Liberty Mutual Insurance Company v. Dometic Corporation

Filing 54

OPINION AND ORDER: The Court GRANTS Liberty Mutual's motion for judgment on the pleadings, 37 , with respect to Count I of its complaint, which seeks a declaratory judgment of no duty to defend or indemnify under the 2004-2005 policy based on exhaustion; DENIES Liberty Mutual's motion for judgment on the pleadings, 37 , with respect to Count II of its complaint; GRANTS Dometic's motion for judgment on the pleadings, 39 , with respect to Count II of Liberty Mutual's c omplaint to the extent it seeks a declaratory judgment of no duty to defend; DENIES Dometic's motion for judgment on the pleadings, 39 , with respect to Count II of Liberty Mutual's complaint to the extent it seeks a declaratory judgment of no duty to indemnify; DISMISSES WITHOUT PREJUDICE Liberty Mutual's declaratory action to the extent it sought a determination of no duty to indemnify. Dometic's breach of contract counterclaims remain pending. Signed by Judge Robert L Miller, Jr on 3/6/2019. (lhc)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
LIBERTY MUTUAL INSURANCE
COMPANY,
Plaintiff/
Counter-Defendant
vs.
DOMETIC CORPORATION,
Defendant/
Counter-Plaintiff

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) CAUSE NO. 3:17-cv-882 RLM-MGG
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OPINION and ORDER
Liberty Mutual Insurance Company sued Dometic Corporation seeking a
declaratory judgment that it has no duty to defend or indemnify Dometic against
three putative class action complaints. Dometic counter-claimed, alleging Liberty
Mutual breached its contractual duty to defend Dometic against the underlying
complaints. Liberty Mutual and Dometic each moved for judgment on the
pleadings, [Doc. Nos. 37, 39], and the court heard arguments on the motions on
February 27, 2019. For the following reasons, the court grants the motions in
part and denies them in part.

I. BACKGROUND
Dometic bought four consecutive commercial general liability policies from
Liberty Mutual. The policies provide coverage for property damage (among other
things) and require Liberty Mutual to defend Dometic against a suit seeking

damages because of property damage. Dometic tendered three putative class
action complaints to Liberty Mutual, seeking coverage.1 The underlying
complaints allege that Dometic sold gas absorption refrigerators, mainly for RVs,
containing a defective cooling unit that can leak flammable gases and cause fires.
Liberty Mutual elected to participate in Dometic’s defense in each of the
underlying suits subject to a reservation of rights, including the right to seek
reimbursement of defense costs, and filed this suit seeking a declaratory
judgment that it has no duty to defend or indemnify Dometic against the
underlying complaints. Dometic filed breach of contract counterclaims. The
parties moved for judgment on the pleadings on Liberty Mutual’s claims.

The Policies
Dometic purchased four policies, covering the periods from 2001 to 2002,
2002 to 2003, 2003 to 2004, and 2004 to 2005. The Liberty Mutual policies

1 About two weeks before the hearing on the cross motions for judgment on the
pleadings, Liberty Mutual filed a notice reporting that the three underlying putative
class action suits were consolidated in the Southern District of Florida and requesting
that the court take judicial notice of the new consolidated class action complaint. [Doc.
No. 49]. Dometic asked the court to decline to take judicial notice, arguing the
consolidated complaint was irrelevant to whether the underlying complaints attached
to Liberty Mutual’s declaratory action complaint triggered a duty to defend. At the
hearing, Liberty Mutual agreed that the court needn’t take notice of the consolidated
class action complaint to resolve the issues relevant to the motions for judgment on the
pleading, but argued that the consolidated complaint “crystalizes” the nature of the
class action claims. The court could properly take judicial notice of the consolidated
class action complaint, Federal Rule of Evidence 201; Scherr v. Marriott Int'l, Inc., 703
F.3d 1069, 1073 (7th Cir. 2013) (citing Gen. Elec. Capital Corp. v. Lease Res. Corp., 128
F.3d 1074, 1081–82 (7th Cir. 1997)), but agrees with the parties that the consolidated
class action complaint is irrelevant to the motions before the court and, so, declines to
do so.

