Seneca Insurance v. Alton Coal Development et al
MEMORANDUM DECISION denying #128 Motion for Judgment on the Pleadings, or, in the alternative, Motion for Summary Judgment. Signed by Judge Ted Stewart on 6/21/17. (jlw)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
SENECA INSURANCE COMPANY, INC.,
MEMORANDUM DECISION AND
ORDER DENYING DEFENDANT’S
MOTION FOR JUDGMENT ON THE
PLEADINGS, OR, IN THE
ALTERNATIVE, MOTION FOR
ALTON COAL DEVELOPMENT, LLC
and CATERPILLAR FINANCIAL
Case No. 2:15-CV-761 TS
District Judge Ted Stewart
This matter is before the Court on Defendant Caterpillar Financial Services Corporation’s
(“Caterpillar”) Motion for Judgment on the Pleadings, or, in the Alternative, Motion for
Summary Judgment. For the reasons discussed below, the Court will deny the Motion.
The case involves an insurance dispute regarding certain mining equipment. Plaintiff
brought suit seeking, among other things, declaratory judgment as to the parties’ rights and
responsibilities under an insurance policy. Specifically, Plaintiff alleges that Caterpillar was the
manufacturer/seller of the mining equipment and may have incurred substantial expense and loss
during the efforts to recover the equipment. Plaintiff named Defendant Caterpillar because
Caterpillar is a loss payee under the policy issued by Plaintiff. Plaintiff alleges that Caterpillar is
an interested party and was joined “so that it may be heard and bound by any outcome of this
action in respect of the Seneca policy.” 1 Plaintiff seeks a judicial determination that it “has no
duty to make payment to Defendants with respect to the claims asserted.” 2
II. STANDARDS OF REVIEW
Defendant seeks either judgment on the pleadings under Rule 12(c) or summary
judgment under Rule 56.
In deciding a motion for judgment on the pleadings, the Court considers only the
pleadings, here Plaintiff’s Complaint and Caterpillar’s Answer. 3 The Court applies the same
standards in evaluating motions under Rule 12(b)(6) and Rule 12(c). 4 In considering a motion to
dismiss for failure to state a claim upon which relief can be granted under Rule 12(b)(6), all wellpleaded factual allegations, as distinguished from conclusory allegations, are accepted as true
and viewed in the light most favorable to Plaintiff as the nonmoving party. 5 Plaintiff must
provide “enough facts to state a claim to relief that is plausible on its face,” 6 which requires
“more than an unadorned, the-defendant-unlawfully harmed-me accusation.” 7 “A pleading that
offers ‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of action will
Docket No. 2, at 3.
Id. at 15; see also id. at 15–16.
Park Univ. Enters., Inc. v. Am. Cas. Co., 442 F.3d 1239, 1244 (10th Cir. 2006).
See Jacobsen v. Deseret Book Co., 287 F.3d 936, 941 n.2 (10th Cir. 2002).
GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir.
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
not do.’ Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual
“The court’s function on a Rule 12(b)(6) motion is not to weigh potential evidence that
the parties might present at trial, but to assess whether the plaintiff’s complaint alone is legally
sufficient to state a claim for which relief may be granted.” 9 As the Court in Iqbal stated,
only a complaint that states a plausible claim for relief survives a motion to
dismiss. Determining whether a complaint states a plausible claim for relief will
. . . be a context-specific task that requires the reviewing court to draw on its
judicial experience and common sense. But where the well-pleaded facts do not
permit the court to infer more than the mere possibility of misconduct, the
complaint has alleged—but it has not shown—that the pleader is entitled to
Summary judgment is appropriate “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 In
considering whether a genuine dispute of material fact exists, the Court determines whether a
reasonable jury could return a verdict for the nonmoving party in the face of all the evidence
presented. 12 The Court is required to construe all facts and reasonable inferences in the light
most favorable to the nonmoving party. 13
Id. (quoting Twombly, 550 U.S. at 557) (alteration in original).
Miller v. Glanz, 948 F.2d 1562, 1565 (10th Cir. 1991).
Iqbal, 556 U.S. at 679 (internal citations and quotation marks omitted).
Fed. R. Civ. P. 56(a).
See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986); Clifton v. Craig, 924
F.2d 182, 183 (10th Cir. 1991).
See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986);
Wright v. Sw. Bell Tel. Co., 925 F.2d 1288, 1292 (10th Cir. 1991).
