Fluor Corporation v. Zurich American Insurance Company

CourtDistrict Court, E.D. Missouri
DecidedApril 21, 2022
Docket4:16-cv-00429
StatusUnknown

This text of Fluor Corporation v. Zurich American Insurance Company (Fluor Corporation v. Zurich American Insurance Company) is published on Counsel Stack Legal Research, covering District Court, E.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fluor Corporation v. Zurich American Insurance Company, (E.D. Mo. 2022).

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MISSOURI EASTERN DIVISION

FLUOR CORPORATION, ) ) ) Plaintiff/Counterclaim Defendant ) ) v. ) No. 4:16CV00429 ERW ) ZURICH AMERICAN INSURANCE ) COMPANY, ) ) Defendant/Counterclaim Plaintiff. )

MEMORANDUM AND ORDER

This matter comes before the Court on Zurich American Insurance Company’s Motion for Costs pursuant to Federal Rule of Civil Procedure 54(d) and Local Rule 8.03 [732]. Zurich moves the Court to award costs to Zurich as the prevailing party. Zurich has filed a Bill of Costs in support of its Motion. I. BACKGROUND On March 29, 2016, Zurich American Insurance Company filed suit in this Court, asserting five separate claims in its Complaint. Zurich’s first three Causes of Action sought declaratory judgments stating the Zurich insurance policies at issue in this case did not provide coverage for the defense or indemnity of Fluor Corporation’s litigation arising out of events which occurred in Herculaneum, Missouri from 1981 through 1994. Zurich’s Fourth Cause of Action sought a declaration the Zurich Policies were exhausted. Zurich’s Fifth Cause of Action sought indemnity or contribution from Fluor for defense fees paid by Zurich. On June 28, 2016, Fluor filed an answer and Counterclaims against Zurich, asserting three Causes of Action: 1) Breach of the Duty to Defend (first cause of action); 2) Bad Faith Failure to Settle and Defend (second cause of action); and 3) Unreasonable Refusal to Pay in violation of Missouri law (third cause of action). In response, Zurich asserted several affirmative defenses, including that various coverage arguments barred any duty by Zurich to defend. Under the five case management orders in this action, there were several dispositive

motion deadlines. Zurich’s first three causes of action were dismissed by the Court’s Orders on September 30, 2019, and September 21, 2020. The Court also granted Fluor’s motion to dismiss Zurich’s affirmative defenses that asserted coverage as a defense to Fluor’s bad faith failure to defend claim. On September 21, 2020, Fluor’s Second Cause of Action for Bad Faith Failure to Defend was dismissed. On July 16, 2021, the Court dismissed Zurich’s fifth cause of action pursuant to Fluor’s motion under Fed. R. Civ. P. 12(b)(1). On July 12, 2021, the Court denied Zurich’s Rule 16 Motion, seeking a determination of policy limits which the Court found should have been appropriately determined through a motion for summary judgment. In its denial the Court noted although a determination of policy limits as a matter of law was necessary to establish both parties’ claims in the action, neither party timely

sought adjudication of this issue despite being afforded ample opportunity to do so under the Court’s five case management orders. The Court therefore ordered an expedited summary judgment briefing of this matter to enable the Court to determine the policy limits as a matter of law prior to the trial set for July 26, 2021. On July 25, 2021, Fluor's claim of bad faith failure to settle was resolved in Zurich's favor on July 25, 2021, by way of the Court’s ruling on a question of law regarding the limits of the Zurich insurance policies. The Court ruled that at the time of issuance the bodily injury, per- occurrence limits available to Fluor under the Zurich Policies totaled $3,500,000, and the liability limits for personal injury at issuance totaled $3,000,000 in the aggregate. Pursuant to this ruling, on July 26, 2021, Fluor's counsel conceded the Court “effectively granted summary judgment on the case, or at least prevented Fluor from proving up its bad faith failure to settle claim,” and that ruling had “the same effect ... on Zurich's fourth cause of action, which is the cause of action for exhaustion.” (See Trial Transcript Vol. I-A, ECF No. 722 at 6:12-24.) The

parties stipulated to facts establishing the policies were exhausted due to settlements that took place before the events central to Fluor's bad faith failure to settle claims arose, and the Court granted summary judgment in Zurich's favor on Fluor's bad faith failure to settle claim as well as dismissed Zurich’s exhaustion claim as moot. ECF No. 723, p. 2. A month later, on August 27, 2021, the parties stipulated to dismissal with prejudice of Fluor’s remaining two counts, with each party to bear their own costs only as it related to those remaining two counts. On September 27, 2021, the Court entered final judgment. Zurich timely filed the instant Motion along with its Bill of Costs within twenty-one (21) days of that entry. Fluor filed a notice of appeal in the Eighth Circuit on October 21, 2021. II. DISCUSSION

Zurich argues it is entitled to an award of costs in the amount of $186,913.67, as the prevailing party on Fluor's claim of bad faith failure to settle, and in favor of Zurich on its claim that the operative policies at issue in this case were exhausted. Zurich claims the heart of the dispute in this case has always turned on Fluor's claims of bad faith failure to settle asserted against Zurich, wherein Fluor sought an award of more than $300 million as well as punitive damages. Zurich argues the Court's summary judgment entered in favor of Zurich on Fluor's claims of bad faith failure to settle materially changed the legal relationship between Fluor and Zurich, and therefore, Zurich is entitled to an award of costs as the prevailing party within the meaning of Fed. R. Civ. Proc. 54(d). In its response in opposition, Fluor offers three reasons the Court should deny Zurich’s Motion. First, Fluor contends Zurich should not be allowed to recover its costs when it engaged in conduct that required the Court to sanction it three separate times. Secondly, Fluor argues Zurich should not be compensated as any costs Zurich incurred were its own fault because it

unreasonably delayed bringing its motion to determine policy limits. Thirdly, Fluor claims Zurich prevailed on one narrow issue and allocating costs to Zurich would not account for the numerous issues on which Fluor prevailed in the lawsuit. Fluor further claims a significant portion of the costs Zurich has submitted are not compensable. Fluor requests the Court deny Zurich’s motion or in the alternative, stay any ruling until after Fluor’s pending appeal in the Eighth Circuit is resolved. Rule 54(d) of the Federal Rules of Civil Procedure provides “costs—other than attorney’s fees—should be allowed to the prevailing party.” See also In re Derailment Cases, 417 F.3d 840, 844 (8th Cir. 2005) (“A prevailing party is presumptively entitled to recover all of its costs.”). A district court has broad discretion over awarding costs to a prevailing party. Blakley

v. Schlumberger Technology Corp., 648 F.3d 921, 930 (8th Cir. 2011) (citation omitted). Before any bill of costs is taxed, the party claiming any item of cost or disbursement must attach an affidavit, having knowledge of the facts, that such item is correct and has been necessarily incurred in the case and that services for which fees have been charged were actually and necessarily preformed. 28 U.S.C. § 1924. Pursuant to 28 U.S.C. § 1920

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Bluebook (online)
Fluor Corporation v. Zurich American Insurance Company, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fluor-corporation-v-zurich-american-insurance-company-moed-2022.