2

provide coverage for “bodily injury”2 and “property damage”3 caused by an
“occurrence”4 during the policy period. The policies provide that Liberty Mutual
has the “right and duty to defend the insured against any ‘suit’ seeking [damages
because of property damage].” [Doc. No. 1-1 at 30]. The policies include several
exclusions and Liberty Mutual argues that exclusions a, k, m, and n bar or limit
coverage in this case.

The Underlying Complaints--The Papasan Complaint
Dometic tendered three putative class action complaints to Liberty Mutual,
seeking coverage under the policies. The Papasan putative class action
complaint alleges that Dometic “refrigerators contain dangerous defects that can
cause them to vent pressurized hydrogen and ignite a fire.” [Doc. No. 1–5 at ¶ 1].
Some of the named plaintiffs claim that fires caused by Dometic refrigerators
damaged property, including damage to RVs, other personal property, and
improvements to real property. The complaint alleges that Dometic’s “[d]efective
[g]as [a]bsorption [r]efrigerators have caused thousands of fires since 1997” and
defines the putative class as including “all persons who purchased or owned a

2 Because the underlying complaints expressly disclaim damages for bodily injury, the
policies’ coverage for bodily injury is irrelevant. [See, e.g., Doc. No. 1–5 at ¶ 9].
The policies define property damage as “physical injury to tangible property, including
all resulting loss of use of that property” and “loss of use of tangible property that is not
physically injured.” [See, e.g., Doc. No. 1-1 at 42].

3

The policies define an occurrence as “an accident, including continuous or repeated
exposure to substantially the same general harmful conditions.” See, e.g., id.

4

3

[d]efective [g]as [a]bsorption [r]efrigerator manufactured or purchased on or after
January 1, 1997.” Id. at ¶ 133, 194].

The Zucconi Complaint
The Zucconi putative class action complaint alleges that Dometic
refrigerators’ “can prematurely develop cracks that release highly flammable
hydrogen and ammonia [that] leak and may ignite.” [Doc. No. 1–6 at ¶ 3]. Some
of the named plaintiffs allege property damage from fires allegedly caused by
Dometic refrigerators, including damage to RVs and other personal property.
See, e.g., id. at ¶ 32, 47. The complaint alleges that “[h]undreds, if not thousands,
of fires have resulted from leaks in [Dometic refrigerators, which] . . . spread very
fast and can turn into raging infernos . . . causing millions of dollars in property
damage.” Id. at ¶ 77. It defines the putative class as including “[a]ll persons . . .
who purchased a Dometic gas absorption refrigerator with a [d]efective [c]ooling
[u]nit.” Id. at ¶ 127.

The Zimmer Complaint
The Zimmer putative class action complaint alleges that Dometic
refrigerators “are prone to premature corrosion and stress fatigue and develop
microscopic cracks, causing noxious and flammable chemicals and gases . . .
inside the boiler tubes to leak[,] . . . creat[ing] . . . a serious risk of fire.” [Doc. No.
1–7 at ¶ 3]. Some of the named plaintiffs allege that their Dometic products
caused fires, but don’t specifically claim that the fires damaged property. The
4

complaint generally alleges that “[h]undreds, if not thousands, of fires have
resulted from leaks in [Dometic refrigerators, which] . . . spread very fast and
can turn into raging infernos, causing millions of dollars in property damage.”
Id. at ¶ 179. The complaint defines the putative class as all persons in nine states
who purchased or owned a defective Dometic refrigerator from January 1, 2001
to the present. Id. at ¶ 233, 235.

