Meridian Chemicals, LLC et al v. Torque Logistics, LLC et al

Filing 60

RULING granting 13 Motion for Summary Judgment as to all claims of by Meridian, as they are unambiguously excluded under the insurance policy issued to Torque. Signed by Chief Judge Shelly D. Dick on 9/27/2018. (EDC)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

MERIDIAN CHEMICALS, LLC, ET AL,

CIVIL ACTION

VERSUS
TORQUE LOGISTICS, LLC, ET AL

18-002-SDD-EWD
RULING

Before the Court is a Motion for Summary Judgment1 filed by Defendant, Kinsale
Insurance Company (“Kinsale”). Kinsale is the Commercial General Liability Insurer of
Torque Logistics, LLC, (“Torque”). Plaintiffs, Meridian Chemicals LLC (“Meridian”), and
Aspen Specialty Insurance Co. (“Aspen”),2 have filed an Opposition.3 Kinsale filed a
Reply.4 For the following reasons, the Court finds that the Motion should be GRANTED.
I.

FACTUAL BACKGROUND
Meridian instituted the foregoing action against Torque and its insurer Kinsale

Insurance Co. for Torque’s failure to manage and oversee tanks of Black Liquor Soap
stored on property owned by Beaulieu Plantation, Inc. (“Beaulieu”). The claims against
Torque and Kinsale arise out of a breach of the lease agreement between Torque and
Beaulieu. Specifically, the Lease provided that, if the Property became contaminated with
“hazardous material” – as defined by the Lease - as a result of the acts of Torque or its

1

Rec. Doc. 13.
As Aspen is the insurance company of Meridian, any and all reference to Meridian or Plaintiff includes
both Meridian and Aspen for the purposes of this Ruling.
3
Rec. Doc. 51.
4
Rec. Doc. 54.
2

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“invitees, agents, or otherwise,” Torque had to indemnify and hold Beaulieu harmless for
all damages or losses, including attorney’s fees, arising as a result of the contamination.5
The Lease also required Torque, at its expense, to promptly take any and all necessary
actions to return the Property to the condition existing before the presence of any
“hazardous material.”6 Meridian instituted suit after it executed an Assignment of Claims
(“the Assignment”) with Beaulieu, assigning Meridian “any and all claims and causes of
action of any kind whatsoever … which [Beaulieu] may have against all persons and
entities that are related to the Product Release” that gave rise to the instant lawsuit.7
The Product Release in the Assignment is a reference to the incident giving rise to
this suit foregoing lawsuit. Meridian alleges that, on or about March 6, 2017, a spill,
release, or discharge of Black Liquor Soap was discovered at the Beaulieu property and
was caused by the actions of Torque.8 Meridian further alleges that it incurred
approximately $2,625,000.00 in expenses to clean up, remediate, and/or restore the
property and surrounding ditches which were contaminated by the Black Liquor Soap.9
Kinsale brings the current Motion arguing that it is entitled to summary judgment
as a matter of law because the insurance policy issued to Torque has an Absolute
Pollution and Pollution Related Liability exclusion which excludes coverage for all the
claims alleged by Meridian, as that exclusion has been interpreted, by the Louisiana
Supreme Court in Doerr v. Mobil Oil Corp.10

5

Rec. Doc. 1-3, pp. 5, 28-31.
Id.
7
Rec. Doc. 1-3, p. 37.
8
Id. at p. 6.
9
Id. at pp. 6-7.
10
2000-0947, (La. 12/19/00); 774 So. 2d 119, opinion corrected on reh'g, 2000-0947 (La. 3/16/01), 782 So.
2d 573.
6

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In opposition, Meridian argues that Kinsale’s Motion should be denied because
there is a material issue of fact as to whether the Absolute Pollution Exclusion applies.
II.

