United States District Court, E.D. Virginia, Richmond Division
HANNAH LAUCK UNITED STATES DISTRICT JUDGE.
matter comes before the Court on five motions:
Plaintiffs Waste Management, Inc., Waste Management of
Virginia, Inc., King George Landfill, Inc., and King George
Landfill Properties, LLC's (collectively, the "Waste
Management Plaintiffs" or the "WM Plaintiffs")
Cross-Motion for Summary Judgment on the Duty to Defend of
Defendants Great Divide Insurance Company and Nautilus
Insurance Company (the "Waste Management Plaintiffs'
Motion for Summary Judgment"), (ECF No. 69);
Defendants Great Divide Insurance Company ("Great
Divide") and Nautilus Insurance Company's
("Nautilus," and, collectively with Great Divide,
the "Insurance Company Defendants") Motion for
Summary Judgment (the "Insurance Company Defendants'
Motion for Summary Judgment"), (ECF No. 71);
Insurance Company Defendants' "Motion for Entry of
Order Permitting the Insurer Defendants to File Under Seal
Exhibit H to Their Opposition to Plaintiffs' Summary
Judgment Motion" (the "Motion to Seal"), (ECF
Waste Management Plaintiffs' "Motion to Strike
Reference to and Reliance Upon Extrinsic Evidence in
Defendant's Summary Judgment Motion and Opposition Brief
(the "Motion to Strike Extrinsic Evidence"), (ECF
No. 78); and, 5. The Waste Management Plaintiffs'
"Motion to Strike Defendants' Reply to
Plaintiffs' Summary Judgment Opposition Brief (the
"Motion to Strike Reply"),  (ECFNo.82).
Waste Management Plaintiffs and the Insurance Company
Defendants filed Cross Motions for Summary Judgment pursuant
to Federal Rule of Civil Procedure 56. The Waste
Management Plaintiffs and the Insurance Company Defendants
have responded to the Cross Motions. (ECF Nos. 73, 74.) The
Waste Management Plaintiffs did not respond to the Insurance
Company Defendants' Motion to Seal and the time to do so
has expired. The Insurance Company Defendants responded to
the Motion to Strike Extrinsic Evidence and the Motion to
Strike Reply, (ECF Nos. 84, 86), and the Waste Management
Plaintiffs replied, (ECF Nos. 87, 88).
Court dispenses with oral argument because the materials
before it adequately present the facts and legal contentions,
and argument would not aid the decisional process. The Court
exercises jurisdiction pursuant to 28 U.S.C. §
1332. For the reasons stated below, the Court
will grant the Insurance Company Defendants' Motion for
Summary Judgment and deny the Waste Management
Plaintiffs' Motion for Summary Judgment.
Factual Background  and Federal Court Procedural
Waste Management Plaintiffs filed their Amended Complaint
seeking a declaration that the Insurance Company Defendants
must provide them with a defense in an ongoing litigation
filed in the Circuit Court of King George County (the
"Underlying Litigation") and asserting breach of
contract claims based on the Insurance Company
Defendants' refusal to provide such a defense. Because
the outcome of the Motions pending before the Court turn on
the allegations in the Underlying Litigation, the Court will
first introduce that litigation. After discussing the
procedural history in this Court, the Court will evaluate the
contract provisions upon which the Waste Management
Plaintiffs base their claims of a duty to defend.
The Underlying Litigation 
October 18, 2011, Arthur Robinson suffered injuries from an
accident at the King George Landfill (the
"Landfill") in Virginia. At the time, Robinson
worked for (the now defunct) TAC Transport, LLC ("TAC
Transport") as a commercial garbage truck driver.
day of the accident, Robinson drove a TAC Transport trailer
to the Landfill to dispose of garbage. The Landfill provided
equipment to commercial drivers, including a 'tipper
device" in order to raise, tip, and lower trailers to
unload garbage. (Am. Compl. ¶ 13, ECF No. 6; Am. Compl.
Ex. A "Underlying Litig. Compl." ¶ 11, ECF No.
Robinson waited in line to dump the contents from his
trailer, the tipper malfunctioned when operating with the
trailer ahead of Robinson, driven by Earl Kennedy. Robinson
claims that nearby Landfill employees should have assisted
Kennedy, but they did not. Instead, Kennedy-also a TAC
Transport employee-asked for Robinson's help to manually
close the rear door of Kennedy's trailer. Robinson
assist in trying to free the lodged rear door, Robinson
climbed onto the Landfill's tipping platform. Once on the
platform, Robinson assisted Kennedy and two other
unidentified people in "us[ing] a wooden 2x4 to apply
pressure to the door in an attempt to lift it." (Mem.