II. STANDARD OF REVIEW
A party may move for judgment on the pleadings after the pleadings are
closed. Fed. R. Civ. P. 12(c). “To survive a motion for judgment on the pleadings,
a complaint must state a claim to relief that is plausible on its face.” Milwaukee
Police Ass'n v. Flynn, 863 F.3d 636, 640 (7th Cir. 2017) (quoting Wagner v. Teva
Pharm. USA, Inc., 840 F.3d 355, 357–358 (7th Cir. 2016)). The court construes
the complaint in the light most favorable to the nonmoving party, accepts all
well-pleaded facts as true, and draws all reasonable inferences in the plaintiff’s
favor. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell v. City of Chicago, 835
F.3d 736, 738 (7th Cir. 2016). A Rule 12(c) motion can be granted “when it
appears beyond a doubt that the plaintiff cannot prove any facts to support a
claim for relief and the moving party demonstrates that there are no material
issues of fact to be resolved.” Moss v. Martin, 473 F.3d 694, 698 (7th Cir. 2007).

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III. DISCUSSION
The court agrees with the parties and the Southern District of Indiana,
which applied Indiana law in a previous case addressing the same insurance
policies, that Indiana law governs this insurance dispute. See Dometic Corp. v.
Liberty Mut. Ins. Co., No. 1:06-CV-1260-DFH-TAB, 2008 WL 4443234, at *1
(S.D. Ind. Sept. 26, 2008). In Indiana, “[g]enerally, the interpretation of an
insurance policy presents a question of law.” Cinergy Corp. v. Assoc. Elec. & Gas,
865 N.E.2d 571, 574 (Ind. 2007) (citing Colonial Penn Ins. Co. v. Guzorek, 690
N.E.2d 664, 667 (Ind. 1997)). The language of an insurance policy contract
“should be given its plain and ordinary meaning.” Id. A ruling as a matter of law
is only appropriate if the policy is unambiguous or the ambiguity can be resolved
“without the aid of the fact-finder.” Id. (citing Plumlee v. Monroe Guar. Ins. Co.,
655 N.E.2d 350, 354 (Ind. Ct. App. 1995); Kutche Chevrolet-Oldsmobile-PontiacBuick, Inc. v. Anderson Banking Co., 597 N.E.2d 1307, 1309 (Ind. Ct. App.
1992)).
“In order to establish that an insurer has a duty to defend, the insured
bears the initial burden of establishing that a claim is covered by [the] policy.”
Def. Sec. Co. v. First Mercury Ins. Co., 803 F.3d 327, 331 (7th Cir. 2015). The
nature of the underlying complaint against the insured determines the insurer’s
duty to defend. Hayes Lemmerz Int'l, Inc. v. Ace Am. Ins. Co., 619 F.3d 777, 781
(7th Cir. 2010) (quoting Transamerica Ins. Services v. Kopko, 570 N.E.2d 1283,
1285 (Ind. 1991)). If the underlying “pleadings reveal that a claim is clearly
excluded under the policy, then no defense is required.” Def. Sec. Co. v. First
6

Mercury Ins. Co., 803 F.3d at 334 (quoting Newnam Mfg., Inc. v. Transcon. Ins.
Co., 871 N.E.2d 396, 401 (Ind. Ct. App. 2007)). “Indiana follows the general rule
that when one theory of liability in a suit against an insured is covered, the
insurer's duty to defend and indemnify is triggered as to the entire lawsuit.”
Aearo Corp. v. Am. Int'l Specialty Lines Ins. Co., 676 F. Supp. 2d 738, 745 (S.D.
Ind. 2009).

Exhaustion of 2004-2005 Policy
Liberty Mutual argues that it is entitled to judgment on the pleadings on
Count I of its complaint because the 2004-2005 policy was exhausted,
contending that the court should give preclusive effect to Judge Hamilton’s
exhaustion determination in Dometic Corp. v. Liberty Mut. Ins. Co., No. 1:06CV-1260-DFH-TAB, 2008 WL 4443234 (S.D. Ind. Sept. 26, 2008). Dometic
conceded the issue in its briefing and at the hearing on this matter, so judgment
on the pleadings is appropriate on Count I of Liberty Mutual’s complaint.

