Id.) The FDA, Center for Disease Control and 25 Prevention (“CDC”), and state investigators determined that consumption of romaine 26 lettuce grown on farms in Yuma County, Arizona and the Wellton, Arizona area “was the 27 cause of the outbreak.” (Doc. 65 at 17; Id.). 28 On July 9, 2021, ASC agreed to settle claims brought by nonparty Nancy Cullinan 1 based on allegations that Cullinan was injured after eating food contaminated with E. coli 2 on March 20, 2018. (Docs. 53 at 4; 65 at 19). On February 20, 2022, ASC agreed to settle 3 claims brought by nonparty Stephanie Ingberg based on allegations that Ingberg was 4 injured after consuming food contaminated with E. coli on March 20, 2018. (Id.) Finally, 5 on March 17, 2022, ASC agreed to settle claims brought by nonparties James and 6 Ruocchio based on allegations that the Ruocchios were injured after consuming food 7 contaminated with E. coli on March 22, 2018. (Id.) Allied World continues to incur 8 defense costs in the Ruocchio natter; despite the settlement, as Freshway filed 9 crossclaims in the United States District Court for the Eastern District of New York and 10 the matter remains ongoing. (Id.) 11 Plaintiff tendered defense and indemnity of its E. coli lawsuits to Defendants on 12 December 13, 2019, and on January 24, 2020, Defendants rejected those tenders 13 maintaining that the liability insurance policies issued by Defendants do not “include 14 ASC as an additional insured.” (Id.) 15 Plaintiff admitted in its answers to Defendants’ interrogatories that it settled the 16 relevant cases over one year before Plaintiff commenced this case. (Docs. 53 at 4; 65 at 17 11). Plaintiff admits that it paid the Ingberg settlement in full on March 17, 2022, the 18 Ruocchio settlement in full on April 4, 2022, and the Cullinan settlement in-full on July 19 15, 2021. (Id.) 20 Plaintiff commenced this action on July 9, 2024. (Doc. 1). Plaintiff brings claims 21 for equitable contributions against Defendant Western (Count I) and Defendant Farm 22 Bureau (Count II). (Id.) The Court allowed Defendants to amend their answer to assert a 23 statute of limitations defense. (Doc. 63). Defendants filed a Motion for Summary 24 Judgment (Doc. 52) and Plaintiff filed a Cross-Motion for Summary Judgment (Doc. 64). 25 The parties filed replies to their cross-motions. (Docs. 73, 75). 26 II. LEGAL STANDARD 27 A party seeking summary judgment “bears the initial responsibility of informing 28 the district court of the basis for its motion [ ] and identifying those portions of [the 1 record] which it believes demonstrate the absence of a genuine issue of material fact.” 2 Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Summary judgment is appropriate if 3 the evidence, viewed in the light most favorable to the nonmoving party, shows “that 4 there is no genuine issue as to any material fact and that the movant is entitled to 5 judgment as a matter of law.” Fed. R. Civ. P. 56(c). Only disputes over facts that might 6 affect the outcome of the suit will preclude the entry of summary judgment, and the 7 disputed evidence must be “such that a reasonable jury could return a verdict for the 8 nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). 9 III. DISCUSSION 10 Plaintiff seeks reimbursement under an equitable contribution theory from 11 Defendants for three lawsuits it settled and crossclaims it continues litigating on behalf of 12 ASC, arising from E. coli infections from the consumption of romaine lettuce. (Doc. 64). 13 Defendants argue that they do not have a duty to defend and indemnify ASC because 14 they did not insure ASC and/or the same risks. (Doc. 52). Defendants allege that the 15 insurance policies did not include ASC as an additional insured, the policies did not cover 16 a communicable disease injury, and that Plaintiff’s claims are untimely under the statute 17 of limitations. (Id.) For the reasons set forth, the Court finds that Plaintiff’s claims are 18 untimely under the relevant statute of limitations. Therefore, the Court need not address 19 the merits of Plaintiff’s equitable contribution claims. 