CMW INTERNATIONAL, LLC et al v. AMERISURE INSURANCE CO.
ORDER ON PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION - For the foregoing reasons, the Court DENIES CMW'S Motion for Preliminary Injunction (Filing No. 5 ). (See Entry.) Signed by Judge Tanya Walton Pratt on 12/27/2016. (JLS)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
CMW INTERNATIONAL LLC and EVERGREEN
HOLDINGS INTERNATIONAL, LLC,
AMERISURE INSURANCE CO.,
) Case No. 1:16-cv-01384-TWP-DKL
ORDER ON PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION
This matter is before the Court on a Motion for Preliminary Injunction filed pursuant to
Federal Rule of Civil Procedure 65 by Plaintiffs CMW International, LLC and Evergreen Holdings
International, LLC (collectively, “CMW”) (Filing No. 5). CMW seeks a declaratory judgment
regarding its rights in relation to its insurer, Defendant Amerisure Mutual Insurance Company
(“Amerisure”). After environmental liability claims were asserted against CMW, Amerisure was
notified of the claims and CMW hired defense counsel and an environmental consultant. CMW
seeks a declaration that it is entitled to retain its chosen defense counsel and environmental
consultant rather than have Amerisure impose its selected defense counsel and environmental
consultant on CMW. In its Motion, CMW asks for a preliminary injunction prohibiting Amerisure
from interfering with CMW’s relationship with its chosen defense counsel and environmental
consultant and requiring Amerisure to continue paying environmental defense costs. For the
following reasons, the Court DENIES CMW’s Motion for Preliminary Injunction.
“A preliminary injunction is an extraordinary remedy never awarded as of right.” Winter
v. Natural Resources Defense Council, Inc., 555 U.S. 7, 24 (2008). Granting a preliminary
injunction is “an exercise of a very far-reaching power, never to be indulged in except in a case
clearly demanding it.” Roland Mach. Co. v. Dresser Indus., Inc., 749 F.2d 380, 389 (7th Cir. 1984)
(citation and quotation marks omitted). When a district court considers whether to issue a
preliminary injunction, the party seeking the injunctive relief must demonstrate that:
(1) it has a reasonable likelihood of success on the merits of its claim; (2) no
adequate remedy at law exists; (3) it will suffer irreparable harm if preliminary
injunctive relief is denied; (4) the irreparable harm it will suffer without preliminary
injunctive relief outweighs the irreparable harm the nonmoving party will suffer if
the preliminary injunction is granted; and (5) the preliminary injunction will not
harm the public interest.
Platinum Home Mortg. Corp. v. Platinum Fin. Group, Inc., 149 F.3d 722, 726 (7th Cir. 1998).
The greater the likelihood of success, the less harm the moving party needs to show to obtain an
injunction, and vice versa. Girl Scouts of Manitou Council, Inc. v. Girl Scouts of the United States
of America, Inc., 549 F.3d 1079, 1086 (7th Cir. 2008).
In the 1940’s P. R. Mallory & Company (“Mallory”) developed battery technology that it
would later trademark under the brand name “Duracell.” Mallory’s Indianapolis, Indiana
operations occupied a large parcel of land centered in and around 70 South Gray Street (the
“Property”), where it manufactured capacitors, timers, controls and metallurgical and specialty
metal products. Following a series of mergers, acquisitions and sales, the metallurgical division
of Mallory was spun off into Contacts, Metals and Welding, Inc. d/b/a CMW, Inc., which operated
on the property at 70 South Gray Street since 1978, and owned the Property since 1983. Plaintiff
CMW is the successor in interest to CMW Inc. The remaining property surrounding the Property
was occupied and used for manufacturing by a number of entities, including predecessors of
Battery Properties, Inc. (“BPI”).
CMW has comprehensive general liability insurance policies issued by Amerisure that
provide insurance coverage for certain environmental liability claims related to the Property.
Sometime before September 2014, BPI began investigating potential environmental
contamination at its property as well as CMW’s Property and the surrounding area. During its
investigation, BPI uncovered evidence of environmental contamination related to CMW and its
predecessors’ use of chlorinated solvents in their operations. Soil borings and groundwater
monitoring by BPI’s environmental consultant detected high concentrations of chlorinated
solvents and other related products in the soil and groundwater on and around the Property. BPI
reported these findings to the Indiana Department of Environmental Management (“IDEM”).
