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National Union Fire Insurance Company of Pittsburgh, Pa and American v. Ready Pac Foods

May 9, 2011

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA AND AMERICAN GUARANTEE & LIABILITY INSURANCE COMPANY, PLAINTIFF/INTERVENING PLAINTIFF,
v.
READY PAC FOODS, INC. AND TACO BELL CORP., DEFENDANT/INTERVENING DEFENDANT. TACO BELL CORP., THIRD-PARTY PLAINTIFF,
v.
ST. PAUL FIRE AND MARINE INSURANCE COMPANY, THIRD-PARTY DEFENDANT.



The opinion of the court was delivered by: Honorable Ronald S.W. Lew Senior, U.S. District Court Judge

ORDER RE: PLAINTIFF NATIONAL UNION'S MOTION FOR CERTIFICATION OF FRCP 54(B) JUDGMENT AND REQUEST FOR STAY OF PROCEEDINGS [172]

On April 12, 2011, Plaintiff National Union Fire Insurance Company's ("National Union") Motion for Certification of FRCP 54(b) Judgment and Request for Stay of Proceedings [172] came on for regular calendar before this Court. The Court having reviewed all papers submitted pertaining to this Motion and having considered all arguments presented to the Court, NOW FINDS AND RULES AS FOLLOWS:

The Court GRANTS Plaintiff National Union's Motion for Certification of FRCP 54(b) Judgment and Request for Stay of Proceedings.

I. Background

This insurance coverage action arises out of claims asserted against Defendant Ready Pac Foods, Inc. ("Ready Pac") by intervenor Taco Bell Corp. ("Taco Bell") resulting from an outbreak of E. coli bacteria at various Taco Bell restaurants in the Northeast in 2006. Taco Bell contends the E. coli outbreak was caused by contaminated lettuce supplied, at least in part, by Ready Pac.

During the period in which the outbreak occurred, Ready Pac was insured by Plaintiff National Union with a commercial liability policy (the "National Union Policy"). Third-Party Defendant St. Paul Fire and Marine Insurance Company ("St. Paul Fire") issued Ready Pac a second layer excess liability policy (the "St. Paul Policy"). The St. Paul Fire Policy was excess to the National Union Policy and provided "Following Form" coverage. In addition to the commercial excess liability policy issued by National Union, and the second layer commercial excess liability policy issued by St. Paul, Plaintiff-in-Intervention American Guarantee & Liability Insurance Company ("American Guarantee") issued Ready Pac a third layer excess liability policy (the "American Guarantee Policy"). Taco Bell contends that all three Policies provide coverage for Ready Pac's liability, if any, for Taco Bell's economic loss arising out of an alleged decline in patronage at Taco Bell restaurants due to the E. coli outbreak.

On December 28, 2010, this Court issued an Order granting the Motions for Partial Summary Judgment of Plaintiff National Union, Plaintiff-in-Intervention American Guarantee, and Third-Party Defendant St. Paul Fire and found that Ready Pac's insurance policies did not provide coverage for the category of damages that Taco Bell suffered because of the decline in patronage at Taco Bell restaurants as a consequence of the bodily injuries suffered by Taco Bell customers and/or property damage to Taco Bell food products.*fn1 On March 18, 2011, the Court issued an Amended Order reflecting that Third-Party Defendant St. Paul Fire issued to Defendant Ready Pac a second layer excess liability policy and that the American Guarantee Policy is a third layer excess liability policy.

II. Request for Judicial Notice

A. Legal Standard

Pursuant to Federal Rule of Evidence 201(a), the Court may take judicial notice of adjudicative facts only. Fed. R. Evid. 201(a). A judicially noticed fact must be one not subject to reasonable dispute in that it is either (1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned. Fed. R. Evid. 201(b). A court must take judicial notice if a party requests it and supplies the court with the requisite information. Fed. R. Evid. 201(d).

As a preliminary matter, the Court GRANTS Plaintiff National Union's Request for Judicial Notice, pursuant to Federal Rule of Evidence 201, of the following: 1) the Complaint filed in this action by National Union on May 7, 2009 [1], 2) the Answer and Counterclaim filed by Intervenor Taco Bell Corp. on November 5, 2009 [47], Properties, Inc., KFC Corporation, and more than 500 of Taco Bell Corp.'s franchisees sued Ready Pac Produce, Inc., Ready Pac Foods, Inc., Gertmenian Produce, Inc., and Ready Pac Florence Partnership, case No. BC427015. and 3) the Complaint in the action entitled Taco Bell Corp., et al. v. Ready Pac Produce, Inc., et al., filed in the Los Angeles County Superior Court, Case No. BC 427015 on November 30, 2009. The Court may take judicial notice of court filings and other matters of public record. See Burbank--Glendale--Pasadena Airport Auth. v. City of Burbank, 136 F.3d 1360, 1364 (9th Cir. 1998).

III. Motion for Certification of Federal Rule of Civil Procedure 54(b) Judgment

A. Legal Standard

Under Federal Rule of Civil Procedure 54(b), when an action presents more than one claim for relief-whether as a claim, counterclaim, cross-claim, or third-party claim-or when multiple parties are involved, the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court ...


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