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Continental Casualty Co. v. National Union Fire Insurance Company of Pittsburgh, PA

United States Court of Appeals, Eighth Circuit

February 9, 2016

Continental Casualty Company, Plaintiff - Appellee
v.
National Union Fire Insurance Company of Pittsburgh, PA, Defendant, The Valspar Corporation, Intervenor Defendant - Appellant; Continental Casualty Company, Plaintiff - Appellee
v.
National Union Fire Insurance Company of Pittsburgh, PA, Defendant - Appellant, The Valspar Corporation, Intervenor Defendant

Submitted October 19, 2015

Appeals from United States District Court for the District of Minnesota - Minneapolis.

For Continental Casualty Company, Plaintiff - Appellee (15-1547, 15-1623): Susan E. Gustad, Jeanne H. Unger, BASSFORD & REMELE, Minneapolis, MN; Karen Ventrell, CARLUCCIO & KEENER, Washington, DC.

For The Valspar Corporation, Intervenor Defendant - Appellant (15-1547): Andrew J. Detherage, John P. Fischer, Jr., BARNES & THORNBURG, Indianapolis, IN; L. Rachel Lerman, BARNES & THORNBURG, Los Angeles, CA; Christopher L. Lynch, BARNES & THORNBURG, Minneapolis, MN.

For National Union Fire Insurance Company of Pittsburgh, PA, Defendant - Appellant (15-1623): Mark R. Azman, Lance D. Meyer, Dale Oreland Thornsjo, O'MEARA & LEER, Minneapolis, MN.

Before RILEY, Chief Judge, SMITH and SHEPHERD, Circuit Judges.

OPINION

Page 1148

RILEY, Chief Judge.

This is a diversity case involving a maker of paints and other coatings--The Valspar Corporation, a Delaware and Minnesota citizen--and two of its insurers--Continental Casualty Company, an Illinois citizen, and National Union Fire Insurance Company of Pittsburgh, PA, a Pennsylvania and New York citizen. See 28 U.S.C. § 1332(a)(1), (c)(1). The district court[1] ordered National Union to pay part of the costs Continental incurred to defend Valspar against several lawsuits. Valspar intervened and now appeals because it has agreements with National Union under which Valspar might be required to reimburse anything National Union pays Continental. We affirm.

I. BACKGROUND

Valspar bought primary general liability insurance from various companies over the years. In 2005 and 2006, Valspar faced lawsuits claiming damages from benzene in its products, triggering policies it bought from Continental and National Union, along with five other primary insurers. Continental agreed to defend Valspar, reserving its rights to have the other insurers contribute to paying the costs.

National Union refused to contribute, explaining it had a " fronting arrangement" with Valspar, which meant Valspar was responsible for its own defense costs and National Union was not obliged to defend it. Continental sued for declarations that National Union had a duty to defend Valspar and owed Continental National Union's share of the defense costs. Valspar intervened, arguing that in light of National Union's asserted right to pass its costs to Valspar, a nominal right of Continental to contribution from National Union would really be a right to contribution from Valspar, to which Continental was not entitled. National Union then cross-claimed for a declaration Valspar must indemnify National Union against any contribution Continental wins, as well as damages against Valspar for anticipatorily breaching its indemnity obligations.[2]

On cross-motions for summary judgment, the district court held National Union had a duty to defend Valspar and to contribute to the defense costs and Valspar did not have a duty to contribute to the defense costs directly (as opposed to potentially having to reimburse National Union). The district court therefore ordered National Union to pay a ...


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