On September 17, 2014, IDEM notified CMW that it was a “responsible person,” allegedly
responsible for environmental contamination that had been found on and around the Property. In
addition, BPI has alleged that CMW is responsible for a portion of the environmental response
costs related to studies about environmental contamination at the same Property. CMW faces
significant exposure measured in the millions of dollars arising from the environmental
contamination on and around the Property. Among other things, IDEM has demanded that CMW
take certain actions to monitor and assess the contaminants’ spread and impact on the area
surrounding the Property. Delay in carrying out these steps could subject CMW to a regulatory
enforcement action brought by IDEM.
From March 1, 1987 through March 1, 1999, and then again from October 15, 2007 through
December 15, 2013, Amerisure provided insurance to CMW pursuant to commercial general
liability policies. The insurance policies require Amerisure to defend and indemnify CMW against
covered liability claims. The policies give Amerisure the “right and duty to defend” its insureds
against covered environmental claims.
The policies also require CMW to cooperate with
Amerisure in its defense of claims.
On October 17, 2014, BPI’s counsel notified some of CMW’s insurers that there was
environmental contamination suspected at the Property. On February 19, 2015, BPI’s counsel sent
CMW’s insurers, including Amerisure, a letter notifying them of the environmental contamination
at the Property and their duty to defend and indemnify.
CMW was not satisfied with the environmental work that was being completed under the
direction of BPI, so CMW hired its own environmental attorney and consultant (Ice Miller and
Environmental Forensic Investigations) in September 2015. On September 11, 2015, Ice Miller
sent CMW’s insurers, including Amerisure, a letter informing them of CMW’s retention of Ice
Miller as counsel and the insurers’ duty to reimburse CMW for the costs of its legal defense and
environmental consulting work. The insurers, including Amerisure, were also notified of CMW’s
retention of Environmental Forensic Investigations on October 1, 2015. On October 15, 2015,
Amerisure acknowledged receipt of CMW’s letters. However, Amerisure did not address CMW’s
retention of Ice Miller and Environmental Forensic Investigations.
Throughout November and December 2015, Ice Miller provided progress updates on the
Property to Amerisure. Amerisure never objected to this work. Amerisure promised to provide
liability coverage to CMW for the IDEM and BPI environmental liability claims. Since the time
Amerisure was first notified of these claims in February 2015, Amerisure has never issued a
reservation of rights letter to CMW or attempted to qualify or limit its coverage obligations. From
the beginning of the project through May 2016, Amerisure paid Ice Miller’s and Environmental
Forensic Investigations’ bills submitted in connection with their work related to the Property.
On February 5, 2016, BPI sent CMW’s counsel a letter further documenting its claims
against CMW related to the environmental contamination at the Property. In the letter, BPI
requested reimbursement for approximately $350,000.00 in past expenses related to environmental
investigation and study as well as for future expenses. On February 25, 2016, the insurers,
including Amerisure, informed CMW for the first time that they wanted to take over the defense
of the IDEM and BPI claims and select a new defense team. This demand came five months after
CMW had retained Ice Miller and Environmental Forensic Investigations and one year after
Amerisure had been notified of the claims.
On May 17, 2016, Amerisure and CMW’s other insurers sent CMW and Ice Miller a letter
instructing CMW to transfer its legal work to counsel selected by Amerisure and informed CMW
that Amerisure would no longer pay Ice Miller’s legal fees for work related to the Property. As of
the date of the hearing on CMW’s Motion for Preliminary Injunction (October 21, 2016),
Amerisure was current on paying all of Environmental Forensic Investigations’ and Ice Miller’s
fees and costs that had been billed and submitted for reimbursement.
