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Maxum Indem. Co. v. Robbins Co.

United States Court of Appeals for the Sixth Circuit

August 12, 2019, Filed

File Name: 19a0417n.06

No. 18-3776

Opinion

 [*367]  ALICE M. BATCHELDER, Circuit Judge. The Robbins Company ("Robbins") leased a tunnel-boring machine (TBM) to a consortium known as JCM, Northlink LLC ("JCM"). When the TBM failed, JCM initiated arbitration against Robbins for breach of contract, seeking more than $40 million in damages. Robbins asked its insurance company, Maxum Indemnity Corporation ("Maxum"), to defend it in the arbitration. Maxum filed this action in federal court seeking declaratory judgment arguing that it owed neither a duty to defend nor a duty to indemnify Robbins in the arbitration. Maxum moved for judgment on the pleadings, which the district court granted. Robbins filed Federal Rules of Civil Procedure 60(b) and 59(e) motions for reconsideration [**2]  or to alter or amend the judgment, but the district court denied both motions. Robbins then appealed to this court. We AFFIRM.

In 2013, Robbins leased to JCM a TBM for a project in Seattle, WA. In December 2015, an internal bearing in the TBM shattered, which caused the TBM to stop working. JCM terminated its lease with Robbins and, in May 2016, commenced arbitration against Robbins in the International Chamber of Commerce. In its request for arbitration, JCM said it was terminating the contract because the contract called for a TBM "free from all latent defects in materials or workmanship." JCM provided a laundry list of problems with the TBM and asserted damages of "at least $40,242,052.20 . . . as a result of [Robbins's] breach of contract." JCM provided no itemization of the damages it was seeking.

In August 2017—fifteen months after JCM commenced arbitration—Robbins reported the arbitration to its insurance company, Maxum, and requested coverage. Upon receipt of Robbins's request, Maxum filed an action for declaratory judgment that it did not have a duty to defend or indemnify Robbins in the underlying arbitration. Maxum gave several reasons for denying coverage, including that [**3]  the property damage alleged by JCM was to Robbins's own product (the TBM) and damage to the insured's own equipment was excluded from coverage, and that the claim was excluded by the "breach of contract" exclusion. Maxum filed a motion for judgment  [*368]  on the pleadings. Robbins opposed the motion, saying that "Maxum's Complaint and attachments do not provide sufficient facts to enable this Court to make an insurance-coverage determination. There are facts outside of the underlying Request for Arbitration attached to Maxum's Complaint that establish insurance coverage as a matter of law." Robbins said further that, "Although the allegations asserted in the Request for Arbitration against Robbins establish Maxum's duty to defend under applicable insurance policies, the parties to the arbitration are not obligated to clarify, categorize, and itemize their claims and damages until February 15, 2018." Robbins argued that Maxum's motion should either be denied or converted to a motion for summary judgment pursuant to Rule 56(d) and the court should wait to rule until the claims were clarified and a coverage determination could be made.

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784 Fed. Appx. 366 *; 2019 U.S. App. LEXIS 23896 **; 2019 FED App. 0417N (6th Cir.)

MAXUM INDEMNITY COMPANY, Plaintiff-Appellee, v. THE ROBBINS COMPANY, Defendant-Appellant.

Notice: NOT RECOMMENDED FOR FULL-TEXT PUBLICATION. SIXTH CIRCUIT RULE 28 LIMITS CITATION TO SPECIFIC SITUATIONS. PLEASE SEE RULE 28 BEFORE CITING IN A PROCEEDING IN A COURT IN THE SIXTH CIRCUIT. IF CITED, A COPY MUST BE SERVED ON OTHER PARTIES AND THE COURT. THIS NOTICE IS TO BE PROMINENTLY DISPLAYED IF THIS DECISION IS REPRODUCED.

Subsequent History: Rehearing denied by Maxum Indem. Co. v. Robbins Co., 2019 U.S. App. LEXIS 27144 (6th Cir., Sept. 6, 2019)

Prior History:  [**1] ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO.

Maxum Indem. Co. v. Robbins Co., 2018 U.S. Dist. LEXIS 57729 (N.D. Ohio, Mar. 21, 2018)

CORE TERMS

arbitration, district court, damages, itemization, duty to defend, allegations, argues, declaration, pleadings, coverage, insurer, declaratory judgment, breach of contract, property damage, amend, declaratory judgment action, duty to indemnify, no duty, breach-of-contract, discretionary, documents, newly, ripe

Civil Procedure, Judgments, Pretrial Judgments, Judgment on Pleadings, Standards of Review, Harmless & Invited Errors, Harmless Error Rule, Pleading & Practice, Pleadings, Amendment of Pleadings, Insurance Law, Liability & Performance Standards, Good Faith & Fair Dealing, Duty to Defend, Complaints, Requirements for Complaint, Procedure, Evidence & Trial, Burdens of Proof, Business & Corporate Compliance, Contracts Law, Types of Contracts, Construction Contracts, Contracts Law, Remedies, Damages, Types of Damages, Substantial Evidence, Sufficiency of Evidence, Appeals, De Novo Review, Preliminary Considerations, Justiciability, Ripeness, Ripeness, Tests for Ripeness, Indemnification, Abuse of Discretion, Declaratory Judgments, Federal Declaratory Judgments, Discretionary Jurisdiction, Reviewability of Lower Court Decisions, Preservation for Review, Relief From Judgments, Altering & Amending Judgments, Newly Discovered Evidence