The opinion of the court was delivered by: Oliver W. Wanger United States District Judge
MEMORANDUM DECISION AND ORDER RE DEFENDANT‟S MOTION TO DISMISS (DOCS. 7, 10)
Plaintiff Ruiz Food Products, Inc. ("Plaintiff") proceeds with this action against Catlin Underwriting U.S., Inc. ("Catlin Underwriting") and Certain Underwriters at Lloyd‟s of London subscribing to policy no. PCI937441010 ("Catlin Syndicate") (together, "Defendants") arising from the denial of Plaintiff‟s insurance claim.
Before the court are: (1) Catlin Underwriting‟s motion to dismiss (Doc. 6) and (2) Catlin Syndicate‟s motion to dismiss (Doc. 10). Plaintiff stipulates to the dismissal of Catlin Underwriting without prejudice (Doc. 20, 2 n.1) and filed an opposition to Catlin Syndicate‟s motion to dismiss (Doc. 20), to which Catlin Syndicate replied (Doc. 21). The motions were heard August 1, 2011.
Plaintiff produces Mexican style food products for sale in retail and wholesale grocery stores (Doc. 2, Ex. 2, ¶ 2), including Tornado Ranchero Beef & Cheese, a ready to eat beef product. Id. at ¶ 9. During production Plaintiff uses beef bouillon, an additive that contains hydrolyzed vegetable protein ("HVP") produced by Basic Food Flavors, Inc. ("Basic Food"). Id.
In March 2010, Plaintiff was required to recall its Tornado Ranchero Beef & Cheese product due to concerns of Salmonella contamination of the HPV used in its production. Id. at ¶ 10. Testing for HPV on the production line at the food processing facility resulted in positive findings of Salmonella. Id. The U.S. Department of Agriculture‟s Food Safety and Inspection Service ("FSIS") issued a recall notice for products containing HVP produced by Basic Food Flavors, Inc. Id. at ¶ 11. As a result of the recall, Plaintiff alleges that it expended substantial sums to refund customers; incurred expense and costs related to the recall; incurred costs for rehabilitation of the product; and sustained substantial damages due to a decrease in the sale of Tornados products. Id. at ¶ 15.
Catlin Syndicate issued Plaintiff a Product Contamination Insurance Policy Number PCI937441010, effective October 1, 2009 to October 1, 2010 ("Policy"). Id. at ¶ 16. Plaintiff alleges that it made timely payments of all premiums on the Policy. Id. at ¶ 17.
Section 1.1 of the Policy provides in pertinent part:
The Insurers will reimburse the Insured for its Loss excess of the applicable Self Insured retention, but not exceeding the limits of liability stated in Item 4 of the declaration, caused by or resulting from any of the following Insured events first discovered during the Policy Period and reported to the Insurers in accordance with Condition 5.21 Notice of Loss, during the Policy Period . . .
1.1Accidental Contamination. Any accidental or unintentional contamination, impairment or mislabeling of an Insured product(s), which occurs during or as a result of its production, preparation, manufacture, packaging or distribution; provided that the use or consumption of such insured product(s):
(i)has resulted or would result in clearly identifiable internal or external physical symptoms of bodily injury, sickness, disease, or death of any person(s) within one hundred and twenty (120) days following such consumption or use or
(ii)has caused or would cause physical damage to or destruction of tangible property other than damage to or ...