United States District Court, W.D. Virginia, Abingdon Division
James P. Jones United States District Judge E. Ford Stephens,
Christian & Barton LLP, Richmond, Virginia, and Douglas
W. Langdon and J. Kendrick Wells, IV, Frost Brown Todd LLC,
Louisville, Kentucky, for Plaintiffs and Counter-Defendants
Harbert, III, and Daniel R. Sullivan, Gentry, Locke, Rakes
& Moore LLP, Roanoke, Virginia, for Defendants and
Counterclaimants Bizzack Construction, LLC, Bizzack, Inc.,
and Brett Cool.
OPINION AND ORDER
P. Jones United States District Judge
diversity action seeking interpretation of the terms of
commercial liability insurance policies, Liberty Mutual Fire
Insurance Company and Liberty Insurance Corporation
(collectively, “Liberty Mutual”) seek a
declaration that they have neither a duty to defend nor a
duty to indemnify Bizzack Construction, LLC, Bizzack, Inc.,
and Brett Cool (collectively, “Bizzack”) in
lawsuits seeking damages resulting from certain highway
construction. Bizzack, in turn, seeks a declaration that
Liberty Mutual does have a duty to defend and indemnify
Bizzack in the underlying actions.
parties have filed cross-motions for summary judgment. I
conclude, applying Kentucky law, that Bizzack's Motion
for Partial Summary Judgment solely related to the duty to
defend must be granted and that Liberty Mutual's Motion
for Summary Judgment must be denied.
Factual Summary and Procedural History.
basic facts, taken from Liberty Mutual's Complaint,
Bizzack's Counterclaim, and the summary judgment record,
are as follows.
prior to November 2012, the Virginia Department of
Transportation (“VDOT”) contracted with Bizzack
to perform work in connection with a road-widening project on
U.S. Route 460 in Grundy, Virginia (the “460 Bypass
Project”). In November 2012, VDOT began notifying coal
owners that it had been “necessary to remove certain
coal” from their land “[d]uring the construction
of Route 460.” Black Letter 14, Ex. C, ECF No. 1-4.
Certain of these coal owners thereafter filed four separate
civil actions against Bizzack in the Circuit Court of
Buchanan County, Virginia, seeking compensation for lost
coal. Bizzack removed all four actions to this court. I
remanded three of the actions seeking damages to the state
court, Town of Grundy Indus. Dev. Auth. v. Bizzack
Constr., LLC, Nos. 1:14CV00031, 1:14CV00032,
1:14CV00034, 2014 WL 4104792 (W.D. Va. Aug. 19, 2014), where
they were voluntarily nonsuited pursuant to Va. Code Ann.
March and April 2015, the plaintiffs in these nonsuited
actions filed three new, but essentially identical civil
actions against Bizzack in the state court, where they remain
pending. The present action arises from these
underlying Coal Removal Suits. The underlying plaintiffs
allege that Bizzack illegally removed and sold their coal and
“damaged the remaining coal in place on the
[property].” Underlying Compl. 5-6, Ex. C, ECF No.
They raise state law claims for trespass, conversion,
assumpsit, gross negligence, conspiracy, and fraud.
Id. at 6-13; see also Compl. ¶ 50, ECF No. 1.
time the underlying Coal Removal Suits were filed, Bizzack
was insured by Liberty Mutual under commercial liability
policies (the “CGL Policies”) and commercial
liability umbrella policies (the “Umbrella
Policies”) (collectively, the “Policies”).
See Compl. ¶¶ 15-40, ECF No. 1; Pls.' Mem.
Supp. Summ. J. 2-3, ECF No. 34; id., Exs. 1-4, ECF
Nos. 34-1 to 34-4. Under the Policies, Liberty Mutual has a
duty to defend and indemnify Bizzack in any suit seeking
damages for “property damage” caused by an
“occurrence, ” subject to certain exclusions.
Compl. ¶¶ 18, 24, ECF No. 1.
action, the plaintiff Liberty Mutual seeks a declaration that
under the Policies it has neither a duty to defend nor a duty
to indemnify Bizzack in the underlying Coal Removal Suits.
