United States District Court, E.D. California
GCUBE INSURANCE SERVICES, INC., a California corporation, Plaintiff,
LINDSAY CORPORATION, a Delaware corporation, and DOES 1 through 10, inclusive, Defendant. LINDSAY CORPORATION, Third-party Plaintiff,
AREVA SOLAR, INC.; AUSRA CA I, LLC now known as AREVA SOLAR CA I, LLC; SPECIAL SERVICES CONTRACTORS, INC.; LLOYD W. AUBRY CO., INC.; MATERIAL INTEGRITY SOLUTIONS, INC.; and ZOES 1 through 50, inclusive, Third-Party Defendants.
MEMORANDUM AND ORDER RE: MOTION FOR SUMMARY JUDGMENT AND CONTINUING PRETRIAL CONFERENCE AND TRIAL DATES
WILLIAM B. SHUBB, District Judge.
Plaintiff GCube Insurance Services, Inc. brought this subrogation action against defendant Lindsay Corporation arising out of defendant's provision of welds for a construction project. Defendant now moves for summary judgment on all claims pursuant to Federal Rule of Civil Procedure 56.
I. Factual Background
In March 2009, Ausra, Inc. ("Ausra") took out a policy of insurance ("the Policy") to insure construction, erection, and operations activities at its Kimberlina solar power generation facility in Bakersfield, California. (Dunkel Decl. Ex. C (Docket No. 60-1).) The policy was issued by certain Underwriters at Lloyd's, London (the "Lloyd's Underwriters"), and names GCube Underwriting Limited ("GCube Underwriting") as the correspondent authorized to act on behalf of the Lloyd's Underwriters. (Id.) The relationship between the Lloyd's Underwriters and GCube Underwriting is memorialized in a Bind Agreement that, among other things, grants GCube Underwriting authority to pursue settlement of claims as well as subrogation on behalf of the Lloyd's Underwriters. (Papazis Decl. Ex. B ("Bind Agreement") at 8-9 (Docket No. 67-3).)
Neither the Policy nor the Bind Agreement expressly mention plaintiff, but plaintiff contends that it shares operations with GCube Underwriting and handles the claims adjustment and subrogation process when claims arise in the United States. (Id. ¶ 2; Munoz Decl. ¶ 6 (Docket No. 67-4).) Both plaintiff and GCube Underwriting are subsidiaries of Jardine Lloyd Thompson, Limited. (Id.)
In January 2010, defendant and Ausra agreed for defendant to weld together a number of A-frame supports for the construction of a Solar Steam Generation array ("SSG array"). (Dunkel Decl. Exs. H, I.) Defendant agreed to provide the welds according to Ausra's specifications and on steel tubes that Ausra supplied, while defendant provided the plates that it welded between the tubes. (Id. Ex. G (Eberhart Dep.) at 16:22-17:10 (Docket No. 60-1).) Defendant then delivered the welded A-frame supports to Ausra in Bakersfield, where Ausra was to assemble the SSG array. (Compl. ¶ 12 (Docket No. 1).)
On May 28, 2010, as Ausra was in the final stages of assembling the SSG array, twenty-four of the twenty-five A-Frame supports buckled at the joints, and the SSG components fell to the ground. (Id. at ¶¶ 15-16.) Pursuant to the Policy, the Lloyd's Underwriters subsequently paid Asura's claim of $2, 319, 172.00. (Munoz Decl. ¶ 9; id. Ex. B.)
Plaintiff filed its Complaint on April 30, 2012, seeking subrogation and bringing claims for strict products liability and negligence. (Docket No. 1.) Defendant filed the present motion for summary judgment on February 21, 2014. (Docket No. 60.)
Summary judgment is proper "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). A material fact is one that could affect the outcome of the suit, and a genuine issue is one that could permit a reasonable jury to enter a verdict in the non-moving party's favor. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248 (1986). The party moving for summary judgment bears the initial burden of establishing the absence of a genuine issue of material fact and can satisfy this burden by presenting evidence that negates an essential element of the non-moving party's case. Celotex Corp. v. Catrett , 477 U.S. 317, 322-23 (1986). Alternatively, the moving party can demonstrate that the non-moving party cannot produce evidence to support an essential element upon which it will bear the burden of proof at trial. Id.
Once the moving party meets its initial burden, the burden shifts to the non-moving party to "designate specific facts showing that there is a genuine issue for trial.'" Id. at 324 (quoting then-Fed. R. Civ. P. 56(e)). To carry this burden, the non-moving party must "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586 (1986). "The mere existence of a scintilla of evidence... will be insufficient; there must be evidence on which the jury could reasonably find for the [non-moving party]." Anderson , 477 U.S. at 252.
In deciding a summary judgment motion, the court must view the evidence in the light most favorable to the non-moving party and draw all justifiable inferences in its favor. Id. at 255. "Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge... ruling on a motion for summary judgment...." Id.
Defendant first moves for summary judgment on the ground that plaintiff lacks standing under the principles of subrogation. "Subrogation is defined as the substitution of another person in place of the creditor or claimant to whose rights he or she succeeds in relation to the debt or claim." Fireman's Fund Ins. Co. v. Md. Cas. Co. , 65 Cal.App.4th 1279, 1291 (1st Dist. 1998). "In the case of insurance, subrogation takes the form of an insurer's right to be put in the position of the insured in order to pursue recovery from third parties legally responsible to the insured for a loss which the insurer has both insured and paid." Id. at 1291-92. "An insurance company plaintiff only has standing to sue as subgrogee when it has paid its insured." HSBC ...