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St. Paul Insurance Co. v. Regal Ware

May 19, 2006

ST. PAUL INSURANCE COMPANY A/S/O EVERSON MUSEUM OF ART AND ACE INDEMNITY INSURANCE COMPANY, PLAINTIFFS,
v.
REGAL WARE, INC., DEFENDANT.
REGAL WARE, INC., THIRD PARTY PLAINTIFF,
v.
KOMAR MANUFACTURING CO., INC., THIRD PARTY DEFENDANT.



The opinion of the court was delivered by: Neal P. McCURN, Senior U.S. District Court Judge

MEMORANDUM-DECISION AND ORDER

I. Introduction

This subrogation action was commenced on August 20, 2003 by St. Paul Insurance Company ("St. Paul") and Ace Indemnity Insurance Company ("Ace") (collectively, the "Plaintiffs"), as subrogees of Everson Museum of Art ("Everson") against Regal Ware, Inc. ("Regal Ware"), in connection with a fire that caused damage to Everson's premises on May 19, 2002. Originally filed in New York State Supreme Court, in the County of New York, Regal Ware removed the case to federal court on October 2, 2003 on the grounds of diversity of citizenship, pursuant to 28 U.S.C. § 1441. The case was transferred from the Southern District to the Northern District of New York, and was received by the Northern District on March 9, 2004 (Dkt. No. 1). St. Paul is a Minnesota citizen; Ace is a Pennsylvania citizen; Regal Ware is a Wisconsin citizen, and the amount in controversy exceeds the threshold amount of $75,000.00 exclusive of interests and costs. Accordingly, the Court has diversity jurisdiction over this matter pursuant to 28 U.S.C. §§ 1441 and 1332.

On August 11, 2005, Regal Ware filed a third party complaint against Komar Manufacturing Co, Inc. ("Komar"), a citizen of the state of Pennsylvania, on the basis of contractual and/or common law indemnification (Dkt. No. 14). On August 25, 2005, the Plaintiffs, both first party insurers for Everson's property, filed a direct claim against Komar pursuant to Rule 14(a) of the Federal Rules of Civil Procedure ("Fed. R. Civ. P."), seeking indemnification from Komar to the extent that Komar is found to be "negligent, careless or otherwise responsible" for the damages suffered by Everson (Dkt. No. 16). Consequently, because Ace and Komar are both citizens of Pennsylvania, complete diversity in the case at bar is now lacking.

Currently before the Court is Komar's motion to dismiss the Plaintiffs' direct action for lack of subject matter jurisdiction (Dkt. No. 27). For the reasons set forth below, Komar's motion will be granted.

II. Factual Background

For the purpose of this motion only, the following facts are taken from the complete record of the case, and are presumed to be true. The Everson Museum of Art, 104 Harrison Street, Syracuse, New York, was damaged by fire on Sunday, May 19, 2002.

A small fire . . . in the basement of the Everson Museum of Art generated a lot of smoke but did not damage any art . . . museum director Sandra Trop said. Syracuse Fire Chief John Cowin said the fire started shortly after noon in a small basement storage room and kitchenette . . . The building is predominantly concrete and the fire did not spread beyond the one room . . . Fire officials told Trop the fire was caused by a coffeepot . . . . (Dkt. No. 27, Tab 1), Minor Fire Hits Everson, THE POST STANDARD, available at www.syracuse.com, May 20, 2002.

A report contained in Exhibit D of Komar's motion to dismiss, specifically a "mitigation of smoke damage" report,*fn1 also gives a brief synopsis of the fire.

[A]t 12:10 p.m., a fire was detected in a small room [in the museum], located in a temporary storage area between the auditorium stage and storage. Consultations indicate a large coffee urn, which had been set up to brew[] a short time earlier, caused the fire. Smoke/heat detectors set off an alarm, started the sprinkler system . . . and shut down the HVAC system as designed to do . . . The fire was put out and confined to the small room. However, smoke invaded most spaces within the building . . . . (Dkt. No. 27, Exhibit D, Everson Museum of Art Report, Page 1-2 of 13.)

Prior to the fire date of May 19, 2002, the following events took place: Regal Ware, a manufacturer of, inter alia, small appliances, including a 30-cup coffee maker model number 7030, ordered power cords from Komar. Komar supplied said power cords, and Regal Ware packaged those power cords with the coffee urns or pots it manufactured. One of those coffee pots, the aforementioned model 7030, was allegedly purchased by Everson.

Some time after May 19, 2002, Plaintiffs St. Paul and Ace paid monies to Everson in excess of $400,000.00, pursuant to policies of insurance for damages allegedly caused by the May 19 fire, and claim to be subrogated to all of their insured's rights as to third parties who may have caused or been responsible for the loss. The Plaintiffs commenced an indemnity action against Regal Ware, the manufacturer of the coffee pot, to recover the monies paid to Everson. As stated above, Regal Ware, in turn, filed a third-party complaint against Komar, alleging active and passive negligence on Komar's part. The Plaintiffs subsequently filed a direct complaint against Komar, seeking indemnification from Komar for the damages suffered by Everson.

III. Discussion

A. Legal ...


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