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Nautilus Insurance Co. v. RDB Universal Services, LLC

United States District Court, E.D. Missouri, Eastern Division

April 26, 2017

NAUTILUS INSURANCE COMPANY, Plaintiff,
v.
RDB UNIVERSAL SERVICES, LLC; DELORIS BERRY; RELDER BERRY; PAINTERS DISTRICT COUNCIL NO. 58; PAINTERS DISTRICT COUNCIL NO. 2 PENSION TRUST; PAINTERS DISTRICT COUNCIL NO. 2 WELFARE TRUST; PAINTERS DISTRICT COUNCIL NO. 2 VACATION TRUST; PAINTERS DISTRICT COUNCIL NO. 2 APPRENTICESHIP AND JOURNEYMAN TRAINING TRUST; GREGG SMITH; DAVID DOERR; RICH LUCKS; WILLIAM BOEVINGLOH; CARL FARRELL; DONALD THOMAS; DANIEL WEINSTROER; MICHAEL SMITH; DANIEL HANSON; STEVEN PHILIPP, JR.; MARK BORGMANN; MICHAEL SLATTERY; JOSEPH KEIPP; TIM WEIS; AND FRED PHILIPP, JR., Defendants.

          OPINIONS, MEMORANDUM AND ORDER

          HENRY EDWARD AUTREY UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Plaintiff's Motion for Summary Judgment, [Doc. No. 27]. Defendants Painters District Council No. 58, et al., [1](“Objecting Defendants”) have filed a written opposition to the Motion. For the reasons set forth below, the Motion will be granted.

         Facts and Background

         The undisputed material facts establish the following:

         Nautilus is a corporation organized under the laws of Arizona with its principal place of business in Scottsdale, Arizona. At all times relevant hereto, Nautilus was a surplus lines insurer whose policies may be sold in Illinois.

         Defendant RDB Universal Services, LLC, ("RDB") is a limited liability company existing under the laws of Missouri, doing business at 5857 Julian, St. Louis, Missouri. Defendant Deloris Berry was at all relevant times hereto a citizen of St. Louis, Missouri. Defendant Relder Berry was at all relevant times hereto a citizen of St. Louis, Missouri. Defendant Painters District Council No. 58 is a labor organization within the meaning of Section 2(5) of the National Labor Relations Act and maintains its principal offices at 2501 59th Street, St. Louis, Missouri 63110. Defendant Painters District Council No. 2 Pension Trust ("Pension Trust") is an employee benefit plan within the meaning of Sections 3(3) and 502(d)(1) of the Employee Retirement Income Security Act of 1974 (ERISA) and is administered at 13801 Riverport Lakes West, Suite 401, Maryland Heights, St. Louis County, Missouri 63043. Defendant Painters District Council No. 2 Welfare Trust ("Welfare Trust") is an employee benefit plan within the meaning of Sections 3(3) and 502(d)(1) of ERISA and is administered at 13801 Riverport Lakes West, Suite 401, Maryland Heights, St. Louis County, Missouri 63043. Defendant Painters District Council No. 2 Vacation Trust ("Vacation Trust") is an employee benefit plan within the meaning of Sections 3(3) and 502(d)(1) of ERISA and is administered at 13801 Riverport Lakes West, Suite 401, Maryland Heights, St. Louis County, Missouri 63043. Defendant Painters District Council No. 2 Apprenticeship and Journeyman Training Trust ("Apprenticeship Trust") is an employee benefit plan within the meaning of Sections 3(3) and 502(d)(1) of ERISA and is administered at 18036 Eads Avenue, Chesterfield, Missouri 63005. Gregg Smith is a citizen of the State of Missouri and, at all relevant times hereto, acted as the business manager of Painters, a trustee of the Pension Trust, Welfare Trust, Vacation Trust, and Apprenticeship Trust. David Doerr is a citizen of the State of Missouri and, at all relevant times hereto, acted as a trustee of the Pension Trust and Vacation Trust. Rich Lucks is a citizen of the State of Missouri and, at all relevant times hereto, acted as a trustee of the Pension Trust. William Boevingloh is a citizen of the State of Missouri and, at all relevant times hereto, acted as a trustee of the Welfare Trust and the Apprenticeship Trust. Carol Farrell is a citizen of the State of Missouri and, at all relevant times hereto, acted as a trustee of the Welfare Trust, Vacation Trust, and Apprenticeship Trust. Donald Thomas is a citizen of the State of Missouri and, at all relevant times hereto, acted as a trustee of the Welfare Trust. Daniel Weinstroer is a citizen of the State of Missouri and, at all relevant times hereto, acted as a trustee of the Pension Trust. Michael Smith is a citizen of the State of Missouri and, at all relevant times hereto, acted as a trustee of the Welfare Trust and Apprenticeship Trust. Daniel Hanson is a citizen of the State of Missouri and, at all relevant times hereto, acted as a trustee of the Welfare Trust. Steven Philipp, Jr. is a citizen of the State of Missouri and, at all relevant times hereto, acted as a trustee of the Vacation Trust. Mark Borgmann is a citizen of the State of Missouri and, at all relevant times hereto, acted as a trustee of the Vacation Trust. Michael Slattery is a citizen of the State of Missouri and, at all relevant times hereto, acted as a trustee of the Apprenticeship Trust. Joseph Keipp is a citizen of the State of Missouri and, at all relevant times hereto, acted as a trustee of the Vacation Trust and Apprenticeship Trust. Tim Weiss is a citizen of the State of Missouri and, at all relevant times hereto, acted as a trustee of the Pension Trust. Fred Philipp, Jr. is a citizen of the State of Missouri and, at all relevant times hereto, acted as a trustee of the Pension Trust.