Caterpillar first argues that it is entitled to judgment on the pleadings because Plaintiff
has failed to state a claim against it. Caterpillar argues that there is no “case or controversy”
The Declaratory Judgment Act provides that “[i]n a case of actual controversy within its
jurisdiction, . . . any court of the United States, upon the filing of an appropriate pleading, may
declare the rights and other legal relations of any interested party seeking such declaration,
whether or not further relief is or could be sought.” 14 “[T]he phrase ‘case of actual controversy’
in the Act refers to the type of ‘Cases’ and ‘Controversies’ that are justiciable under Article III”
of the United States Constitution. 15 “Basically, the question in each case is whether the facts
alleged, under all the circumstances, show that there is a substantial controversy, between parties
having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a
declaratory judgment.” 16
In this case, Plaintiff seeks a declaration as to the parties’ rights and responsibilities under
an insurance contract covering certain mining equipment. Plaintiff alleges that Caterpillar was
the manufacturer/seller of that equipment, incurred substantial expense and loss in trying to
recover the equipment, and is a loss payee under the insurance contract. Plaintiff seeks a
declaration that it has no obligation to make payment to Defendants, including Caterpillar. In
contrast, Caterpillar asserts that Plaintiff does have a “duty to make payment to or indemnify
[Caterpillar] under the Policy” and does have a “duty to make payment to [Caterpillar] with
28 U.S.C. § 2201(a).
MedImmune, Inc. v. Genetech, Inc., 549 U.S. 118, 127 (2007).
Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941).
respect to the claims asserted by Defendant Alton Coal Development, LLC under the Policy.” 17
This dispute is sufficient to state a claim under the Declaratory Judgment Act. The fact that
Caterpillar’s claim is contingent on Alton Coal’s recovery does not alter this conclusion. 18
In its Reply, Caterpillar agrees that “Seneca could have alleged a cause of action against
[Caterpillar] seeking a declaration from this Court that Seneca has no obligation to pay
[Caterpillar] under the policy.” 19 Caterpillar argues that “Seneca did not do this,” but instead
only sought declaratory relief against Alton Coal. This argument ignores the allegations and
relief sought in Plaintiff’s Complaint. Plaintiff requests the “Court determine and adjudicate the
rights, duties, and obligations of the parties with respect to the policy of insurance described in
this Complaint.”20 More specifically, Plaintiff seeks a judicial determination that it has “no duty
to make payment to Defendants with respect to the claims asserted.” 21
Caterpillar’s concession that Plaintiff could seek a declaration that it has no obligation to
pay Caterpillar under the policy undermines Caterpillar’s argument that Plaintiff has failed to
state a claim against it. The Complaint makes clear that Plaintiff is indeed seeking a declaration
that it has no obligation to Caterpillar. Plaintiff seeks a determination that it has no duty to make
payment to Defendants. Caterpillar is a named Defendant. Thus, it follows that Plaintiff is
Docket No. 14, at 16. Because this is a Motion for Judgment on the Pleadings, the
Court can consider the information contained in Caterpillar’s Answer.
See Md. Cas. Co., 312 U.S. at 273–74 (finding an actual controversy between insurer
and third party); see also Harris v. Quinones, 507 F.2d 533, 537 (10th Cir. 1974) (“[W]e have
previously supported the view that in an action for declaratory judgment all persons interested in
the declaration are ‘necessary’ parties.”).
Docket No. 146, at 3–4.
Docket No. 2, at 15.
Id.; see also id. at 15–16.
seeking the exact type of declaration Caterpillar admits is permissible under the Declaratory
The fact that there are minimal allegations against Caterpillar does not alter this
conclusion. Indeed, it is unclear what additional allegations could be lodged against Caterpillar.
Plaintiff alleges that Caterpillar is the manufacturer/seller of the mining equipment at issue, that
it incurred substantial expense and loss seeking to recover the equipment, that it has an interest in
this action as a loss payee, and seeks a declaration that it has no obligation to make payment to
either Defendant. This is sufficient to survive a motion for judgment on the pleadings.
Caterpillar next argues that it is entitled to summary judgment because it will be bound
by the outcome of this action under the doctrine of res judicata/issue preclusion. Because it will
be bound by any final judgment entered by the Court on Plaintiff’s claims against Alton Coal,
Caterpillar argues that Plaintiff’s claims against it must be dismissed.
Caterpillar’s reliance on claim preclusion fails. Claim preclusion requires, among other
things, a final judgment on the merits in an earlier action. 22 Here, there is no such judgment and
there is no earlier action. Thus, claim preclusion can play no role in the disposition of this
Further, even assuming Caterpillar is correct that claim preclusion would bar future
action for recovery under the policy, Caterpillar fails to point to any authority that would suggest
it is entitled to summary judgment. Caterpillar seeks entry of judgment in its favor and dismissal
of Plaintiff’s Complaint against it with prejudice. However, Caterpillar fails to explain how the
potential future application of claim preclusion entitles it to such relief. Claim preclusion is an
Yapp v. Excel Corp., 186 F.3d 1222, 1226 (10th Cir. 1999).
affirmative defense that Plaintiff could assert in any future-filed action. 23 It has not and could
not be asserted in the instant action and provides no relief to Caterpillar here.
It is therefore
ORDERED that Defendant’s Motion for Judgment on the Pleadings, or, in the
Alternative, Motion for Summary Judgment (Docket No. 128) is DENIED.
DATED this 21st day of June, 2017.
BY THE COURT:
United States District Judge
Fed. R. Civ. P. 8(c).
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