Houston Casualty Company v. B&H Freight, Inc. et al

Northern District of Illinois, ilnd-1:2016-cv-05201

Statement of Material Facts in Support of Motion for Judgment on the Pleadings of Plaintiff Houston Casualty Company STATEMENT by Houston Casualty Company

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Case: 1:16-cv-05201 Document #: 37 Filed: 02/16/17 Page 1 of 5 PageID #:167 IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS HOUSTON CASUALTY COMPANY) Plaintiff,)) CASE NO.: 1:16-cv-05201 v.)) JUDGE AMY J. ST. EVE B&H FREIGHT, INC., B&H SYSTEMS,) INC., MIDWEST STAR GROUP, INC., AND) SOMPO JAPAN INSURANCE COMPANY) OF AMERICA, AS SUBROGEE OF CANON) U.S.A., INC.) Defendants.) STATEMENT OF MATERIAL FACTS IN SUPPORT OF MOTION FOR JUDGMENT ON THE PLEADINGS OF PLAINTIFF HOUSTON CASUALTY COMPANY Plaintiff Houston Casualty Company ("HCC") hereby submits its statement of material facts in support of its Motion for Judgment on the Pleadings: 1. HCC is a corporation organized pursuant to the laws of the State of Texas, having its principal place of business in the State of Texas, and at all times relevant hereto operated on a surplus lines basis in the State of Illinois. 2. HCC issued Professional Liability Errors & Omissions Insurance Policy No. H714-104470 ("Policy"), to B&H Freight, Inc. ("Freight"), effective October 1, 2014 to October 1, 2015. (Doc. #11, Systems Ans. ¶¶ 12-13; Doc. #12, Freight Ans. ¶¶ 12-13.) 3. Freight and B&H Systems, Inc. are corporations organized pursuant to the laws of the State of Illinois, having their principal places of business in Cook County, Chicago, Illinois. (Doc. #11, Systems Ans. ¶ 2; Doc. #12, Freight Ans. ¶ 2.) 4. Freight does not own more than 50% of the issued and outstanding voting stock of Systems. (Doc. #11, Systems Ans. ¶ 30; Doc. #12, Freight Ans. ¶ 30.) 732848 1 Case: 1:16-cv-05201 Document #: 37 Filed: 02/16/17 Page 2 of 5 PageID #:168 5. On September 22, 2014, Freight submitted to HCC its "Professional Liability Errors and Omissions Insurance Renewal Application" ("Application"). (Doc. #11, Systems Ans. ¶¶ 10-11; Doc. #10, Freight Ans. ¶¶ 10-11.) 6. Systems is not named on the Application. (Doc. #11, Systems Ans. ¶¶ 31; Doc. #10, Freight Ans. ¶¶ 31.) 7. Systems has not been added to the Policy by Endorsement. (Doc. #11, Systems Ans. ¶¶ 32; Doc. #10, Freight Ans. ¶¶ 32.) 8. On November 13, 2014, Canon U.S.A., Inc. ("Canon") hired Freight as its broker for a shipment of four loads of cameras that were to be delivered on November 17, 2014 to QVC Network, Inc. ("QVC") in Suffolk, Virginia. (Doc. #11, Systems Ans. ¶ 14; Doc. #12, Freight Ans. ¶ 14; Doc. #28, Sompo Ans. ¶ 14.) 9. Freight retained Midwest Star Group, Inc. ("Midwest") as the carrier for one of the loads, with pick up to occur on November 14, 2014 at B&H Freight’s facility. (Doc. #11, Systems Ans. ¶ 15; Doc. #12, Freight Ans. ¶ 15; Doc. #20, Midwest Ans. ¶ 15; Doc. #28, Sompo Ans. ¶ 15.) 10. Midwest is a corporation organized pursuant to the laws of the State of Illinois, having its principal place of business in DuPage County, Illinois. (Doc. #20, Midwest Ans. ¶ 3.) 11. On November 14, 2014, Midwest picked up the load for delivery to QVC. (Doc. #11, Systems Ans. ¶ 16; Doc. #12, Freight Ans. ¶ 16; Doc. #20, Midwest Ans. ¶ 16; Doc. #28, Sompo Ans. ¶ 16.) 