throbber
Case: 4:20-cv-00500-DDN Doc. #: 1 Filed: 09/19/19 Page: 1 of 15 PageID #: 1
`
`IN THE UNITED STATES DISTRICT COURT FoR THà
`SO U T H E R N D ISTR IC T O F FL O R ID A
`
`FILED B
`
`D.C.
`
`SEF 1 9 201S
`
`
`
`t'/krLll lîtkk s o,ouw .v.A
`
`D EL M O N TE FRESH PR O D UC E
`N .A ., IN C ., a Florida corporation
`
`Plaintiff,
`
`V .
`
`C A SE N O .:
`
`AM C O IN SUR AN C E CO M PA N Y
`an O hio corporation; and
`TH E M IDW EST 'S BEST
`P R O D U C E C O M PA N Y ,
`a M issouri corporation
`
`D efendants.
`
`C O M PL A IN T FO R D EC L A R A T O R Y JU D G M EN T
`
`DEL M ONTE FRESH PRODUCE N.A., INC. C DeI M ontess) tsles this
`
`Com plaint for D eclaratory Judgm ent against defendants A M C O IN SUR A NC E
`
`COM PANY (<<AM CO '') and THE M IDW EST'S BEST PRODUCE
`
`COM PANY D/B/A M IDW EST BEST PRODUCE, INC C M idwest Bestsg)
`
`pursuant to Rule 57 of the Federal Rules of Civil Procedure and 28 U .S.C. jj 1332
`
`and 2201 et seq., seeking a declaration that D el M onte is an additional insured
`
`under liability policies of insurance issued to M idw est B est by A M CO , and that
`
`A M CO has a direct and im m ediate obligation to defend and indem nify D el M onte
`
`under those policies for a1l claim s against it.
`
`

`

`Case: 4:20-cv-00500-DDN Doc. #: 1 Filed: 09/19/19 Page: 2 of 15 PageID #: 2
`
`PA R T IE S
`
`Plaintiff D el M onte is a dom estic corporation organized and existing
`
`under the law s of the state of Florida w ith its principal place of business in Coral
`
`G ables, Florida, and is a corporate citizen of the State of Florida.
`
`2.
`
`D efendant A M CO is a corporation organized and existing under the
`
`law s of the State of Iow a w ith its principal place of business in Des M oines, Iowa
`
`and is a corporate citizen of the State of lowa.
`
`D efendant M idw est Best is a corporation organized and existing under
`
`the law s of the State of M issouri w ith its principal place of business in St. Louis,
`
`M issouri, and is a corporate citizen of the State of M issouri.
`
`JU R ISD IC TIO N A N D V E N U E
`
`4. This Court has jurisdiction of this dispute based upon Rule 57 of the
`
`Federal Rules of Civil Procedure and 28 U.S.C. j 2201 et.seq. and 28 U .S.C. j
`
`1332. A n actual controversy exists as to w hether A M CO has a direct and
`
`im m ediate duty to defend and indem nify D el M onte for claim s asserted by various
`
`consumers against Del M onte for bodily injury allegedly occurring from
`
`contam inated vegetables provided by M idw est B est to D el M onte for distribution
`
`to those consum ers, including claim s asserted in tw o underlying law suits and in
`
`connection with non-lawsuit claim s asserted by 174 claim ants (ttunderlying Suits
`
`