LAW AND ANALYSIS
A. Summary Judgment Standard
“The court shall grant summary judgment if the movant shows that there is no

genuine dispute as to any material fact and the movant is entitled to judgment as a matter
of law.”11 “When assessing whether a dispute to any material fact exists, we consider all
of the evidence in the record but refrain from making credibility determinations or weighing
the evidence.”12 A party moving for summary judgment “must ‘demonstrate the absence
of a genuine issue of material fact,’ but need not negate the elements of the nonmovant’s
case.”13 If the moving party satisfies its burden, “the non-moving party must show that
summary judgment is inappropriate by setting ‘forth specific facts showing the existence
of a genuine issue concerning every essential component of its case.’”14 However, the
non-moving party’s burden “is not satisfied with some metaphysical doubt as to the
material facts, by conclusory allegations, by unsubstantiated assertions, or by only a
scintilla of evidence.”15
Notably, “[a] genuine issue of material fact exists, ‘if the evidence is such that a

11

Fed. R. Civ. P. 56(a).
Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398-99 (5th Cir. 2008).
13
Guerin v. Pointe Coupee Parish Nursing Home, 246 F.Supp.2d 488, 494 (M.D. La. 2003)(quoting Little
v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994)(en banc)(quoting Celotex Corp. v. Catrett, 477 U.S.
317, 323-25, 106 S.Ct. at 2552)).
14
Rivera v. Houston Independent School Dist., 349 F.3d 244, 247 (5th Cir. 2003)(quoting Morris v. Covan
World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998)).
15
Willis v. Roche Biomedical Laboratories, Inc., 61 F.3d 313, 315 (5th Cir. 1995)(quoting Little v. Liquid Air
Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).
12

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reasonable jury could return a verdict for the nonmoving party.’”16 All reasonable factual
inferences are drawn in favor of the nonmoving party.17 However, “[t]he Court has no
duty to search the record for material fact issues. Rather, the party opposing the summary
judgment is required to identify specific evidence in the record and to articulate precisely
how this evidence supports his claim.”18 “Conclusory allegations unsupported by specific
facts … will not prevent the award of summary judgment; ‘the plaintiff [can]not rest on his
allegations … to get to a jury without any “significant probative evidence tending to
support the complaint.”’”19
B. The Policy Language
Kinsale’s policy, Policy No. 0100033968-1 issued to Torque, is a commercial
general liability policy which contains an “Absolute Pollution Exclusion” that provides in
pertinent part, as follows:
The following exclusions are added to this policy. If this policy already
includes a pollution exclusion or a pollution related exclusion, such
exclusion(s) is (are) deleted and replaced with the following:
1. This insurance does not apply to any claim or “suit” for “bodily injury”,
“property damage”, “personal and advertising injury” or other injury or
damage arising directly or indirectly out of, related to, or, in any way
involving:
Pollution/environmental impairment/contamination or any expenses or
any obligation to share damages with or repay anyone else who must
pay damages from same in conjunction with occurrences arising out of
or alleged to have arisen out of same. All liability and expense arising
out of or related to any form of pollution, whether intentional or otherwise
and whether or not any resulting injury, damage, devaluation, cost or
16

Pylant v. Hartford Life and Accident Insurance Company, 497 F.3d 536, 538 (5th Cir. 2007)(quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).
17
Galindo v. Precision American Corp., 754 F.2d 1212, 1216 (5th Cir. 1985).
18
RSR Corp. v. International Ins. Co., 612 F.3d 851, 857 (5th Cir. 2010).
19
Nat’l Ass’n of Gov’t Employees v. City Pub. Serv. Bd. of San Antonio, Tex., 40 F.3d 698, 713 (5th Cir.
1994)(quoting Anderson, 477 U.S. at 249).

