Opinion
1:21-CV-487-RP
2022-08-22
DISCOVER PROPERTY & CASUALTY COMPANY and The Travelers Indemnity Company of Connecticut, Plaintiffs/Counter-Defendants, v. BLUE BELL CREAMERIES USA, INC.; Blue Bell Creameries, L.P.; Blue Bell Creameries, Inc.; John W. Barnhill, Jr.; Greg A. Bridges; Richard Dickson; Paul A. Ehlert; Jim E. Kruse; Paul W. Kruse; W.J. Rankin; Howard W. Kruse; Patricia I. Ryan; Dorothy McCleod MacInerney, Defendants/Counter-Plaintiffs.
Amanda Laviage Goldstein, J. Stephen Barrick, Courtney E. Ervin, Hicks Thomas LLP, Houston, TX, James R. Old, Hicks Thomas, LLP, Beaumont, TX, for Plaintiffs/Counter-Defendants. Douglas A. Daniels, Daniels & Tredennick LLP, Houston, TX, Jesse Jonas Bair, Timothy Wilson Burns, Jeff J. Bowen, Pro Hac Vice, Burns Bowen Bair LLP, Madison, WI, for Defendants/Counter-Plaintiffs.
Amanda Laviage Goldstein, J. Stephen Barrick, Courtney E. Ervin, Hicks Thomas LLP, Houston, TX, James R. Old, Hicks Thomas, LLP, Beaumont, TX, for Plaintiffs/Counter-Defendants. Douglas A. Daniels, Daniels & Tredennick LLP, Houston, TX, Jesse Jonas Bair, Timothy Wilson Burns, Jeff J. Bowen, Pro Hac Vice, Burns Bowen Bair LLP, Madison, WI, for Defendants/Counter-Plaintiffs. ORDER ROBERT PITMAN, UNITED STATES DISTRICT JUDGE
Before the Court are cross-motions for summary judgment filed by Plaintiffs and Counter-Defendants Discover Property & Casualty Company ("Discover") and The Travelers Indemnity Company of Connecticut ("Travelers") (together, "Plaintiffs"), (Dkt. 30), and Defendants Blue Bell Creameries USA, Inc., Blue Bell Creameries, L.P., Blue Bell Creameries, Inc. (collectively, the "Blue Bell Entities" or "Blue Bell"), John W. Barnhill, Jr., Greg A. Bridges, Richard Dickson, Paul A. Ehlert, Jim E. Kruse, Paul W. Kruse, W.J. Rankin, Howard W. Kruse, Patricia I. Ryan, and Dorothy McCleod MacInerney (collectively, the "Officers and Directors,") (together, "Defendants"), (Dkt. 32), and the responsive briefing thereto. Having considered the parties' arguments, the evidence, and the relevant law, the Court will grant Plaintiffs' motion and deny Defendants' motion.
I. BACKGROUND
This is an insurance coverage dispute. In 2015, an outbreak of the pathogenic bacterium Listeria monocytogenes ("Listeria") in Blue Bell Creameries' factories resulted in a nationwide recall of its ice cream products. (Compl., Dkt. 1, at 6). On August 14, 2017, shareholder Jack L. Marchand II filed a shareholder derivative suit (the "Shareholder Suit") against Blue Bell Creameries, as the nominal defendant, and its Officers and Directors. (See Shareholder Compl., Dkt. 1-1). That suit alleged the Officers and Directors breached their fiduciary duty to Blue Bell when they "knowingly disregarded Listeria contamination risk and continued the Company's production and distribution of ice cream," and when the Board of Directors "willfully failed to exercise its fundamental authority and duty to govern Company management and establish standards and controls for Company compliance." (Id. at 3). The suit claims that the alleged breaches of fiduciary duty caused Blue Bell and its stockholders "injury in the amount of at least hundreds of millions of dollars" resulting in "catastrophic" financial harm to Blue Bell and its shareholders. (Id. at 4).
