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BITCO General Insurance Corp. v. Kelluem

United States District Court, S.D. Georgia, Augusta Division

December 21, 2017

BITCO GENERAL INSURANCE COMPANY, Plaintiff,
v.
EDWARD KELLUEM, FRANK POWELL, GRANGE INDEMNITY INSURANCE COMPANY, GRANGE MUTUAL CASUALTY COMPANY, CHARLES NICHOLAS BRANSON, and CALVIN "RICKY" DELOACH, Defendants.

          ORDER

          J. RANDAL HALL, CHIEF JUDGE

         Before the Court are motions for partial summary judgment from Plaintiff BITCO General Insurance Company ("BITCO") (docs. 57, 59) and Defendants Grange Indemnity Insurance Company and Grange Mutual Casualty Company ("Grange") (doc. 60). The Clerk has given the opposing parties notice of the summary judgment motion and the summary judgment rules, of the right to file affidavits or other materials in opposition, and the consequences of default.[1] (Doc. 61.) Therefore, the notice requirements of Griffith v. Wainwright, 772 F.2d 822, 825 (11th Cir. 1985) (per curiam), have been satisfied. The matters have been fully briefed and are ripe for consideration.[2]

         I. BACKGROUND

         On July 24, 2013, Defendant Edward Kelluem was returning to G&H Timber and Harvesting ("G&H") after unloading a shipment of timber. (Compl., Doc. 1, ¶ 52.) As Kelluem began to cross a railroad, the tractor he was driving collided with a locomotive operated by Defendants Charles Nicholas Branson and Calvin "Ricky" Deloach. (Id.) The tractor belonged to Defendant Frank Powell and was insured by Grange.[3] (Holt Decl., Doc. 57, Attach. 4, ¶ 10; Doc. 1, Attach. 3, at 2.) Powell had agreed to let G&H use the tractor to haul lumber and G&H would pay Powell according to the miles the tractor was driven and the amount of lumber hauled.[4] (Holt Decl., ¶ 10.) G&H, in turn, assigned the tractor to Kelluem. (Id.) G&H had business auto and commercial insurance policies with BITCO. (Olson Decl., Doc. 57, Ex. 7 ¶ 3.)

         Branson and Deloach each brought a separate lawsuit against Kelluem, Powell, and G&H in Bibb and Burke County, Georgia (the "State Action") . (Doc. 57, Attach. 2, at 1; Doc. 57, Attach. 3, at 1.) Branson and Deloach claimed Kelluem negligently failed to yield at a railroad crossing and that G&H was vicariously liable for both Kelluem and Powell. (Doc. 57, Attach. 2, at 3; Doc. 57, Attach. 3, at 5.)

         Grange retained counsel to defend Kelluem and Powell, and BITCO retained counsel for G&H, subject to a reservation of rights. (Compl. ¶¶ 74-75; Olson Decl., ¶ 9.) On March 31, 2015, BITCO contacted Grange requesting that Grange defend G&H and assume the associated costs but Grange refused. (Compl. ¶ 90.) On April 22, 2016, Branson's counsel contacted BITCO and claimed that Kelluem and Powell are insureds under BITCO's policy. (Doc. 82, Attach. 4, at 1.)

         BITCO initiated this action seeking a declaratory judgment establishing that (a) Grange has a duty to defend and indemnify G&H in the State Action and therefore is obligated to reimburse BITCO for the costs it has incurred defending G&H thus far; and (b) BITCO has no duty to defend and indemnify Kelluem or Powell in the State Action. (Compl. ¶ 185.) Presently, Grange and BITCO have filed cross-motions for partial summary judgment on the issue of whether Grange has a duty to defend G&H and reimburse BITCO. (Docs. 59, 60.) Additionally, BITCO has filed a separate motion for partial summary judgment on the issue of whether it has a duty to defend and indemnify Kelluem or Powell. (Doc. 57.)

         II. STANDARD

         A motion for summary judgment will be granted if there is no disputed material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The Court must view facts in the light most favorable to the non-moving party and draw all inferences in its favor. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The movant initially bears the burden of proof and must point to evidence on file which demonstrates the absence of a disputed material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The movant must also show no reasonable jury could find for the non-moving party on any of the essential elements. Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993) . If the movant carries its burden, the non-moving party must come forward with significant, probative evidence showing there is a material fact in dispute. Id., at 1116. The non-moving party cannot simply rely on its pleadings and must respond with affidavits or other forms provided by Federal Rule of Civil Procedure 56. Id. at 1116 n.3.

         III. DISCUSSION

         A. Grange's Duty to Defend G&H[5]

         Through its motion, Grange seeks to invoke two separate exclusions precluding coverage. Grange argues that G&H is not covered by its policy since Kelluem was using Powell's tractor as a "for hire motor carrier" and was hauling cut trees. For its part, BITCO disputes whether the exclusions Grange cites are part of its policy. Additionally, BITCO claims that the policy's exclusions do not apply.

         1. Grange's AutoAccel Eligibility Document

         Grange claims that the exclusions listed in the "AutoAccel Eligibility" document ("Eligibility Document") were included in Powell's application, which was expressly incorporated into the policy. The Eligibility Document excludes coverage for risks including " [v]ehicles hauling . . . cut trees [and] logging" and "[v]ehicles operated as a 'for hire motor carrier' that require Hired Auto Liability Coverage." (Doc. 60-2, at 66.) BITCO responds that the Eligibility Document was a guideline for Grange's agents and not part of Powell's application. A writing may be incorporated into an agreement by reference or physical attachment. West v. Rudd, 249 S.E.2d 76, 79 (Ga. ...


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