Selective Way Insurance v. Crawl Space Door System, Inc.

162 F. Supp. 3d 547, 2016 U.S. Dist. LEXIS 22097, 2016 WL 740063
CourtDistrict Court, E.D. Virginia
DecidedFebruary 22, 2016
DocketCIVIL NO. 2:14CV650
StatusPublished
Cited by10 cases

This text of 162 F. Supp. 3d 547 (Selective Way Insurance v. Crawl Space Door System, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Selective Way Insurance v. Crawl Space Door System, Inc., 162 F. Supp. 3d 547, 2016 U.S. Dist. LEXIS 22097, 2016 WL 740063 (E.D. Va. 2016).

Opinion

ORDER AND OPINION

Robert G. Doumar, UNITED STATES DISTRICT JUDGE

This matter comes before the Court on opposing requests for declaratory 'judgment regarding Selective Way Insurance Company’s (“Plaintiff’ or “Selective”) al[549]*549leged duty to defend and indemnify Crawl Space Door System, Inc. d/b/a/ Crawl Space Door Systems, Inc. (“Defendant” or “CSD”) against a lawsuit filed on September 24, 2013 in the United States District Court for the District of New Jersey (“the Smart Vent action”). Selective claims the commercial liability insurance policy it issued to CSD covering a period from September 5, 2009 to September 5, 2010 (“Selective Policy”) does not provide- coverage for the allegations and claims set forth in the Smart Vent action. In opposition, CSD contends that at least two provisions of the Selective Policy require Selective to defend and indemnify them in the Smart Vent action.

Before the Court are opposing motions for summary judgement. ECF Nos. 17, 19. Following full briefing and a hearing on these motions, the Court took them under advisement pending the complete resolution of a Motion for Partial Judgment on the Pleadings and any subsequent pleadings filed as a result thereof in the Smart Vent action. Although the Motion for Partial Judgment on the Pleadings filed in the Smart Vent action has not been fully resolved, the Court finds that the Smart Vent action has progressed sufficiently to rule on the outstanding motions for summary judgment at this time. Accordingly, for the reasons stated herein, Selective’s Motion for Summary Judgment, ECF No. 17, is GRANTED and CSD’s Motion for Partial Summary Judgment, ECF No. 19, is DENIED.

I. BACKGROUND

A. Facts as Alleged by the Parties

CSD is a Virginia corporation that manufactures, distributes, and sells various flood vent products. Compl. ¶¶ 3, 5. Selective is an insurance company that is headquartered in and organized under the laws of the state of New Jersey. Id. at ¶ 1. On September 5, 2009, Selective began providing annual coverage to CSD under commercial general liability insurance policies. Id. at ¶2. CSD renewed these- policies annually and the parties stipulate that the Business Liability Coverage and Commercial Umbrella Liability Coverage policies for the policy period beginning September 5, 2009 and ending September 5, 2010 constitute the pertinent insurance policy for the claims and defenses presented in this action. Joint Appendix, Exhibit 2 (ECF No. 16-2); see also Selective Memorandum in Support, ¶ 27 (ECF No. 18).

On September 24, 2013, Smart Vent Products, Inc. (“Smart Vent”), a CSD competitor that also sells flood vents, initiated a lawsuit against CSD in the United States District Court for the District of New Jersey. Compl. ¶ 16; see also Compl., Exhibit A (ECF No. 4-1). Smart Vent brought five counts against CSD: (1) unfair competition under the Lanham Act; (2) unfair competition under similar New Jersey statutes; (3) unfair competition at common law; (4) negligent misrepresentation; and (5) federal trademark infringement. Compl., Exhibit A (ECF No. 4-1). The Smart Vent action was served on CSD on October 7, 2013 and CSD tendered the defense to Selective on October 8, 2013. ECF No. 20 at 6. On December 5, 2013, Selective sent a letter to CSD disclaiming coverage for the Smart Vent action. ECF No. 16-3. CSD filed an internal appeal with Selective’s Claims Internal Appeal Administrator on February 10, 2014. ECF No. 16-4. In response to the appeal, Selective agreed to defend CSD in the Smart Vent action subject to a reservation of rights set forth in a letter Selective sent to CSD on March 11, 2014. ECF No. 16-5.

B. Procedural History

On December 22, 2014, Selective filed the instant declaratory judgment action. [550]*550ECF No. 1. CSD answered the Complaint and counterclaimed for declaratory judgment on February 6, 2015. ECF No. 10. On June 11, 2015, both parties filed opposing motions for summary judgment. ECF Nos. 17, 19. On July 13, 2015, the Court heard oral arguments regarding the parties’ respective motions for summary judgment. During that hearing, the parties indicated that a Motion for Partial Judgment on the Pleadings was pending in the Smart Vent action. As a result, in an Order issued on July 17, 2015, the Court took the opposing motions for summary judgement under advisement pending the complete resolution of the Motion for Partial Judgment on the Pleadings in the Smart Vent action and the filing of any pleadings in New Jersey as a result thereof. ECF No. 28. Selective subsequently requested the Court to reconsider its Order by filing a motion on July 31, 2015. ECF No. 29. After the motion was fully briefed, the Court issued an Order denying Selective’s Motion for Reconsideration. ECF No. 35.

Both parties have subsequently provided the Court with multiple status reports regarding the Smart Vent action. As previously indicated, although the Motion for Partial Judgment on the Pleadings in the Smart Vent action has not been resolved, the Smart Vent action has progressed sufficiently to rule on the outstanding opposing motions for summary judgment at this time.

II. LEGAL STANDARDS

A. Summary Judgment

A party is entitled to summary judgment if “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). Summary judgment will “be granted unless ‘a reasonable jury could return a verdict for the nonmoving party’ on the evidence presented.” Kelley v. United Parcel Service, Inc., 528 Fed. Appx. 285, 285 (4th Cir.2013) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). “Conclusory or speculative allegations do not suffice, nor does a mere scintilla of evidence in support of [the nonmov-ing party’s] case.” Id. (quoting Thompson v. Potomac Elec. Power Co., 312 F.3d 645, 649 (4th Cir.2002)). Moreover, “[t]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Roche v. Lincoln Property Co., 2003 WL 22002716 (E.D.Va. July 25, 2003).

In this case, summary judgment is appropriate as “the material facts are essentially uncontested and the dispute turns entirely on whether these uncontested facts fit within the scope of coverage provided by [the Selective] Policy.” Bohreer v. Erie Ins. Grp., 475 F.Supp.2d 578, 583 (E.D.Va.2007).

B. Choice of Law

Courts sitting in diversity must apply the forum state’s substantive law. Salve Regina Coll. v. Russell, 499 U.S. 225, 226, 111 S.Ct. 1217, 113 L.Ed.2d 190 (1991) (citing Erie R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct.

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162 F. Supp. 3d 547, 2016 U.S. Dist. LEXIS 22097, 2016 WL 740063, Counsel Stack Legal Research, https://law.counselstack.com/opinion/selective-way-insurance-v-crawl-space-door-system-inc-vaed-2016.