`

`Case: 4:20-cv-00500-DDN Doc. #: 1 Filed: 09/19/19 Page: 3 of 15 PageID #: 3
`
`and Claim s''). True and accurate copies of the complaints in the two underlying
`
`law suits are attached as Exhibits A and B.
`
`The states of citizenship of D el M onte, A M CO and M idw est Best are
`
`com pletely different and diverse.
`
`6. The amount in controversy exceeds the minim um jurisdiction am ount
`
`of $75,000. The policy lim its at issue in this case, the claim s for com pensatory and
`
`punitive dam ages alleged against D el M onte in the U nderlying M atters for which it
`
`seeks
`
`Coverage,
`
`and the am ount of attorney's fees and expenses that w ill be
`
`incurred by D el M onte for the defense of the underlying law suits each exceed
`
`$75,000, exclusive of interest and costs. 28 U .S.C. j 1446; 28 U .S.C. j 1332 (a).
`
`V enue is proper in this Court because defendants do business in this
`
`judicial district, are subject to the Court's personal jurisdiction, and a substantial
`
`part of the events or omissions giving rise to the claim occurred in this judicial
`
`district. 28 U.S.C. j 1391.
`
`FA C T U A L A L L E G A T IO N S
`
`A . D eI M onte's R elationship w ith M idw est B est
`
`8.
`
`D el M onte is one of N orth A m erica's leading vertically integrated
`
`producers, m arketers and sellers of quality fresh and fresh-cut fruits and
`
`vegetables.
`
`

`

`Case: 4:20-cv-00500-DDN Doc. #: 1 Filed: 09/19/19 Page: 4 of 15 PageID #: 4
`
`9.
`
`Onc of D el M onte's products is a prepackaged ready-to-eat vegetable
`
`tray sold in various venues, including Kw ik Trip stores in M innesota, W isconsin
`
`and other states. The vegetable trays are typically com prised of broccoli,
`
`cauliflow er, celery sticks, carrots and dill dip supplied by vendors including
`
`M idwest Best.
`
`10. At all tim es relevant, D el M onte purchased from M idw est Best
`
`broccoli croxvns, celery and caulifower (çûvegetables''). The vegetables were
`
`included within Del M onte vegetable trays it sold to various custom ers, including
`
`but not lim ited to K wik Trip convenience stores in M innesota, W isconsin and other
`
`M idw estern states.
`
`B . C yclospora C laim s A sserted A gainst D eI M onte
`
`1 1 . In early June 20 18, D el M onte w as inform ed that state health
`
`departm ents were investigating an increase of Cyclospora infections from patients
`
`w ho had reported purchasing and eating D e1 M onte vegetable trays sold at
`
`W isconsin or M innesota K w ik Trip retail locations.
`
`12. ln an abundance of caution, D el M onte w ithdrew all vegetable trays
`
`from m arket retail locations on June 8, 2018, and issued a voluntary recall of all
`
`rem aining vegetable trays with an expiration date of June 17, 2018.
`
`M idwest Best w as one of the providers of broccoli crow ns, celery and
`
`caulitlower contained within the subject vegetable trays.
`
`

`

`Case: 4:20-cv-00500-DDN Doc. #: 1 Filed: 09/19/19 Page: 5 of 15 PageID #: 5
`
`14. ln connection w ith reports by consum ers who alleged contracting
`
`Cyclosporasis aftereating D e1 M onte vegetable trays, Del M onte w as presented
`
`w ith the claim s for alleged dam ages asserted in the U nderlying M atters.
`
`15. The allegations contained in the filed and unfiled com plaints are
`
`essentially identical-.the com plainants allege they suffered a food borne illness,
`
`specifically Cyclosporiasis, as a result of consum ing produce w ithin the vegetable
`
`tray.
`
`C . M idw est B est and A M C O 'S A greem ent to lndem nify and Insure
`D eI M onte
`
`16. s4idxvest Best entered into an agreem ent w ith D e1 M onte related to
`
`supplying food item s entitled ççD el M onte Fresh Produce, N A , lnc. Continuing
`
`Food Guaranty.'' A copy of this agreem ent is attached hereto as Exhibit C . ln the
`
`Continuing Food Guarantee, M idw est Best agreed ççto at a11 tim es defend,
`
`indem nify, and hold harm less D e1 M onte, its agents and em ployees against and
`
`from any and all actions, suits, liabilities, prosecutions, penalties, settlem ents,
`
`losses, dam ages, costs, charges, attorney's fees, and al1 other expenses relating to
`
`or arising from any and al1 claim s (whether founded or unfounded) of every nature
`
`or character (including, without limitation, claims for personal injury, death or
`
`damage to property):
`
`arising out of the condition of the
`(a) based upon or
`m erchandise,
`any defect or alleged defect in the
`m erchandise,
`or based upon any allegation that the
`
`