Duty to Defend
Dometic argues that all three underlying putative class action complaints
contain allegations of property damage sufficient to trigger Liberty Mutual’s duty
to defend. Dometic points to third-party property allegations by the named
plaintiffs and broad allegations of hundreds or thousands of fires that caused
millions of dollars in property damage. Dometic argues that although the named
plaintiff’s claims fall outside of the coverage periods, the court can and should
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consider the putative classes’ claims, which would fall within the unexhausted
policy coverage periods. Liberty Mutual contends that no coverage lies because
none of the named plaintiffs allege property damage that occurred during a policy
period, the putative class claims are too speculative to trigger coverage and would
be barred by the applicable statute of limitation, and the policies’ exclusions bar
or limit coverage.
Liberty Mutual first argues that it has no duty to defend Dometic against
the underlying complaints because no named plaintiffs allege a potentially
covered property damage claim during a policy period. It’s undisputed that the
property damage claims of the named plaintiffs in the underlying complaints all
occurred years after the Liberty Mutual policies expired.5 Liberty Mutual
therefore contends it has no duty to defend because “[i]f the pleadings reveal that
a claim is clearly excluded under the policy, then no defense is required.”
Newnam Mfg., Inc. v. Transcon. Ins. Co., 871 N.E.2d at 401 (quoting Liberty Mut.
Ins. Co. v. OSI Indus., Inc., 831 N.E.2d 192, 198 (Ind. Ct. App. 2005)). Dometic
argues that the court can’t confine itself to the allegations of the named plaintiffs
and should consider the putative class members’ claims and whether the

5 The earliest occurrence of property damage alleged in the Papasan putative class
action is 2012, [Doc. No. 1–5 at ¶ 69]; the earliest occurrence alleged in the Zucconi
putative class action is 2008, [Doc. No. 1–6 at ¶ 24]; and while no named plaintiff in the
Zimmer putative class action alleges third-party property damage, the earliest fire
alleged in the complaint is 2008. [Doc. No. 1–7 at ¶ 74]. The last unexhausted Liberty
Mutual policy period ended in 2004.

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complaints’ class definitions cover putative class members who purchased
Dometic products during the Liberty Mutual policies’ coverage period.6
Neither party cites any cases applying Indiana law to their disagreement:
whether an insurer’s duty to defend is triggered by a putative class action
complaint in which the named plaintiff’s claims don’t fall within the policies’
coverage period, but, if the class is certified, the claims of class members might.
Courts outside of Indiana have addressed the issue.
The Eleventh Circuit Court of Appeals considered a case in which the
insurer argued, as Liberty Mutual argues in this case, that putative class
members’ claims are too remote and speculative to trigger the duty to defend and
a court shouldn’t consider whether a duty to defend exists in a putative class
action in which coverage could potentially be triggered by the putative class
members’ claims until the class is certified. Hartford Acc. & Indem. Co. v. Beaver,
466 F.3d 1289 (11th Cir. 2006). That court held that an insurer has a duty to
defend if the putative class’s potential claims fall within the policy’s coverage. Id.
at 1296. The court noted that “no authority found in Florida law or, for that
matter, anywhere else, has concluded that claims by putative class members are
somehow insufficient to trigger an insurer's duty to defend.” Id. at 1294. The

6 The Papasan putative class action defines its class as “all persons who purchased or
owned a [d]efective [g]as [a]bsorption [r]efrigerator manufactured or purchased on or
after January 1, 1997.” [Doc. No. 1–5 at ¶ 238]. The Zucconi putative class action
complaint defines the putative class as including “[a]ll persons . . . who purchased a
Dometic gas absorption refrigerator with a [d]efective [c]ooling [u]nit.” [Doc. No. 1–6 at ¶
127]. The Zimmer putative class action complaint defines the class as anyone in nine
states who purchased or owned a defective Dometic refrigerator from January 1, 2001
to the present. [Doc. No. 1–7 at ¶ 233, 235].