The Shareholder Suit claims the Officers and Directors were required, as part of their fiduciary duties, "to comply with regulations and establish controls to monitor for, avoid and remediate contamination and conditions that expose the Company and its products to risk of contamination." (Id. at 20). Yet as early as 2009, inspection reports from the Food and Drug Administration ("FDA") and other governmental agencies identified issues at Blue Bell facilities that could cause contamination in Blue Bell products. (Id. at 25-26). Indeed, inspection reports allegedly "evidence a history of repeated findings of unsafe conditions." (Id. at 25).
In February 2015, Blue Bell was first notified that certain of its products tested positive for Listeria. (Id. at 28). According to three reports from the FDA, Blue Bell "failed to manufacture foods under conditions and controls necessary to minimize the potential for growth of microorganisms, failed to clean food-contact surfaces frequently as necessary to protect against contamination of food, and failed to take all reasonable precautions to ensure that production procedures did not contribute to contamination." (Compl., Dkt. 1, at 7-8). As of April 2015, Blue Bell had recalled and disposed its products, consisting of eight million gallons of ice cream. (Shareholder Compl., Dkt. 1-1, at 29).
The Shareholder Complaint claims the Officers and Directors, specifically Paul Kruse ("Kruse") and Greg Bridges ("Bridges"), "knowingly disregarded contamination risk and safety compliance and continued the Company's production and distribution of ice cream," despite positive Listeria tests. (Id. at 39). From 2013 until notification of the 2015 Listeria outbreak, the Officers and Directors "received increasingly frequent and continuing positive presumptive test results for Listeria . . . [y]et Paul Kruse and Bridges continued the Company's production and distribution of ice cream." (Id.). According to the Shareholder Complaint, Kruse and Bridges "knowingly disregarded contamination risk and legal compliance" and "knew the Company had a Listeria problem and insufficient process to eliminate contamination, yet continued to produce and distribute ice cream." (Id. at 53). The Complaint states the Defendant Directors "willfully failed to exercise [their] fundamental authority to govern management and institute a system of controls for legal compliance and safe operations of the Company." (Id. at 41). Further, it claims the Directors supported the Officers "despite the obvious existential threat to the Company due to management's failure to operate the Company safely and the blatantly evident lack of adequate oversight and reporting of the known Listeria problems." (Id. at 48).
The Shareholder Suit brings claims for breaches of fiduciary duties to Blue Bell by its Officers and Directors. Specifically, it brings: (1) a derivative claim against Kruse and Bridges for breaching the fiduciary duties of loyalty and care by knowingly disregarding the risk of contamination and failing to oversee Blue Bell's operation and compliance; and (2) a derivative claim against the Officers and Directors for breach of the fiduciary duty of loyalty for willfully failing to manage the company and institute a system of controls and reporting. (Id. at 58-60). The Shareholder Complaint seeks (1) a declaration that Plaintiff represents Blue Bell in that action; (2) a declaration that the defendants there breached their fiduciary duties to Blue Bell; (3) damages due from the breach of fiduciary duties; (4) disgorgement and cancellation of Blue Bell stock, dividends, and other benefits owned or received by Defendants; (5) an order for Blue Bell to implement policies and procedures to adequately control its Board governance and management; and (6) costs, fees, and interest. (Id. at 61).
The Blue Bell Entities were covered between 2009 and 2016 by several commercial general liability ("CGL") policies. (Compl., Dkt. 1, at 5). From 2009 through 2011, Discover provided a policy; in 2011 and 2013 through 2016, Travelers covered some or all of the Blue Bell Entities. (Id.; see Answer, Dkt. 16, at 15). The policies provide coverage for liability incurred because of bodily injury or property damage. (Answer, Dkt. 16, at 15). Specifically, Plaintiffs must pay "those sums that the insured becomes legally obligated to pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies." (Policy, Dkt. 27-1, at 15). "Bodily injury" or "property damage" include only damage that "is caused by an 'occurrence' that takes place in the 'coverage territory.' " (Id.). An " '[o]ccurrence' means an accident, including continuous or repeated exposure to substantially the same general harmful conditions." (Id. at 28).
