Scottsdale Insurance Company v. United Rentals (North America), Inc.

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

SCOTTSDALE INSURANCE COMPANY, )

)

Plaintiff, ) CIVIL ACTION NO.

) 13-12824-DPW

v. )

)

UNITED RENTALS )

(NORTH AMERICA), INC., )

)

Defendant. )

MEMORANDUM AND ORDER

March 30, 2018

I. BACKGROUND

This is the second phase of an insurance coverage action

arising from a personal injury suit in the Rhode Island courts.

In the first phase, I found that plaintiff Scottsdale Insurance

Company (“Scottsdale”) owed a duty to defend to defendant United

Rentals (North America), Inc. (“United Rentals”) in an

underlying personal injury action. Scottsdale Ins. Co. v.

United Rentals (N. Am.), Inc. (“Scottsdale I”), 152 F. Supp. 3d

15 (D. Mass. 2015). The underlying action has now settled, and

I am called upon to determine whether Scottsdale also owes

United Rentals indemnification.

The basic facts were set forth in my previous Memorandum

and Order:

In a contract dated June 22, 2007, Gomes Services, Inc.

(“Gomes”) rented an electric boom lift from United Rentals.

Gomes used that lift at a trade show held at the Rhode

Island Convention Center, where on June 26, 2007 an

accident occurred. Guy Ayotte, the plaintiff in the

underlying action, was struck and injured by the lift,

which was then being operated by Gomes employee Mario

Perez. At that time, Gomes was insured by Scottsdale.

United Rentals had its own insurance policies, two of which

are at issue in this litigation and now asserts that it was

an additional insured on the Scottsdale policy as well. The

relevant features of these contracts and policies will be

described as they arise in the analysis of the legal

questions presented.

After the accident, Ayotte and his wife filed suit in Rhode

Island state court against United Rentals, Gomes, and

others. Ayotte ex. rel. Ayotte v. Perez, C.A. No. 10-2164

(R.I. Super. Ct., amended complaint filed Mar. 11, 2011).

Three counts in the amended complaint assert causes of

action against United Rentals and are relevant here:

Negligent Operation and Ownership Liability (Count I);

Negligent Maintenance of a Dangerous Instrumentality (Count

V), and Negligent Hiring of a Dangerous Instrumentality

(Count VI). At the heart of the claims against United

Rentals is the allegation that the lift should have been

properly equipped with an alarm which warned bystanders of

the lift's approach, but that the lift emitted no audible

sounds at the time.

Scottsdale I, 152 F. Supp. 3d at 18.

The underlying Ayotte action has settled, and, pursuant to

that settlement, United Rentals paid a sum of money to the

Ayottes.1

In my previous Memorandum and Order, I resolved a number of

disputes concerning the relationship between the parties. These

rulings remain the law of the case.

1 The settlement amount is treated as confidential by the

parties.

First, I found that Massachusetts law governs this dispute.

Id.

Second, I determined that Scottsdale’s insurance contract

with Gomes required United Rentals to be added as an additional

insured. Id. at 22-23.

Third, I held that Scottsdale owed United Rentals a duty to

defend in the underlying action, and that it had failed to do

so. Id. at 25.

Because a declaration concerning indemnification was not

then ripe, however, I did not decide that issue. Id. at 19.

But the issue is now ripe before me. Both parties now seek a

declaratory judgment in their favor on the duty to indemnify,

and United Rentals also seeks damages for Scottsdale’s breach of

its contractual duty to indemnify.

The standard of review remains the same:

Under Federal Rule of Civil Procedure 56, summary judgment

is appropriate where there “is no genuine issue as to any

material fact and [] the movant is entitled to judgment as

a matter of law.” Fed. R. Civ. P. 56(c). Cross-motions

for summary judgment do not alter this standard, but rather

require a determination of whether either party can show an

entitlement to judgment as a matter of law based on the

undisputed facts. Adria Int'l Grp., Inc. v. Ferre Dev.,

Inc., 241 F.3d 103, 107 (1st Cir. 2001). The

interpretation of an insurance contract is a question of

law. Cody v. Connecticut Gen. Life Ins. Co., 387 Mass.

142, 439 N.E.2d 234, 237 (1982).

Id. at 18.

II. MOTION TO STRIKE

United Rentals has moved to strike three elements from

Scottsdale’s briefing: pages filed beyond the 20-page limit set

forth in Local Rule 7.1(b)(4); all references to Scottsdale’s

internal investigation by representative Eliza Czerwein, which

was belatedly disclosed; and the confidential amount of the

settlement in the underlying litigation.