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court then reasoned that “the fight over class certification is often the whole ball
game” in class actions, so “[t]he overwhelming importance of class certification
to the ultimate resolution of the case militates strongly against leaving the
insured without a defense until after a decision on class certification.” Id. at
1296.
Other federal courts have also held that the potential claims of a putative
class can trigger an insurer’s duty to defend. See New NGC, Inc. v. Ace Am. Ins.
Co., 105 F. Supp. 3d 552 (W.D.N.C. 2015) (applying North Carolina law and
holding that courts must look beyond the allegations of the named plaintiffs in
a putative class action to determine whether the potential class’s claims trigger
coverage under the policies); Paternostro v. Choice Hotel Int'l Servs. Corp., No.
CIV.A. 13-0662, 2014 WL 6460844 (E.D. La. Nov. 17, 2014) (applying Louisiana
law and denying the insurers motion to dismiss because the putative class
representative’s claims fall outside of the policy’s coverage period on the grounds
that “claims of class members would include injuries within a whole spectrum
of dates”); Nationwide Mut. Ins. Co. v. Harris Med. Assocs., LLC, 973 F. Supp.
2d 1045 (E.D. Mo. 2013) (examining Georgia and Missouri law and concluding
that an insurer isn’t entitled to judgment as a matter of law when the named
plaintiffs claims fell outside the policies’ coverage period, but the claims of
putative class members could fall within the coverage period); LensCrafters, Inc.
v. Liberty Mut. Fire Ins. Co., 2005 WL 146896 (N.D. Cal. 2005) (applying
California law and holding that allegations of personal injury against putative
class members triggered the insurer's duty to defend).
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Liberty Mutual doesn’t point the court to any cases directly addressing the
issue that disagree with this persuasive authority. The approach of the federal
courts that have addressed the issue is that generally followed under Indiana
law, which provides that coverage is triggered when claims in the underlying
complaint “potentially fall within indemnity coverage provided by the [p]olicies.”
Allstate Ins. Co. v. Preferred Fin. Sols., Inc., 8 F. Supp. 3d 1039, 1043 (S.D. Ind.
2014) (citing Newnam Mfg., Inc. v. Transcontinental Ins. Co., 871 N.E.2d at 401–
402). Accordingly, the court will consider the putative class’ claims when
deciding whether Liberty Mutual owes Dometic a duty to defend.
Liberty Mutual contends that even if the court considers the putative class
action claims, no coverage is triggered because, according to Liberty Mutual, the
putative class claims alleged in the complaints are uncovered benefit-of-thebargain and economic loss claims, not property damage claims. The court
disagrees.
“In determining whether an insurance policy extends coverage in a
particular suit, the Court must look to the nature of the complaint.” Soc'y Ins. v.
Jiffy Mini Marts, Inc., No. 208CV00203LJMWGH, 2011 WL 13234986, at *4 (S.D.
Ind. Aug. 12, 2011) (citing Transamerica Ins. Servs. v. Kopko, 570 N.E.2d 1283,
1285 (Ind. 1991)). Liberty Mutual argues that the legal theories employed in the
complaints demonstrate that the complaints don’t include any property damage
claims, but because a complaint’s factual allegations, not its legal theories,
determine whether coverage exists, the court will examine the factual allegations
to determine whether they allege property damage claims. Id. See also Hartford
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Fire Ins. Co. v. Thermos L.L.C., 146 F. Supp. 3d 1005 (N.D. Ill. 2015); Indiana
Ins. Co. v. N. Vermillion Cmty. Sch. Corp., 665 N.E.2d 630, 635 (Ind. Ct. App.
1996).
The