         This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332 because there is complete diversity of citizenship between the Plaintiff and the Defendants, and the amount in controversy exceeds $75, 000, exclusive of interest and costs. Venue is proper pursuant to 28 U.S.C. § 1391 because a substantial part of the events giving rise to this litigation occurred in this judicial district and because all of the defendants are residents of this judicial district.

         On October 27, 2014, the Union Defendants filed a lawsuit in the United States District Court for the Eastern District of Missouri, entitled Painters District Council No. 58 et al. v. RDB Universal Services, LLC et al., and pending as Case Number 4:14-cv-01812 ("Underlying Lawsuit").[2] The Underlying Lawsuit alleges that RDB Universal was a signatory and/or bound by a collective bargaining agreement ("CBA") with Painters District Council No. 58 through the signature of Relder Berry, on April 15, 2013. The Underlying Lawsuit alleges that, per the CBA, RDB Universal was required to submit fringe benefits, dues remissions, and contributions to a Labor Management Cooperation Fund, evidencing hours worked by its construction employees. The Underlying Lawsuit further alleges that, per the CBA, RDB Universal was obligated to make weekly reports and contributions for all covered employees, showing the number of hours worked and contributions due for its construction employees. The Underlying Lawsuit alleges that the CBA required RDB Universal to make weekly contributions to the employee benefit plans and to the Labor Management Cooperation Fund. The Underlying Lawsuit further alleges that the CBA required RDB Universal to remit union dues to Painters District Council No. 58. The Underlying Lawsuit alleges that, per the CBA, the employee benefit plans were entitled to audit RDB Universal's books and records to ensure compliance with RDB Universal's obligations. The Underlying Lawsuit alleges that since about August 9, 2014, RDB Universal has failed and refused to file accurate reports evidencing the hours that its construction employees worked. The Underlying Lawsuit alleges that this constitutes a breach of the CBA and a violation of the Employment Retirement Income Security Act ("ERISA"). The Underlying Lawsuit alleges that, under ERISA, RDB Universal is liable to the Union Defendants for all unpaid principal amounts, liquidated damages, attorneys' fees, accounting fees, and costs incurred by the Union Defendants. The Underlying Lawsuit further alleges that Deloris and Relder are personally liable for amounts owed due to personal guarantees that they executed.

         Nautilus issued a commercial general liability insurance policy to RDB Universal Services, Inc. under Policy Number NN410182 for the policy period of December 12, 2013 to December 12, 2014 (the "2013-2014 Policy").

         Nautilus also issued a Commercial General Liability Policy to RDB Universal Services LLC as the Named Insured through Policy No. NN516321 for the policy period December 12, 2014 through December 12, 2015 (the "2014-2015 Policy"). The 2013-2014 Policy and 2014-2015 Policy (collectively, the "Policies") incorporate the following insuring agreement through form CG 00 0112 04:

         SECTION I - COVERAGES COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY

1. Insuring Agreement.
a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "bodily injury" or "property damage" to which this insurance does not apply. We may, at our discretion, investigate any "occurrence" and settle any claim or "suit" that may result. But:
(1) The amount we will pay for damages is limited as described in Section III - Limits Of ...

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