Supp. Pis. Mot. Summ. J. ¶ 11, ECF No. 72.) Robinson
testified during the Underlying Litigation that "Kennedy
gave Robinson 'the okay that it was okay to go ahead
and'" assist in trying to free the door.
(Id. (quoting Mem. Supp. Pis. Mot. Summ. J. Ex. A
"Robinson Depo." 150-54, ECF No. 72-1).) Robinson
also testified that "[t]hen just when the door came
free, I slipped and went off-went off the back."
(Id. (quoting Robinson Depo. 165).) Robinson fell
backward off the Landfill's tipper, landing on the ground
fifteen to twenty feet below, and sustaining serious
injuries. Although Robinson described his fall off the
Landfill's tipper as due to a slip, he testified that he
had "no idea" what he slipped on. (Robinson Dep.
167-68.) He noted that he "didn't see any problems
with the tipper" on the day of his fall. (Id.
October 4, 2013, Robinson filed the complaint in the King
George County Circuit Court, alleging one count of negligence
each against Waste Management, Inc., Waste Management of
Virginia, Inc., King George Landfill, Inc., and King George
Landfill Properties, LLC,  as entities that "owned, operated,
managed and/or w[ere] responsible for the Landfill."
(Am. Compl. ¶ 17; Underlying Litig. Compl. ¶¶
4-7, 23-46.) In the Underlying Litigation, Robinson contends
that the Waste Management Plaintiffs' negligent actions
caused him to fall from the Landfill's tipper, which
resulted in his injuries. Robinson seeks $10, 000, 000 in
damages jointly and severally from those four entities.
Robinson did not include any claim against TAC Transport in
the Underlying Litigation.
case, the WM Plaintiffs seek representation from the
Insurance Company Defendants for the Waste Management
Plaintiffs' defense in the Underlying Litigation. They
assert three contractual bases for the duty to defend, the
first of which is a service agreement, while the other two
are insurance contracts. First, the Waste Management
Plaintiffs cite a transportation service agreement between
TAC Transport and Waste Management of Maryland, Inc. (the
"Transportation Agreement"). The Waste Management
Plaintiffs claim the Transportation Agreement would obligate
TAC Transport, as Robinson's employer, to defend them in
the Underlying Litigation because TAC Transport's
negligence caused Robinson's injuries. Second, the WM
Plaintiffs contend that the duty to defend arises under a
Commercial General Liability Policy (the "CGL"
Policy) between TAC Transport and Great Divide. Finally, the
Waste Management Plaintiffs contend a duty to defend arises
under a Business Auto Policy (the "BA Policy")
between TAC Transport and Great Divide. In Section III
below, the Court will discuss seriatim the Waste Management
Plaintiffs' arguments for seeking defense costs under the
Transportation Agreement, the CGL Policy, and the BA Policy.
Procedural History Before This Court
Waste Management Plaintiffs filed their Complaint in this
Court asserting six claims against the Insurance Company
Defendants and Arthur Robinson. (See generally CompL,
ECF No. 1.) While these six claims pertain to three insurance
contracts,  only two of the insurance contracts are
relevant to the Court's analysis of the current
cross-motions. On February 14, 2017, the Waste
Management Plaintiffs filed their Amended Complaint asserting
the same six claims against the Insurance Company Defendants
and Robinson. (See generally Am. Compl., ECF No. 6.)
On March 13, 2017, after an extension of time, the Insurance
Company Defendants filed an answer and counterclaim. (ECF No.
15.) With the Court's permission, on April 13, 2017, the
Insurance Company Defendants filed their Corrected Answer to
the Amended Complaint and Counterclaim. (ECF No. 24.)
April 18, 2017, the Court referred several
motions to the Honorable David J. Novak, United
States Magistrate Judge, for Report and Recommendation,
including the Waste Management Plaintiffs' Motion to
Dismiss Counterclaims, (ECF No. 20). (ECF No. 27.) On April
21, 2017, the Court also referred the Insurance Company
Defendants' Motion to Dismiss Underlying Claimant Parties
for Lack of Standing, (ECF No. 28), and Motion to Drop the
Waste Management Subsidiaries as Parties Hereto or Declare
Them to be Nominal or Otherwise Unnecessary Parties, (ECF No.