20 A. Statute of Limitations 21 At issue here is whether Plaintiff’s equitable contribution claims are time barred. 22 (Docs. 52, 64, 73, 75). Defendant contends that the UCATA’s one-year statute of 23 limitations applies to Plaintiff’s equitable contribution claims. (Doc. 52 at 8-9). In 24 response, Plaintiff contends that the one-year statute of limitations does not apply in this 25 case because (1) Plaintiff asserts an independent equitable right to contribution from co- 26 insurers of the same risk that falls outside of the UCATA’s scope and (2) courts in other 27 jurisdictions have held that contribution claims between insurers are governed by general 28 statute of limitations provisions, not the UCATA one-year statute of limitations. (Doc. 64 1 at 11); see A.R.S. § 12-253. At minimum, both parties agree that the three-year statute of 2 limitations under A.R.S. § 12-543 applies. (Docs. 73 at 12-13; 75 at 9). 3 Under Arizona law, “a cause of action accrues, and the statute of limitations 4 commences, when one party is able to sue another.” Gust, Rosenfeld & Henderson v. 5 Prudential Ins. Co. of Am., 898 P.2d 964, 967 (Ariz. 1995). “The very purpose of 6 enacting a statute of limitations is to fix a limit within which an action must be brought 7 and to prevent the unexpected enforcement of stale claims against persons who have been 8 thrown off their guard by want of prosecution.” Hall v. Romero, 685 P.2d 757, 763 (Ariz. 9 Ct. App. 1984). 10 When a defendant asserts the statute of limitations as a defense, the defendant has 11 the burden of proving that the complaint falls within the statute. Troutman v. Valley Nat. 12 Bank of Arizona, 826 P.2d 810, 814 (Ariz. Ct. App. 1992). “However, the burden of 13 proving that the statute was tolled or that the defendant is estopped from relying on the 14 statute falls on the plaintiff.” Id. If doubt exists “as to which of two limitations periods 15 apply, courts generally apply the longer.” Gust, 898 P.2d at 968. 16 1. A.R.S. § 12-2503(D) 17 Arizona has adopted a modified version of the Uniform Contribution Among 18 Tortfeasors Act (“UCATA”), A.R.S. §§ 12-2501 to 2509. The UCATA abolished the 19 prior common law rule prohibiting claims of contribution among joint tortfeasors and 20 made each joint tortfeasor responsible for that tortfeasor’s pro rata share of the entire 21 liability, which was to be allocated according to “relative degrees of fault.” See § 12- 22 2502. A right of contribution against other joint tortfeasors was created in favor of any 23 tortfeasor who has paid more than that tortfeasor’s “pro rata share of the common 24 liability.” See § 12-2501(B). Additionally, the Arizona UCATA creates a separate and 25 distinct cause of action for contribution which does not accrue until after one of several 26 joint tortfeasors has paid more than its share of the common liability. § 12-2501(B); § 12- 27 2503; see Nikolous v. Superior Court In & For Maricopa Cnty., 756 P.2d 925, 926 (Ariz. 28 1988); see also Kriz v. Buckeye Petroleum Co., 701 P.2d 1182, 1188 (Ariz. 1985). 1 Although contribution is an equitable remedy, the limitations period for such a 2 claim is governed by statute. Nikolous, 756 P.2d at 926 (“contribution is statutory”); see 3 Freeman v. Sorchych, 245 P.3d 927, 932 (Ariz. App. 2011) (“In Arizona, contribution is 4 an equitable remedy that has been recognized by the Arizona courts and legislature in 5 limited circumstances, most notably in the insurance and tort contexts.”) (collecting 6 cases). Specifically, A.R.S. § 12-2503(D) states the following:

