Garris et al v. Pelonis Appliances, Inc. et al

Filing 354

ORDER Denying 340 Motion for Summary Judgment; Granting 341 Motion for Summary Judgment. Signed by Judge Jay C. Zainey on 3/21/2017. (Reference: 10-4513, 12-1358)(ajn)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
ELIZABETH GARRIS, ET AL.

CIVIL ACTION

VERSUS

NO: 10-1569

PELONIS APPLIANCES, INC. ET AL

SECTION: "A" (1)
ORDER

Before the Court is a Motion for Summary Judgment (Rec. Doc. 340) filed by Defendant
Pelonis, USA Ltd (“Pelonis USA”). Defendant Allianz Versicherungs AG opposes the motion.
(Rec. Doc. 342). Also before the Court is a Motion for Summary Judgment (Rec. Doc. 341)
filed by Defendant Allianz Versicherungs AG (“Allianz AG”). Defendant Pelonis USA opposes
the motion. (Rec. Doc. 343). The motions, set for submission on December 14, 2016, are before
the Court on the briefs.
I.

Background
Defendant Pelonis USA filed its motion for summary judgment against Defendant Allianz

AG seeking the defense costs Pelonis USA has paid to Dan Dwyer and the Unruh, Turner, Burke
& Frees firm from the underlying matter. Defendant Allianz AG filed its opposing motion for
summary judgment, seeking dismissal of Pelonis USA’s claim against Allianz AG with prejudice.
The Court dismissed the underlying matter on April 29, 2016, after the case settled, but retained
jurisdiction over claims for reimbursement of attorney’s fees and litigation costs.
Plaintiffs originally initiated their action in 2010 based on a fire that was allegedly caused
by a defective heater. The insurance policy on the heater was issued by Allianz China which in
2009, at the time of the incident, was a branch of Allianz AG. Allianz China became its own entity
in 2010, but Chinese insurance regulations required that Allianz AG continue to guarantee the
obligations of its insurance policies in the event that Allianz China failed to perform them.
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Specifically the document that Allianz AG signed in order for the Chinese government to allow
Allianz’s Chinese branch to become its own entity stated that:
The claims and debts of the original Allianz Insurance Company Gungzhou Branch
shall be shared and carried by the transformed Allianz Property Insurance (China)
Co. Ltd. Its outstanding insurance contracts and other contracts will continue
performing under Allianz Property Insurance (China) Co. Ltd. Allianz Insurance
Company shall assume joint liability for the aforementioned debts, insurance
policies and contracts.
When Plaintiffs brought this action in May of 2010, Allianz China retained
Dominick W. Savaiano of the Clausen Miller, P.C. firm as counsel for Defendants Midea
USA and Pelonis Appliances. Then, with Allianz China’s approval, Clausen Miller, P.C.
retained George Hebbler of the Hebbler & Giordano, LLC firm as local counsel for
Defendants Midea USA and Pelonis Appliances. The case was consolidated with another
action and its defense was led by Betsy Grover of Clausen Miller, P.C. (Rec. Doc. 341).
In December of 2011, Plaintiffs Ronald Garris and Mark Wallace initiated an action
against Pelonis USA in the United States District Court for the Eastern District of
Pennsylvania. Dan Dwyer, Esq. and the law firm Unruh, Turner, Burke & Frees have been
Pelonis USA’s longstanding corporate counsel and represented Pelonis USA in the
Pennsylvania litigation, which was later transferred to the Eastern District of Louisiana and
consolidated with this lawsuit.
Plaintiffs Ronald Garris and Mark Wallace then filed a second supplemental and
amending complaint against Pelonis USA, for which Pelonis USA retained Jack Alltmont,
Esq. and the Sessions Fishman firm. Allianz China “decided to provide indemnity and
defense to Pelonis USA and authorized the retention of Jack Alltmont and the Sessions
Fishman firm to continue its defense of Pelonis USA.” (Rec. Doc. 341). The parties
ultimately settled in 2016. As of now, Allianz China has covered the defense costs incurred
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by Pelonis USA for its Louisiana counsel, but not its Pennsylvania counsel (Rec. Doc.
340).
II.

Analysis
Defendant Pelonis USA moves for summary judgment against Defendant Allianz AG

seeking defense costs incurred from retaining Mr. Dan Dwyer and the Unruh, Turner, Burke &
Frees firm. Defendant Allianz AG moves for summary judgment to dismiss Defendant Pelonis
USA’s claims for defense costs incurred.
Summary judgment is appropriate only if “the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any,” when viewed in the
light most favorable to the non-movant, “show that there is no genuine issue as to any material
fact.” TIG Ins. Co. v. Sedgwick James, 276 F.3d 754, 759 (5th Cir. 2002) (citing Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986)). A dispute about a material fact is “genuine” if
the evidence is such that a reasonable jury could return a verdict for the non-moving party. Id.
(citing Anderson, 477 U.S. at 248). The court must draw all justifiable inferences in favor of the
non-moving party. Id. (citing Anderson, 477 U.S. at 255).
Once the moving party has initially shown “that there is an absence of evidence to support
the non-moving party’s cause,” Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986), the nonmovant must come forward with “specific facts” showing a genuine factual issue for trial. Id.
(citing Fed.R.Civ.P. 56(e); Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986)).
Conclusional allegations and denials, speculation, improbable inferences, unsubstantiated
assertions, and legalistic argumentation do not adequately substitute for specific facts showing a
genuine issue for trial. Id. (citing SEC v. Recile, 10 F.3d 1093, 1097 (5th Cir.1993)). Additionally,
if the nonmoving party would bear the burden of proof of the dispositive issue at trial, then the

