Hanover Insurance v. Superior Labor Services, Inc.
Hanover Insurance v. Superior Labor Services, Inc.
Opinion of the Court
ORDER AND REASONS
Before the Court is Third-Party Defendant Gray Insurance Company’s motion to dismiss the amended third-party claim against it.
BACKGROUND
A. State-Court Lawsuits
This is a consolidated action. The case originates from two personal-injury actions (“State-Court Lawsuits”) filed in state court against Allied Shipyard, Inc. (“Allied”). The plaintiffs in the State-Court Lawsuits allege Allied negligently performed sandblasting activities, causing dangerous silica dust and other hazardous substances to permeate the plaintiffs’ neighborhood.
In both State-Court Lawsuits, Allied filed third-party demands against its contractors who performed the sandblasting jobs, including Masse Contracting, Inc. (“Masse”)
Masse alleges that, after Allied filed a third-party demand against Masse in the State-Court Lawsuits, many of the plaintiffs in the State-Court Lawsuits “have amended their Petition to name Masse as a direct Defendant.”
The contractors against which Allied brought third-party demands “in turn sought coverage, defense and/or indemnity from them various insurers for the periods of time when these jobs were allegedly performed, which prompted the insurers to file lawsuits in federal courts.”
B. Declaratory Actions in Federal Court
There are three federal actions related to the State-Court lawsuits pending in this Court. The Court consolidated the three cases on November 21, 2014.
1. No. 11-2375
On September 21, 2011, Hanover Insurance Company (“Hanover”) filed a complaint in this Court.
On January 14, 2015, Hanover filed a second supplemental and amending complaint naming Allied as a defendant.
2. No. U-19S0
On August 22, 2014, Arch Insurance Company brought an action for declaratory judgment against Superior and Allied. Arch seeks a declaration of its rights and responsibilities under “certain insurance policies issued by Arch to Superior,” with respect to Superior’s request for defense and indemnity in the State-Court Lawsuits.
3. No. U-1933
On August 22, 2014, Arch also filed an action for declaratory judgment against Masse and Allied. Arch provided insurance coverage to Masse for November 15, 2005, to November 15, 2006, under policy number PML 0011399.
C. Masse’s Third-Party Claims
Masse filed a third-party complaint in No. 14-1933 on January 14, 2015, against several of its insurers from 1995 through 2008, including Gray Insurance Company (“Gray”).
D. Gray’s Motion to Dismiss
Gray filed the instant motion to dismiss on May 13, 2015, under Rule 12(b)(1) and Rule 12(b)(6) of the Federal Rules of Civil Procedure.
Masse filed a memorandum in opposition on July 7, 2015.
STANDARD OF LAW
A motion to strike, sever, or try separately a third-party claim requires a determination of whether the third-party claim is proper under Rule 14.
DISCUSSION
Gray argues that Rule 14 does not authorize Masse’s third-party claim against it because Gray’s potential liability to Masse is not dependent on the outcome of Arch’s claim against Masse and Gray cannot be liable to Masse for any part of Arch’s claim.
Rule 14 aims to promote efficiency and reduce litigation “by having one lawsuit do the work of two.”
The third-party complaint alleges, “Gray provided insurance to Masse from November 15, 2002 to November 15, 2005 under policy number GL072824. Gray has a duty to defend and/or indemnify Masse in the Underlying Lawsuit[s].”
Masse contends that its third-party demand against Gray should be allowed to proceed because Gray may be liable for all or part of Arch’s claims against Masse. Masse explains as follows:
If Arch is successful in its declaratory action against Masse, and the Court determines that Allied is not an additional assured under Masse’s insurance policy through Arch, then Allied will seek indemnity and defense directly from Masse based upon alleged contractual indemnity. The purported Master Work Contract between Masse and Allied is unenforceable and against public policy. Therefore, Allied’s sole source for recovery of defense and indemnity costs is its insurer Gray Insurance Company. Since Gray may be liable for all or part of Allied’s claim for defense and indemnity, which is the subject of Arch’s claims against Masse, Gray Insurance Company is a proper third party defendant in this matter.55
In response, Gray notes that, if Arch is successful in its claim against Masse, Arch will have no duty to defend or indemnify Masse in the State-Court Lawsuits.
The Court finds that Masse’s third-party claim against Gray is not derivative of or dependent on Arch’s claim against Masse. Arch's policy and Gray’s policy are independent and distinct policies.
If Arch succeeds in its claim against Masse, Masse will not owe Arch anything; rather, Arch will be awarded declaratory judgment acknowledging that Arch owes no duty to defend or indemnify Masse in the State-Court Lawsuits.
Masse argues that “many courts have permitted third-party claims to proceed in declaratory judgment actions despite a lack of derivative liability.”
Masse cites Old Republic Insurance Company v. Concast, Inc., a ease in which the Southern District of New York relied in part on the Fifth Circuit’s decision in American Fidelity and Casualty Company v. Greyhound Corporation.