7 If there is no judgment for the injury or wrongful death against the tortfeasor 8 seeking contribution, his right of contribution is barred unless he has either:

9 1. Discharged by payment the common liability within the statute of limitations 10 period applicable to the claimant's right of action against him and has commenced his action for contribution within one year after payment. 11

12 2. Agreed while action is pending against him to discharge the common liability and has within one year after the agreement paid the liability and commenced his 13 action for contribution. 14 Here, Plaintiff contends that the Arizona UCATA does not apply to equitable 15 contribution claims among insurers. (Doc. 64 at 11). Rather, Plaintiff contends that the 16 UCATA only applies to tortfeasors seeking contribution from other tortfeasors and 17 insurers subrogated to its insured’s rights against tortfeasors, but it asserts an independent 18 right of contribution from co-insurers of the same risk. (Id.) 19 In response, Defendants contend that the distinction between seeking contribution 20 from another tortfeasor and seeking contribution from another insurer is essentially the 21 same. (Doc. 73 at 10-11). Further, Defendants contend that, in both scenarios, Plaintiff 22 must show that ASC was covered under Defendants’ policies for the same risk or 23 casualty. (Id. at 10); see Nucor Corp. v. Employers Ins. Co. of Wausau, 296 P.3d 74, 83- 24 84 (Ariz. App. 2012). Therefore, Defendants contend that Plaintiff is subject to the same 25 defenses that ASC would be subject to if it were asserting a coverage claim directly, 26 including: (1) that ASC was not an insured, and (2) that ASC was subject to a coverage 27 exclusion. (Doc. 73 at 10-11); see California Cas. Ins. Co. v. Am. Family Mut. Ins. Co., 28 94 P.3d 616, 622 (Ariz. App. 2004). 1 Plaintiff also contends that this Court should follow decisions from the District of 2 Nevada interpreting the Nevada UCATA. (Doc. 64 at 13-14). However, as Defendants 3 correctly point out, decisions in other judicial districts are not binding on this Court. 4 (Doc. 73 at 12); Camreta v. Greene, 563 U.S. 692, 709 n.7 (2011) (“[a] decision of a 5 federal district court judge is not binding precedent in either a different judicial district, 6 the same judicial district, or even upon the same judge in a different case.”) 7 This Court previously determined that the Arizona UCATA applies to insurance 8 companies seeking equitable contribution for liability in a tort action. (Doc. 63). Once the 9 statute of limitations is determined, the plaintiff has “the burden of proving that the 10 statute was tolled or that the defendant is estopped from relying on the statute.” 11 Troutman, 826 P.2d at 814. However, Plaintiff does not argue that the statute should be 12 tolled or that Defendants are estopped from relying on the statute. 13 Plaintiff admitted in its answers to Defendants’ interrogatories that it settled the 14 relevant cases over one-year before Plaintiff commenced this case. (Docs. 53 at 4; 65 at 15 11). Specifically, Plaintiff admits that it paid the Ingberg settlement in full on March 17, 16 2022, the Ruocchio settlement in full on April 4, 2022, and the Cullinan settlement in-full 17 on July 15, 2021. (Id.) However Plaintiff commenced this suit on July 9, 2024, which is 18 nearly three-years after the first settlement was paid in-full. (Doc. 1). Thus, Plaintiff was 19 approximately two years late in bringing this action. Accordingly, the Court finds that 20 Plaintiff’s claims are time barred under A.R.S. § 12-2503(D). 21 2. A.R.S. § 12-543 22 However, to the extent doubt exists “as to which of two limitations periods apply, 23 courts generally apply the longer.” Gust, 898 P.2d at 968; Continental Cas. Co. v. Gabe 24 Brick Co., 401 P.2d 168, 170 (Ariz. 1965) (“where two constructions are possible, the 25 one which gives the longer period of limitations is the one which is to be preferred.”). 26 Plaintiff contends that the three-year statute of limitations should apply and that its 27 claims are timely. (Doc. 64 at 14). Plaintiff further contends in its reply that the 28 applicable limitations period did not begin running until it paid final payment or 1 settlement, and asks the Court to follow non-binding precedent in the District of Nevada 2 and the Northern District of Illinois. (Doc. 75 at 9). In contrast, Defendants contend that 3 even if the three-year statute of limitations applies, Plaintiff’s claims are still time-barred 4 because the cause of action began accruing when Defendants first denied coverage. (Doc. 5 73 at 12-13). 6 In Arizona, “a cause of action accrues whenever one person may sue another.” 7 Healey v. Coury, 783 P.2d 795, 799 (Ariz. App. 1989). In the context of equitable 8 contribution, Arizona law does not require an insurer to provide a complete defense 9 before it can file suit. Nucor, 296 P.3d at 84; see also Am. Cont’l Ins. Co., Inc., 903 P.2d 10 at 611 (“In determining whether a claim for equitable contribution may lie, we see no 11 reason why the question should be limited to whether a claim was made or a lawsuit filed 12 against the insured.”). 13 Rather, accrual occurs when the claim for a defense and indemnity is denied. See 14 Healey v. Coury, 783 P.2d 795, 799–800 (Ariz. App. 1989) (applying § 12-543 and 15 holding that “cause of action arose and the statute of limitations began to run. . .when 16 [Plaintiff] demanded payment and [Defendant] refused to pay”); Don Kelland Materials, 17 Inc. v. Langel, 560 P.2d 1281, 1282 (Ariz. App. 1977) (applying § 12-543 and holding 18 that claim “accrued when appellant’s claim under the policy was denied”). 19 Here, Defendants first denied coverage in March 2019. (Doc. 65 at 99–102.) 20 Defendants also denied coverage in letters to Plaintiff’s counsel sent in January 2020 21 (Doc. 65 at 104–09), and again in May 2020 (Doc. 65 at 111–15). All these letters were 22 sent more than three years before Plaintiff commenced this lawsuit on July 9, 2024. (Doc. 23 1). Thus, even if § 12-543’s three-year limitation applies, Plaintiff’s claims are still 24 barred. Moreover, Plaintiff has the burden of proving that the statute of limitations was 25 tolled, but Plaintiff does not argue that the statute of limitations should be tolled. See 26 Troutman, 826 P.2d at 814. 27 Thus, even if this Court applies the three-year statute of limitations under A.R.S § 28 12-543, Plaintiff’s claims are still time-barred because they accrued more than three years || before Plaintiff commenced suit. Accordingly, the Court finds that Plaintiff's claims are 2|| barred under A.R.S. § 12-543. 3 IV. CONCLUSION 4 Upon reviewing the parties’ briefing on their cross-motions for summary 5 || judgment, the Court concludes that Plaintiff's claims are time-barred under both statute 6|| of limitations, A.R.S. § 12-2503(D) and A.R.S. § 12-543. Therefore, the Court need not || reach the merits of Plaintiff's equitable contribution claims. 8 Accordingly, for the reasons set forth, 9 IT IS ORDERED granting Defendants’ Motion for Summary Judgment. (Doc. 10]) 52). 11 IT IS FURTHER ORDERED denying Plaintiff's Cross-Motion for Summary 12 || Judgment. (Doc. 64). 13 IT IS FURTHER ORDERED dismissing Plaintiff's Complaint with prejudice. (Doc. 1). 15 IT IS FURTHER ORDERED directing the Clerk of Court to enter judgment accordingly and terminate this action. 17 Dated this 11th day of February, 2026. 18

0 Stephen M. McNamee Senior United States District Judge 21 22 23 24 25 26 27 28

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