Papasan

complaint

alleges

that

Dometic’s

“[d]efective

[g]as

[a]bsorption [r]efrigerators have caused thousands of fires since 1997, and
continue to cause new fires at an alarming rate.” [Doc. No. 1–5 at ¶ 133]
(emphasis supplied). The complaint expressly disclaims damages for bodily
injury, but doesn’t disclaim property damage and some of the named plaintiffs
claim fires caused third-party property to be damaged. The Rule 23(a)(3)
typicality allegations allege that “[p]laintiffs and the members of the [c]lass have
all sustained injury in that . . . their [d]efective [g]as [a]bsorption [r]efrigerators
are defectively designed and present an unreasonable risk of fire.” Id. at ¶ 199.
The prayer for relief requests that the court award the “damages under applicable
state law for the subclasses.” Id. at 118.
The Zimmer complaint also alleges that “[h]undreds, if not thousands, of
fires have resulted from leaks in [Dometic refrigerators, which] . . . spread very
fast and can turn into raging infernos, causing millions of dollars in property
damage.” [Doc. No. 1–7 at ¶ 179]. The class definition excludes personal injury
claims, but contains no such exclusion for property damage claims. Id. at ¶ 235.
The Rule 23(a)(3) typicality allegations allege that “[p]laintiffs and the members
of the [c]lass have all sustained injury in that . . . their [d]efective [g]as
[a]bsorption [r]efrigerators . . . are defectively designed and present an
unreasonable risk of fire.” Id. at ¶ 240. The prayer for relief requests that the
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court award the plaintiffs and the class “all damages and relief that may be
allowed under applicable law.” Id. at 116.
The Zucconi complaint alleges that “[h]undreds, if not thousands, of fires
have resulted from leaks in [Dometic refrigerators, which] . . . spread very fast
and can turn into raging infernos . . . causing millions of dollars in property
damage.” [Doc. No. 1–6 at ¶ 77]. Some of the named plaintiffs allege third-party
property damage from fires. Although the Rule 23(a)(3) typicality allegations
allege only allege benefit of the bargain and economic loss injuries, the
complaint’s prayer for relief is expansive, requesting that the court award all
relief deemed just and equitable.
The factual allegations of property damage in each of the underlying
putative class action complaints are sufficient to trigger Liberty Mutual’s duty to
defend. See Soc'y Ins. v. Jiffy Mini Marts, Inc., No. 208CV00203LJMWGH, 2011
WL 13234986 at *4; Hartford Fire Ins. Co. v. Thermos L.L.C., 146 F. Supp. 3d
1005 (N.D. Ill. 2015); Indiana Ins. Co. v. N. Vermillion Cmty. Sch. Corp., 665
N.E.2d 630, 635 (Ind. Ct. App. 1996).
Liberty Mutual next argues that even if any of the putative class members
properly stated a claim for property damage within a policy period, those claims
would be barred by the applicable statutes of limitations. Liberty Mutual cites to
the relevant statutes of limitations for a number of states, noting that the longest
limitations period is six years. Liberty Mutual argues that the policy period for
the last policy it issued expired in 2005 and the underlying suits were filed in
2016 and 2017, so the applicable statute of limitations would bar any potentially
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covered claim. Dometic contends that it would be improper for the court to
adjudicate a potential statute of limitations defense to an underlying complaint’s
claim in a declaratory judgment suit because the question before the court is
whether the underlying complaints’ allegation trigger coverage, not whether a
potential defense might defeat a claim. The court agrees.
“It is the nature of the [underlying] claim, not its merits, that determines
an insurer's duty to defend.” 5200 Keystone Ltd. Realty, LLC v. Netherlands Ins.
Comp., 29 N.E.3d 156, 161 (Ind. Ct. App. 2015). An insured purchases
commercial general liability coverage for a defense against any potentially
covered action, even frivolous suits, and an insurer “has a contractual duty to
defend unfounded, false or fraudulent suits based upon risks it has insured.”
Davidson v. Cincinnati Ins. Co., 572 N.E.2d 502, 505 (Ind. Ct. App. 1991).
Accordingly, the court declines to consider whether a statute of limitations
defense could succeed against any claims in the underlying complaints.
Liberty Mutual also argues that various policy exclusions limit its duty to
defend, but, in the course of their briefing, the parties appear to agree that three
of the four exclusions don’t bar coverage for third-party property damage claims.7

7 The exclusions that Liberty Mutual concedes don’t bar coverage for third-party
property damage are exclusion k, which bars coverage for property damage to the
insured’s product; exclusion m, which denies coverage for damage to impaired property
or property not physically injured; and exclusion n, which excludes coverage related to
a recall of an insured’s product. To the extent Liberty Mutual asks the court to decide
whether or how these exclusions narrow the policies’ coverage in light of the underlying
complaints’ allegations, the court declines to do so. Such an inquiry might be relevant
to deciding Liberty Mutual’s duty to indemnify, but it isn’t relevant to determining its
duty to defend: if an insurer has a duty to defend any part of a suit, it has a duty to
defend against the entire suit. Aearo Corp. v. Am. Int'l Specialty Lines Ins. Co., 676 F.
Supp. 2d 738, 745 (S.D. Ind. 2009).