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expense is expected by any insured or any person or entity, is excluded
throughout this policy.
2. This insurance does not apply to any damages, claim, or “suit” arising
out of the actual, alleged or threatened discharge, dispersal, seepage,
migration, release or escape of "pollutants" including but not limited to
any:
a. “Bodily injury”, “personal and advertising injury”, “property damage”
or other injury or damages for the devaluation of property, or for
taking, use or acquisition or interference with the rights of others in
or on property or air space, or any other type injury or expense; or
b. Any loss, cost, expense, fines and/or penalties arising out of any (i)
request, demand, order, governmental authority or directive that of
any private party or citizen action that any insured, or others, test for,
monitor, clean up, remove, contain, treat, detoxify or neutralize or in
any way respond to, or assess same, the effects of “pollutants”,
environmental impairments, contaminants or (ii) any litigation or
administrative procedure in which any insured or others may be
involved as a party as a result of actual, alleged or threatened
discharge, dispersal, seepage, migration, release, escape or
placement of “pollutants”, environmental impairments, or
contaminants into or upon land, premises, buildings, the
atmosphere, any water course, body of water, aquifer or ground
water, whether sudden, accidental or gradual in nature or not, and
regardless of when.
These exclusions apply regardless of whether:
1. Injury or damage claimed is included within the “productscompleted operations hazard” of the policy; or
2. An alleged cause for the injury or damage is the insured's
negligent hiring, placement, training, supervision, retention,
act, error or omission.
The following definition is added to the policy. If the policy already includes
a definition of “pollutants” such definition is deleted and replaced with the
following:
“Pollutants” means any solid, liquid, gaseous, fuel, lubricant, thermal,
acoustic, electrical, or magnetic irritant or contaminant, including but not
limited to smoke, vapor, soot, fumes, fibers, radiation, acid, alkalis,
petroleums, chemicals or “waste”. “Waste” includes medical waste,
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biological infectants, and all other materials to be disposed of, recycled,
stored, reconditioned or reclaimed.20
C. Interpretation of Insurance Contracts
Because subject matter jurisdiction in this case is based on diversity of citizenship,
the Court applies the law of the forum state. In Louisiana, in an action under an insurance
contract, the insured bears the burden of proving the existence of policy and coverage.
The insurer, however, bears the burden of showing any policy limits or exclusions.21
Summary judgment declaring a lack of coverage under an insurance policy is not proper
unless there is no reasonable interpretation of the policy, when applied to the undisputed
material facts shown by the evidence supporting the motion, under which coverage could
be afforded.22
An insurance policy is a contract between the parties and should be construed
using ordinary contract principles. The parties' intent, as reflected by the words of the
policy, determines the extent of coverage. An insurance policy should not be interpreted
in an unreasonable or a strained manner so as to enlarge or to restrict its provisions
beyond what is reasonably contemplated by its terms or so as to achieve an absurd
conclusion. However, if after applying the other rules of construction an ambiguity
remains, the ambiguous provision is to be construed against the drafter and in favor of
the insured.23

20

Rec. Doc. 13-3, pp. 37-38.
Tunstall v. Stierwald, 2001–1765 (La. 2/26/02); 809 So.2d 916; Curry v. Taylor, 40,185 (La. App. 2d Cir.
9/21/05); 912 So.2d 78; Whitham v. Louisiana Farm Bureau Casualty Insurance Company, 45,199 (La.
App. 2d Cir. 4/14/10); 34 So.3d 1104.
22
Elliott v. Continental Casualty Company, 2006–1505 (La. 2/22/07); 949 So.2d 1247; Reynolds v. Select
Properties, Ltd., 93–1480 (La. 4/11/94); 634 So.2d 1180; Palmer v. Martinez, 45,318 (La. App. 2d Cir.
7/21/10); 42 So.3d 1147, writs denied, 2010–1952, 2010–1953, 2010–1955 (La. 11/5/10); 50 So.3d 804,
805.
23
Curry v. Taylor, supra; Whitham v. Louisiana Farm Bureau Casualty Insurance Company, supra.
21