12. On November 15, 2014, the cameras were discovered missing from Midwest’s trailer, and in turn, on November 17, 2014, Canon presented its "Loss and Damage Claim" to Freight, asserting that it sustained a loss as a result of the theft of the cameras. (Doc. #11, Systems 732848 2 Case: 1:16-cv-05201 Document #: 37 Filed: 02/16/17 Page 3 of 5 PageID #:169 Ans. ¶¶ 17-18; Doc. #12, Freight Ans. ¶¶ 17-18; Doc. #20, Midwest Ans. ¶¶ 17-18; Doc. #28, Sompo Ans. ¶¶ 17-18.) 13. On February 24, 2015, Freight reported Canon’s claim to HCC under the Policy. (Doc. #11, Systems Ans. ¶¶ 19; Doc. #12, Freight Ans. ¶¶ 19.) 14. On September 17, 2015, Sompo Japan Insurance Company of America ("Sompo"), as subrogee of Canon, filed suit against Freight, B&H Systems, Inc. ("Systems"), and Midwest alleging that Freight, Systems, and Midwest were responsible for violating "statutory, common law, and contractual duties", and negligence in "their handling of the Cargo", and that if Freight was determined to be a broker, it should have known Midwest was unreliable and underinsured as to be in breach of its agreement with Canon and its duties as a broker ("Sompo Litigation"). (Doc. #11, Systems Ans. ¶¶ 23-24; Doc. #12, Freight Ans. ¶¶ 23-24; Doc. #20, Midwest Ans. ¶¶ 23-24; Doc. #28, Sompo Ans. ¶¶ 23-24.) 15. Sompo is an insurer domiciled in New York with its place of business in New York. (Doc. #28, Sompo Ans. ¶ 4.) 16. HCC agreed, subject to reservation of rights, to defend Freight in the Sompo Litigation. (Doc. #11, Systems Ans. ¶¶ 21-22, 25-26; Doc. #12, Freight Ans. ¶¶ 21-22, 25-26.) 17. The within lawsuit is a controversy between citizens of different states, as to give rise to complete diversity of citizenship within the meaning of 28 U.S.C. § 1332; the matter in controversy exceeds the sum value of $75,000.00, exclusive of interest and costs; and, an actual, justiciable controversy exists as to whether Freight and/or Systems are entitled to coverage for the Sompo Litigation under the Policy, such that HCC is entitled to a declaration of its rights, duties, and obligations under its Policy pursuant to Rule 57 of the Federal Rules of Civil Procedure and 28 U.S.C. § 2201. (Doc. #11, Systems Ans. ¶¶ 5-8; Doc. #12, Freight Ans. ¶¶ 5-8.) 732848 3 Case: 1:16-cv-05201 Document #: 37 Filed: 02/16/17 Page 4 of 5 PageID #:170 18. This matter is properly venued with the Court pursuant to 28 U.S.C. § 1391. (Doc. #11, Systems Ans. ¶¶ 9; Doc. #12, Freight Ans. ¶¶ 9.) Respectfully submitted,/s/Crystal L. Maluchnik______________ STEVEN G. JANIK (0021934) CRYSTAL L. MALUCHNIK (0077875) JANIK L.L.P. 9200 South Hills Blvd., Suite 300 Cleveland, Ohio 44147 Tel: 440-838-7600 * Fax: 440-838-7601 Email: Steven.Janik@janiklaw.com Crystal.Maluchnik@janiklaw.com Mail: Janik L.L.P. P.O. Box 470550 Cleveland, Ohio 44147 Attorneys for Plaintiff Houston Casualty Company 732848 4 Case: 1:16-cv-05201 Document #: 37 Filed: 02/16/17 Page 5 of 5 PageID #:171 CERTIFICATE OF SERVICE The undersigned hereby certifies that a copy of the foregoing was filed electronically this 16th day of February, 2017. Notice of this filing will be sent to the Parties by operation of the Court’s electronic filing system. Parties may access this filing through the Court’s system./s/Crystal L. Maluchnik One of the Attorneys for Plaintiff Houston Casualty Company 732848 5