Waste Management, Inc. et al v. Great Divide Insurance Company et al

Filing 54

MEMORANDUM ORDER. Finding no error in the R&R, the Court: 1) ADOPTS the findings and recommendations set forth in the R&R, (ECF No. 50 ); 2) OVERRULES Defendants' objections; 3) GRANTS IN PART Plaintiffs' Motion to Dismiss, (ECF No. 20 ); 4 ) DENIES AS MOOT Defendants' Motion to Drop Robinson, (ECF No. 28 ); 5) DENIES Defendants' Motion to Drop Subsidiaries, (ECF No. 29 ); 6) GRANTS Defendants' Motion to Strike, (ECF No. 37 ); 7) DISMISSES Defendants' Counterclaims I -B, 11-B, IV, and V-B; and, 8) DISMISSES the following Counter-Defendants: Baltimore Refuse Energy Systems Company; Wheelabrator Baltimore, L.P., Wheelabrator Baltimore, Inc.; Wheelabrator Baltimore, L.L.C.; Waste Management of Maryland; Waste Management Disposal Services of Maryland, Inc.; Waste Management National Services, Inc.; Waste Management Services, Inc.; and, Wheelabrator Technologies, Inc. Because the Court dismisses the above Counter-Defendants, the Court DENIES AS MOOT Plai ntiffs' Agreed Motion Regarding Responses to Counterclaim. (ECF No. 47 .) In order to clarify the record, the Court ORDERS Defendants to file an Amended Counterclaim that complies with the R&R as fully adopted. Defendants SHALL file their Amende d Counterclaim by close of business October 10, 2017. The Court further GRANTS Plaintiffs' Agreed Motion Regarding Submission of Answer to Counterclaim, (ECF No. 22 ), and ORDERS Plaintiffs to file their Answer to Defendants' Amended Counterclaim by close of business October 24, 2017. See for complete details. It is so ORDERED. Signed by District Judge M. Hannah Lauck on 10/03/2017. (nbrow)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division
WASTE MANAGEMENT, INC., et al,
Plaintiffs,

v.

Civil Action No. 3: 17cv60

GREAT DIVIDE INSURANCE
COMPANY, et al.,
Defendants.
MEMORANDUM ORDER
Plaintiffs Waste Management, Inc., Waste Management of Virginia, Inc., King George
Landfill, Inc., and King George Landfill Properties, Inc. (collectively, "Plaintiffs") filed this
action against Defendants Great Divide Insurance Company, Nautilus Insurance Company
(collectively, the "Defendants") and Arthur A. Robinson. 1 (ECF No. 1.) Plaintiffs filed an
Amended Complaint before any defendant appeared in the action. (ECF No. 6.) Plaintiffs'
Amended Complaint flows from a negligence suit Robinson filed in state court against the
Plaintiffs (the "Robinson Suit").
The Amended Complaint seeks a declaratory judgment that the Defendants have
contractual duties to defend and indemnify Plaintiffs in the Robinson Suit, and alleges breach of
contract claims for the Defendants' failure to abide by those duties to date. Defendants filed an
answer and counterclaim in which they denied any duty to defend and indemnify Plaintiffs for
the Robinson Suit. In their counterclaim, the Defendants sought a declaratory judgment of nonresponsibility to defend and indemnify in the Robinson Suit, and also sought a declaratory
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No. 43.)

Robinson later was dismissed as a defendant upon the consent of the parties. (ECF

judgment of non-responsibility to defend or indemnify in a case filed in Maryland state court (the
"Thomas suit"). The Thomas suit arises from events that occurred in a different place, involves a
different plaintiff, and is brought against at least nine defendants who are not named Plaintiffs in
the Amended Complaint in this case.
After the Defendants filed their counterclaims, Plaintiffs filed a Motion to Dismiss
Defendants' Counterclaims ("Plaintiffs' Motion to Dismiss"). (ECF No. 20.) The Defendants
then filed a Motion to Dismiss Underlying Claimant Parties for Lack of Standing, (the "Motion
to Drop Robinson"), (ECF No. 28), and a Motion to Drop the Waste Management Subsidiaries as
Parties, (the "Motion to Drop Subsidiaries"), (ECF No. 29). The Defendants later filed a Motion
to Strike, (ECF No. 37), which Plaintiffs did not oppose, (see ECF No. 46). As noted Robinson
later was dismissed as a defendant upon the consent of the parties, (ECF No. 43), mooting the
Motion to Drop Robinson, (ECF No. 28).
The Court referred all of the above motions to the Honorable David J. Novak, United
States Magistrate Judge, pursuant to the provisions of28 U.S.C. § 636(b)(l)(B) and (C) and
Federal Rule of Civil Procedure 72(b). Judge Novak filed a Report and Recommendation
("R&R") on June 30, 2017. (ECF No. 50.) Judge Novak recommended that the Court grant in
part and deny in part Plaintiffs' Motion to Dismiss; deny as moot the Defendants' Motion to
Drop Robinson; deny the Defendants' Motion to Drop Subsidiaries; and, grant the Defendants'
Motion to Strike. (R&R 17, ECF No. 50.)
By copy of the R&R, each party was advised of the right to file written objections to the
findings and recommendations made by Judge Novak within fourteen days after being served
with a copy of the R&R. 28 U.S.C. § 636(b)(l); (R&R 17-18). The Defendants timely objected

