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JTO, Inc. v. Travelers Indemnity Co. of America

United States District Court, N.D. Ohio, Eastern Division

March 16, 2017

JTO, INC., Plaintiff,



         This matter is before the Court on Defendant The Travelers Indemnity Company of America's Motion for Judgment on the Pleadings (ECF # 8). For the following reasons, the Court grants Travelers' Motion and dismisses the case.

         Plaintiff JTO, Inc. is an Ohio based construction company. The Travelers Indemnity Company (“Travelers”) is an insurance company incorporated under the laws of the State of Connecticut. According to JTO's Complaint, JTO and the City of Willoughby, Ohio entered into a contract for two road projects, the Riverside Common Drive and the Apollo Parkway Extension Projects in December of 2002. JTO obtained insurance coverage under two Commercial General Liability policies from Travelers. From February 1, 2002 through February 1, 2003, policy DT CO 251X6024-TIA-02 was in effect and from February 1, 2003 through February 1, 20014, policy # DT CO 251X6024-TIA-03 was in effect. Both policies expressly provided insurance coverage for the Riverside and Apollo projects.

         Construction work began on the two road projects in 2003. In December of 2004, the United States Army Corps of Engineers issued a Cease and Desist Order stopping all construction on the projects. In 2011, the United States and State of Ohio Environmental Protection Agencies filed suit against JTO and others for alleged violations of the Clean Water Act under both federal and state law. According to the suit, both the Riverside and Apollo road projects were located on protected wetlands.

         JTO promptly gave notice to Travelers of the suit and sought defense and indemnity coverage under the policies. Travelers twice denied coverage. JTO alleges Breach of Contract and seeks Declaratory Judgment that it is entitled to defense and indemnity coverage under the policies.

         Travelers moves for Judgment on the Pleadings on all JTO's claims. According to Travelers, it has no duty to defend nor indemnify JTO under the policies because there was no accident or fortuitous event, consequently, there was no “occurrence” to trigger coverage. Rather, the claims by the EPAs against JTO stem from JTO's affirmative conduct and decisions, including JTO's failure to obtain the required permits before beginning construction and its decision to discharge dredged and fill material into the waterways. Travelers further argues that the EPAs have not made any claims against JTO for compensatory damages but seek only statutory penalties and Injunctive relief, therefore, JTO cannot show there was damage to property in order to trigger coverage. Lastly, Travelers contends the absolute pollution exclusion in the policies forecloses any duty to defend or indemnify.

         JTO contends environmental damage constitutes property damage under the law and under the allegations in its Complaint, which the Court must construe as true. Furthermore, JTO argues that whether there was an “occurrence” under the policy involves questions of intent to cause an injury, which is a fact question unsuited for resolution on a Motion for Judgment on the Pleadings. Lastly, JTO argues the pollution exclusion does not apply because dredged and fill material do not meet the policy definition of “pollutant.”


         Standard of Review

         After the pleadings are closed, but within such time as not to delay the trial, any party may move for judgment on the pleadings. Fed.R.C.iv.P. 12(c). In this jurisdiction, “[t]he standard of review for a judgment on the pleadings is the same as that for a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) . . . . We ‘construe the complaint in the light most favorable to the plaintiff, accept all of the complaint's factual allegations as true, and determine whether the plaintiff undoubtedly can prove no set of facts in support of the claims that would entitle relief.'” Roger Miller Music, Inc. v. Sony/ATV Publishing, LLC, 477 F.3d 383, 389 (6th Cir.2007) (citations omitted). The court's decision “rests primarily upon the allegations of the complaint;” however, “‘exhibits attached to the complaint[] also may be taken into account.'” Barany-Snyder v Weiner, 539 F.3d 327, 332 (6th Cir.2008) (citation omitted) (brackets in the original). Lastly, a Rule 12(c) motion “is granted when no material issue of fact exists and the party making the motion is entitled to judgment as a matter of law.” Paskvan v. City of Cleveland Civil Serv. Comm'n, 946 F.2d 1233, 1235 (6th Cir.1991). In deciding a motion to dismiss under Fed.R.Civ.P. 12(b)(6), the court must accept as true all of the factual allegations contained in the complaint. Erickson v. Pardus, 551 U.S. 89, 93-94 (2007). The court need not, however, accept conclusions of law as true:

Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” As the Court held in [Bell Atlantic v.] Twombly, 550 U.S. 544, 127 S.Ct. 1955');">127 S.Ct. 1955 [(2007)], the pleading standard Rule 8 announces does not require “detailed factual allegations, ” but it demands more than an unadorned, the-Defendant-unlawfully-harmed-me accusation. Id. at 555. A pleading that offers “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” Id. at 555. Nor does a complaint suffice if it tenders “naked assertion[s]” devoid of “further factual enhancement.” Id. at 557.
To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” Id. at 570. A claim has facial plausibility when the Plaintiff pleads factual content that allows the court to draw the reasonable inference that the Defendant is liable for the misconduct alleged. Id. at 556. The plausibility standard is not akin to a “probability requirement, ” but it asks for more than a sheer possibility that a Defendant has acted unlawfully. Id. Where a complaint pleads facts that are “merely consistent with” a Defendant's liability, it “stops short of the line between possibility and plausibility of ‘entitlement to relief.'” Id. at 557.

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         According to the Sixth Circuit, the standard described in Twombly and Iqbal “obliges a pleader to amplify a claim with some factual allegations in those contexts where such amplification is needed to render the claim plausible.” Weisbarth v. Geauga Park Dist., 499 F.3d 538, 541 (6th Cir. 2007) (quoting Iqbal v. Hasty, 490 F.3d 143, 157-58 (2nd Cir. 2007)). That is, “Iqbal interpreted Twombly to require more concrete allegations only in those instances in which the complaint, on its face, does not otherwise set forth a plausible claim for relief.” Weisbarth, 499 F.3d at 542. A complaint should be dismissed when it fails to allege “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570.

         Declaratory Judgment

         The Declaratory Judgment Act states that “[i]n a case of actual controversy within its jurisdiction . . . any court of the United States . . . may declare the rights and other legal relations of any interested party seeking such declaration.” 28 U.S.C. § 2201. Nevertheless, the Supreme Court has reiterated the discretionary nature of the Act. In Public Affairs Press v. Rickover, 369 U.S. 111, 82 S.Ct. 580, 7 L.Ed.2d 604 (1962), the highest court opined: “‘The Declaratory Judgment Act was an authorization, not a command. It gave the federal courts competence to make a declaration of rights; it did not impose a duty to do so.' Brillhart v. Excess Ins. Co., 316 U.S. 491, 494, 499 [62 S.Ct. 1173');">62 S.Ct. 1173, 1177-78, 86 L.Ed. 1620 (1942)].” Put another way, the declaratory judgment statute “is an enabling Act, which confers a discretion on the courts rather than an absolute right upon the litigant.” Green v. Mansour, 474 U.S. 64 at 72 (1985).

         As an initial matter, the parties do not dispute that Ohio law governs the interpretation of the relevant contracts for insurance. The policies were written for JTO, an Ohio company, and insured work projects on ...

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