Target Corp. v. Ace Am. Ins. Co.

Target Corp. v. Ace Am. Ins. Co.

Opinion

ORDER

Before the Court is Plaintiff Target Corporation's (Target) motion to alter or amend the judgment pursuant to Federal Rules of Civil Procedure 56(f)(2) and 59(e). (Dkt. 51.) Defendants ACE American Insurance Company and ACE Property & Casualty Insurance Co. (collectively, ACE) oppose the motion. For the reasons addressed below, the Court grants Target's motion to alter or amend the judgment pursuant to Federal Rule of Civil Procedure 59(e), vacates the Court's February 8, 2021 Order, denies ACE's motion for summary judgment, and grants Target's motion for partial summary judgment.

BACKGROUND [*2] 

In 2013, Target discovered that a hacker stole payment card data and personal contact information of individuals with Target payment cards (Data Breach). Because the Data Breach compromised the payment cards, the banks that issued these payment cards (Issuing Banks) cancelled the payment cards and issued replacement payment cards, incurring costs for which the Issuing Banks sought compensation from Target. Target settled the Issuing Banks' claims.

In this case, Target alleges that under ACE's general liability policies (the Policies), ACE is obligated to indemnify Target with respect to the settlements with the Issuing Banks. The Policies provide coverage for losses resulting from property damage, including "loss of use of tangible property that is not physically injured." The Policies apply to property damage only if the "property damage" is caused by an "occurrence." Target provided ACE with notice and a detailed accounting of the loss. ACE denied coverage as to Target's claim and refused to compensate Target. Target filed this lawsuit against ACE in November 2019, alleging breach of contract and seeking declaratory and compensatory damages.

Target moved for partial summary judgment, [*3]  seeking a declaration that the Policies covered the costs Target incurred settling the claims for replacement of the payment cards. Target argued that ACE's refusal to provide coverage for these claims lacked any basis in either the Policies' language or Minnesota law. ACE countered that Target failed to meet its burden of establishing the elements required to trigger coverage—specifically, that the settlement satisfied Target's legal obligation to pay "damages because of loss of use of tangible property" caused by an "occurrence." On February 8, 2021, this Court denied Target's motion for partial summary judgment and granted ACE's motion for summary judgment. On March 8, 2021, Target filed the pending motion to alter or amend the judgment pursuant to Federal Rules of Civil Procedure 56(f)(2) and 59(e), contending that the Court's February 8, 2021 Order contains an error of law.

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