Each policy provides a liability limit of $5,000,000 for each "occurrence" and a general aggregate limit of $10,000,000. (Answer, Dkt. 16, at 15). Under the policies' terms, an insured corporation's " 'executive officers' and directors are insureds, but only with respect to their duties as [the corporation's] officers or directors." (Policy, Dkt. 27-1, at 22). The policies impose a duty to defend on Plaintiffs, requiring them to defend the Blue Bell Entities and the Directors and Officers against suits seeking covered damages, wherein the Officers and Directors were acting pursuant to their official responsibilities. (Id.). Defendants claim they "paid substantial premiums" to purchase the policies. (Id.).
The parties have stipulated that, with the exceptions of the policy numbers, insurers, named insureds, and policy periods, the material elements of all the policies are identical to the 2015 Policy. (Stip., Dkt. 27, at 2; Policy, Dkt. 27-1). The parties further stipulated the cross motions for summary judgment may refer only to the 2015 Policy but apply to all policies in effect at times relevant. (Id.).
In addition, the motions concern the duty to indemnify only to the extent that the Court finds no duty to defend: if so, the Court may also find there is no duty to indemnify. (Id.).
On April 1, 2021, the Blue Bell Entities notified Plaintiffs of their claim that they were entitled to coverage in the Shareholder Suit under Plaintiffs' policies. On June 3, 2021, Plaintiffs filed this suit. (See Compl., Dkt. 1). Plaintiffs seek: (1) a declaration that Plaintiffs have no duty to defend or indemnify any Defendant for the Shareholder Suit under the insurance policies; (2) in the event that the Court finds a duty to defend, a declaration that Plaintiffs' obligations are limited to post-tender fees and costs excess to exhaustion of self-funded retentions or other applicable terms; (3) in the event that the Court finds a duty to indemnify, a declaration that Plaintiffs' obligations are subject to the limits of the policies, excess of proper exhaustion of self-funded retention obligations and subjection non cumulation of each occurrence; (4) in the event that the Court finds a duty to indemnify, a declaration that Plaintiffs' obligations are limited to payment of covered damages; (5) a declaration of any other rights and obligations of the parties under the policies as implicated by the Shareholder Suit; and (6) costs and fees. (Id. at 13).
On August 6, 2021, Defendants filed their answer, which included a counterclaim for breach of contract arising out of Plaintiffs' failure to pay Defendants' costs from defending the Shareholder Suit as provided in the policies. (Answer, Dkt. 16, at 18). On December 10, 2021, Plaintiffs filed their motion for summary judgment, (Pls.' Mot. Summ. J., Dkt. 30), and Defendants filed their cross motion, (Defs.' Mot. Summ. J., Dkt. 32).
II. LEGAL STANDARD
Summary judgment is appropriate when there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A dispute regarding a material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "A fact is material if its resolution in favor of one party might affect the outcome of the lawsuit under governing law." Sossamon v. Lone Star State of Tex., 560 F.3d 316, 326 (5th Cir. 2009) (quotations and footnote omitted). When reviewing a summary judgment motion, "[t]he evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson, 477 U.S. at 255, 106 S.Ct. 2505. Further, a court may not make credibility determinations or weigh the evidence in ruling on a motion for summary judgment. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000).
If the moving party does not bear the ultimate burden of proof, after it has made an initial showing that there is no evidence to support the nonmoving party's case, the party opposing the motion must come forward with competent summary judgment evidence of the existence of a genuine fact issue. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). When the movant bears the burden of proof, she must establish all the essential elements of her claim that warrant judgment in her favor. See Chaplin v. NationsCredit Corp., 307 F.3d 368, 372 (5th Cir. 2002). In such cases, the burden then shifts to the nonmoving party to establish the existence of a genuine issue for trial. Austin v. Kroger Tex., L.P., 864 F.3d 326, 335 (5th Cir. 2017).
