Federal Mutual Ins. Co. v. Coyle Mechanical Supply Inc.

Dist. Ct. erred in granting plaintiff-insurance company’s motion for judgment on pleadings in its lawsuit seeking declaration that it had no duty to defend or indemnify defendant-insured in state-court lawsuit alleging that defendant breached commercial contract to supply valves that proved to be defective. While Dist. Ct. ruled that plaintiff’s state court action did not come within contours of plaintiff’s policy because state court complaint did not allege property damage or “occurrence,” Dist. Ct. erred in denying defendant’s motion for leave to file supplemental briefs, which contained material factual disputes bearing on plaintiff’s duty to defend, since Dist. Ct. improperly treated said motion as motion to file reply brief. Also, Dist. Ct. erred in expressly referring to materials that were outside instant pleadings, where: (1) Dist. Ct. had denied plaintiff’s motion to supplement that contained said materials; and (2) Dist. Ct. ignored favorable evidence for defendant in same materials. Moreover, Dist. Ct. should have converted instant motion for judgment on pleadings into summary judgment motion if it was going to rely on materials outside of pleadings. Too, Ct. found existence of material fact as to whether state-court complaint sought damages for physical injuries to property that would be covered under plaintiff’s policy.