Food Market Merchandising, Inc., a Minnesota corporation Plaintiff- Appellant
Scottsdale Indemnity Company Defendant-Appellee
Submitted: March 9, 2017
from United States District Court for the District of
Minnesota - Minneapolis
LOKEN, MURPHY, and BENTON, Circuit Judges.
BENTON, Circuit Judge.
Market Merchandising, Inc. sued Scottsdale Indemnity Company
for coverage under a Business and Management Indemnity
Policy. Both parties moved for summary judgment. The district
court granted Scottsdale's motion. Having
jurisdiction under 28 U.S.C. § 1291, this court affirms.
policy covers "only claims first made against the
insured during the policy period . . . and reported to the
insurer pursuant to the terms of the relevant coverage
section." The "Notification" provision of the
coverage section at issue states:
The Insureds shall, as a condition precedent
to their rights to payment under this Coverage Section only,
give Insurer written notice of any
Claim as soon as practicable, but in no
event later than sixty (60) days after the end of the
E.1. (bolded words in original, defined in policy).
January 2014, former employee Robert Spinner sued Food
Market, seeking unpaid commissions. In June, a court granted
partial summary judgment for Spinner, awarding twice the
unpaid commissions and attorney's fees. It did not reduce
the award to judgment. (The parties settled two years later).
August 2014-during the policy period-Food Market notified
Scottsdale of the Spinner lawsuit. It sought defense and
indemnification under the "Employee Insuring"
provision of the Employment Practices coverage:
Insurer shall pay the Loss
of the Insureds which the
Insureds have become legally obligated to
pay by reason of an Employment Practices
Claim first made against the
Insureds during the Policy
Period or, if elected, the Extended
Period, and reported to the Insurer
pursuant to Section E.1. herein, for an Employment
Practices Wrongful Act taking place prior to the end
of the Policy Period.
September, Scottsdale tentatively denied coverage.
2015, Food Market sued Scottsdale for coverage, asserting
claims for breach of contract, breach of the covenant of good
faith and fair dealing, and declaratory judgment. A week
later, Scottsdale formally denied coverage, stating Food