Unsubstantiated assertions, improbable inferences, and unsupported speculation are not competent summary judgment evidence, and thus are insufficient to defeat a motion for summary judgment. Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir. 2007). Furthermore, the nonmovant is required to identify specific evidence in the record and to articulate the precise manner in which that evidence supports his claim. Adams v. Travelers Indem. Co. of Conn., 465 F.3d 156, 164 (5th Cir. 2006). Rule 56 does not impose a duty on the court to "sift through the record in search of evidence" to support the nonmovant's opposition to the motion for summary judgment. Id. After the nonmovant has been given the opportunity to raise a genuine factual issue, if no reasonable juror could find for the nonmovant, summary judgment will be granted. Miss. River Basin All. v. Westphal, 230 F.3d 170, 175 (5th Cir. 2000). Cross-motions for summary judgment "must be considered separately, as each movant bears the burden of establishing that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law." Shaw Constructors v. ICF Kaiser Eng'rs, Inc., 395 F.3d 533, 538-39 (5th Cir. 2004).
III. DISCUSSION
Under Texas law, a determination of the duty to defend is governed by the "eight corners" rule. That rule states that the duty applies only if the complaint alleges facts within the scope of coverage of the policy at issue. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Merch. Fast Motor Lines, Inc., 939 S.W.2d 139, 141 (Tex. 1997) (per curiam). The claim is thus controlled by the language of the two documents: the complaint and the policy. Accordingly, the duty to defend can be determined by the Court as a matter of law based solely on those documents. (Id.). When a Court finds there is no duty to defend, the duty to indemnify can similarly be determined as a matter of law. See Farmers Tex. County Mut. Ins. Co. v. Griffin, 955 S.W.2d 81, 84 (Tex. 1997).
The parties' respective motions and responsive briefing focus on the same four issues: (1) whether Defendants are properly covered under the 2015 Policy such that they can invoke the duty to defend; (2) whether the damages sought arise from an "occurrence" as that term is defined under the policy; (3) whether the damages are sought as a result of "bodily injury" as required by the policy; and (4) whether any exclusions from the duty to indemnify apply.
A. Defendants' Coverage
Initially, Plaintiffs claim they have no duty to defend Defendants in the Shareholder Suit because Defendants do not qualify as "insureds" under the policy. The 2015 Policy states, the insured corporation's " 'executive officers' and directors are insureds, but only with respect to their duties as [the corporation's] officers or directors." (Policy, Dkt. 27-1, at 22). Plaintiffs note the Shareholder Suit's only cause of action against the Officers and Directors is for breach of fiduciary duty. (Pls.' Mot. Summ. J., Dkt. 30, at 9). Plaintiffs argue that, because the claim is for breach of fiduciary duties, Defendants were not acting "with respect to their duties as [Blue Bell's] officers or directors" when they breached those very duties. (Id.). As such, they are not "insureds" within the meaning of the policy. Further, the Blue Bell Entities are not parties to the Shareholder Suit, so any independent duty to defend those entities has no bearing on the question here.
Although this precise situation has not been addressed by Texas courts, the Eighth Circuit has found CGL coverage for breach of duty by corporate officers and directors precluded based on the same language at issue here, as such policies "are intended to cover injuries caused by corporate officers when these officers are properly carrying out their duties . . . to advance the business of the corporation, not the officer who acts in a manner that is antagonistic toward the corporation's business interests." Farr v. Farm Bureau Ins. Co. of Nebraska, 61 F.3d 677, 681 (8th Cir. 1995). As such, "the policies provide no coverage for injuries arising from a corporate officer's breach of a duty owed to the corporation." Id. Other appellate courts have found the same. See Haggerty v. Fed. Ins. Co., 32 Fed. Appx. 845, 848-49 (9th Cir. 2002) (unpublished) ("[T]he district court rightly found [the defendant] could not have been acting in an insured capacity while allegedly acting against the interests of the named insured . . . . There was no error in finding [he] was not acting 'with respect to [his] duties' when he allegedly defamed [the company] in violation of his contractual and fiduciary duties."); Milazo v. Gulf Ins. Co., 224 Cal.App.3d 1528, 274 Cal. Rptr. 632, 639 (1990) ("To hold that a partner could be covered under a partnership general liability policy for his acts against the very business organization that gives him his status as an insured person would turn the concept of partnership coverage on its head."). So too here, the Shareholder Suit claims the Officers and Directors knowingly and willfully breached their fiduciary duties causing harm to the entity whose interests they were required to serve. (Pls.' Resp., Dkt. 35, at 5). Therfore, they cannot be considered "insureds" under the policy.