CMW filed its Complaint on June 6, 2016, requesting declaratory judgment regarding who
gets to select CMW’s defense counsel and environmental consultant, CMW or Amerisure (Filing
No. 1). Under theories of waiver and estoppel, CMW asserts that it is entitled to continue using
its chosen defense counsel and environmental consultant because Amerisure waited more than a
year to inform CMW that it wanted to use different defense counsel and environmental consultants,
and Amerisure has acquiesced by paying CMW’s attorney fees and environmental consultant
In its Motion for Preliminary Injunction, CMW asks that the Court enter an injunction
prohibiting Amerisure from interfering with CMW’s relationship with its chosen defense counsel
and environmental consultant: Ice Miller and Environmental Forensic Investigations. CMW also
asks for a preliminary injunction requiring Amerisure to continue paying the invoices from Ice
Miller and Environmental Forensic Investigations and to continue with the existing defense team
to defend against the environmental claims asserted by IDEM and BPI against CMW.
In order to obtain a preliminary injunction, CMW must show that it has a reasonable
likelihood of success on the merits of its claims, that no adequate remedy at law exists, that it will
suffer irreparable harm if a preliminary injunction is denied, that the irreparable harm it will suffer
without preliminary injunctive relief outweighs the irreparable harm Amerisure will suffer if the
preliminary injunction is granted, and that the preliminary injunction will not harm the public
interest. Platinum Home Mortg. Corp., 149 F.3d at 726.
CMW argues that it will be irreparably harmed if Amerisure is permitted to force CMW to
agree to use the defense counsel and environmental consultant of Amerisure’s choosing at this
stage of the litigation and the environmental investigation and clean-up. In particular, CMW
contends that changing the defense team at this stage will make it impossible for CMW to meet its
obligations to IDEM and will significantly impair the remediation efforts at the Property. CMW
also asserts that a change could jeopardize its working relationship with IDEM.
In addition, CMW claims that allowing Amerisure to change the defense team will prevent
CMW from using the Property and taking advantage of current development opportunities and
incentives. The Property is within the Indianapolis neighborhood of Englewood Village, which
was recently announced as part of the “Great Places 2020” initiative established by the City of
Indianapolis in partnership with a number of nonprofits, including national community
development organization Local Initiatives Support Corporation (commonly known as LISC).
The initiative’s purpose is to foster sustainable redevelopment and revitalization of the City of
Indianapolis. CMW explains that the Marion County Assessor’s office has established the current
assessed value of the Property to be $1,924,600.00, and asserts that any delay in the remediation
of the Property and obtaining regulatory closure will drastically reduce the value of the Property
and curtail development opportunities.
Regarding the factors for a preliminary injunction, CMW asserts that it has a likelihood of
success on the merits regarding its theories of waiver and estoppel because Amerisure never
objected to CMW’s choice of counsel and consultant for five months and, in fact, it paid the
invoices for CMW’s chosen defense team. CMW points to seven cases in support of its argument
that it has some likelihood of success on the merits. See Haley v. Kolbe & Kolbe Millwork Co.,
Inc., 97 F. Supp. 3d 1047 (W.D. Wis. 2015); American Family Mut. Ins. Co. v. Kivela, 408 N.E.2d
805 (Ind. Ct. App. 1980); Protective Ins. Co. v. Coca-Cola Bottling Co., 423 N.E.2d 656 (Ind. Ct.
App. 1981); Federal Ins. Co. v. Stroh Brewing Co., 127 F.3d 563 (7th Cir. 1997); Federal Ins. Co.
v. Stroh Brewing Co., 35 F. Supp. 2d 650 (N.D. Ind. 1998); Indiana Ins. Co. v. Ivetich, 445 N.E.2d
110 (Ind. Ct. App. 1983); West v. Indiana Ins. Co., 264 N.E.2d 335 (Ind. Ct. App. 1970). In each
of these cases, based upon the specific facts of the case, the court held that the insurer waived (or
was estopped from raising) coverage defenses by untimely raising the defense.
CMW further argues that it will be irreparably harmed by Amerisure’s change of defense
team in the middle of the investigation and clean-up because such a change will delay the cleanup, cause IDEM deadlines to be missed, possibly damage the relationship between CMW and
IDEM, and cause CMW to miss the redevelopment opportunities presented by Indianapolis’
CMW asserts that a damaged relationship with IDEM will not be remedied by a traditional
legal remedy. Further, CMW asserts that the balance of harms weighs in its favor because the
effects of changing its defense team (delays, damaged working relationships, and reduced property
value) cannot be undone, whereas Amerisure will suffer no harm by continuing its current course
of paying the invoices of CMW’s current defense team.