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to the R&R, and Plaintiffs filed a response. (See ECF Nos. 52, 53.) Plaintiffs have filed no
objection to the R&R and the time to do so has expired.
The Defendants object to numerous aspects of the R&R. (See Obj. 2-4, ECF No. 52.)
The Defendants argue that Judge Novak erred in: (1) addressing the merits of Plaintiffs' Motion
to Dismiss before considering the merits of Defendants' Motion to Drop Subsidiaries;
(2) "failing to properly interpret and apply" federal rules; (3) relying on "inapposite legal
precedents" and "ignor[ing] a substantial body of longstanding insurance-coverage precedent";
(4) "ignor[ing] the real-word fact that [Waste Management, Inc.] is the only necessary party to
this coverage dispute; and, (5) recommending that the Court not "join resolution of coverage for
the Thomas Suit with resolution of coverage for the Robinson Suit." (Id.) In sum, the
Defendants assert both procedural and substantive reasons why the Magistrate Judge "could have
wisely recommended exercising the Court's 'wide discretion' to allow joinder here." (Id. at 4.)
The Court has conducted a de novo review of the R&R and Defendants' objections. The
Court is unpersuaded by Defendants' arguments about the various ways in which the R&R
failed. First, Defendants cite to no law-binding or otherwise-in support of their argument that
Judge Novak should have first addressed the Motion to Drop Subsidiaries before examining the
merits of Plaintiffs' Motion to Dismiss. (See Obj. 2, 5, 11-12.) They merely assert, in a
conclusory fashion, that the "Defendants' motion papers made it clear that the appropriate
solution here is to treat [Waste Management, Inc. ("WMI")] as the only real party in interest ....
Once that solution is adopted, there is no longer any reason to deny joinder and permit the entire
Counterclaim to proceed." (Id at 12.) Further, although the Defendants argue vehemently that
the Court should not adopt the R&R, even Defendants recognize the wide discretion this Court
has in granting or denyingjoinder, and they, appropriately, stop short of arguing anything other

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than the Court could join the declaratory issues in the Robinson Suit and the Thomas Suit. (See
id. at 13.)

The Court is similarly unpersuaded by Defendants' contention that Judge Novak relied on
inapplicable law in the R&R. Although Defendants contend that "a substantial body of
longstanding precedent illustrat[es] the legality and practicality of joining multiple underlying
events in a single insurance coverage action," (Obj. 8), Defendants' citations to cases allowing
joinder of multiple products liability claims and injury arising from exposure to asbestos are
inapposite. Significant differences exist between products liability actions and cases involving
asbestos litigation and the issues of insurance coverage for a personal injury claim that are
presented in the Thomas Suit and the Robinson Suit. As the R&R correctly stated:
At most, [the Robinson and Thomas] coverage actions have in common that they
(1) stem from state lawsuits brought by [employees of the same company],
(2) involve transportation service agreements that contain similar language in
certain provisions, and (3) trigger (or do not trigger) coverage from one or more
of three insurance policies. They arise from separate sets of facts and separate
agreements, despite any common issues .
. . . . [B]oth actions would involve consideration of the same three
insurance policies, but the evidentiary overlap ends there.
(R&R 11 (footnote omitted).)
Finally, Defendants' argument that Judge Novak did not recognize that "Maryland law
will govern the coverage issues in this case" fails. The R&R stated outright that "Maryland
contract law governs both service agreements." (R&R 11 n.5.) The Magistrate Judge's citation
to a case from the Eastern District of Virginia for the basic principle that the facts underlying the
Thomas Suit and the Robinson Suit "necessarily inform whether or not Defendants have a duty
to defend and/or indemnify the Plaintiffs and/or Counter Defendants," (R&R 10), cannot support
Defendants' argument.

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Accordingly, finding no error in the R&R, the Court:
1) ADOPTS the findings and recommendations set forth in the R&R,
(ECF No. 50);
2) OVERRULES Defendants' objections;
3) GRANTS IN PART Plaintiffs' Motion to Dismiss, (ECF No. 20);

4) DENIES AS MOOT Defendants' Motion to Drop Robinson, (ECF
No. 28);
5) DENIES Defendants' Motion to Drop Subsidiaries, (ECF No. 29);
6) GRANTS Defendants' Motion to Strike, (ECF No. 37);
7) DISMISSES Defendants' Counterclaims I-B, 11-B, IV, and V-B; and,
8) DISMISSES the following Counter-Defendants:
•
•
•
•
•
•
•
•
•

Baltimore Refuse Energy Systems Company;
Wheelabrator Baltimore, L.P .,
Wheelabrator Baltimore, Inc.;
Wheelabrator Baltimore, L.L.C.;
Waste Management of Maryland;
Waste Management Disposal Services of Maryland, Inc.;
Waste Management National Services, Inc.;
Waste Management Services, Inc.; and,
Wheelabrator Technologies, Inc.

Because the Court dismisses the above Counter-Defendants, the Court DENIES AS
MOOT Plaintiffs' Agreed Motion Regarding Responses to Counterclaim. (ECF No. 47.)
In order to clarify the record, the Court ORDERS Defendants to file an Amended
Counterclaim that complies with the R&R as fully adopted. Defendants SHALL file their
Amended Counterclaim by close of business October 10, 2017.
The Court further GRANTS Plaintiffs' Agreed Motion Regarding Submission of Answer
to Counterclaim, (ECF No. 22), and ORDERS Plaintiffs to file their Answer to Defendants'
Amended Counterclaim by close of business October 24, 2017.

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Let the C lerk send a copy of this Order to all counsel of record .
It is so ORDERED.

Date: \ 0 ( ~ \ 1
Ri chmond, Virginia

T'

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