In determining whether sanctions are appropriate for

untimely disclosures and other discovery violations related to

Czerwein’s investigation, I am guided by the factors the First

Circuit has laid out. District courts should “weigh the

severity of the discovery violations, legitimacy of the party's

excuse for failing to comply, repetition of violations,

deliberateness of the misconduct, mitigating excuses, prejudice

to the other party and to the operations of the court, and

adequacy of lesser sanctions,” as well as whether the court

previously “gave the offending party notice of the possibility

of sanctions and the opportunity to explain its misconduct and

argue against the imposition of such a penalty.” AngioDynamics,

Inc. v. Biolitec AG, 780 F.3d 429, 435 (1st Cir.), cert. denied,

136 S.Ct. 535 (2015).

After weighing these factors, I conclude no sanction is

necessary. The record shows no pattern of discovery violations

by Scottsdale – and as a result, no prior warnings about

sanctions were given. Nor did these failures create any

substantial prejudice to United Rentals. First, my analysis of

the merits of the case does not rely upon, or otherwise make use

of, Ms. Czerwein’s testimony. Her investigation is potentially

relevant in addressing factual questions about the negligent

maintenance of the boom lift but that does not affect my

determination as to indemnity coverage on summary judgment.

Moreover, Scottsdale points out that this evidence comes from

the underlying litigation, to which United Rentals, but not

Scottsdale, was a party; thus, United Rentals already had access

to this information. I see no need for sanction in this

instance.

I find the other two issues harmless. First, Scottsdale

has already filed a Notice of Scrivener’s Error and a corrected

memorandum addressing the confidential settlement figure. This

suffices to cure any problem. Second, while Scottsdale’s

briefing exceeded the page limit, it was largely repetitive of

briefing from the first phase of this litigation and then

repeated in Scottsdale’s opposition brief; the extra pages did

not serve to augment the persuasiveness of Scottsdale’s

arguments. While I must warn Scottsdale and its attorneys of

the need for greater care in its briefing and closer attention

to the Rules of Civil Procedure and the Local Rules of this

District, I impose no sanctions at this juncture and I will deny

the motion to strike.

III. ANALYSIS

A. The Duty to Indemnify

Although Scottsdale had a duty to defend United Rentals in

the underlying action, “the obligation to indemnify does not

ineluctably follow from the duty to defend.” Newell-Blais Post

No. 443, Veterans of Foreign Wars of U.S., Inc. v. Shelby Mut.

Ins. Co., 487 N.E.2d 1371, 1374 (Mass. 1986). The duty to

indemnify is narrower. “[A]n insurer's obligation to defend is

measured by the allegations of the underlying complaint while

the duty to indemnify is determined by the facts, which are

usually established at trial.” Travelers Ins. Co. v. Waltham

Indus. Labs. Corp., 883 F.2d 1092, 1099 (1st Cir. 1989). Here,

however, there was no trial in the underlying action but rather

a settlement. “This means that the duty to indemnify must be

determined in the basis of the settlement and, since this [is] a

summary judgment proceeding, the undisputed facts.” Id.

Because Scottsdale wrongfully declined to defend United

Rentals, even if it did so in good faith, the relevant burden of

proof shifts and Scottsdale must prove that the claim was not

within its policy’s coverage in order to avoid owing

indemnification. Polaroid Corp. v. Travelers Indem. Co., 610

N.E.2d 912, 922 (Mass. 1993).

This burden shifting brings certain additional consequences

in the context of a settlement. If some underlying claims are

covered by the policy and others are not covered, the insurer

also bears the burden of allocating the judgment or settlement

between those claims. Liquor Liab. Joint Underwriting Ass'n of

Massachusetts v. Hermitage Ins. Co., 644 N.E.2d 964, 969 (Mass.

1995). If that allocation is “speculative and arbitrary,” then

the insurer will be liable for the full amount. Id.; see also

Liberty Mut. Ins. Co. v. Metro. Life Ins. Co., 260 F.3d 54, 63

(1st Cir. 2001) (“if the insurer fails to defend the lawsuit, it

is liable for all defense costs and (assuming policy coverage)

the entire resulting judgment or settlement, unless liability

can be allocated among covered and uncovered claims.”).