In response, Defendants claim the oversights and failures to act of the Officers and Directors to not rise to the level of misconduct necessary to preclude them from coverage as "insureds." According to Defendants, the Shareholder Suit "essentially alleges negligence or recklessness on the part of the named individual defendants in their oversight," and when they "failed to take various actions that would have prevented the Listeria outbreak that harmed consumers and consequently harmed the company." (Defs.' Resp., Dkt. 37, at 14). They claim the Shareholder Complaint does not allege facts sufficient to preclude their coverage, as they were not "acting in some other capacity or were pursuing the interests of some other entity"—a standard for which they provide no authority. (Defs.' Resp., Dkt. 37, at 14). Even Defendants' own briefing concedes the Shareholder Complaint alleges that Defendants "knowingly disregarded contamination risk and safety compliance" and "willfully failed to exercise" their authority. (Id.). The Shareholder Suit further alleges Defendants "had knowledge in fact of the ongoing health and safety violations and the actual escalating Listeria contamination," (Shareholder Compl., Dkt. 1-1, at 59), that the Board supported management despite the "blatantly evident lack of adequate oversight and reporting of the known Listeria problems," (Id. at 48), that Defendants engaged in "bad faith and disloyal misconduct in their willful failure to govern management . . . and institute controls and oversight," (Id. at 57), and that their "willful failure to govern the Company was the product of their individual failures to comply with their fiduciary duties." (Id. at 60).
Defendants attempt to distinguish the facts in the cases cited by Plaintiffs, but the slight factual differences cannot save their claims. (Id. at 15). And as Plaintiffs point out, the cases Defendants rely on concern directors and officers liability policies—designed specifically to cover individuals like Defendants—rather than the CGL policy at issue here. (Pls.' Resp., Dkt. 41, at 4 (nor do the Texas cases concern shareholder derivative suits)); see Nat'l Union Fire Ins. Co. of Pittsburgh, PA v. U.S. Liquids, Inc., 271 F. Supp. 2d 926 (S.D. Tex. 2003); Burks v. XL Spec. Ins. Co., 534 S.W.3d 458 (Tex. App.—2015, pet. granted, judgm't vacated w.r.m.); World Water Works Holdings, Inc. v. Cont'l Cas. Co., 392 F. Supp. 3d 923 (N.D. Ill. 2019); BCB Bancorp, Inc. v. Progressive Cas. Ins. Co., No. 13-1261, 2017 WL 4155235 (D.N.J. Sept. 18, 2017).
Defendants appear to minimize the severity of these allegations, suggesting they are not serious enough breaches of duty or instances of misconduct to invalidate the coverage. Indeed, they assert that "[b]ecause all of the alleged acts or omissions were committed by the individuals as part of the performance of ongoing operations of the company and its facilities," the acts remain part of their official duties. (Id.). But to suggest that the alleged acts constitute execution of Defendants' ordinary obligations in managing the company belies reason. The Court cannot accept Defendants' contention that they were acting with respect to their duties when it is alleged that they breached those very duties, and consequently concludes that Defendants are not "insureds" under the 2015 policy. Accordingly, the Court finds Plaintiffs have no duty to defend Defendants in the Shareholder Suit, and so will grant summary judgment to Plaintiffs.
Plaintiffs also claim third-party CGL policies do not cover the type of first-party loss at issue here. (Pls.' Mot. Summ. J., Dkt. 30, at 7). To this extent that this is a separate argument, the Court declines to express an opinion given its independent finding of no duty to defend.
