Pekin Insurance Company v. Correct Roofing & Construction Inc et al

Filing 86

ORDER granting 85 Rains and Turner's motion for distribution of proceeds and granting 78 Motion for Summary Judgment. This case is dismissed with prejudice. Accordingly, the Clerk is directed to make payment of the remaining $200,000 a s follows: $100,000, plus accrued interest, to "The Estate of James Edward Rains, Deceased, and the Trust Account of Hale, Young, and Partlow"; and $100,000, plus accrued interest, to "The Estate of Marshall Turner, Deceased,and the Trust Account of McDaniel Law Firm, PLC". Signed by Chief Judge Brian S. Miller on 3/17/2015. (jak)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF ARKANSAS
JONESBORO DIVISION
PEKIN INSURANCE COMPANY

v.

PLAINTIFF

CASE NO. 3:14CV00135 BSM

CORRECT ROOFING &
CONSTRUCTION INC., et al.

DEFENDANTS
ORDER

Defendants’ joint motion for distribution of proceeds [Doc. No. 85] is granted, Pekin
Insurance Company’s motion for summary judgment [Doc. No. 78] is granted, and this case
is dismissed with prejudice.
On February 5, 2015, an order was entered granting the motion for declaratory relief
of Michelle Rains and Rosia Turner. See Doc. No. 84. Specifically, the order held that
Arkansas law applied to the disbursement of the remaining $200,000 of the insurance policy
at issue. Thus, any other party seeking subrogation rights could only do so after Rains and
Turner are “made whole” for their total losses. See Franklin v. Healthsource of Arkansas,
942 S.W.2d 837, 839 (Ark. 1997). Rains and Turner now move for distribution of the
remaining $200,000, and no responses have been filed. Accordingly, the joint motion for
distribution is granted.
Additionally, Pekin moves for summary judgment, contending that it should be
released from the interpleader action upon disbursement of the final $200,000 because it has
no further duty to defend either Correct or Walker. Neither Correct nor Walker responded

to Pekin’s motion.
Summary judgment is appropriate when there are no genuine disputes of material fact
and the moving party is entitled to judgment as a matter of law. See Celotex Corp. v. Catrett,
477 U.S. 317, 322–23 (1986). All reasonable inferences must be drawn in the light most
favorable to the non-moving party. Holland v. Sam’s Club, 487 F.3d 641, 643 (8th Cir.
2007). The non-moving party may not rest upon the mere allegations or denials in his
pleadings, but must produce admissible evidence demonstrating a genuine factual dispute
that must be resolved at trial. Holden v. Hirner, 663 F.3d 336, 340 (8th Cir. 2011).
The policy issued by Pekin to Correct states that Pekin’s duty to defend ends when it
has paid out the policy limits. See Doc. No. 1-3, Ex. B at 8. While Pekin notes that there
may be an issue of whether Arkansas or Illinois law applies to the issue, courts in both states
have recognized that where an insurance company has exhausted its policy limits, no further
duty to defend exists. See Emcasco Ins. Co. v. Davis, 753 F.Supp. 1458, 1462–64 (W.D.
Ark. 1990); Zurich Ins. Co. v. Raymark Indus., Inc., 514 N.E.2d 150, 163 (Ill. 1987). As all
the money has been disbursed and the interpleader action resolved, there appears to be no
reason to keep Pekin in the suit and extend its obligations. Accordingly, Pekin’s motion for
summary judgment is granted.
For the reasons stated above, Rains and Turner’s motion for distribution of proceeds
[Doc. No. 85] is granted, Pekin’s motion for summary judgment [Doc. No. 78] is granted,
and this case is dismissed with prejudice. Accordingly, the clerk is directed to make

2

payment of the remaining $200,000 as follows:
1.

$100,000, plus accrued interest, to “The Estate of James Edward Rains,
Deceased, and the Trust Account of Hale, Young, and Partlow”; and

2.

$100,000, plus accrued interest, to “The Estate of Marshall Turner, Deceased,
and the Trust Account of McDaniel Law Firm, PLC.”

IT IS SO ORDERED this 17th day of March 2015.

________________________________
UNITED STATES DISTRICT JUDGE

3