OneBeacon Insurance v. U.S. Foods, Inc.

304 F.R.D. 536, 2014 WL 2937476, 2014 U.S. Dist. LEXIS 88255
CourtDistrict Court, N.D. Illinois
DecidedJune 25, 2014
DocketNo. 13 C 4656
StatusPublished
Cited by5 cases

This text of 304 F.R.D. 536 (OneBeacon Insurance v. U.S. Foods, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
OneBeacon Insurance v. U.S. Foods, Inc., 304 F.R.D. 536, 2014 WL 2937476, 2014 U.S. Dist. LEXIS 88255 (N.D. Ill. 2014).

Opinion

MEMORANDUM OPINION AND ORDER

Chief Judge Rubén Castillo, United States District Court

Plaintiff OneBeacon Insurance Company (“OneBeacon”) filed this action on August 26, 2013, seeking a declaratory judgment that it is entitled to reimbursement of a workers’ compensation claim and a disability benefits claim it paid to an employee of Defendant U.S. Foods pursuant to an employer’s liability insurance policy OneBeacon issued to U.S. Foods. (R. 1, Compl.) OneBeacon also seeks a declaration that U.S. Foods breached the terms of the insurance policy. (Id.) On October 4, 2013, U.S. Foods filed a third-party complaint against The Insurance Company of the State of Pennsylvania (“ICSP”) seeking indemnification for any amount for which the Court finds U.S. Foods liable to OneBeacon. (R. 23, Third-Party Compl.) U.S. Foods moved for summary judgment on October 28, 2013. (R. 32, U.S. Foods’ Mot. Summ. J.) OneBeacon filed its cross-motion for summary judgment on December 5, 2013. (R. 52, One Beacon’s Mot. Summ. J.) U.S. Foods filed the present motion on December 27, 2013, asking the Court to stay ruling on OneBeaeon’s motion for summary judgment to allow for additional discovery. (R. 63, U.S. Foods’ Rule 56(d) Mot.) U.S. Foods contends that it needs to conduct additional discovery to properly contest OneBeacon’s summary judgment motion and to prove its affirmative defense. (Id.) For the reasons stated below, U.S. Foods’ motion is granted.

BACKGROUND AND PROCEDURAL HISTORY

OneBeacon is an insurance company incorporated in Pennsylvania, with its principal place of business in Minnetonka, Minnesota. (Id. ¶ 1.) ICSP is a Pennsylvania corporation with its principal place of business in New York, New York. (R. 49, ICSP’s Answer ¶ 11.) U.S. Foods is a foodserviee distributor incorporated in Delaware, with its principal place of business in Rosemont, Illinois. (R. 58, OneBeacon’s Rule 56.1 Resp. ¶ 2.) On December 23, 1997, JP Foodser-vice, a separate, unrelated entity, acquired U.S. Foods, and eventually began operating under the name U.S. Foods. (R. 69, U.S. [538]*538Foods’ Reply to its Rule '56(d) Mot. at 5; R. 69-3, Ex. 2, U.S. Foods’ S.E.C. Filing.)

OneBeacon issued a workers’ compensation and employer’s liability insurance policy to U.S. Foods (“OneBeacon Policy”) for the period of April 1, 1997 to April 1, 1998. (R. 58, OneBeacon’s Rule 56.1 Resp. ¶ 6.) Subsequently, Discover-Re, an insurance provider that is not a party to this suit, provided U.S. Foods with a workers’ compensation and employer’s liability insurance policy beginning April 1, 1998 until April 1, 1999. (R. 54, OneBeacon’s Facts ¶ 16; R. 63-1, Ex. 7, Apr. 30, 2013 Cracco E-Mail at 112.) In addition, ICSP issued JP Foodservice a workers’ compensation and employer’s liability insurance policy (“ICSP Policy”) for the period of July 1,1997 to July 1,1998. (R. 49, ICSP’s Answer ¶ 1; R. 63, U.S. Foods’ Rule 56(d) Mot. at 6; see R. 63-1, Ex. 4, ICSP Activity Notes.)