29), to the Magistrate Judge for Report and Recommendation.
(ECF No. 34.) Additionally, on May 1, 2017, the Court
referred the Insurance Company Defendants' Motion to
Strike, (ECF No. 37), to the Magistrate Judge for
consideration and incorporation into his Report and
Recommendation. (ECF No. 41.)
30, 2017, the Magistrate Judge filed his Report and
Recommendation (the "R&R"). (ECF No. 50.) In
the R&R, Magistrate Judge Novak recommended that
Plaintiffs' Motion to Dismiss (ECF No. 20) be DENIED as
to Counterclaim Counts I-A, II-A, III and V-A, and GRANTED as
to Counterclaim Counts I-B, II-B, IV and V-B, that
Defendants' Motion to Dismiss Underlying Claimant Parties
(ECF No. 28) be DENIED as MOOT, that Defendants' Motion
to Drop (ECF No. 29) be DENIED, and that Defendants'
Motion to Strike (ECF No. 37) be GRANTED.
(R&R 17, ECF No. 50.) The Magistrate Judge notified the
parties that they had 14 days to file an objection to the
14, 2017, the Insurance Company Defendants filed objections,
citing numerous issues with the R&R. (See ECF
No. 52.) On October 3, 2017, the Court overruled the
Insurance Company Defendants' objections and adopted the
findings and recommendations in the R&R. (See
Oct. 3, 2017 Order, ECF No. 54.) In that same October 3, 2017
Order, the Court instructed the Insurance Company Defendants
to file an Amended Answer and Counterclaim that complied with
the R&R's findings.
October 9, 2017, the Insurance Company Defendants filed their
Amended Answer. (ECF No. 55.) In their Amended Answer, the
Insurance Company Defendants assert that the insurance
contracts do not create a duty to defend or to indemnify. In
their Counterclaim, the Insurance Company Defendants also
seek a declaration that no duty to defend or indemnify exists
under the CGL Policy, the BA Policy, or the Excess Policy. On
October 16, 2017, the Waste Management Plaintiffs filed an
Answer to the Insurance Company Defendants' Counterclaim.
(ECF No. 56.)
December 1, 2017, the Court held an initial pretrial
conference with all parties. In the Initial Pretrial Order,
issued on December 5, 2017, the Court ordered that all
dispositive motions be filed no later than May 3, 2018, and
responses to those motions be filed no later than 20 days
after the dispositive motion was filed. (Dec. 5, 2017 Order
5, ECF No. 61.)
1, 2018, the Court entered an Order clarifying the scope of
briefing for summary judgment and granting the parties
additional time, until May 7, 2018, to file their summary
judgment motions. (ECF No. 68.) The Insurance Company
Defendants and the Waste Management Plaintiffs filed their
Motions for Summary Judgment. Each party filed its response
to the opposing party's Motion for Summary
Judgment. This matter is now ripe for disposition.
Applicable Legal Standards
Standard of Review; Motions for Summary Judgment
judgment under Rule 56 is appropriate only when the Court,
viewing the record as a whole and in the light most favorable
to the nonmoving party, determines that there exists no
genuine issue of material fact, and that the moving party is
entitled to judgment as a matter of law. See Celotex
Corp. v. Catrett, 477 U.S. 317, 322-24 (1986);
Liberty Lobby, 477 U.S. at 248-50. "The
interpretation of an insurance policy is a question of law
that is particularly well suited for summary judgment."
Minn. Lawyers Mut. Ins. Co. v. Protostorm LLC, 197
F.Supp.3d 876, 882 (E.D. Va. 2016) (citing St. Paul Fire
& Marine Ins. Co. v. Jacobson, 826 F.Supp. 155, 157
(E.D. Va. 1993), aff'd, 48 F.3d 778 (4th Cir.
fact is material if the existence or non-existence thereof
could lead a jury to different resolutions of the case."
Thomas v. FTS USA, LLC, No. 3:13cv825, 2016
WL3653878, *4 (E.D. Va. June 30, 2016) (citing Liberty
Lobby, 477 U.S. at 248). Once a party has properly filed
evidence supporting its motion for summary judgment, the
nonmoving party may not rest upon mere allegations in the
pleadings, but instead must set forth specific facts
illustrating genuine issues for trial. Celotex Corp.,
411 U.S. at 322-24. The parties must present these in
the form of exhibits and sworn affidavits. Fed.R.Civ.P.
views the evidence and reasonable inferences drawn therefrom
in the light most favorable to the nonmoving party.