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Louisiana courts have held that insurance companies have the right to limit
coverage in any manner they desire, as long as the limitations do not conflict with statutory
provisions or public policy.24 The Louisiana Supreme Court has specifically addressed
the pollution exclusion at issue here:
[A] total pollution exclusion was neither designed nor intended to be read
strictly to exclude coverage for all interactions with irritants or contaminants
of any kind. Instead, we find that “[i]t is appropriate to construe [a] pollution
exclusion clause in light of its general purpose, which is to exclude coverage
for environmental pollution, and under such interpretation, [the] clause will
not be applied to all contact with substances that may be classified as
pollutants.” Russ, supra, at § 127:6 n. 62. The applicability of a total pollution
exclusion in any given case must necessarily turn on several
considerations:
(1) Whether the insured is a “polluter” within the meaning of the exclusion;
(2) Whether the injury-causing substance is a “pollutant” within the meaning
of the exclusion; and
(3) Whether there was a “discharge, dispersal, seepage, migration, release
or escape” of a pollutant by the insured within the meaning of the policy.25
Kinsale argues that the second part of the Absolute Pollution Exclusion meets the Doerr
factors presented above. The Court will discuss each of these enumerated factors below.
D. The Absolute Pollution Exclusion
i. Torque is a Polluter
In determining whether an insured is a Polluter, the Louisiana Supreme Court
enunciated the following considerations: (1) the nature of the insured's business, (2)
whether that type of business presents a risk of pollution, (3) whether the insured has a

24

Elliott v. Continental Casualty Company, supra; Reynolds v. Select Properties, Ltd., supra; Chretien v.
Thomas, 45,762 (La.App.2d Cir.12/15/10), 56 So.3d 298.
25
Doerr v. Mobil Oil Corp., 2000-0947 (La. 12/19/00), 774 So. 2d 119, 135, opinion corrected on reh'g,
2000-0947 (La. 3/16/01), 782 So. 2d 573.

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separate policy covering the disputed claim, (4) whether the insured should have known
from a read[ing] of the exclusion that a separate policy covering pollution damages would
be necessary for the insured's business, (5) who the insurer typically insures, (6) any
other claims made under the policy, and (7) any other factor the trier of fact deems
relevant to this conclusion.26
Here, Torque is alleged to be an operator of tank storage facilities located in Port
Allen, Louisiana.27 The company was originally formed for the purpose of transporting
and storing calcium chloride for Meridian.28 In 2016, Torque began storing Black Liquor
Soap for Meridian.29

While the Court located no Louisiana jurisprudence providing

guidance on whether a trucking and storage company such as Torque qualifies as a
polluter, the summary judgment evidence indicates that Torque anticipated that its
business presented a risk of pollution. The record evidence shows that the lease
agreement between Torque and Beaulieu required Torque to carry both general liability
insurance in the amount of $1,000,000 and pollution insurance in the amount of
$5,000,000.30 In addition, the lease contains a lengthy environmental provision prohibiting
contamination of the property or its neighbors and describes in detail the repercussions if
contamination should occur.31
In arguing that Torque is not a polluter, Meridian presents evidence of Torque’s
subjective opinion that the materials it hauls are not hazardous or that it has never

26

Doerr, 782 So. 2d at 135.
Rec. Doc. 1-3, p. 3.
28
Rec. Doc. 51-2, pp. 3-6.
29
Rec. Doc. 1-3, p. 4.
30
Id. at pp. 20-21.
31
Id. at pp. 28-31.
27

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transported hazardous waste.32 Additionally, Meridian argues that Torque lacks the
equipment and procedures associated with a polluter.33 Meridian provides no case law to
support this argument and fails to explain what equipment or procedures would normally
be associated with a polluter. As such, Meridian has failed to present evidence to
demonstrate a material issue of fact as to whether Torque is a polluter. Considering the
factors enumerated in Doerr, the Court finds that Torque is a polluter within the meaning
of the exclusion.
ii. Black Liquor Soap is a Pollutant
In determining whether an injury-causing substance is a pollutant, the Louisiana
Supreme Court enunciated the following considerations: (1) the nature of the injurycausing substance, (2) its typical usage, (3) the quantity of the discharge, (4) whether the
substance was being used for its intended purpose when the injury took place, (5) whether
the substance is one that would be viewed as a pollutant as the term is generally
understood, and (6) any other factor the trier of fact deems relevant to that conclusion.34
Here, Kinsale argues that the policy defines pollutants as including any “irritant or
contaminant.”35 Further, Kinsale argues that the Petition itself forecloses any argument
that Black Liquor Soap is not a pollutant insofar as it alleges that the soap “harmed and
contaminated the soil,” caused “contamination on the Property,” “led to the contamination
of the Property and nearby ditches,” and caused “contamination on the property.”36
Finally, Kinsale contends any argument by Meridian that Black Liquor Soap is not harmful