Massachusetts courts have generally looked for unambiguous

allocations of liability, such as a special jury verdict

dividing liability across claims, to meet the burden. See,

e.g., Palermo v. Fireman's Fund Ins. Co., 676 N.E.2d 1158, 1163-

64 (Mass. App. Ct. 1997) (suggesting insurer should have

requested judge employ special jury questions) (citing

Hermitage, 644 N.E.2d at 969); Republic Franklin Ins. Co. v.

United Educators Reciprocal Risk Retention Grp., 847 N.E.2d

1139, No. 04-p-1730, 2006 WL 1360019, at *3 (Mass. App. Ct. May

18, 2006) (“Republic settled the Perry action without

adjudicating any of its coverage defenses. Any allocation of

the settlement amount, therefore, would be speculative.”).

Accordingly, in this case, Scottsdale bears the burden of

showing that United Rentals’ settlement costs were not covered

under the policy and, if it can show that only some claims were

not covered, establishing a reliable allocation of settlement

costs across the claims.

B. Scope of the Additional Insured Coverage

United Rentals is covered as an additional insured under

the Scottsdale policy provided to Gomes. That policy provides

additional insured coverage “only with respect to liability for

‘bodily injury,’ ‘property damage’ or ‘personal and advertising

injury’ caused, in whole or in part, by [Gomes’] acts or

omissions; or [t]he acts or omissions of those acting on

[Gomes’] behalf.” This provision can be read in two ways,

depending on what the “caused by” phrase is seen to modify.

Scottsdale argues that coverage is provided only where the

liability is caused by Gomes’ acts – in other words, only for

vicarious liability. United Rentals argues that it is the

injury or damage that must be caused by Gomes’ acts. This

interpretive issue in insurance contracts is not unknown, as the

many cases each party cites demonstrate; Massachusetts courts,

however, appear not to have addressed it yet. Consequently, I

apply the ordinary principles of interpreting an insurance

contract, looking to the “the actual language of the policies,

given its plain and ordinary meaning,” and resolving any

ambiguities against the insurer. Valley Forge Ins. Co. v.

Field, 670 F.3d 93, 97 (1st Cir. 2012) (quoting Brazas Sporting

Arms, Inc. v. Am. Empire Surplus Lines Ins. Co., 220 F.3d 1, 4

(1st Cir. 2000)) (internal quotation marks omitted).

The weight of authority from other jurisdictions examining

substantially identical language supports the interpretation of

United Rentals. In a particularly thoughtful opinion, Judge

Arterton of the District of Connecticut offered three reasons to

believe that coverage is provided where the acts of the named

insured caused bodily injury. First Mercury Ins. Co. v. Shawmut

Woodworking & Supply, Inc., 48 F. Supp. 3d 158, 172-73 (D. Conn.

2014). First, she pointed to alternative contractual provisions

that clearly and expressly limit coverage to cases of vicarious

liability. Id. For example, an additional insured could be

covered only where the additional insured is “held liable for

[the named insured’s] acts or omissions” or “only to the extent

of liability resulting from occurrences arising out of

negligence of the policyholder.” Id. at 172 (quoting Ne. Utils.

Serv. Co. v. St. Paul Fire & Marine Ins. Co., No. 3:08–CV–01673

(CSH), 2012 WL 2872810, at *4 (D. Conn. July 12, 2012) and

Harbor Ins. Co. v. Lewis, 562 F. Supp. 800, 804–05 (E.D. Pa.

1983)) (emphasis in original) (internal quotation marks

omitted). By comparison, the relevant language here did not

directly invoke vicarious liability.

Second, Judge Arterton concluded that the “in whole or in

part” phrase is incompatible with an interpretation in which

only vicarious liability is covered. Id. at 172-73.

“[V]icarious liability is an all or nothing proposition and thus

a party could not be vicariously liable ‘in part’ for [the named

insured’s] acts.” Id. at 173.

Third, she explored the drafting history of this

standardized contractual language and persuasively demonstrated

that the provision in question was intended to impose limits

related to proximate causation, not vicarious liability. Id. at

173. While this final reason goes beyond the plain language of

the contract, it is nevertheless instructive regarding the

meaning of the language.

Other courts have focused on the lack of explicit language

limiting additional insured coverage to vicarious liability.