Bizzack has filed a Counterclaim seeking a contrary
declaration that Liberty Mutual does have both a duty to
defend and a duty to indemnify Bizzack.
parties have now filed cross-motions for summary judgment,
which have been fully briefed and orally argued. Liberty
Mutual seeks summary judgment on the grounds that there is no
coverage under the Policies based upon the allegations of the
Coal Removal Suits because (1) there was no defined
“occurrence”; (2) there was no defined
“property damage”; (3) the so-called
“j(5)” exclusion from coverage applies; and (4)
the “expected or intended injury” exclusion
applies. Pls.' Mem. Supp. Summ. J. 15-28, ECF No. 34;
Pls.' Mem. Opp. Defs.' Summ. J. 4-17, ECF No. 38.
Bizzack seeks partial summary judgment solely as to the
question of Liberty Mutual's duty to defend. Bizzack also
argues that summary judgment is premature as to Liberty
Mutual's duty to indemnify on the ground that this
question cannot be resolved until certain operative facts
have been determined through the resolution of the Coal
Removal Suits. Defs.' Mem. Supp. Summ. J. 2, ECF No. 37.
reasons stated below, I will deny Liberty Mutual's Motion
for Summary Judgment and will grant Bizzack's Motion for
Partial Summary Judgment as to Liberty Mutual's duty to
Rule of Civil Procedure 56(a) requires a court to grant a
motion for summary judgment “if the movant shows that
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). In ruling on cross-motions for summary
judgment, the court must, “[w]ith respect to each
side's motion . . . view the facts and all justifiable
inferences arising therefrom in the light most favorable to
the nonmoving party.” Kolbe v. Hogan, 849 F.3d
114, 130 (4th Cir. 2017). The party seeking summary judgment
bears “the burden of showing the absence of a genuine
issue as to any material fact.” Adickes v. S. H.
Kress & Co., 398 U.S. 144, 157 (1970). However, the
party opposing summary judgment must nevertheless
“properly address [the movant]'s assertion of
fact” in order to proceed to trial. Fed.R.Civ.P. 56(e).
this is a diversity case, Virginia substantive law, including
Virginia choice-of-law rules, applies. Res. Bankshares
Corp. v. St. Paul Mercury Ins. Co., 407 F.3d 631, 635
(4th Cir. 2005) (“A federal court hearing a diversity
claim must apply the choice-of-law rules of the state in
which it sits.”). In Virginia, “the law of the
place where an insurance contract is written and delivered
controls issues as to its coverage.” Buchanan v.
Doe, 431 S.E.2d 289, 291 (Va. 1993). It is undisputed
that the Policies were delivered to Bizzack in Kentucky. The
parties accordingly agree that Kentucky substantive law
controls this case. Hr'g Tr. 3:2-4, Apr. 6, 2017, ECF No.
Kentucky, “the construction and legal effect of an
insurance contract is a matter of law for the court.”
Bituminous Cas. Corp. v. Kenway Contracting, Inc.,
240 S.W.3d 633, 638 (Ky. 2007). Where a policy is ambiguous,
it must be “liberally construed so as to resolve all
doubts in favor of the insured.” Id. (citing
Wolford v. Wolford, 662 S.W.2d 835, 838 (Ky. 1984)).
By contrast, “[w]here not ambiguous, the ordinary
meaning of the words . . . is to be followed.”
Id. (quoting James Graham Brown Found., Inc. v.
St. Paul Fire & Marine Ins. Co., 814 S.W.2d 273, 279
(Ky. 1991)). In addition, because the purpose of commercial
general liability insurance is to “provide broad
comprehensive insurance . . . all risks not expressly
excluded . . . are covered, including those not contemplated
by either party.” Id. “The insurer has a
duty to defend if there is any allegation which potentially,
possibly or might come within the coverage of the
policy.” Brown Found., 814 S.W.2d at 279.
“[O]nly an unequivocal, conspicuous and plain and clear
manifestation of the company's intent to exclude coverage
will defeat this expectation.” Bituminous Cas.
Corp., 240 S.W.3d at 638.
parties raise four issues regarding Bizzack's coverage
under the Policies, all of which are potentially ...