Lastly, CMW argues that the public interest would be served by an injunction because it
would allow for a speedier remediation of the Property, which would allow for productive use and
revitalization of the blighted area. It also argues that the public interest is served in honoring the
attorney-client relationship and allowing a client to choose its own counsel.
In responding to CMW’s request for a preliminary injunction, Amerisure asserts that any
delay in providing a defense before September 2015 is attributable to CMW because CMW never
filed a claim with or requested a defense from Amerisure until after it had retained Ice Miller and
sent a letter to Amerisure on September 11, 2015. After receiving notice from CMW in September
2015, Amerisure communicated with CMW and also tried to locate policy information for CMW,
which dated back to 1987. At no time during this initial investigative period did Amerisure
disclaim coverage or reserve the right to do so. Amerisure paid CMW’s defense costs as they were
incurred and submitted for reimbursement.
Amerisure accurately explains that CMW has conceded that general liability policies give
insurers the right to control the defense of claims. Amerisure asserts that this right carries with it
the right to make decisions regarding the overall conduct of the defense of the underlying litigation,
which is well recognized in Indiana and elsewhere, pointing to Armstrong Cleaners, Inc. v. Erie
Ins. Exchange, 364 F. Supp. 2d 797, 806 (S.D. Ind. 2005) (“liability insurance policies typically
give the insurer control over the defense of the underlying litigation”). Amerisure’s right to control
the defense comes directly from the language in the insurance contracts, which explains
Amerisure’s “right and duty to defend the insured.” (Filing No. 1-1 at 7.) Amerisure’s right to
control the defense also stems from an insurer’s right to protect its financial interests. See Nat’l
Cas. Co. v. Forge Indus. Staffing, Inc., 567 F.3d 871, 874 (7th Cir. 2009) (“an insurer has this right
so that it may protect its financial interest in the litigation’s outcome and minimize unwarranted
Amerisure further explains that CMW also has conceded that, absent a conflict of interest,
an insurer’s right to select defense counsel is inherent in the insurer’s right to control the defense,
pointing to Armstrong Cleaners. Because Amerisure has assumed the defense of the claims
asserted against CMW without any reservation of rights, Amerisure explains that there is no
conflict of interest, and thus, it is entitled to select the defense team for CMW.
Amerisure argues that CMW has no likelihood of success on the merits under the theories
of waiver and estoppel because there has been no express waiver and there is no prejudice to CMW.
In order for waiver to apply, there must be an intentional, express relinquishment of rights, and
Amerisure simply did not intentionally and expressly waive any rights. Silence or inaction cannot
be the basis for an express waiver. See Tate v. Secura Ins., 587 N.E.2d 665, 671 (Ind. 1992);
Westfield Nat’l Ins. Co. v. Nakao, 963 N.E.2d 1126, 1132 (Ind. Ct. App. 2012). Amerisure points
out that CMW argues only that Amerisure’s alleged delay in asserting its rights and its
acquiescence to CMW’s selection of counsel amounts to waiver; thus, there is no express waiver.
Implied waiver or estoppel may apply when express waiver does not apply. However, in
order for implied waiver or estoppel to apply, CMW must have suffered prejudice as a result of
Amerisure’s actions or inaction. Amerisure points to the decisions in Tate and Nakao for this
argument. Amerisure argues that CMW cannot show that it detrimentally relied on Amerisure,
thereby leading to prejudice, because Amerisure assumed CMW’s defense without any reservation
of rights and has fully paid the invoices submitted to it by CMW. Amerisure has agreed to continue
paying for CMW’s defense after the matter is transferred to Amerisure’s chosen defense team.
Furthermore, Amerisure has agreed to pay both CMW’s chosen defense team and its own chosen
defense team during the time of transition. Therefore, CMW cannot show that it has been or will
be prejudiced. Amerisure explains that, without an express waiver and without prejudice, CMW
has no likelihood of success on the merits under its theories of waiver and estoppel.