CONCLUSION
In light of the Court’s analysis above, the Court strikes Masse’s third-party demand against Gray from the amended third-party complaint,
Accordingly;
IT IS ORDERED that Gray’s motion to strike is GRANTED. That portion of Masse’s amended third-party demand asserting a claim against Gray is STRICKEN and the third-party demand against Gray is DISMISSED WITHOUT PREJUDICE.
IT IS FURTHER ORDERED that Masse has until Thursday, March 24, 2016, at 5:00 p.m. to file a memorandum stating why the additional third-party demands made against the remaining third-party defendants
. R. Doc. 130 (Third-Party Complaint); R. Doc. 169 (Amended Third Party Complaint); R. Doc. 174 (Motion to Dismiss).
. See R. Doc. 174-1 at 2; R. Doc. 1 at ¶¶ 11-12.
. See R. Doc. 1 at ¶¶ 11-12.
. R. Doc. 174-1 at 2; R. Doc. 130 at ¶ 14.
. R. Doc. 1 at ¶¶ 14-17.
. R. Doc. 169 atlffl 17-18.
. Id. atHl 9.
. No. 14-1930, R. Doc. 1 at ¶¶ 12-13.
. Id. at ¶¶ 14-18.
. R. Doc. 174-1 at 2.
. See R. Doc. 108.
. Hanover Ins. Co. v. Superior Labor Servs., Inc., et al., No. 11-2375.
. R. Doc. 69.
. Id. at ¶¶ 23-24.
. Id. atfl26.
. Id. at 22-23.
. Id. at ¶ 2.
. ¿tí. at ¶ 3.
. R. Doc. 125.
. Id. at ¶ 79.
.¿tí. at 9.
. Id.
. No. 14-1930, R. Doc. 1 at ¶ 3.
. Id. at ¶ 4.
. Id. at ¶¶21, 47.
. Id. at ¶ 47.
. R. Doc. 137 at 2.
. No. 14-1933, R. Doc. 1 at ¶ 3.
. Id. at ¶ 4.
. Id. at ¶ 46.
. R. Doc. 130 at ¶¶ 5-11.
. R. Doc. 169.
. Id. at ¶ 12.
. Id. at 7.
. R. Doc. 174.
. R. Doc. 174-1 at 6-9.
. Id. at 9-13.
. Rule 14(a)(4) states, "Any party may move to strike the third-party claim, to sever it, or to try it separately." Fed. R. Civ. P. 14(a)(4). See Morris ex rel. Estate of Morris v. Trust Co. of Va., No. 12-1020, 2014 WL 4826829, at *4 n. 11 (M.D.Ala. Sept. 26, 2014).
. The Court notes that Gray is a Louisiana corporation, as is Masse. No independent basis for jurisdiction exists. The Court lacks supplemental jurisdiction over Masse's third-party claims, as Arch’s claim against Masse and Masse's third-party claim against Gray are not "so related.. .[such] that they form part of the same case or controversy." 28 U.S.C. § 367(a). See also Martin v. Fid. Nat. Title Ins. Co., No. 09-4195, 2011 WL 4478432, at *3 (E.D.La. Sept. 26, 2011).
. R. Doc. 214,
. R. Doc. 219.
. Fed. R. Civ. P. 14(a)(4). See United States v. Joe Grasso & Son, Inc., 380 F.2d 749 (5th Cir. 1967); U.S. ex rel. Branch Consultants, L.L.C, v. Allstate Ins. Co., 265 F.R.D. 266, 272-73 (E.D.La. 2010).
. Fed. R. Civ. P. 14(a)(1).
. Id. ("A defending party may, as third-party plaintiff, serve a summons and complaint on a nonparty who is or may be liable to it for all or part of the claim against it.”). See also Branch Consultants, 265 F.R.D. at 272.
. Id. See also Joe Grasso, 380 F.2d at 750-52 ("The question whether a defendant's demand presents an appropriate occasion for the use of impleader or else constitutes a separate claim
. Joe Grasso, 380 F.2d at 751 (citations omitted).
. R. Doc. 174-1 at 6-9.
. Mullins, 514 F.2d at 749 (citations omitted) (internal quotation marks omitted).
. Id. (citing Joe Grasso, 380 F.2d at 751).
. Am. Express Travel Related Servs. Co. v. Beaumont, No. 01-1869, 2002 WL 31298867, at *2 (N.D.Tex. Oct. 9, 2002) (quoting Mullins, 514 F.2d at 749) (emphasis added).
. Majors v. Am. Nat. Bank of Huntsville, 426 F.2d 566, 568 (5th Cir. 1970) (internal quotation marks omitted).
. When a Third-Party Action Is Proper, 6 Fed. Peac. & Proc. Civ. § 1446 (3d ed. 2010).
. R. Doc. 169 at ¶ 12.
. See id. at ¶¶ 14-20.
. R. Doc. 214 at 8.
. R. Doc. 219 at 4.
. Id.
. R. Doc. 214 at 8.
. R. Doc. 219 at 4-5.