`

`Case: 4:20-cv-00500-DDN Doc. #: 1 Filed: 09/19/19 Page: 6 of 15 PageID #: 6
`
`m erchandise is not fit or safe for consum er use, based
`upon the nature of the m aterial contained in the
`m erchandise, or based on, arising out of, or any w ay
`related to the services and/or m erchandise of supplier, or
`due to any actual negligence or dishonesty of, or any
`actual act or com m ission or om ission by, supplier, its
`agents, em ployees, Or Contractors . . . ..
`
`17. ln addition, M idw est B est agreed çûto cany and m aintain such
`
`insurance as will protect (M idwest) and De1 M onte from claim s . . . for personal
`
`injury, death or property dam age which m ay be m ade by agents or employees of
`
`suppliers and/or any third party arising out of or in connection w ith supplier
`
`services and/or products.'' See Exhibit C .
`
`M idw est Best contractually agreed to ûçcause its insurance policies. . .to
`
`nam e De1 M onte Fresh Produce, N A , lnc. as additional insured'' on general
`
`liability policies w ith lim its of at least $1 m illion per occurrence and not less than
`
`$2 m illion aggregate.
`
`A s required by the Continuing Food G uaranty, M idw est Best obtained
`
`liability insurance policies from A M CO . AM CO issued a com m ercial general
`
`liability policy of prim ary insurance to M idw est Best bearing policy num ber
`
`A CPG LA O3008550160 w ith an operative policy period from N ovem ber 20, 2017-
`
`November 20, 20 18 (the ççprim ary Policy''). A copy of the policy is attached as
`
`Exhibit D . The general liability policy provides $1 m illion per occurrence and $2
`
`m illion in aggregate lim its.
`
`

`

`Case: 4:20-cv-00500-DDN Doc. #: 1 Filed: 09/19/19 Page: 7 of 15 PageID #: 7
`
`20. AM CO also issued a com m ercial um brella policy of insurance bearing
`
`policy num ber A CPCA A3008550160 for the N ovem ber 20, 2017 to N ovem ber 20,
`
`2018 policy period w ith lim its of $3 m illion per occurrence and $3 m illion
`
`aggregate lim its. See Exhibit E.
`
`2 1. The policies of insurance w ere delivered to M idw est Best in the state
`
`of M issouri.
`
`U nder the underlying Prim ary Policy, A M CO agreed to Eçpay those
`
`sum s that the insured becom es legally obligated to pay as dannages because of
`
`tbodily injury' or Eproperty damage' to which this insurance applies.'' AM CO
`
`agreed that it ççw ill have the right and duty to defend the insured against any çsuit'
`
`seeking those dam ages.'' See Exhibit D .
`
`23. The Primary Policy detines ltbodily injury'' as ûûbodily injury, sickness
`
`or disease sustained by a person including death resulting from any of these at any
`
`tim e period.'' The policy defines ttsuit'' as çta civil proceeding in w hich dam ages
`
`because of çbodily injury', çproperty damage' or tpersonal and advertising injury'
`
`to w hich this insurance applies are alleged. The policy definition of ltsuit'' also
`
`Kçincludes...tb) any other alternative dispute resolution proceeding in which such
`
`dam ages are claim ed and to w hich the insured subm its w ith our consent.'''
`
`24. Endorsem ent CG 72121216 to the Prim ary Policy confers lfautom atic''
`
`additional insured status ççw hen required in an agreem ent.'' This endorsem ent
`
`