32

Rec. Doc. 51, p. 2.
Id.
34
Doerr, 782 So. 2d at 135.
35
Rec. Doc. 13-1, p.9; Rec. Doc. 13-3, p. 38.
36
Rec. Doc. 13-1, p. 9, citing to the Petition at Rec. Doc. 1-3, pp. 8-11.
33

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to the environment is directly refuted by Louisiana Senate Resolution 183 which found
that “black liquor impacts the environment through destruction of aquatic ecosystems,
and kills a large number of fish estimated possibly in excess of fourteen million, turtles,
mussels and other listed endangered species in the Pearl River… .37
Kinsale’s arguments are supported by the Court’s findings as well. The
Environmental Protection Agency (“EPA”)38 issued a document entitled Technical
Support Document for Best Management Practices for Spent Pulping Liquor
Management, Spill Prevention and Control,39 which provides:
The BMPs [Best Management Practices] establish controls that will reduce
the release of toxic, conventional, and nonconventional pollutants to
navigable waters. The principal objective of the BMPs is to prevent losses
and spills of spent pulping liquor (also referred to as "black liquor” at kraft
mills) from equipment items in pulping liquor service; the secondary
objective is to contain, collect, and recover, or otherwise control, spills,
losses and intentional liquor diversions that do occur. The BMPs also apply
to pulping by-products, such as turpentine and soap, for mills that
process these items.40
Section 5.6 of the document is entitled, “Toxic and Hazardous Pollutants Found in

37

https://www.legis.la.gov/legis/BillInfo.aspx?s=12RS&b=SR183.
Under Federal Rule of Evidence 201 the Court takes Judicial notice of the following document issued by
the EPA because the accuracy of such cannot be reasonably questioned. Federal Rule of Evidence 201
provides that: “A judicially noticed fact must be one not subject to reasonable dispute in that it is either (1)
generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready
determination by resort to sources whose accuracy cannot reasonably be questioned.”
39
EPA-B21-R-97-011
found
at
https://nepis.epa.gov/Exe/ZyNET.exe?ZyAction=ZyActionS&Client=EPA&Index=2011+Thru+2015&Index
=2000+Thru+2005&Index=2006+Thru+2010&Index=Prior+to+1976&Index=1976+Thru+1980&Index=198
1+Thru+1985&Index=1986+Thru+1990&Index=1991+Thru+1994&Index=1995+Thru+1999&Index=Hardc
opy+Publications&Docs=&Query=pulp+pulping+paper+liquor+mill&Time=&SearchMethod=2&TocRestrict
=n&Toc=&TocEntry=&QField=&QFieldYear=&QFieldMonth=&QFieldDay=&UseQField=&IntQFieldOp=0&
ExtQFieldOp=0&File=&User=ANONYMOUS&Password=anonymous&SortMethod=h%7C&MaximumDocuments=15&MaximumPages=1&FuzzyDegree=0&ImageQuality=r85g16%2Fr85g16%2Fx
150y150g16%2Fi500&Display=hpfr&DefSeekPage=x&SearchBack=ZyActionL&Back=ZyActionS&BackD
esc=Results%20page.
40
Id. at p. 13.
38

