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Restaurant Recycling, LLC v. New Fashion Pork, LLP

United States District Court, D. Minnesota

July 14, 2017

Restaurant Recycling, LLC, Plaintiff,
v.
New Fashion Pork, LLP, Intervenor Plaintiff,
v.
Employer Mutual Casualty Company d/b/a EMC Insurance Companies and Hamilton Mutual Insurance Company, Defendants.

          Brandon M. Schwartz, Esq., Michael D. Schwartz, Esq. and Schwartz Law Firm, counsel for plaintiff.

          David C. Kim, Esq., Dean M. Zimmerli, Esq. and Gislason & Hunter LLP, counsel for intervenor plaintiff.

          Beth A. Jenson Prouty, Esq. and Arthur Chapman, counsel for defendants.

          ORDER

          David S. Doty, Judge United States District Court

         This matter is before the court upon the motion for judgment on the pleadings by defendants Employer Mutual Casualty Company d/b/a EMC Insurance Companies and Hamilton Mutual Insurance Company.[1] Based on a review of the file, record, and proceedings herein, and for the following reasons, the court grants defendants' motion.

         BACKGROUND

         This insurance coverage dispute arises out of an underlying claim by intervenor plaintiff New Fashion Pork (NFP)[2] against plaintiff Restaurant Recycling, LLC and Superior Feed, LLC.[3] NFP is a pork producer that owns and operates feed mills where it blends grain, fat, and other ingredients to create feed for its swine. ECF No. 9-1 ¶ 6.[4] Restaurant Recycling is a manufacturer and supplier of fat products for animal feed. Id. ¶ 7. NFP alleges that, between July 1, 2014, and September 24, 2015, Restaurant Recycling delivered four shipments of fat products to NFP that were contaminated with lasalocid and lascadoil. Id. ¶¶ 9-10. Lasalocid is a medication regulated by the Food and Drug Administration that is generally used in chicken and turkey feed, but it is not approved for use in swine. Id. ¶ 11. Lascadoil is a byproduct created in the production of lasalocid and is only approved for use as biofuel. Id. ¶ 10.

         NFP claims that it used Restaurant Recycling's fat products to produce feed for its swine and the contaminated feed caused serious health problems in its swine. Id. ¶¶ 14-15. On November 23, 2016, NFP filed an amended complaint in Ramsey County alleging breach of contract, breach of implied warranty of merchantability, breach of implied warranty of fitness for a particular purpose, negligence, strict liability, and fraud.[5]

         EMC insured Restaurant Recycling under Policy No. 4D5-66-11-15 from July 2, 2014 to July 2, 2015, which provided general commercial liability coverage. See ECF No. 9-2. The policy contains an absolute pollution exclusion. Specifically, the policy does not cover: “‘Body injury' or ‘property damage' which would not have occurred in whole or part but for the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of ‘pollutants' at any time.” Id. at 44. The policy defines “pollutants” as “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes material to be recycled, reconditioned or reclaimed.” Id. at 38.

         On January 3, 2017, Restaurant Recycling filed this action seeking a declaration that EMC is obligated, pursuant to the policy, to provide defense and coverage for all claims asserted by NFP and for any damages awarded. Defendants now move for judgment on the pleadings.

         DISCUSSION

         I. Subject Matter Jurisdiction

         Because the underlying litigation was settled for an amount less than $75, 000, the court requested that the parties submit letters on whether the court retained jurisdiction. Both parties concluded that the settlement agreement did not divest the court of jurisdiction. The court agrees. “It is well established that the requirements for diversity jurisdiction must be satisfied only with respect to the [amount alleged in the complaint at] the time of filing.” Scottsdale Ins. Co. v. Universal Crop Protection All., LLC, 620 F.3d 926, 931 (8th Cir. 2010). Furthermore, “subsequent events reducing the amount in controversy do not destroy diversity jurisdiction.” Id. As a result, the court retains subject matter jurisdiction.

         II. ...


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