`

`Case: 4:20-cv-00500-DDN Doc. #: 1 Filed: 09/19/19 Page: 8 of 15 PageID #: 8
`
`m odifies Section 11 - W HO IS AN INSURED to tçinclude .. . organizationts)
`
`described in Paragraphs a. - i. below w ith w hom you have agreed in writing in a
`
`contract or agreem ent that such person or organization be added as additional
`
`insured on your policy.'' Subsection i. includes dtvendors but only w ith respect to
`
`bodily injury or property damage arising out of your products which are distributed
`
`or sold in the regular course of the vendor's business. . .''
`
`25. Because M idw est B est contractually agreed to nam e Del M onte as an
`
`additional insured under the A M CO policy, and D e1 M onte has claim s against it
`
`for bodily injury arising out of M idwest Best's products distributed by De1 M onte
`
`in the regular course of D e1 M onte's business, D e1 M onte is an insured under the
`
`A M CO policy.
`
`26. A M CO has acknow ledged that D el M onte is an additional insured
`
`under the policy for the claim s against it described herein.
`
`Under the term s of the A M CO Prim ary Policy, A M CO is prim ary
`
`over any other collectable insurance, subject to exceptions not applicable to this
`
`claim . The AM CO Prim ary Policy provides that tigijf this insurance is prim ary, our
`
`obligations are not affected unless any of the other insurance is also prim ary.''
`
`28. Because Del M onte is an additional insured on the AM CO policy, the
`
`AM CO policy is prim ary and any other policy of insurance affording coverage to
`
`D e1 M onte is excess only.
`
`

`

`Case: 4:20-cv-00500-DDN Doc. #: 1 Filed: 09/19/19 Page: 9 of 15 PageID #: 9
`
`29. Because M idwest Best has contractually agreed to indem nify D el
`
`M onte for these claim s, and the A M CO policies provide indem nity to M idw est
`
`Best and A M CO for these claim s, applicable 1aw requires AM CO to fully defend
`
`and indem nify D el M onte
`
`notwithstanding the existence of any other insurance
`
`available to D e1 M onte.
`
`30. Because M idw est Best has contractually agreed to indem nify D el
`
`M onte for these claim s, and the AM CO policies provide indem nity to M idw est
`
`Best and A M CO for these claim s, once the A M CO Prim ary Policy is exhausted
`
`applicable law requires AM CO to fully defend and indem nify D e1 M onte under its
`
`Excess Policy notwithstanding the existence any other insurance available to D el
`
`M onte.
`
`D . N ationw ide R efuses to Provide
`D efense or Indem niscation
`
`D eI M onte w ith a C om plete
`
`31. O n June 20, 2018, De1 M onte, through counsel, placed M idw est Best
`
`on w ritten notice of the initial action in the M innesota case served on June 13,
`
`2018, and the W isconsin com plaint filed on June 15, 2018, w hich at that tim e had
`
`not yet been served. In its notification, D el M onte tendered these current claim s
`
`and al1 potential claim s, dem ands or suits or future or related claim s, that m ay arise
`
`from products that M idw est Best supplied to D e1 M onte for a defense and
`
`indem niication under the Continuing Food G uarantee and under the A M CO
`
`