See Am. Empire Surplus Lines Ins. Co. v. Crum & Forster

Specialty Ins. Co., No. CIV. H-06-0004, 2006 WL 1441854, at *7

(S.D. Tex. May 23, 2006) (“The words ‘derivative’ and

‘vicarious’ are conspicuously absent from the Endorsement. Crum

was free to draft an endorsement that specifically limited

additional insured coverage to situations [in] which the

additional insured was liable on only a vicarious liability

theory. However, Crum did not do so.”); Thunder Basin Coal Co.

v. Zurich Am. Ins. Co., 943 F. Supp. 2d 1010, 1014-15 (E.D. Mo.

2013) (“the policy does not contain any specific mention of

vicarious liability as a limitation on coverage, and such a

restriction could have been written into the policy if the

parties had intended to limit coverage in that way.”); WBI

Energy Transmission, Inc. v. Colony Ins. Co., 56 F. Supp. 3d

1194, 1202 (D. Mont. 2014) (contrasting this language with “held

liable” language).

In contrast, the leading case cited by Scottsdale offers

only a conclusory reading of the relevant clause. Schafer v.

Paragano Custom Bldg., Inc., No. A-2512-08T3, 2010 WL 624108, at

*3 (N.J. Super. Ct. App. Div. Feb. 24, 2010) (per curiam). The

Schafer court “perceive[d] no ambiguity” and found it obvious

that only liability caused by the acts of the named insured was

covered. Id.

The other cases cited by Scottsdale are simply inapposite,

concerning different contractual language or different

interpretive questions. For example, in Merchs. Ins. Co. of

N.H. v. U.S. Fid. & Guar. Co., 143 F.3d 5, 9 (1st Cir. 1998), a

case on which Scottsdale relies heavily, the court looked to a

different provision (providing additional insured coverage “only

with respect to liability arising out of ‘your work’ for that

insured by or for you”) and examines what standard of causation

is required by that provision.

I agree with those courts that have found under this

contractual language additional insured coverage for all

injuries caused by acts of the named insured, not only for

vicarious liability. Their holdings best give effect to the

clause as a whole. To the degree disagreements among courts are

enough to show that “the policy language is susceptible to more

than one rational interpretation,” Valley Forge Ins. Co, 670

F.3d at 97, and therefore must be interpreted in favor of the

insured party, I conclude that both United Rentals’ independent

and vicarious liability is covered by the additional insured

endorsement.

The additional insured provision covers United Rentals for

the two counts concerning its own negligence: Counts V and VI.

Scottsdale I, 152 F. Supp. 3d at 24 (“no one disputes that

Gomes’ operation of the lift caused Ayotte’s injury.”).

Scottsdale cannot meet the burden of allocating the settlement

amount in any non-speculative fashion – indeed, to the extent

that it tries to do so, it argues that 100 percent of United

Rentals’ share of settlement should be allocated to those two

counts. Consequently, it must indemnify United Rentals.2

2 Scottsdale argues that the remaining count, alleging vicarious

liability under R.I. Gen. Laws § 31-34-1, would have failed as a

C. Excess and Primary Coverage

Scottsdale argues, in the alternative, that its additional

insured coverage to United Rentals is only excess of United

Rentals’ own insurance policies. Analysis begins with the

relevant policy provisions. The Scottsdale policy provided to

Gomes (and then to United Rentals as additional insured) states

that “[a]ny coverage provided hereunder will be excess over any

other valid and collectible insurance available to the

additional insured whether primary, excess, contingent or on any

other basis unless a written contract specifically requires that

this insurance be primary.”

United Rentals, for its part, has two potentially relevant

insurance policies provided by ACE. The first, which Scottsdale

deems the “ACE CGL Policy,”3 has a limit of $2 million per

occurrence, with a $2 million deductible per occurrence. That

matter of law because that statute imposes liability only on

vehicles rented in Rhode Island, whereas this vehicle was rented

in Massachusetts. This appears to be correct. Fratus v.

Amerco, 575 A.2d 989, 992 (R.I. 1990) (“We do not believe that §

31-34-4 can be applied extraterritorially to a Massachusetts

bailment.”); see also Lopes v. Phillips, 680 A.2d 65, 70 (R.I.

1996) (reaffirming holding in Fratus). The case law is not

clear, however, regarding whether an unmeritorious claim

nevertheless might have had some settlement value, particularly

on the eve of trial, or whether the entire settlement must be

allocated to the potentially successful claims. This issue is

immaterial, however, in the posture of this case.

3 I adopt Scottsdale’s naming conventions for the sake of clarity

but do not ascribe any legal significance to this convenient set

of conventions.

policy provides that “[i]f other valid and collectible insurance

is available to the insured,” then it is excess over “any other

primary insurance available to you . . . for which you have been

added as an additional insured by attachment of an endorsement”

but is otherwise (for present purposes) primary.

