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Netherlands Insurance Co. v. Cellar Advisors, LLC

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

February 22, 2018

NETHERLANDS INSURANCE COMPANY and HAWKEYE-SECURITY INSURANCE COMPANY, Plaintiffs/Counterclaim Defendants,
v.
CELLAR ADVISORS, LLC, DOMAINE SAINT LOUIS, LLC, DOMAINE NEW YORK, LLC, and MARC LAZAR, Defendants/Counterclaimants/Crossclaim Defendants, and GREAT NORTHERN INSURANCE COMPANY, Defendant/Crossclaimant.

          MEMORANDUM AND ORDER

          PATRICIA L. COHEN UNITED STATES MAGISTRATE JUDGE.

         This matter is before the Court (1) on review of the record regarding the need for each of the four organizational Defendants to file a Disclosure of Organizational Interests Certificate (“Certificate”); (2) on a motion for continuance of the Rule 16 Conference filed by Netherlands Insurance Company (“Netherlands”) and Hawkeye-Security Insurance Company (“Hawkeye-Security”) (collectively referred to as “Plaintiffs”) [ECF No. 44];[1] and (3) on a motion to dismiss Defendant/Crossclaimant Great Northern Insurance Company's (“Great Northern's”) crossclaim, filed by Defendants/Crossclaim Defendants Cellar Advisors, LLC (“Cellar Advisors”), Domaine Saint Louis, LLC (“Domaine StL”), Domaine New York, LLC (“Domaine NY”), and Marc Lazar (collectively referred to as “Cellar Defendants”) [ECF No. 35].

         I. Background

         Great Northern “issued a homeowners' insurance policy to [non-parties] Reid and Krista Buerger . . . [who] contracted with . . . Cellar Defendants for wine consultation and storage services.”[2] When the Buergers' approximately nine-year relationship with Cellar Defendants ended in 2014, the Buergers claimed that approximately 1, 300 bottles of their wine, having a value over $1.9 million, were missing.[3] Great Northern paid the Buergers for the loss and, as subrogee of the Buergers, is now suing Cellar Defendants in a Pennsylvania state court to recover the loss.[4]

         Plaintiff Netherlands issued a $1 million per occurrence primary commercial general liability insurance policy and Plaintiff Hawkeye-Security issued a $1 million per occurrence umbrella policy for the period July 5, 2012, to July 5, 2013.[5] Netherlands issued its policy to Cellar Advisors, Domaine StL, and Domaine NY, and Hawkeye-Security issued its policy to Cellar Advisors and Domaine StL.[6] Defendants Cellar Advisors, Domaine StL, and Domaine NY “are [allegedly] owned, operated, and/or managed by [D]efendant Marc Lazar, [and] are in the business of wine consultation and storage.”[7]

         Utilizing this Court's diversity jurisdiction under 28 U.S.C. § 1332, Plaintiffs seek declaratory judgment relief under 28 U.S.C. § 2201.[8] By their four-count complaint, Plaintiffs seek a judgment declaring that there is no coverage under their insurance policies and Plaintiffs have no duty to defend or indemnify Cellar Defendants because the alleged loss: (1) did not result from an occurrence either within the policies' period or that was unknown prior to the policies' effective dates; (2) did not result from an “occurrence” or “accident” as defined by the policies due to Great Northern's claims for conversion and breach of contract; (3) is not for “property damage” as defined in the policies, but instead is for wine that was lost, stolen, or never acquired; and (4) falls within one or more of the policies' exclusions.[9]

         Great Northern filed a crossclaim alleging eight claims against Cellar Defendants.[10]Cellar Defendants filed a counterclaim seeking relief for Plaintiffs' alleged breach of their insurance policies by denying indemnification and defense of Cellar Defendants with respect to Great Northern's claims in the Pennsylvania lawsuit and crossclaim in this lawsuit.[11] Cellar Defendants allege in relevant part that Great Northern's crossclaim in this lawsuit “makes the same general allegations that [Great Northern made] in the [Pennsylvania lawsuit] complaint.”[12]

         II. Disclosure of Organizational Interests Certificate

         Local Rule 3-2.09(A) requires “[e]very non-governmental organizational party” to file a Certificate “with the party's first pleading or entry of appearance.” In relevant part, the Certificate provides specified information about the ownership of a corporate entity and the membership of a limited liability company or partnership. Local Rule 3-2.09(B). In the Court's Order Setting Rule 16 Conference, the Court reminded “[a]ll non-governmental corporate parties . . . to comply with” the Local Rule requiring the filing of the Certificate.[13]

         An entry of appearance on behalf of each Defendant was first filed in November 2017.[14]Each Defendant filed an answer in November or December 2017.[15] A review of the record reveals that, as of this date, none of the four Defendants who are “non-governmental organizational” litigants have filed Certificates. Therefore, the Court will set a deadline for each of those Defendants to file the Certificate.

         III. Plaintiffs' motion for continuance of Rule 16 conference [ECF No. 44]

         The Court scheduled a Rule 16 conference for March 15, 2018.[16] Plaintiffs ask that the Court re-set the conference “in or after the week of March 19, 2018” because “both of plaintiffs' counsel will be out of the office and have a scheduling conflict that prevents their attendance at the conference.”[17] Defendants have not responded to the motion or sought more time in which to do so. See Local Rule 7-4.01(B). The Court will grant Plaintiffs' unopposed motion to continue the Rule 16 Conference.

         IV. Motion to dismiss Great Northern's Crossclaim [ECF No. 35]

         Great Northern's crossclaim seeks monetary relief from Cellar Defendants for conversion, breach of contract, unjust enrichment, negligent misrepresentation, negligence, gross negligence, bailment, and breach of fiduciary duty pertaining to the Buergers' missing wine, [18]claims which Great Northern allegedly also pursues in the Pennsylvania lawsuit.[19] Cellar Defendants move to dismiss Great Northern's crossclaim with prejudice under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted.[20] More specifically, Cellar Defendants argue (1) all of the claims in Great Northern's crossclaim are barred by waivers of subrogation which are valid and enforceable under Missouri law; (2) Great Northern's unjust enrichment claim fails to state a claim because Missouri law does not permit a litigant to pursue a quasi-contractual claim in a matter involving an express contract; and (3) Great Northern's “gross negligence” claim is not recognized in Missouri and is merely duplicative of Great Northern's negligence claim.[21] Great Northern opposes the motion on the grounds: (1) the Pennsylvania court dismissed similar arguments; (2) the written agreements between Cellar Defendants and the Buergers address only the storage of the wine and not the rest of those parties' relationship, which also encompassed Cellar Defendants advising the Buergers about wine, and selecting, purchasing, and transporting wine for the Buergers; (3) the written ...


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