`

`Case: 4:20-cv-00500-DDN Doc. #: 1 Filed: 09/19/19 Page: 10 of 15 PageID #: 10
`
`Policy. Del M onte reasserted those tenders at least on July 10, 2018 and
`
`Septem ber 7, 2018.
`
`Upon inform ation and belietl M idwest Best notified AM CO of De1
`
`M onte's tender in or after June 2018 and provided it w ith a copy of the Underlying
`
`M atters as a defendant in the pending actions.
`
`D e1 M onte also placed A M CO on form al notice of the underlying
`
`actions and tendered the m atters for a defense and indem nity as an additional
`
`insured under the A M CO policy.
`
`34. O n D ecem ber 21, 2018, AM CO issued a reservation of rights letter to
`
`D el M onte in w hich it acknow ledged that D e1 M onte w as an additional insured
`
`under the A M CO policy and that A M CO 'S policy applied to these claim s.
`
`H ow ever, despite the fact that the allegations of the com plaints triggered a duty to
`
`defend and A M CO has prim ary coverage, A M CO only offered to çtparticipate in
`
`reim bursing counsel selected for defense by D el M onte based on its proportionate
`
`share of the defense cost that m ay be incurred by counsel selected by D el M onte or
`
`its carrierss subject to a full reservation of rights under the applicable policies and
`
`j 55asv.
`
`35. The only coverage issues reserved by A M CO w ere the assertion of
`
`five exclusions in the policy identified as: tçrepackaging'' ççexpress w arranty
`
`claim s'' tGinspection'' çç hysical change to a product'' and çtrelabeling'' exclusions.
`, P
`,
`,
`
`

`

`Case: 4:20-cv-00500-DDN Doc. #: 1 Filed: 09/19/19 Page: 11 of 15 PageID #: 11
`
`The reservation of rights letter did not explain how each of the exclusions
`
`precluded coverage for the allegations or
`
`otherwise lim ited A M CO 'S duty to
`
`defend to only tta proportionate share of the defense cost'' as asserted in the
`
`reservation of rights letter.
`
`36. A M CO has inform ed Del M onte, w ithout explanation, that it is only
`
`obligated to reim burse D el M onte for 20% of the costs incurred in the defense of
`
`the underlying suits.
`
`37. AM CO has refused to reim burse any defense costs incurred prior to
`
`O ctober 2018, the date on w hich it claim s it first received notice of the U nderlying
`
`Law suits.
`
`38. AM CO has refused to reim burse D el M onte for the settlem ents
`
`reached by D e1 M onte.
`
`39. D el M onte advised A M CO of its intent to attem pt to resolve the
`
`U nderlying Lawsuits and other pending claim s in a global m ediation before a
`
`retired Federal D istrict Court Judge in M innesota and requested A M CO 'S
`
`participation therein. A M CO has refused to participate fully in the m ediation and
`
`has refused to consent to the resolution of any claim not currently in suit. AM CO
`
`has also inform ed D e1 M onte that it w ill not indem nify D el M onte for any claim
`
`settled w ithout A M CO 'S consent.
`
`

`

`Case: 4:20-cv-00500-DDN Doc. #: 1 Filed: 09/19/19 Page: 12 of 15 PageID #: 12
`
`40. Despite Del M onte's request, AM CO has refused without justification
`
`to am end or w ithdraw its reservation to honor its obligations to D e1 M onte under
`
`the policies.
`
`4 1. D ue to the unreasonable and inappropriate restrictions placed on
`
`coverage by AM CO in its reservation of rights letter and subsequent
`
`com munications, and as permitted by applicable law, Del M onte has rejected
`
`AM CO 'S tender of a partial defense
`
`under reservation of rights and brings this
`
`declaratory judgment action seeking a declaration of AM CO'S duties and
`
`obligations under the Policies.
`
`C O UN T I- D ECLAR A TO R Y JU D G M EN T
`
`42. D e1 M onte adopts and incom orates the prior paragraphs as if fully
`
`stated and set forth herein.
`
`43. De1 M onte is an additional insured under the subject AM CO policies
`
`based on claims alleging bodily injury occurring within the AM CO policy period
`
`as a result of products supplied by M idw est Best to De1 M onte for distribution.
`
`44. The underlying state court actions are ççsuits'' under the policies for
`
`w hich A M CO is obligated to defend and indem nify D e1 M onte in full.
`
`45. The unfiled claim s against D el M onte constitute suits for which a
`
`defense and indem nity is ow ed because De1 M onte had requested A M CO 'S
`
`