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Turpentine and Soap.”41 As demonstrated by this document, the EPA considers Black
Liquor Soap to be and or contain toxic and hazardous pollutant(s). As such, the Court
finds there is no genuine issue of material fact regarding Black Liquor Soap being a
pollutant.
iii. There was a discharge, dispersal, seepage, migration, release or escape of
Black Liquor Soap
In determining whether there was a “discharge, dispersal, seepage, migration,
release or escape,” the Louisiana Supreme Court enunciated the following
considerations: (1) whether the pollutant was intentionally or negligently discharged, (2)
the amount of the injury-causing substance discharged, (3) whether the actions of the
alleged polluter were active or passive, and (4) any other factor the trier of fact deems
relevant.42
Here, Meridian clearly alleges that there was a “spill, release, or discharge of the
Black Liquor Soap… discovered at the property.”43 Additionally, Meridian alleges and
admits in their statement of undisputed facts that they incurred or expended
approximately $2,625,000 in remediation as a result of the March release.44 Finally,
neither party argues that there is a dispute as to whether there was actually a discharge
of the Black Liquor Soap at the Beaulieu property. Both Parties’ statement of undisputed
facts submit that Black Liquor Soap spread onto the Beaulieu property, the soil, and
nearby ditches.45 There is no issue of material fact as to whether there was a release or

41

Id. at p. 48.
Id. at 136.
43
Rec. Doc. 1-3, p. 6.
44
Id. at p. 7; Rec. Doc. 51-1, p. 2.
45
Rec. Doc. 13-4, p. 2; Rec. Doc. 51-1, p. 2.
42

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discharge of Black Liquor Soap at the property. Any argument by Meridian that there was
not a discharge is directly in conflict with its own claims forming the basis of this lawsuit.
Meridian disputes that Torque caused the undisputed discharge. However, liability
and causation are not at issue. The only issue is whether Kinsale’s policy covers the
alleged loss. For purposes of determining the issue of coverage, the Court finds that there
was in fact a discharge of Black Liquor Soap on the Beaulieu property.
As discussed above, the Court finds that the Absolute Pollution Exclusion in
Kinsale’s policy meets the three factors as set forth in Doerr. The Court finds that the
second part of Kinsale’s Absolute Pollution Exclusion unambiguously excludes coverage
for damages arising out of the release of the Black Liquor Soap on Beaulieu’s property.
Since the Court finds that the second part of the Absolute Pollution Exclusion
unambiguously excludes coverage of Meridian’s claims, an analysis of the first part of the
exclusion is unnecessary.
Kinsale argues that if either part of the Absolute Pollution Exclusion applies, there
is no coverage for the lawsuit as a whole, regardless of the specific damages alleged.46
In its Petition, Meridian claims it is entitled to all damages or losses, including attorney’s
fees, arising as a result of the contamination. Additionally, Meridian seeks the loss of the
value of the Black Liquor Soap. The Absolute Pollution Exclusion applies to any
“damages, claim, or ‘suit’ arising out of the… release or escape of “pollutants.” Thus, the
Court finds that the exclusion unambiguously applies to all of Meridian’s claims for
damages or losses, including attorney’s fees, arising as a result of the contamination.

46

Rec. Doc. 13-1, p. 15.

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However, the Court finds that the exclusion does not unambiguously apply to a claim of
damages for the value of the Black Liquor Soap itself which was lost. Kinsale argues that
such a loss is excluded under other parts of the policy.
E. Care, custody, or control exclusion
In addition to environmental cleanup costs, Meridian seeks damages for the value
of the lost Black Liquor Soap itself. Kinsale argues that these damages are independently
excluded by the care, custody, or control exclusion of the policy. For the following
reasons, the Court agrees that the claim for the value of the lost liquor soap is
unambiguously excluded under the Kinsale policy.
Meridian alleges that it entered into a depositary contract with Torque to store
Black Liquor Soap and that Torque failed to fulfill its obligations and is liable for the loss
of the value of the soap.47 Kinsale argues that Section 2(j)(4) of the policy excludes
coverage for “’[p]roperty damage’ to … [p]ersonal property in the care, custody, or control
of the insured.”48
In support of its argument, Kinsale cites to several Louisiana cases analyzing
whether a care, custody, or control exclusion applied in situations where damage
occurred while an insured was in possession or under control of property belonging to
another.49 The language in the Kinsale policy is almost identical to all of the cases cited,
and in each case, the court found that the policy language excluded coverage for damage
sustained while the property was in control or possession of the insured.