On December 12, 2001, Dominie Ruberstell filed an Application for Adjustment of Claim with the Illinois Workers’ Compensation Commission (“IWCC”) against U.S. Foods, seeking damages for nerve injuries sustained in the course of his employment on or about December 16, 1998. (R. 58, OneBeacon’s Rule 56.1 Resp. ¶ 14.) The parties agree, although it is unclear from the record, that Ruberstell was likely an employee of JP Foodservice at the time of the accident, not U.S. Foods. (R. 54, OneBeacon’s Facts ¶ 18; R. 63, U.S. Foods’ Rule 56(d) Mot. at 6 n.5.) On or about November 22, 2004, an IWCC arbitrator convened a hearing to resolve Ru-berstell’s claims. (R. 58, OneBeacon’s Rule 56.1 Resp. ¶ 15.) The arbitrator found that Ruberstell’s condition was causally connected to his employment and that he was entitled to temporary total disability benefits through the date of the hearing and permanent total disability benefits from U.S. Foods. (Id. ¶ 16.) On July 7, 2006, after U.S. Foods filed a Petition for Review, the IWCC amended Ruberstell’s injury date from December 16, 1998, to January 16, 1998, and remanded the matter to the arbitrator to determine whether the statute of limitations had expired prior to Ruberstell filing his claim. (Id. ¶¶ 17-18.) On or about June 23, 2008, the arbitrator found that Ruberstell’s claim was not time-barred and the permanent total disability award was reinstated. (Id. ¶ 19.) The IWCC affirmed the arbitrator’s decision on September 23, 2009. (Id. ¶ 20). U.S. Foods appealed the ruling to the Circuit Court of LaSalle County and ultimately to the Illinois Appellate Court for the Third District; both affirmed the IWCC’s decision. U.S. Food Service v. Ill. Workers’ Comp. Com’n, No. 3-11-0373WC, 2012IL App (3d) 110373 WC-U, 2012 WL 7006338 (Ill. App. Ct. 3d Dist. Nov. 2, 2012).

After Ruberstell filed his claim alleging an injury date of December 16,1998, U.S. Foods first provided timely notice to Discover-Re, its insurer for the policy period encompassing the injury date. (R. 54, OneBeacon’s Facts ¶ 16; R. 63, U.S. Foods’ Rule 56(d) Mot. at 5.) Discover-Re provided U.S. Foods with a defense in Ruberstell’s suit until the IWCC amended the injury date to January 16, 1998, which fell outside Discover-Re’s policy coverage period. (R. 54, One-Beacon’s Facts ¶ 16; R. 63, U.S. Foods’ Rule 56(d) Mot. at 5.) U.S. Foods alleges that it then provided timely notice to ICSP pursuant to the ICSP Policy. (R. 63, U.S. Foods’ Rule 56(d) Mot. at 5.) U.S. Foods further alleges that on or about June 10, 2010, it tendered Ruberstell’s claims to ICSP, and ICSP defended the claims for nearly three years, a contention that ICSP denies. (R. 49, ICSP’s Answer ¶ 2.) U.S. Foods alleges that on March 1, 2013, without warning, ICSP refused to further defend U.S. Foods against Ruberstell’s claims, a contention that ICSP also denies. (Id. ¶4.) ICSP offers a different version of events: it alleges that U.S. Foods failed to provide timely notice because it did not notify ICSP of Ruberstell’s claims until May 25, 2010, more than three years after the IWCC amended Ruberstell’s injury date. (Id. at 11, 16.) ICSP also alleges that because it maintained a policy with JP Foodservice rather than U.S. Foods, it owes U.S. Foods no duty to indemnify against RuberstelPs claims. (Id. at 15.)

After learning of ICSP’s refusal to continue defending the Ruberstell suit, U.S. Foods tendered Ruberstell’s claims to OneBeacon for indemnification of the award against it on or about April 25, 2013. (R. 58, OneBeacon’s Rule 56.1 Resp. ¶ 7.) OneBeacon alleges that this was the first notice it had received [539]*539from U.S. Foods regarding Ruberstell’s claims. (R. 54, OneBeacon’s Facts ¶ 24.) OneBeaeon alleges that it wanted to further investigate Ruberstell’s claims before paying him, but U.S. Foods advised OneBeaeon that it should pay Ruberstell immediately in order to avoid incurring statutory penalties for late payment. (Id. ¶ 25.) OneBeaeon acquiesced, issuing payment to Ruberstell on behalf of U.S. Foods in the amount of $604,227.57 on May 10, 2013. (Id.; R. 58, OneBeaeon’s Rule 56.1 Resp. ¶ 8.) OneBeaeon subsequently submitted a letter to U.S. Foods reiterating that OneBeaeon paid the Ruberstell award only to avoid statutory penalties and that it reserved the right to dispute whether it was indeed liable to pay Ruberstell’s claims.1 (R. 54, OneBeacon’s Facts ¶ 25; R. 58, OneBea-eon’s Rule 56.1 Resp.

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Cite This Page — Counsel Stack

Bluebook (online)
304 F.R.D. 536, 2014 WL 2937476, 2014 U.S. Dist. LEXIS 88255, Counsel Stack Legal Research, https://law.counselstack.com/opinion/onebeacon-insurance-v-us-foods-inc-ilnd-2014.