`

`Case: 4:20-cv-00500-DDN Doc. #: 1 Filed: 09/19/19 Page: 13 of 15 PageID #: 13
`
`perm ission to enter into alternative dispute resolution proceedings but A M CO has
`
`impermissibly withheld withoutjustification.
`
`46. D e1 M onte has m et a11 conditions precedent for coverage under the
`
`policies.
`
`47.
`
`The exclusions asserted by A M CO in its reservation of rights letter do
`
`not preclude a defense to or indem niGcation for any of the claim s against it in the
`
`underlying state court actions or in the other claim s asserted against D e1 M onte for
`
`w hich suit has not been filed.
`
`48. The A M CO policies are prim ary over any other insurance available to
`
`D e1 M onte. AM C O is obligated to defend and indem nify D el M onte for a11 claim s
`
`against it arising from products supplied by M idwest Best, subject only to the
`
`lim its of available insurance under the Prim ary and Excess Policies.
`
`49. A M CO has waived or has otherwise estopped from asserting any
`
`coverage defenses including, but not lim ited to, forfeiture clauses and exclusions
`
`under the Policies because of its failure to tim ely or properly reserve its rights
`
`under the Policies or in the altem ative, because its purported reservation
`
`constitutes a denial of the claim withoutjustifcation.
`
`C LA IM FO R R ELIEF
`
`D e1 M onte respectfully requests a declaration from this Court that:
`
`

`

`Case: 4:20-cv-00500-DDN Doc. #: 1 Filed: 09/19/19 Page: 14 of 15 PageID #: 14
`
`A. A bona fide justiciable controversy exists between the parties that
`
`m ust be resolved',
`
`B. D el M onte is an additional insured under the Policies issued to
`
`M idw est Best;
`
`The A M CO Policies are prim ary over any other policy of liability
`
`insurance providing coverage to Del M onte for the subject claims;
`
`D . AM CO is obligated to im m ediately provide a full and com plete
`
`defense to D e1 M onte and reim burse it for a1l defense costs incurred in defense of
`
`the U nderlying Law suit;
`
`E. AM CO is obligated to indem nify Del M onte for all losses claim ed
`
`against it, which includes an obligation to reim burse D e1 M onte for a1l settlem ents
`
`of filed and unfiled claim s reached by De1 M onte, up to the policy lim its;
`
`For such other and further relief to which Del M onte is entitled.
`
`/s/D . Ross M ccloy, Jr.
`D . R oss M cc loy, Jr.
`Florida Bar N o. 0262943
`Attorneyfor Plaintt
`
`

`

`Case: 4:20-cv-00500-DDN Doc. #: 1 Filed: 09/19/19 Page: 15 of 15 PageID #: 15
`
`O F CO UN EL:
`H A ND A R EN DA LL H AR R ISO N SA LE, LLC
`P.O . D raw er 1579
`Panam a City, Florida 32402
`Telephone: (850) 769-3434
`Fax: (850) 769-6121
`rmccloy@ handfirm.com
`riackson@ handfirm.com
`
`Joseph L. Cow an, 11
`Pro Hac V ice A dm ission Pending
`Attorneyfor Plaint#
`
`O F CO U N EL:
`HAND ARENDALL HARRISON SA LL LLC
`1801 5TH A venue N orth, Suite 400
`Birm ingham , A labam a 35203
`Telephone: (205) 324-4400
`Fax: (205) 322-1163
`icowan@ handfirm.com
`
`SE R V E D E FE N D A N T V lA C E R TIF IE D M A IL
`A M CO lnsurance C om pany
`c/s Florida Chief Financial Officer as ltA
`Service of Process Section
`PO Box 6200
`Tallahassee, FL 32314-6200
`
`SER V E D E FEN D A N T V lA C ER T IFIE D M A IL
`The M idw est's Best Produce Com pany
`D an Pupillo
`President-cEo
`4101 G eraldine A ve
`St. Louis, M O 63115-1210
`
`

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