47

Rec. Doc. 1-3, pp. 12-13.
Rec. Doc. 13-3, p. 8.
49
See Keller v. Case,1999-0424 (La. App. 1 Cir. 3/31/00); 757 So.2d 920; Bergquist v. Fernandez, 535
So.2d 827 (La. App. 2d Cir. 8/17/88); Duchman v. Orleans Mar. Brokerage, Inc., 603 So.2d 818 (La. App.
4 Cir. 1992).
48

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In opposition to Kinsale’s argument, Meridian asserts that summary judgment is
inappropriate because there is conflicting evidence as to who had control over the Black
Liquor Soap as of the date it was lost. Specifically, Meridian claims that Torque “disavows
any responsibility for managing the soap and asserts that it had nothing to do with placing
the frac tanks in which the Black Liquor Soap was stored.”50 In support of this argument,
Meridian cites to deposition testimony of Torque’s Federal Rule 30(B)(6) representative,
Sean Thomason, who stated that, Meridian did not ask Torque, nor was Torque being
paid to maintain or manage the frac tanks in which the Black Liquor Soap was stored.51
Here, Meridian alleged that: (1) Torque was in the care, custody, and control of the
Black Liquor Soap at the time the damage occurred, (2) Meridian paid Torque to take
possession of and store the Black Liquor Soap; and (3) that Torque would hold the soap
for safekeeping under the obligation of returning the soap to Meridian upon demand. Now,
to avoid summary judgment, Meridian argues that there is a genuine fact dispute as to
whether Torque was a depositary because of the testimony given by Torque’s
representative, Sean Thomason. However, that testimony clearly conveys that Torque
was under no impression that it had any responsibilities for maintaining or managing the
frac tanks themselves. The Court finds this argument disingenuous in light of Meridian’s
allegations.
Meridian’s attempt at creating an issue of fact fails because it is irrelevant to the
question of whether coverage is excluded under Kinsale’s policy. As such, a
determination of whether Torque was or was not Meridian’s depositary is unnecessary.

50
51

Rec. Doc. 51, p. 9.
Rec. Doc. 51-2, p. 25.

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Assuming Torque was the depositary, the Court finds that coverage for the loss would be
excluded under the policy. Therefore, the Court finds that the care, custody, or control
exclusion of the Kinsale policy unambiguously excludes coverage for any claim to
property damage or loss of the Black Liquor Soap if it was in Torque’s possession.
F. Meridian’s Claim for Attorney Fees
The Court does not reach the issue of deciding whether Meridian’s claim for
attorney’s fees is excluded under the contractual liability exclusion of the Kinsale policy.
Any attorney’s fees for breach of the lease agreement between Torque and Beaulieu are
unambiguously excluded as “damages… arising out of the actual, alleged or threatened
discharge, dispersal, seepage, migration, release or escape of ‘pollutants’” under the
Absolute Pollution Exclusion as discussed above. Therefore, an individual analysis of
whether the contractual liability exclusion applies is unnecessary because Kinsale is not
responsible as a matter of law for environmental liability damages as set forth above.
III.

CONCLUSION
For the foregoing reasons, Defendant, Kinsale Insurance Company’s Motion for

Summary Judgment52 is GRANTED as to all claims by Meridian, as they are
unambiguously excluded under the insurance policy issued to Torque.
Baton Rouge, Louisiana the 27th day of September, 2018.

S

____________________________________________
SHELLY D. DICK, CHIEF DISTRICT JUDGE
MIDDLE DISTRICT OF LOUISIANA

52

Rec. Doc. 13.

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