The second, which Scottsdale has titled the “ACE Ultimate

Net Loss Policy,” is described as an “Excess Commercial General

Liability Policy.” That policy has a limit of $3 million per

occurrence, subject to a $2 million self-insured retention

(“SIR”) per occurrence. It also has an “other insurance”

clause, which provides that “[i]f other insurance is available

to the insured for a loss we cover under this policy, this

insurance is excess over that other insurance, unless that

insurance is written specifically to apply in excess of the

Limits of Insurance shown in the Declarations.”

The Scottsdale policy does not require significant

interpretation. It is excess “unless a written contract

specifically requires that this insurance be primary.” There is

no contention that any such contract so requires. Consequently,

the Scottsdale coverage is excess, so long as one of the ACE

policies is “valid and collectible insurance.”

Conversely, the ACE Ultimate Net Loss Policy is excess over

other insurance, unless that other insurance is “written

specifically” to apply in excess of the ACE Ultimate Net Loss

Policy. There is no contention that the Scottsdale policy was

written specifically to apply in excess of the ACE Ultimate Net

Loss Policy. The Net Loss policy is also an excess policy (as

clearly stated in its title, “Excess Commercial General

Liability Policy”).

In arguing that the ACE policies offer primary coverage,

Scottsdale relies on Lexington Ins. Co. v. Va. Sur. Co., 486 F.

Supp. 2d 173, 179 (D. Mass. 2007), in which the court found

policies with large self-insured retentions to be primary.

Lexington certainly stands for the proposition that “[a] policy

is not rendered ‘excess’ simply because it sits over a SIR.”

Id. But it is logically unsound to conclude that, therefore,

all policies which sit over a SIR are primary, as Scottsdale

seems to do in its briefing. The Lexington court found the

policies there to be primary in part because they were printed

on “industry-standard primary CGL forms, rather than on

industry-standard excess coverage forms” and stated that “this

insurance is primary.” Id. at 177. The ACE Ultimate Net Loss

Policy identifies itself as excess, on a standard excess form.

Regardless of whether the SIR renders it excess, the policy

itself is unambiguously an excess policy.

As for the ACE CGL policy, on its face, it provides primary

coverage. The ACE CGL policy is only excess over other primary

coverage, but the Scottsdale policy provides excess coverage.

Consequently, the plain meaning of these provisions requires the

ACE CGL policy to remain primary. Cf. Am. Family Mut. Ins. Co.

v. Nat’l Fire & Marine Ins. Co., 463 F. App’x 680, 685 (9th Cir.

2011) (unpublished opinion) (applying Arizona law,

distinguishing between other insurance provisions that make a

policy excess over “any other insurance” and over “any other

primary insurance”); Certain Underwriters at Lloyd’s London v.

Cent. Mut. Ins. Co., 12 N.E.3d 762, 768 (Ill. App. Ct. 2014)

(applying Illinois law, distinguishing between policies that are

primary but excess over other primary policies and policies that

are excess unless a contract specifically requires them to be

primary); Irene Realty Corp. v. Travelers Prop. Cas. Co. Am.,

973 A.2d 1118, 1123 (R.I. 2009) (same as Lloyd’s, but under

Rhode Island law).

United Rentals offers a variety of arguments as to why the

ACE CGL policy should not be considered as insurance for these

purposes at all. First, and least persuasively, United Rentals

argues that the CGL policy “was not designed to cover URI but to

provide coverage for a customer specifically added by

endorsement to become an additional insured.” In support of

that argument about intent, United Rentals offers deposition

testimony, notes that no claim has ever been submitted under the

policy, and suggests that having two overlapping policies would

make no sense. But I must interpret insurance contracts by

looking to the “actual language” of the policies; that is where

the material intent of the drafters must be found.

United Rentals also characterizes the structure of the ACE

CGL policy as showing that it is not “valid and collectible

insurance.” According to United Rentals, this policy is a

“fronting policy.” “In a fronting arrangement, an insurer, for

a fee, issues an insurance policy with the intent of passing

most or all of risk back to the policyholder, or to a reinsurer,

or to the policyholder's captive. Insureds commonly use fronting

to retain risks and control reinsurance.” Ins. Co. of N. Am. v.