Liberty Lobby, 411 U.S. at 255. Whether an inference
is reasonable must be considered in conjunction with
competing inferences to the contrary. Sylvia Dev. Corp.
v. Calvert Cty., 48 F.3d 810, 818 (4th Cir. 1995).
Nonetheless, the nonmoving "party is entitled 'to
have the credibility of his [or her] evidence as forecast
assumed.'" Miller v. Leathers, 913 F.2d
1085, 1087 (4th Cir. 1990) (en banc) (quoting
Charbonnages de France v. Smith, 597 F.2d 406, 414
(4th Cir. 1979)).
end, the non-moving party must do more than present a
scintilla of evidence in its favor.
Rather, the non-moving party must present sufficient evidence
such that reasonable jurors could find by a preponderance of
the evidence for the non-movant, for an apparent dispute is
not genuine within contemplation of the summary judgment rule
unless the non-movant's version is supported by
sufficient evidence to permit a reasonable jury to find the
facts in his [or her] favor.
Sylvia Dev. Corp., 48 F.3d at 818 (internal
quotations, citations, and alterations omitted). The ultimate
inquiry in examining a motion for summary judgment is whether
there is "sufficient evidence favoring the nonmoving
party for a jury to return a verdict for that party. If the
[nonmoving party's] evidence is merely colorable, or is
not significantly probative, summary judgment may be
granted." Liberty Lobby, 477 U.S. at 249-50
(internal citations omitted). Where the court is faced with
cross-motions for summary judgment, as in the instant case,
the court must review each motion separately on its own
merits. Rossignol v. Voorhaar, 316 F.3d 516, 523
(4th Cir. 2003).
Contract Interpretation Under Maryland Law
parties properly agree that the Court must analyze the
insurance policies pursuant to Maryland contract law. See
Klein v. Verizon Commc 'ns, Inc., 61A Fed. App'x
304, 307-08 (4th Cir. 2017) (finding that a federal court
sitting in diversity must apply the choice-of-law provisions
of the state in which it sits, and that under Virginia law
"lex loci contractus [or the law of the place of
the contract] serves as the default rule ... [h]owever,
choice of law contractual provisions are an exception to that
general rule"); Buchanan v. Doe, 246 Va. 67,
70-71 (1993) (finding that under Virginia state law,
"the law of the place where an insurance contract is
written and delivered controls issues as to its
coverage"). (Mem. Supp. Defs. Mot. Summ. J. 15; Mem.
Supp. Pis. Mot. Summ. J. 10.)
the majority of other states, Maryland does not follow the
rule that insurance polices are to be most strongly construed
against the insurer." Capital City Real Estate, LLC
v. Certain Underwriters at Lloyd's London, 788 F.3d
375, 379 (4th Cir. 2015) (quoting Empire Fire
& Marine Ins. Co. v. Liberty Mut. Ins. Co., 117
Md.App. 72 (1997)). Rather, under Maryland law, "[i]n
interpreting the provisions of an insurance policy, [a
court]... rel[ies] on the same principles that [it]...
appli[es] to traditional contracts." White Pine Ins.
Co. v. Taylor, 233 Md.App. 479, 498 (Md. Ct. Spec. App.
2017) (citing Bailer v. Erie Ins. Exck, 344 Md. 515,
521 (2000)); Capital City, 788 F.3d at 379
("Maryland law applies ordinary contract principles to
follows the objective interpretation of contracts.
Spacesaver Sys., Inc. v. Adam, 440 Md. 1, 8 (2014).
Under this process, a court must
determine from the language of the agreement itself what a
reasonable person in the position of the parties would have
meant at the time it was effectuated. In addition, when the
language of the contract is plain and unambiguous there is no
room for construction, and a court must presume that the
parties meant what they expressed. In these circumstances,
the true test of what is meant is not what the parties to the
contract intended it to mean, but what a reasonable person in
the position of the parties would have thought it meant.
Id. (quoting Gen. Motors Acceptance Corp. v.
Daniels, 303 Md. 254, 261 (1985)). "[I]f an
insurance policy is ambiguous, it will be construed liberally
in favor of the insured and against the insurer as
drafter of the instrument" Capital City, 788 F.3d
at 379 (quoting Empire Fire & Marine Ins.
Co., Ill. Md.App. 72) (emphasis in original).