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moving party can satisfy its burden by proving that the evidence in the record contains insufficient
proof concerning an essential element of the nonmoving party’s claim. Celotex Corp. v. Catrett,
477 U.S. 317, 325 (1986).
1. Pelonis USA’s Motion for Summary Judgment
Pelonis USA seeks summary judgment in its favor to recover the defense costs incurred
from retaining Dan Dwyer and the Unruh, Turner, Burke & Frees firm. Plaintiff bases its motion
for summary judgment on Allianz AG’s agreement to assume joint liability for Allianz China’s
debts and because Allianz China “reported that it would cover the defense of Pelonis, USA” when
Jack Alltmont of the Sessions Fishman firm made a demand for defense costs. Allianz AG opposed
Pelonis USA’s motion, arguing that even if Allianz AG agreed to joint liability of Allianz China’s
obligations, Pelonis USA has failed to prove that Allianz China owes Pelonis USA the defense
costs from retaining Dan Dwyer and the Unruh, Turner, Burke & Frees firm. Indeed, whether
Allianz AG is liable for defense costs turns on whether Allianz China is liable for those costs.
The Court finds that, drawing inferences in the light most favorable to Allianz AG, Pelonis
USA has failed to prove that it is entitled to summary judgment against Allianz AG for the defense
costs from retaining Dan Dwyer and the Unruh, Turner, Burke & Frees firm because Pelonis USA
has failed to prove that Allianz China is liable for those costs. Pelonis USA has not provided the
Court with any proof that Allianz China is liable for the defense costs from retaining Dan Dwyer
and the Unruh, Turner, Burke & Frees firm. Pelonis USA has failed to provide the Court with any
agreement between Pelonis USA and Allianz China in which Allianz China agrees to pay all of
Pelonis USA’s defense costs. The three-page insurance policy that Pelonis USA does provide
merely states that Allianz China is an insurance provider to a number of companies, none of which
is Pelonis USA, in the United States.

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The other piece of evidence that Pelonis USA relies upon, an e-mail exchange in which
Allianz China’s attorney states that it would cover the defense of Pelonis USA, was sent years ago
in response to Jack Alltmont’s formal demand for defense. The e-mail, at most, supports Allianz
China’s agreement to cover the defense costs of retaining Jack Allmont and his firm Sessions,
Fishman, Nathan, and Israel LLC. Allianz China has already covered those defense costs, the issue
here is the legal fees of the Pennsylvania attorneys. Allianz AG has repeatedly said that Allianz
China “never agreed to retain Mr. Dwyer or his firm to perform any work or services on behalf of
any Pelonis entity in this or in any litigation.” (Rec. Doc. 341-1). Absent proof of an agreement
between Allianz China and Pelonis USA to cover the defense costs from retaining Dan Dwyer and
the Unruh, Turner, Burke & Frees firm. Pelonis USA is not entitled to summary judgment in its
favor for defense costs from retaining Dan Dwyer and the Unruh, Turner, Burke & Frees firm.
2. Allianz AG’s Motion for Summary Judgment
Allianz AG moves for summary judgement to dismiss with prejudice Pelonis USA’s claims
for defense costs, making the same arguments it made when Allianz AG opposed Pelonis USA’s
Motion. For reasons previously stated, the Court finds that Pelonis USA did not meet its burden
of proving that it is entitled to summary judgment in its favor for the defense costs from retaining
Dan Dwyer and the Unruh, Turner, Burke & Frees firm. The Court finds that Allianz AG is entitled
to summary judgment given the absence of any legal basis for Pelonis USA to receive defense
costs from retaining Dan Dwyer and the Unruh, Turner, Burke & Frees firm. The Court has not
been given any evidence of an agreement between Allianz China and Pelonis USA for
reimbursement of Dan Dwyer and the Unruh, Turner, Burke & Frees firm’s fees. Therefore,
Allianz AG is entitled to summary judgment in its favor, and Pelonis USA’s claims for the defense

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costs from retaining Dan Dwyer and the Unruh, Turner, Burke & Frees firm is dismissed with
prejudice.
Accordingly;
IT IS ORDERED that the Motion for Summary Judgment (Rec. Doc. 340) filed by
Defendant Pelonis USA is DENIED.
IT IS FURTHER ORDERED that the Motion for Summary Judgment (Rec. Doc. 341)
filed by Defendant Allianz AG is GRANTED.
New Orleans, Louisiana this 21th day of March, 2017.

__________________________________________
JAY C. ZAINEY
UNITED STATES DISTRICT JUDGE

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