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Conagra Foods, Inc. v. Americold Logistics, LLC

United States District Court, Tenth Circuit

October 4, 2013

Conagra Foods, Inc. f/k/a Conagra, Inc.; Swift-Eckrich, Inc.; Kraft Foodservice, Inc.; Safeway, Inc.; and Phillips Connections, Inc. d/b/a Phillips Connections and Hanover, Inc., Plaintiffs,
v.
Americold Logistics, LLC; and Americold Realty Trust, Defendants.

MEMORANDUM & ORDER

JOHN W. LUNGSTRUM, District Judge.

Plaintiffs filed a petition in state court asserting claims for breach of contract and specific performance arising out of defendants' refusal to execute Stipulations of Revivor after the Kansas Supreme Court ruled that plaintiffs' underlying judgments against defendants' predecessor were extinguished. Defendants removed the case on the basis of diversity jurisdiction. Shortly thereafter, defendants filed a motion to dismiss plaintiffs' petition on various grounds. In May 2013, the court held a hearing on the motion to dismiss during which defendants agreed to withdraw their motion and the parties agreed that the issues were best resolved in the context of cross-motions for summary judgment. The parties further agreed that no discovery was necessary (and none was conducted) and have stipulated to all but a handful of the pertinent facts. This matter, then, is now before the court on the parties' cross-motions for summary judgment (doc. 35 and 37). As will be explained, plaintiffs' motion is denied and defendants' motion is granted.

Standard

"Summary judgment is appropriate if the pleadings, depositions, other discovery materials, and affidavits demonstrate the absence of a genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." Water Pik, Inc. v. Med-Systems, Inc., ___ F.3d ____, 2013 WL 4046470, at *4 (10th Cir. Aug. 12, 2013) (quotation omitted); see Fed.R.Civ.P. 56(a). A factual issue is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Water Pik, Inc., ___ F.3d at ___; 2013 WL 4046470, at *4 (quotation omitted). The nonmoving party is entitled to all reasonable inferences from the record; but if the nonmovant bears the burden of persuasion on a claim at trial, summary judgment may be warranted if the movant points out a lack of evidence to support an essential element of that claim and the nonmovant cannot identify specific facts that would create a genuine issue. Id.

The fact that the parties here have filed cross-motions for summary judgment does not change the legal standard. Each party has the burden of establishing the lack of a genuine issue of material fact and entitlement to judgment as a matter of law. Atlantic Richfield Co. v. Farm Cr. Bank, 226 F.3d 1138, 1148 (10th Cir. 2000). "[C]ross-motions for summary judgment are to be treated separated; the denial of one does not require the grant of another." Ultra Clean Holdings, Inc. v. TFG-California, L.P., ___ Fed.Appx. ___, at *3 (10th Cir. Aug. 21, 2013) (quoting Buell Cabinet Co. v. Sudduth, 608 F.2d 431, 433 (10th Cir. 1979)). "And when the parties file cross-motions for summary judgment, the court is entitled to assume that no evidence needs to be considered other than that filed by the parties, but summary judgment is nevertheless inappropriate if disputes remain as to material facts." Id. (quoting Atlantic Richfield, 226 F.3d at 1148).

Facts

The following facts have either been stipulated by the parties in the parties' joint stipulation of facts (doc. 30) or are related in the light most favorable to the nonmoving party. In December 1991 a fire started in an underground storage facility generally known as 6500 Inland Drive in Kansas City, Kansas. The facility was owned and operated by Americold Corporation. Defendant Americold Logistics, LLC, a wholly owned subsidiary of defendant Americold Realty Trust, is the legal successor to Americold Corporation. Defendants Americold Logistics, LLC and Americold Realty Trust will be referred to collectively as "Americold."

Plaintiffs ConAgra Foods, Inc. f/k/a/ ConAgra, Inc.; Swift-Eckrich, Inc.; Kraft Foodservice, Inc.; Safeway, Inc.; and Phillips Confections, Inc. d/b/a Phillips Confections and Hanover, Inc. leased space for storage of food products in Americold's underground facility. Plaintiffs filed lawsuits against Americold Corporation in 1992 seeking damages for their lost and contaminated products. Plaintiffs' cases were consolidated into Associated Wholesale Grocers et al. v. Americold Corporation et al ., Case No. 92C4015 in the District Court of Wyandotte County, Kansas (the "Kansas Action"). Americold Corporation was insured under a policy of commercial excess liability insurance issued by Northwestern Pacific Indemnity Company (NPIC) with limits of $25, 000, 000. NPIC denied coverage for the claims under the policy's pollution exclusion because NPIC claimed the damages had been caused by toxic smoke. On March 10, 1994, a settlement was reached between Americold Corporation and plaintiffs, along with other claimants against Americold Corporation that are not parties to the present action.

