Associated Wholesale Grocers, Inc. v. Americold Corp.

270 P.3d 1074, 293 Kan. 633
CourtSupreme Court of Kansas
DecidedDecember 23, 2011
DocketNo. 99,506
StatusPublished
Cited by36 cases

This text of 270 P.3d 1074 (Associated Wholesale Grocers, Inc. v. Americold Corp.) is published on Counsel Stack Legal Research, covering Supreme Court of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Associated Wholesale Grocers, Inc. v. Americold Corp., 270 P.3d 1074, 293 Kan. 633 (kan 2011).

Opinions

The opinion of the court was delivered by

Johnson, J.:

This garnishment action, together with its voluminous appellate record, returns to this court for the third time. See Associated Wholesale Grocers, Inc. v. Americold Corp., 261 Kan. 806, 934 P.2d 65 (1997) (Americold I); Associated Wholesale Grocers, Inc. v. Americold Corp., 266 Kan. 1047, 975 P.2d 231 (1999) (Americold II). Accordingly, we will refer to the current appeal as Americold III.

The appellant in Americold III is the garnishee, Northwestern Pacific Indemnity Company (NPIC). The appellees/cross-appellants are the plaintiffs in the garnishment action below (hereafter referred to as Plaintiffs). In that garnishment action, Plaintiffs were seeking to collect the consent judgments they had previously obtained in settlement of their tort actions against Americold. The [635]*635judgment debtor in the settled tort action, Americold, is not a participant in the garnishment action, despite being the eponymous party.

NPIC appeals the district court’s adverse rulings on the issues that were remanded by Americold I, which focused principally on two questions: (1) whether NPIC had acted in bad faith toward its insured, Americold; and (2) whether the consent judgments between Plaintiffs and Americold were reasonable and in good faith. However, the parties also raise jurisdictional issues, one of which is NPIC’s contention that the underlying judgments against Americold were extinguished pursuant to K.S.A. 60-2403, thus depriving the district court of subject matter jurisdiction to proceed with this garnishment action. Finding in favor of NPIC on that issue, we reverse the district court and remand with instructions to dismiss these garnishment proceedings.

Factual and Procedural Overview

Given that we are not reaching the merits of NPIC’s issues of bad faith or the reasonableness of Americold’s setdement, we need not set forth a detailed recitation of the facts. In Americold II, Justice Six provided a summary of what had transpired prior to that 1999 Supreme Court ruling. His recitation will serve our purposes, except that we would note that Justice Six referred to the Plaintiffs as “Associated,” which we have modified to “Plaintiffs” here for clarity:

“Our background journey requires a brief return to Associated Wholesale Grocers, Inc. v. Americold Corp., 261 Kan. 806, 934 P.2d 65 (1997) (Americold I). Americold I involved lawsuits arising out of a fire in Americold’s 170 acre underground cold storage facility. Americold had primary general liability coverage for tenant claims of $1 million through National Union Fire Insurance Company (National Union), with $25 million excess coverage through NPIC. TIG Insurance Company (TIG) provided $15 million excess coverage to National Union and NPIC. National Union eventually tendered the $1 million policy limit to plaintiffs, who were various tenants and their subrogated insurers, referenced here as [Plaintiffs].
“Although the fire burned only a part of the stored goods, smoke and other contaminants discharged by the fire damaged other goods stored in the facility. NPIC disclaimed coverage, reasoning that the claimed damages were excluded by the policy’s pollution exclusion.
[636]*636“Concluding that NPIC and TIG were denying coverage, Americold negotiated a settlement with [Plaintiffs]. The settlement included consent judgments totalling. $58,670,754, a covenant by [Plaintiffs] not to execute against the assets of Americold, and an assignment of Americold’s claims against its excess insurers, NPIC and TIG. After the settlement, [Plaintiffs] filed a garnishment action against NPIC. The district court granted summary judgment in favor'of [Plaintiffs], We reversed. TIG settled while Americold I was on appeal. Material issues of'fact remained ‘as to the good faith and reasonableness of the settlement amount resulting in the consent judgments, the excess insurer’s bad faith in denial of coverage and rejection of settlement within the policy limits, and the liability of the excess insurer for tire judgments over policy limits.’ 261 Kan. 806, Syl. ¶ 15. We held, however, that the pollution exclusion in the NPIC policy did not exclude-coverage. 261 Kan. at 811.” 266 Kan. at 1048-49.

Upon remand to the district court, the parties engaged in extensive discovery for a number of years. Ultimately, in tire fall of 2005, the district court conducted a 10-week bench trial on the remand issues identified by Americold I.

On January 10, 2006, the court conducted a hearing on NPIC’s motion to dismiss, in which the garnishee contended that the consent judgments entered in 1994 and 1995 had become dormant and extinguished pursuant to the provisions of K.S.A. 60-2403 and K.S.A. 60-2404. Therefore, NPIC argued, without valid judgments for Plaintiffs to collect, tire district court did not have subject matter jurisdiction to proceed with a garnishment action. By journal entry filed January 19, 2006, the district court overruled the motion, finding that enforcement of the consent judgments had been stayed or prohibited within the meaning of K.S.A. 60-2403(c) and that the Supreme Court’s remand with directions stayed the time provisions of the dormancy and revivor statutes and prohibited Plaintiffs from executing on their judgments.

A little over a year later, on February 16, 2007, the district court filed a journal entry describing its rulings on the various issues. On the principal issues, the court found that the settlement agreement between the Plaintiffs and Americold represented a reasonable, good faith settlement and that NPIC’s denial of coverage was in bad faith, as was its refusal to participate in the settlement conferences and its refusal to settle Plaintiffs’ claims within policy limits. The trial court found NPIC hable for the entire amount of the [637]*637consent judgments, including the amounts in excess of its policy limits. The court directed the Plaintiffs to prepare, circulate, and present to the court for approval separate journal entries reflecting the adjusted amount of judgment for each plaintiff after deducting the TIG settlement and adding accrued interest and attorney fees to that date. Those journal entries were filed August 27,2007, with an amended journal entry filed August 28, 2007.

NPIC filed a notice of appeal, the particulars of which will be discussed below. Plaintiffs cross-appealed, claiming the district court erred in denying their claim for punitive damages and complaining about the trial court’s exclusion of an exhibit. Upon motion by NPIC, the appeal was transferred from the Court of Appeals to the Supreme Court. See K.S.A.

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Cite This Page — Counsel Stack

Bluebook (online)
270 P.3d 1074, 293 Kan. 633, Counsel Stack Legal Research, https://law.counselstack.com/opinion/associated-wholesale-grocers-inc-v-americold-corp-kan-2011.