B. Occurrence
The Court has found above that Defendants do not qualify as insureds under the 2015 policy, and as such cannot require Plaintiffs to defend them in the Shareholder Suit. This conclusion precludes any need to address the remainder of the parties' arguments. However, out of an abundance of caution, the Court will briefly discuss several remaining arguments.
Plaintiffs claim there is no duty to defend in the Shareholder Suit because the policy only covers injuries caused by an "occurrence," defined as an "accident." (Pls.' Mot. Summ. J., Dkt. 30, at 11). The Fifth Circuit has defined an "accident" as "a fortuitous, unexpected, and unintended event." Wilkinson v. State Farm Lloyds, 458 F. App'x 379, 381 (5th Cir. 2012). An act is not an accident when injuries that follow from the act "could be reasonably anticipated from the intentional act." American States Ins. Co. v. Bailey, 133 F.3d 363, 372 (5th Cir. 1998) (citations omitted). Further, an accident does not include "the natural and probable results of [one's] acts even if he did not subjectively intend or anticipate those consequences." Wessinger v. Fire Ins. Exch., 949 S.W.2d 834, 837 (Tex. App.—Dallas 1997, no pet.).
Plaintiffs argue that under this definition, there was no "occurrence" for which Defendants claim coverage. Plaintiffs state that the Officers and Directors are alleged to have acted "knowingly and willfully," and to "have known about ongoing health and safety violations" when they breached their duties. (Pls.' Mot. Summ. J., Dkt. 30, at 11). As discussed above, (see supra Section II.A), the Complaint alleges a variety of willful acts taken by Defendants. Given that these acts were undertaken with knowledge on the part of the Officers and Directors, the Court cannot accept that they constitute "accidents," or, consequently, "occurrences" under the policy. See HVAW v. American Motorists Ins. Co., 149 F.3d 1175, 1998 WL 413803, *2-3 (5th Cir. 1998); Butler & Binion v. Hartford Lloyd's Ins. Co., 957 S.W.2d 566, 568-69 (Tex. App.—Houston [14th Dist.] 1995, no pet.); Trinity Universal Ins. Co. v. Cowan, 945 S.W.2d 819, 827-28 (Tex. 1997); Martin Marietta Materials Southwest Ltd. v. St. Paul Guardian Ins. Co., 145 F. Supp. 2d 794, 799 (N.D. Tex. 2001); Latray v. Colony Ins. Co., No. 07-19-00350-CV, 2021 WL 5127520, *5 (Tex. App.—Amarillo Nov. 4, 2021, no pet.); Brown v. Am. W. Home Ins. Co., 05-11-00561-CV, 2013 WL 873824, at *4 (Tex. App.—Dallas Jan. 3, 2013, no pet.) (mem. op.).
Defendants counter that the Listeria outbreak qualifies as an "occurrence" under the policy because only the "bodily injury" itself must be an "occurrence," rather than the entire chain of events leading to the injury. (Defs.' Mot. Summ. J., Dkt. 32, at 14). While acknowledging that intentional acts may have been involved at some level, Defendants note that the Officers and Directors did not intend their products to contain bacteria, for any consumer to suffer harm, or for economic damage to come to the company. (Id.).
Even aside from the difficulty of accepting an accident as arising from knowing and willful conduct, the cases upon which Defendants rely are inapposite for three main reasons: (1) they rely on state laws not in effect in Texas, see McCreary v. Fla. Residential Prop. & Cas. Joint Underwriting Ass'n, 758 So. 2d 692 (Fla. Ct. App. 1994) (relying on Florida law that defined accident more broadly to include damages or injuries not expected or intended by the insured); (2) they involve policy exclusions for intentional injury, with no bearing on the meaning of an accident or occurrence, State Farm Gen. Ins. Co. v. White, 955 S.W.2d 474 (Tex. App.—Austin 1997, no pet); or (3) they involve allegations of only ordinary negligence, unlike the knowing and intentional conduct alleged here, see Mass. Bonding & Ins. Co. v. Orkin Exterminating Co., 416 S.W.2d 396 (Tex. 1967); Westchester Fire Ins. Co. v. Gulf Coast Rod, Reel & Gun Club, 64 S.W.3d 609 (Tex. App.—Houston 2001, no pet.); Hallman v. Allstate Ins. Co., 114 S.W.3d 656 (Tex. App.—Dallas 2003), rev'd on other grounds, 159 S.W.3d 640 (2005). As such, Defendants fail to provide authority to support their interpretation of the "occurrence" term.
