Communications Unlimited Contracting Services, Inc. v. Broadband Infrastructure Connection, LLC

          MEMORANDUM AND ORDER

          AUDREY G. FLEISSIG, JUDGE

         This diversity action seeking indemnification and equitable contribution is before the Court on the motion (ECF No. 48) of Plaintiff Communications Unlimited Contracting Services ("Communications Unlimited") for partial summary judgment on Defendant Mid-Continent Casualty Company's ("Mid-Continent") counterclaim for noncontractual indemnity or contribution from Communications Unlimited for sums Mid-Continent paid to settle claims made against its insured, Defendant Broadband Infrastructure Connection, LLC ("Broadband"), in an earlier action. For the reasons set forth below, the motion will be granted.

         BACKGROUND

         The facts relevant to the motion before the Court are as recited in the Court's Memorandum and Order dated May 10, 2017, converting Communications Unlimited's motion to dismiss Mid-Continent's counterclaim to a motion for summary judgment:

In 2007, a company named Communications Unlimited entered into a Master Contractor Agreement with Charter Communications, Inc. ("Charter"), under which Communications Unlimited agreed to install cable services for Charter customers in Missouri. In 2012, Communications Unlimited entered into a Master Service Agreement with [Broadband], setting forth terms under which Broadband would perform cable installation work assigned to it by Communications Unlimited. The Master Service Agreement contained an "Insurance" provision, requiring Broadband to obtain Commercial General Liability Insurance, with coverage for a minimum amount of $1 million per occurrence, as well as Umbrella Excess Insurance in the same amount. The Master Service Agreement obligated Broadband to name Communications Unlimited as an additional insured party under Broadband's policies. Broadband obtained such insurance, with Mid-Continent as the insurer.

The Master Service Agreement between Communications Unlimited and Broadband also contained an "Indemnification" provision pursuant to which Broadband agreed to indemnify Communications Unlimited for any claims and liabilities arising out of, as relevant here, wrongdoing on the part of any Broadband employee.

Communications Unlimited itself was insured under a Commercial General Liability Policy issued by Plaintiff Charter Oak Fire Insurance Company ("Charter Oak"), and an Umbrella Excess Liability Policy issued by Plaintiff St. Paul Fire & Marine Insurance Company ("St. Paul").

On September 23, 2014, Jane Doe filed an action in Missouri state court for damages against Charter; Broadband; Communications Unlimited; and James Helderle, a cable technician. Doe alleged in her first amended petition that the three corporate defendants were joint employers of Helderle, in that they each had the right to control hiring, supervising, and firing him. Doe alleged that Helderle came into contact with her "through his employment and/or agency and/or affiliation with" the three corporate defendants. She alleged that he entered her apartment on December 2, 2012, to perform technical cable services, and acted inappropriately. Helderle was fired on December 4, 2012, based on Doe reporting his inappropriate behavior, and was told the reason for his termination. The next night he forced his way into Doe's apartment and sexually assaulted her. Doe asserted claims of negligent hiring, negligent supervision, and negligent failure to warn against each of the three corporate defendants, and a battery claim against Helderle.

Plaintiffs in the present case made a demand upon Mid-Continent to defend and indemnify Communications Unlimited in the Doe action, but Mid-Continent denied the request. Communications Unlimited alleges that on January 20, 2016, the three Plaintiffs in the present case paid a confidential sum in settlement of Doe's claims against Communications Unlimited. Communications Unlimited now seeks indemnification from Broadband (Count I), under the Master Service Agreement, for the full amount of the Doe settlement plus expenses and costs incurred in that action; and for the same amount from Mid-Continent (Count II) for breach of the Broadband insurance policies naming Communications Unlimited as an additional insured. Charter Oak and St. Paul seek equitable contribution against Mid-Continent (Count III).

Mid-Continent filed a counterclaim against Communications Unlimited in which it stated that (on or about January 3, 2017) Mid-Continent settled Doe's claims against Broadband, its insured, for a confidential amount. Mid-Continent further stated that Broadband assigned Broadband's rights against Communications Unlimited to Mid-Continent, with respect to the amount paid to settle Doe's claims against Broadband. Mid-Continent alleged that Communications Unlimited was the corporate party that was solely responsible for, and at fault in, hiring and supervising Helderle, in that Communications Unlimited "completely dominated all operations of Broadband . . . including] complete control regarding hiring, training, supervision, disciple and firing of employees." More specifically, Mid-Continent alleged that "[i]t was employees or officers of [Communications Unlimited] who hired Helderle and were responsible for his training, job assignment and supervision." Mid-Continent claimed that, as such, Communications Unlimited was liable to Mid-Continent for contribution or indemnity for the amount Mid-Continent paid to settle Doe's claims against Broadband.

ECF No. 44.

         On January 28, 2016, Doe voluntarily dismissed with prejudice her state court claims against Charter and Communications Unlimited. On December 22, 2016, Doe filed a notice of her dismissal with prejudice of the case against Broadband, which was granted by the court on January 3, 2017. On January 4, 2017, Doe dismissed her claim against Helderle.

         In support of its motion to dismiss, Communications Unlimited argued that Mid-Continent's counterclaims for contribution or non-contractual indemnity were barred pursuant to Mo. Rev. Stat. § 537.060, by virtue of Communications Unlimited's settlement of Doe's claim against it. Section 537.060 provides as follows:

When an agreement by release ... is given in good faith to one of two or more persons liable in tort for the same injury or wrongful death, such agreement shall not discharge any of the other tort-feasors for the damage unless the terms of the agreement so provide; however such agreement shall reduce the claim by the stipulated amount of the agreement, or in the amount of consideration paid, whichever is greater. The agreement shall discharge the tort-feasor to whom it is given from all liability for contribution or noncontractual indemnity to any other tort-feasor. The term "noncontractual indemnity" as used in this section refers to indemnity between joint tort-feasors culpably ...