United States Court of Appeals for the Fourth Circuit has
recognized that a court's "primary task in
interpreting an insurance policy, as with any contract, is to
apply the terms of the contract itself." Pa.
Nat'l Mut. Cas. Ins. Co. v. Roberts, 668 F.3d 106,
112 (4th Cir. 2012) (quoting Cole v. State Farm Mut. Ins.
Co., 359 Md. 298 (2000)). To this end, a court
"must 'look first to the contract language employed
by the parties to determine the scope and limitations of the
insurance coverage.'" Id. (quoting
Cole, 359 Md. 298). A court applying Maryland
contract law "give[s] the words of the contract their
ordinary and accepted meaning, looking to the intention of
the parties from the instrument as a whole." White
Pine Ins. Co., 233 Md.App. at 498 (quoting Phila.
Indent. Ins. Co. v. Md. Yacht Club, Inc., 129 Md.App.
455, 467-68 (1999)). "A contract must be construed as a
whole, and effect given to every clause and phrase, so as not
to omit an important part of the agreement."
Baltimore Gas & Elec. Co. v. Commercial Union Ins.
Co., 113 Md.App. 540, 554 (Md. Ct. Spec. App. 1997).
reviewing an insurance contract under Maryland law must
consider the entire agreement, but because
"'exclusions are designed to limit or avoid
liability,' limitations on coverage must be construed
strictly and narrowly and 'in favor of a finding of
coverage.'" White Pine Ins. Co., 233
Md.App. at 500 (quoting Megonnell v. UnitedServs. Auto.
Ass'n, 368 Md. 633, 656 (2002)). The insurer
"must draft the language of an exclusion
'conspicuously, plainly and clearly' and 'clearly
set forth' any limitation on coverage to the
insured." Id. (quoting Megonnell, 368
Md. at 656.) "[I]n all cases, the insurer bears the
burden of showing that an exclusion applies."
Cornerstone Title & Escrow, Inc. v. Evanston Ins.
Co., 555 Fed.Appx. 230, 235 (4th Cir. 2014).
The Duty to Defend Under Maryland Contract Law
Maryland law, an insurer's duty to defend an insured
"is 'broader than the duty to indemnify.'"
Cowan Sys., Inc. v. Harleysville Mut. Ins. Co., 457
F.3d 368, 372 (4th Cir. 2006) (quoting Litz v. State Farm
Fire & Cas. Co., 346 Md. 217 (1997)). Maryland state
courts clarify that "[a]n insurance company has a duty
to defend its insured for all claims that are potentially
covered under the policy." Walk v. Hartford Cas.
Ins. Co., 382 Md. 1, 15 (2004) (citing Brohawn v.
Transamerica Ins. Co., 276 Md. 396, 408 (1975)). As the
Fourth Circuit has recognized "[e]ven a slim possibility
can constitute a 'potentiality.'"
Cornerstone, 555 Fed.Appx. at 234 (comparing
Walk, 382 Md. 1, with Litz v. State Farm Fire
& Cas. Co., 346 Md. 217 (1997)). Indeed, Maryland
courts expand on this precept when observing that "by
its contract, the insurer is obligated to provide a defense
to a covered claim, even if the claim will ultimately
fail." Baltimore Gas & Elec. Co., 113
Md.App. at 574. However, "[t]he insurer is not obligated
to provide a defense to a suit that does not assert a covered
claim." Id. If a court finds that a duty to
defend exists over a part of the case, then the insurer must
provide a defense to the entire case. Cornerstone,
555 Fed.Appx. at 235-36 (citing Perdue Farms, Inc. v.
Travelers Cas. & Sur. Co. of Am., 448 F.3d 252, 258
(4th Cir. 2006)).
determine whether a duty to defend exists under Maryland law,
a court undertakes a two-part inquiry. See Capital
City, 788 F.3d at 379 (quoting St. Paul Fire &
Marine Ins. Co.,292 Md. 187). First, the Court asks
"what is the coverage and what are the defenses under
the terms and requirements of the insurance policy?"
Id. Second, the Court must inquire whether "the
allegations in the tort action potentially bring the tort
claim within the policy's coverage?" Id.
"The first question focuses upon the language and
requirements of the policy, and the second question focuses
on the allegations of the tort suit. At times these two
questions involve separate and distinct matters, and at other
times they are intertwined, perhaps involving an identical
issue." Id. If any doubt exists regarding the