Plaintiffs correctly note that the Listeria outbreak and the attendant financial harm was the natural and probable consequence of the Officers' and Defendants' knowing and willful misconduct, as alleged in the Shareholder Complaint. (Pls.' Resp., Dkt. 35, at 8). Whether Defendants intended the harms as they unfolded is "of no consequence" to whether the offending actions themselves were accidental. Cowan, 945 S.W.2d at 827-28; see Argonaut Sw. Ins. Co. v. Maupin, 500 S.W.2d 633, 635 (Tex. 1973) (No occurrence where Defendant's "acts were voluntary and intentional, even though the result or injury may have been unexpected, unforeseen and unintended."). Accordingly, the Court finds the Shareholder Suit does not allege an "occurrence" causing bodily injury within the meaning of the policy, and so finds Plaintiffs entitled to summary judgment on this independent basis.
C. Bodily Injury
Plaintiffs also claim there is no duty to defend or indemnify here because the Shareholder Complaint seeks damages and equitable relief for financial losses rather than damages for bodily injury—the only claims covered under the policy (aside from damage to property, not at issue here). (Pls.' Mot. Summ. J., Dkt. 30, at 14; Policy, Dkt. 27-1, at 15). The Shareholder Suit seeks to recover damages to remedy the financial harm to Blue Bell and its shareholders arising from the Listeria outbreak. Nowhere does it allege damages because of bodily injury beyond an indirect connection to illnesses suffered by non-parties to this action. Plaintiffs note that they have defended, under appropriate policies, suits filed against Blue Bell by its injured customers, but that is not the situation here. (Pls.' Mot. Summ., J., Dkt. 30, at 16). To the contrary, any description of bodily injurie to Blue Bell customers in the Shareholder Complaint is "merely informative." See Fox Elec. I, Ltd. v. Amerisure Ins. Co., No. 4:05-CV-118-Y, 2006 WL 8438294, at *4 (N.D. Tex. Mar. 21, 2006) (finding no duty to defend where the underlying plaintiff sought to recover purely economic losses, though stemming from analogous property damage suffered by others, as "[w]hile the third-party petition describes the property damages suffered . . . , that description is merely informative as to the claims").
Defendants cite a line of cases brought by consumers of headsets purchased to protect them from exposure to harmful radiation who suffered bodily injury from the products. (Defs.' Mot. Summ. J., Dkt. 32, at 11; see Samsung Elecs. Am., Inc. v. Fed. Ins. Co., 202 S.W.3d 372, 375 (Tex. App.—Dallas 2006), aff'd, 268 S.W.3d 506 (Tex. 2008); Ericsson, Inc. v. St. Paul Fire & Marine Ins. Co., 423 F. Supp. 2d 587, 589 (N.D. Tex. 2006); Voicestream Wireless Corp. v. Fed. Ins. Co., 112 F. App'x 553, 555 (9th Cir. 2004); Motorola, Inc. v. Assoc. Indem. Corp., 878 So. 2d 824, 827-28 (La. Ct. App. 2004); see also Zurich American Ins. Co. v. Nokia, Inc., 268 S.W.3d 487, 489 (Tex. 2008)). Defendants' reliance is misplaced, however, because those cases concern coverage for suits brought by the injured consumers for bodily injuries they themselves suffered. Here, Defendants seek coverage for economic harms from breach of fiduciary duties; any Listeria-related injuries cited in the Complaint are ancillary to the dispute.