Concerning irreparable harm and adequate legal remedies, Amerisure explains that CMW’s
concern over any potential delays in the clean-up is unfounded because Amerisure has agreed to
continue paying Ice Miller and Environmental Forensic Investigations until the matter is
transitioned to the new defense team. Thus, work at the Property can continue to move forward
without delay. Amerisure also explains that the counsel and consultant of its choosing have
extensive experience working with IDEM, so CMW’s concern about a damaged relationship with
IDEM is also unfounded. CMW has failed to specify any set deadlines imposed by IDEM, making
the argument of missed deadlines unfounded. Finally, CMW’s concern about missed opportunities
for property development and use are highly speculative and purely financial. Therefore, legal
remedies (money damages) are adequate to address any potential injury suffered by CMW,
precluding a preliminary injunction.
Amerisure asserts that the balance of harms does not favor an injunction because the
absence of an injunction will not leave CMW without any defense and will not require CMW to
start paying for its defense. Amerisure has agreed without reservation of rights to provide
coverage, has paid for the defense, and will continue to pay for the defense. CMW suffers no harm
without an injunction. On the other hand, Amerisure will not be able to ensure that the defense
work being completed is reasonable and necessary and not duplicative if an injunction is granted,
thereby depriving it of its contractual right to control the defense.
Amerisure agrees with CMW that a speedy clean-up will benefit the public. It has agreed
to pay CMW’s chosen defense team during the time of transition to Amerisure’s chosen defense
team, who also has extensive experience working with IDEM on environmental claims, which will
allow for the clean-up to proceed in a timely manner. Amerisure also asserts that the public interest
is advanced when courts honor the freedom to contract, and the insurance contracts plainly state
that Amerisure has the right to control the defense. Thus, Amerisure argues, a preliminary
injunction in favor of CMW is inappropriate.
During the preliminary injunction hearing, CMW’s environmental consultant conceded
that many other environmental consultants—including Amerisure’s chosen consultant—are
capable of performing the work necessary to clean up the Property and have working relationships
When asked during the hearing about the purely financial nature of the harms CMW has
asserted that it will suffer, CMW conceded that the environmental claims brought by IDEM and
BPI against CMW are claims that Amerisure has agreed to defend without any reservation of rights
and that Amerisure has been paying the defense costs, so these costs were not at issue. Then CMW
argued that the potential lost development opportunities and investment opportunities were harms
that could not be remedied by a monetary award because CMW could not establish a current value
of the Property. Yet, in its own Verified Complaint, CMW alleged that the Marion County
Assessor’s office has established the current assessed value of the Property to be $1,924,600.00
(Filing No. 1 at 3).
Because Amerisure has not reserved any rights and has been paying all the defense fees
and costs to date, the Court is hard-pressed to find a conflict of interest that would override the
express and plain contractual right of Amerisure to control the defense of the claims asserted
against CMW, which are insured under the insurance contracts. Amerisure has not expressly
waived its rights, and there is no implied waiver or estoppel because CMW has not and will not
suffer prejudice because Amerisure has been paying all defense costs without a reservation of
rights. Therefore, the Court determines that CMW has failed to show a reasonable likelihood of
success on the merits of its waiver and estoppel claims.
The potential harms alleged by CMW—lost property value, lost development
opportunities, lost investment opportunities, payment of environmental attorney and consultant
fees—are each purely monetary harms that can be adequately remedied by a legal remedy. Any
irreparable harm asserted by CMW—delays in the clean-up, missed IDEM deadlines, and a
damaged relationship between CMW and IDEM—appears to be highly speculative because
Amerisure has paid and promises to continue to pay all defense costs, and it is selecting an
environmental defense team that has experience working with IDEM on projects similar to the
Property. Further, there is no evidence of missed IDEM deadlines or impending IDEM deadlines.
Both CMW and Amerisure agree on the public interest being served by a speedy clean-up
of the Property. The freedom to contract and the Court’s enforcement of unambiguous contractual
terms is equally important as honoring the attorney-client relationship and allowing a client to
choose its own counsel. In light of these determinations, it is clear that a preliminary injunction is
not warranted in this action.
For the foregoing reasons, the Court DENIES CMW’s Motion for Preliminary Injunction
(Filing No. 5).
Andrew Bentley Janutolo
GOODIN ABERNATHY LLP
Karl G. Popowics
GOODIN ABERNATHY LLP
Robert D. Zink
GOODIN ABERNATHY LLP
Kaitlyn Jordan Marschke
ICE MILLER LLP
ICE MILLER LLP
Nicholas B. Reuhs
ICE MILLER LLP
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?