14

The parties’ dispute is therefore narrowed to the applicability of exclusion a,
which excludes coverage for property damage the insured expected or intended.
Liberty Mutual asserts that the underlying complaints allege that Dometic had
actual knowledge of the defects in its products that caused fires and worked to
conceal the inherent risks in those products.
“Coverage exclusions are construed strictly against the insurer and the
insurer bears the burden of showing that an exclusion applies.” Home Fed. Sav.
Bank v. Ticor Title Ins. Co., 695 F.3d 725, 732 (7th Cir. 2012) (citing Hoosier
Ins. Co. v. Audiology Found. of America, 745 N.E.2d 300, 309 (Ind. Ct. App.
2001)). Property damage is expected “when the insured acted even though he
was consciously aware that harm was practically certain to occur from his
actions.” Armstrong Cleaners, Inc. v. Erie Ins. Exch., 364 F. Supp. 2d 797, 810
(S.D. Ind. 2005) (quoting PSI Energy, Inc. v. Home Ins. Co., 801 N.E.2d 705, 728
(Ind. Ct. App. 2004)).
Liberty Mutual contends that the allegations in the underlying complaints
alleging that Dometic knew that its products were defectively designed and
manufactured and that these units were causing fires, but continued
manufacturing those products, demonstrate that Dometic expected or intended
the third-party property damage alleged in the underlying complaints. The court
disagrees. These allegations don’t demonstrate that, when Dometic was
manufacturing and selling products, it was “practically certain” that those
products would cause a fire, resulting in third-party property damage. See id.

15

Duty to Indemnify
The parties also moved for judgment on the pleadings on Liberty Mutual’s
claim that it has no duty to indemnify Dometic, but the underlying actions are
still proceeding, so the duty to indemnify claims aren’t ripe. See Med. Assur. Co.
v. Hellman, 610 F.3d 371, 375 (7th Cir. 2010). Accordingly, the proper
disposition for those unripe claims is “to dismiss without prejudice the
declaratory judgment action insofar as it sought a determination of the
company's duty to indemnify.” Prop.-Owners Ins. Co. v. Virk Boyz Liquor Stores,
LLC, 219 F. Supp. 3d 868, 878 (N.D. Ind. 2016) (quoting Nationwide Ins. v.
Zavalis, 52 F.3d 689, 693 (7th Cir. 1995)).

IV. CONCLUSION
For the foregoing reasons, the court:
1. GRANTS Liberty Mutual’s motion for judgment on the pleadings, [Doc. No.
37], with respect to Count I of its complaint, which seeks a declaratory
judgment of no duty to defend or indemnify under the 2004-2005 policy
based on exhaustion;
2. DENIES Liberty Mutual’s motion for judgment on the pleadings, [Doc. No.
37], with respect to Count II of its complaint;
3. GRANTS Dometic’s motion for judgment on the pleadings, [Doc. No. 39],
with respect to Count II of Liberty Mutual’s complaint to the extent it seeks
a declaratory judgment of no duty to defend;

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4. DENIES Dometic’s motion for judgment on the pleadings, [Doc. No. 39],
with respect to Count II of Liberty Mutual’s complaint to the extent it seeks
a declaratory judgment of no duty to indemnify;
5. DISMISSES WITHOUT PREJUDICE Liberty Mutual’s declaratory action to
the extent it sought a determination of no duty to indemnify.
Dometic’s breach of contract counterclaims remain pending.
SO ORDERED.
ENTERED:

March 6, 2019
/s/ Robert L. Miller, Jr.
Judge, United States District Court

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