. The policies don’t even cover the same time period. Compare R. Doc. 169 at ¶ 12 with R. Doc. 253 at 6-7 and R. Doc. 137 at 2.
. R. Doc. 169 at 7.
. No. 14-1933, R. Doc. 1 at 13-19.
. See id. at ¶¶ 3, 15
. R. Doc. 169 at 5-7.
. See id.
. Evert v. Finn, No. 98-3293, 1999 WL 397401, at *2 (E.D.La. June 15, 1999) ("The crucial characteristic of a Rule 14 claim is that defendant is attempting to transfer to the third-party defendant the liability asserted against defendant by the original plaintiff.”); When a Third-Party Action is Proper, 6 Fed. Prac. & Proc. Civ. § 1446 (same).
. Branch Consultants, 265 F.R.D. at 273.
. Joe Grosso, 380 F.2d at 751. See also Martin v. Lafon Nursing Facility of the Holy Family, Inc., No. 06-5108, 2007 WL 4163678, at *2 (E.D.La. Nov. 20, 2007) ("Impleader is...only permitted in those cases in which a third party is derivatively or secondarily liable to the defendant, i.e., ‘the third party's liability [is] in some way derivative of the outcome of the main claim.’ ” (quoting Joe Grasso, 380 F.2d at 751)); When a Third-Party Action Is Proper, 6 Fed. Prac. & Proc. Civ. § 1446 ("The mere fact that the alleged third-party claim arises from the same transaction or set of facts as the original claim is not enough.”); Vinmar Overseas, Ltd. v. OceanConnect, LLC, No. 11-4311,
. R. Doc. 214 at 6.
. Cedar Ridge, LLC v. Landmark Am. Ins. Co., No. 13-672, 2014 WL 68792, at *2 (E.D.La. Jan. 8, 2014); Vinmar, 2012 WL 5989206, at *3; Briones v. Smith Dairy Queens, Ltd., No. 08-48, 2008 WL 4200931, at *2 (S.D.Tex. Sept. 9, 2008).
. Vinmar, 2012 WL 5989206, at *3 (emphasis added). See also McCain v. Clearview Dodge Sales, Inc., 574 F.2d 848, 849-50 (5th Cir. 1978) (per curiam) ("[A] third-party complaint is not proper under Rule 14 if the defendant cannot show a basis for the third-party defendant's liability to the defendant.”).
. R. Doc. 214 at 6.
. Id. at 6-7.
. For example, in the first case Masse cites to support its contention that courts apply a "declaratory judgment action exception,” the court refused to allow impleader because the court determined that the third-party plaintiff sought to implead a separate insurance company that issued a different type of policy as that involved in the main claim. Nat’l Fire Ins. Co. of Hartford v. Nat’l Cable Television Coop., Inc., No. 10-2532, 2011 WL 1430331, at *2 (D.Kan. Apr. 14, 2011).
. Old Republic Ins. Co. v. Concast, Inc., 99 F.R.D. 566, 568-69 (S.D.N.Y. 1983).
. Am. Fid. & Cas. Co. v. Greyhound Corp., 232 F.2d 89, 92 (5th Cir. 1956).
. Id.
. See R. Doc. 214 at 7-8.
.In Joe Grasso, the Fifth Circuit affirmed the district court’s dismissal of the defendant's third-party complaint. The court also suggested in dicta that there is a circumstance that might fit within the scope of Rule 14 but is different from the "usual situation where impleader is used, i.e., where the third impleader is secondarily liable for the judgment against the original defendant.” Joe Grasso, 380 F.2d at 752. In Joe Grasso, the plaintiffs were boat owners who brought suit against the United States for a refund of employment taxes they paid on a group of crewmem-bers. Id. at 750. The United States brought a third-party complaint against the boat captains who could be alternatively liable for the taxes on the same group of crewmembers. Id. The Fifth Circuit affirmed dismissal but noted that, "in order for the government to be able to implead the captains as third party defendants in this tax refund suit, it must appear that the liability of the two taxpayers is an either/or proposition as a result of the law or the facts.” Id. at 752. The Fifth Circuit found that the United States failed to show that the tax liability "necessarily will fall upon either [the boatowners] or the captains.” Id. The court concluded that, although "allowing impleader of the captains would expedite administratively the entire controversy,” the third-party complaint against the captains was "a separate claim for taxes, and as such must be denied.” Id. The instant case is not like the situation discussed in dicta by the Fifth Circuit in Joe Grasso. The determination of whether one insurer or another owes Masse a duty to indemnify or defend it in the State-Court Lawsuits is not "an either/or proposition" between Plaintiff Arch and Third-Party Defendant Gray. Id. Like the third-party claim in Joe Grasso, Masse’s third-party claims are separate and distinct from Arch’s claim against Masse. The third-party claim against Gray may not be brought under Rule 14.
. R. Doc. 169.
. See R. Doc. 169.
Reference
- Full Case Name
- HANOVER INSURANCE COMPANY v. SUPERIOR LABOR SERVICES, INC.
- Cited By
- 8 cases
- Status
- Published