The case at bar is more analogous to Nat'l Union Fire Ins. Co. of Pittsburgh, PA v. Ready Pac Foods, Inc., 782 F. Supp. 2d 1047, 1057 (C.D. Cal. 2011), where the Court held economic losses of a lettuce supplier related to an E. coli outbreak at Taco Bell did not constitute damages because of bodily injury under the supplier's CGL policy. There, as here, the precursor to the claims was a contaminated food product. But there too, the underlying suit sought only economic damages to Taco Bell arising out of its lost profits and good-will, not to remedy any damage to body or property. (Id. at 1055-57). There, as here, the complaint did not allege damages because of bodily injury. (Id.). Defendants' vague assertion that Blue Bell "seeks coverage under Texas law for direct, tangible loss because of bodily injury" cannot distinguish this case when no allegation identifies any such direct, tangible loss. (Defs.' Resp., Dkt. 37, at 23).
The Shareholder Suit brings claims for lost value and lost profits arising out of the Officers and Directors' acts allegedly in breach of their duties, seeking relief "economic in nature as opposed to relief for [bodily injury] itself." (Id.). These claims arise out of purely financial injuries to the company and its shareholders, and the "broader financial impact of the outbreak and product recalls." (Pls.' Resp., Dkt. 35, at 12). These losses are not alleged to have arisen from any bodily injury, nor will any damages awarded address, care for, treat, or remedy any bodily injury. Defendants rely on cases seeking damages to cover care or treatment of bodily injuries, but those cases do not speak to the situation here, where damages for financial loss are entirely divorced from any bodily injury. See Scottsdale Ins. Co. v. Nat'l Shooting Sports Found., Inc., No. 99-31046, 2000 WL 1029091, 226 F.3d 642, *2 n.3 (5th Cir. July 11, 2000) (per curiam) (seeking damages for the costs of increased medical care and other expenses arising from bodily injuries caused by handguns under a policy covering "damages claimed by any person or organization for care, loss of services, or death resulting at any time from the bodily injury."); Cincinnati Ins. C. v. H.D. Smith, L.L.C., 829 F.3d 771 (7th Cir. 2016) (seeking damages for the costs of providing care arising out of bodily injury from drug addiction). Here, there is no suggestion that the Shareholders intend to use damages awarded to treat or care for any Listeria-related bodily injury, nor for any purpose other than to remedy financial losses.
Confined, as it is, to the eight corners of the 2015 Policy and the Shareholder Complaint, the Court cannot speculate as to how any damages may be tangentially related to bodily injury. To the extent that these damages are intended to reimburse Defendants for customer suits that do arise out of bodily injury, such damages cannot be recovered under a CGL policy and do not convert the claims into claims related to bodily injury. See Preau v. St. Paul Fire & Marine Ins. Co., 645 F.3d 293, 297 (5th Cir. 2011) (holding that damages to reimburse the underlying plaintiff for its cost to settle a bodily injury lawsuit were not damages for bodily injury). Therefore, the Court finds the Shareholder Suit does not seek damages because of bodily injury, relieving Plaintiffs of any alleged duty to defend. Accordingly, Plaintiffs are entitled to summary judgment on this basis as well. Having found no duty to defend, the Court also finds Plaintiffs did not breach their contract with Defendants, and so will deny summary judgment to Defendants on all claims.
Because the Court has found no duty to defend based on the lack of covered insureds, any occurrence, or any claimed bodily injury as required by the 2015 Policy, the Court need not reach the issue of exclusions from the duty to indemnify. (See Policy, Dkt. 27-1, at 16). Accordingly, the Court expresses no opinion as to the merits of any party's claims on this issue.
IV. CONCLUSION
For these reasons, IT IS ORDERED that Plaintiffs' motion for summary judgment, (Dkt. 30), is GRANTED. IT IS FURTHER ORDERED that Defendants' motion for summary judgment, (Dkt. 32), is DENIED.