The Settlement Agreement provided for the entry of consent judgments in favor of the plaintiffs and a covenant not to execute by plaintiffs on the personal assets of Americold Corporation. The Settlement Agreement included an assignment by Americold Corporation to plaintiffs of Americold Corporation's right to seek recovery of insurance policy proceeds and amounts in excess of policy limits from excess carriers including NPIC. As partial consideration for Americold Corporation agreeing to settle the dispute "and in recognition of Americold's interest in protecting its personal assets, " plaintiffs agreed that they would seek to satisfy their judgments against Americold Corporation "by execution, garnishment or otherwise as provided by law against the liability insurance identified" in the Settlement Agreement. Settlement Agreement at ¶ 11.3. Americold Corporation agreed to "execute any additional documents necessary to effectuate the purpose and intent of [the Settlement Agreement] or to pursue the assigned claims or execute on the judgments obtained by plaintiffs." Id. ¶ 14.1. Pursuant to the Settlement Agreement, consent judgments were entered in favor of plaintiffs and against Americold Corporation. NPIC is not a party to the Consent Judgments.

On March 15, 1994, NPIC filed a declaratory judgment action in the District Court of Johnson County, Kansas against Americold Corporation and plaintiffs in the Kansas Action. The action sought a declaration that (1) the NPIC policy issued to Americold Corporation provided no coverage; (2) NPIC had no duty to defend or indemnify Americold Corporation for the pending lease claims; and (3) if any coverage existed, it was excess to any covered available to Americold Corporation under the tenant liability policies. This action was transferred to the District Court of Wyandotte County and consolidated into the Kansas Action. In September 1994, after the Consent Judgments were entered in favor of plaintiffs in the Kansas Action, plaintiffs in the Kansas Action commenced garnishment proceedings against NPIC and TIG Insurance Company.

After extensive discovery in the garnishment action, a ten-week trial took place which terminated on November 15, 2005. Plaintiffs did not file renewal affidavits, file requests for the issuance of additional garnishments, or file motions to revive the Consent Judgments with the District Court of Wyandotte County, Kansas. On November 14, 2005, NPIC filed a Request to the Clerk of Court pursuant to K.S.A. § 60-2403(a) to Release Judgments of Record. The Wyandotte County Clerk released the 1994 Consent Judgments in November 2005. NPIC then moved to dismiss the garnishment proceedings on the grounds that the district court lacked subject matter jurisdiction to conduct the garnishment proceedings. On January 19, 2006, the district court entered its journal entry denying NPIC's motion to dismiss. In that order, the district court determined that "the action of the Clerk of the District Court of Wyandotte County, Kansas in extinguishing these judgments pursuant to K.S.A. 60-2403 was in error based upon the court's ruling herein and is set aside and determined to be void ab initio." On or about August 27, 2007, separate journal entries of judgment were entered against NPIC and in favor of plaintiffs (the "NPIC Judgments").

NPIC appealed the district court's January 19, 2006 decision and the Kansas Supreme Court reversed that decision. Associated Wholesale Grocers, Inc. v. Americold Corp., 270 P.3d 1074 (Kan. 2011) ( Americold III ). In so deciding, the Kansas Supreme Court wrote:

[W]e hold that when the district court entered its judgment against NPIC in this garnishment proceeding, the Plaintiffs' underlying consent judgments against Americold had been extinguished by operation of the dormancy and revivor statutes, K.S.A. 60-2403 and K.S.A. 60-2404. Because Americold was not legally obligated to pay an unenforceable judgment, NPIC was no longer indebted to Americold under its contract to pay the judgments for which Americold was legally liable.

Id. at 1083. The Kansas Supreme Court, then, remanded the matter to the district court to dismiss without prejudice the garnishment proceedings. Thereafter, the district court dismissed the garnishment action and vacated ...


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