Pyramid Ins. Co. of Bermuda, No. 92 Civ. 1816(SS), 1994 WL

88701, at *4 (S.D.N.Y. Mar. 16, 1994) (quoting David M. Katz,

RIMS to Oppose Limits on Fronting, National Underwriter:

Property & Casualty/Risk & Benefits Management, Nov. 5, 1990, at

3) (internal quotation marks omitted). Fronting “is beneficial

and cost effective to a large company . . . because such

arrangement permits the company for all practical purposes to

self-insure losses up to the amount of the deductible without

meeting the formal legal requirements for qualifying as a self-

insurer in jurisdictions where it does business.” Forest Ins.,

Ltd. v. Am. Motorists Ins. Co., No. 89 CIV. 4326 (BN), 1994 WL

97138, at *2 (S.D.N.Y. Mar. 21, 1994). Under this policy,

United Rentals retains its risk because the limit matches the

deductible: practically, it is for all intents and purposes

self-insured, since it will have to pay out of pocket for all

claims.

Courts are divided as to whether self-insurance qualifies

as “other insurance,” although a “clear majority of courts” has

held that it does not. Stratford Sch. Dist., S.A.U. Dist. No.

58 v. Emp’rs Reinsurance Corp., 162 F.3d 718, 721 (1st Cir.

1998). A divide also exists as to whether fronting policies

that approximate self-insurance qualify as “other insurance.”

See, e.g., Air Liquide Am. Corp. v. Cont'l Cas. Co., 217 F.3d

1272, 1278-79 (10th Cir. 2000) (under Oklahoma law, fronting

policy is “other collectible insurance”); State Farm Mut. Auto.

Ins. Co. v. Universal Atlas Cement Co., 406 So. 2d 1184, 1186-87

(Fla. Dist. Ct. App. 1981) (“Self-insurance, even though

administered by someone else . . . is not ‘other collectible

insurance.’”); see also Carns v. Smith, No. 01-972H, 2003 WL

22881538, at *2 n.4 (Ohio Ct. Com. Pl. Nov. 7, 2003) (collecting

cases); cf. Mark Flory & Angela Lui Walsh, Know Thy Self-

Insurance (and Thy Primary and Excess Insurance), 36 Tort & Ins.

L.J. 1005, 1018 (2001) (“jurisdictions are split on the question

of whether SIRs constitute ‘insurance’ for purposes of

construing ‘Other Insurance’ clauses.”).

Massachusetts appears not to have decided whether either

true self-insurance or fronting policies constitute “other

insurance” for these purposes. That said, the Supreme Judicial

Court has found that self-insurance can be the “primary layer”

of insurance over which excess insurance sits. Boston Gas Co.

v. Century Indem. Co., 910 N.E.2d 290, 294 n.7 (Mass. 2009)

(“‘Excess ... insurance over a qualified purely self-insured

retention of risk would not be considered ‘primary;’ the self-

insurance itself is the ‘primary’ layer.’ The excess policies

that Century issued to Boston Gas in this case provided the

first layer of excess coverage over Boston Gas's primary layer

of self-insurance.”) (quoting 1 R. PERSONS & K. BROWNLEE, EXCESS

LIABILITY: RIGHTS AND DUTIES OF COMMERCIAL RISK INSUREDS AND INSURERS § 5:3,

at 2 (4th ed. 1999)). This implies that self-insurance –

particularly when it takes the form of a formalized fronting

policy – can be valid and collectible insurance over which an

excess policy sits. Thus, the ACE CGL policy is valid and

collectible insurance that is only excess over other primary

insurance policies, which the Scottsdale policy is not – and

therefore the Scottsdale policy is excess over the ACE CGL

policy. I therefore conclude that Scottsdale owes United

Rentals only excess coverage over the ACE CGL policy.

IV. CONCLUSION

For the reasons set forth above, I DENY United Rentals’

motion to strike and GRANT IN PART and DENY IN PART the

respective motions for summary judgment of Scottsdale and United

Rentals. I declare that Scottsdale owes United Rentals a duty

to indemnify, but only as a provider of excess coverage above

the ACE CGL policy. To the extent that this gives rise to

damages, I GRANT United Rentals’ claim for summary judgment on

its breach of contract counterclaim. The parties are directed

to submit a joint status memorandum and proposed scheduling

order on or before April 20, 2018 proposing a process to be

followed to bring this case to final judgment.

/s/ Douglas P. Woodlock________

DOUGLAS P. WOODLOCK

UNITED STATES DISTRICT JUDGE