United States District Court, D. Arizona
AMENDED ORDER
G.
Murray Snow Chief United States District Judge.
Pending
before the Court are the Motion for Summary Judgment of
Plaintiff Depositors Insurance Company (Doc. 67) and the
Cross Motion for Summary Judgment of Defendant H&E
Equipment Services, Inc. (Doc. 70). For the following
reasons, Depositors' Motion is denied, and H&E's
Cross Motion is granted.
BACKGROUND
I.
The Accident and the Underlying Lawsuit
The
Lower Buckeye Jail needed washing and painting, so Riddle
Painting was hired to do the job. Riddle did not own all the
equipment needed, so it leased a mobile lift from H&E
Equipment Services. Riddle's project at the jail went
tragically wrong. One day, as two Riddle employees were
driving the lift, it tipped over, killing both men. As
required by law, the beneficiaries of Riddle's deceased
employees received Arizona's workers' compensation
benefits. The workers' compensation statute prevented the
families from suing Riddle, but the statute did not shield
H&E. So the families sued H&E in Arizona state court.
H&E
requested that Riddle's general liability insurer,
Depositors Insurance Company, defend H&E in the
state-court action and pay any damages for which it might
eventually be held liable. Depositors agreed to cover half of
the cost of H&E's defense but reserved its right to
file a separate lawsuit to determine whether it owed H&E
a duty to defend or indemnify. Depositors then filed this
lawsuit to resolve those questions. H&E filed a
counterclaim, asserting that Depositors owes it duties to
defend, reimburse, and indemnify, as well as a single claim
of breach of contract.
II.
The Lease Agreement and the Additional Insured
Endorsements
The
lease agreement between Riddle and H&E obligated Riddle
to do certain things. First, Riddle was required to maintain
and inspect the lift in compliance with its owner's
manual, and “inform[] all potential operators of the
[lift] of said instructions, signs and limitations.”
(Doc. 70-1 at 27.) Next, Riddle had to purchase and maintain
general liability insurance, and provide coverage to H&E
as an additional insured. (Id.) Lastly, Riddle was
required to indemnify and hold H&E harmless for all
claims arising from the use, operation, or condition of the
lift, including all damages or injuries to property or
people. (Id.)
Riddle
purchased a general liability insurance policy (“CGL
policy”) from Depositors. The CGL policy contained two
provisions at issue in these motions: a Blanket Additional
Insured Endorsement and a Contractors Enhancement Plus
Endorsement. Both endorsements have multiple requirements and
limitations on who counts as an additional insured under the
contract, but the first requirement for both is the same: in
order to be covered as an additional insured, the party
seeking coverage must have signed a valid, written agreement
with Riddle that required Riddle to add the party as an
additional insured. (Doc. 70-1 at 212; 216.)[1]
The
other limitations on coverage under the two endorsements
differed. The Blanket Endorsement limited coverage by only
applying to “liability for ‘bodily injury' or
‘property damage' caused, in whole or in part, by
‘your [i.e., Riddle's] work' for the
additional insured.” (Id. at 212.) As relevant
here, the Contractor's Endorsement limited coverage by
only applying “to the extent [Riddle is] held liable
due to . . . [m]aintenance, operation or use of equipment
leased to [Riddle] by [H&E].” (Id. at
216.)
DISCUSSION
I.
Legal Standards
A
principal purpose of summary judgment is to identify
factually unsupported claims and dispose of them. Celotex
Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). Summary
judgment is appropriate if the evidence, viewed in the light
most favorable to the nonmoving party, shows “that
there is no genuine issue as to any material fact and that
the movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(c). Only disputes over facts that might
affect the outcome of the suit will preclude the entry of
summary judgment, and the disputed evidence must be
“such that a reasonable jury could return a verdict for
the nonmoving party.” Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986).
“[A]
party seeking summary judgment always bears the initial
responsibility of informing the district court of the basis
for its motion and identifying those portions of [the record]
which it believes demonstrate the absence of a genuine issue
of material fact.” Celotex, 477 U.S. at 323.
If the movant meets that burden, the party opposing summary
judgment must then “cit[e] to particular parts of
materials in the record” that establish a genuine
factual dispute or “show[] that the materials cited do
not establish the absence . . . of a genuine dispute.”
Fed. R. Civ. Pro. 56(c)(1). If the opposition fails to do so,
the court is not required to comb through the record on its
own to come up with reasons to ...