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Danaher Corp. v. The Travelers Indemnity Co.

United States District Court, S.D. New York

March 21, 2014



J. PAUL OETKEN, District Judge.

This is a dispute about insurance coverage for silica-and asbestos-related claims against Chicago Pneumatic Tool Company ("Chicago Pneumatic"). On September 6, 2012, the Court held that Defendants The Travelers Indemnity Company ("Travelers Indemnity") and Travelers Casualty and Surety Company ("Travelers C&S") (collectively, "Travelers") have a duty to defend such claims. Travelers subsequently impleaded six insurers-AIU Insurance Company, Century Indemnity Company, Liberty Mutual Insurance Company, Liberty Mutual Fire Insurance Company, Trygg-Hansa Insurance Company, Ltd., and Industria Insurance Company ("Industria") (collectively, "Impleaded Insurers")-seeking a declaration of their obligations to contribute.

The Impleaded Insurers have moved to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6), and Industria individually has moved to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2). Danaher Corporation ("Danaher") and Atlas Copco North America LLC ("Atlas Copco") also seek an order holding Travelers in contempt of the September 2012 Order. Atlas Copco individually seeks an order holding Travelers in contempt of this Court's April 5, 2013; Order requiring Travelers to pay its attorney's fees expended in procuring the September 2012 Order. For the reasons that follow, Industria's 12(b)(2) motion is granted, the Impleaded Insurers' 12(b)(6) motions are granted, and the motions for contempt are denied.

I. Background

A. Factual Background[1]

Chicago Pneumatic, a tool company, sold products containing asbestos and silica for years. In 1986, the company was acquired by Danaher. On June 4, 1987, pursuant to a Stock Purchase Agreement ("Agreement"), Danaher conveyed 100% of the stock of Chicago Pneumatic to Atlas Copco. Under the terms of the Agreement, Danaher retained liability for products liability losses arising from products manufactured by Chicago Pneumatic prior to June 4, 1987, and obtained rights to receive the proceeds of insurance policies covering those losses.

Between January 1, 1936 and January 1, 1970, Travelers C&S issued primary comprehensive general liability policies to Chicago Pneumatic. Between January 1, 1970 and April 1, 1987, Travelers Indemnity issued such policies to Chicago Pneumatic and Danaher (collectively, "Travelers Policies"). North River Insurance Company ("North River") also issued various umbrella and excess insurance policies to Chicago Pneumatic between April 1, 1979 and April 1, 1982. Nine additional insurers-not parties to the instant motions-issued various excess insurance policies to Chicago Pneumatic between 1972 and 1986 ("Additional Insurers").

Chicago Pneumatic has been and is the defendant in silica-and asbestos-related products liability claims throughout the United States ("Underlying Claims"). As a result of these claims, Danaher has incurred defense and indemnity costs, without reimbursement from other insurers, and will continue to incur such costs in the future. Danaher has tendered timely claims for coverage of the Underlying Claims under the Travelers Policies and other policies, but has not received payment.

B. Procedural Background

Danaher initiated this action against Travelers and North River on January 7, 2010. (Dkt. No. 1.) Travelers answered on February 26 and impleaded Atlas Copco. (Dkt. No. 13.) On January 3, 2011, Danaher filed an amended complaint naming the Additional Insurers as defendants. (Dkt. No. 22.) After two years of discovery, Danaher and Atlas Copco moved for summary judgment seeking a declaration that Travelers has a duty under New York law to defend the Underlying Claims. (Dkt. No. 53.) In a bench decision issued September 6, 2012, the Court granted the motion and held that Travelers has a "duty to defend in the past and in the future." (Dkt. No. 98; Dkt. No. 117, Ex. D at 8.)

On November 5, 2012, Atlas Copco moved for partial summary judgment seeking an order directing Travelers to pay its attorney's fees and costs incurred to establish Travelers' duty to defend. (Dkt. No. 107.) On January 15, 2013;, Travelers amended its third-party complaint to add the Impleaded Insurers and asserted claims for declaratory judgment, allocation, contribution, and equitable subrogation.[2] (Dkt. No. 123 ("Am. Compl.").) On January 31, 2013;, Magistrate Judge Francis issued a report and recommendation granting Atlas Copco's motion seeking attorney's fees and costs, which the Court adopted on April 5, 2013. Danaher Corp. v. Travelers Indemnity Co., No. 10 Civ. 121 (JPO) (JCF), 2013 WL 1387017 (S.D.N.Y. Apr. 5, 2013). On March 15, 2013 the Impleaded Insurers moved to dismiss Travelers' third-party complaint. (Dkt. Nos. 144, 149, 152, 154 & 158.) On April 3, Danaher and Atlas Copco filed a motion for contempt against Travelers. (Dkt. No. 163.) On February 12, 2014, Atlas Copco individually filed a second motion for contempt against Travelers. (Dkt. No. 181.)

II. Legal Standards

A. 12(b)(2) Motion to Dismiss

On a motion to dismiss for lack of personal jurisdiction, a federal district court may rely solely upon the pleadings and affidavits. CutCo Indus., Inc. v. Naughton, 806 F.2d 361, 364 (2d Cir. 1986). To prevail, the plaintiff need only make a prima facie showing of personal jurisdiction. Id. (citations omitted).[3] Prior to discovery, the plaintiff meets this burden by pleading good faith allegations sufficient to establish jurisdiction. Capitol Records, LLC v. VideoEgg, Inc., 611 F.Supp. 349, 356-57 (S.D.N.Y. 2009) (citation omitted). Although the threshold for making a prima facie showing is low and the plaintiff is entitled to a presumption that its factual allegations are true, mere conclusory statements will not suffice. See, e.g., Jazini v. Nissan Motor Co., Ltd., 148 F.3d 181, 185 (2d Cir. 1998).

B. 12(b)(6) Motion to Dismiss

In considering a motion to dismiss for failure to state a claim, the court must accept all well-pleaded factual allegations as true and draw all reasonable inferences in the pleader's favor. LaFaro v. N.Y. Cardiothoracic Group, 570 F.3d 471, 475 (2d Cir. 2009) (citation omitted). However, the court will not consider mere conclusory allegations lacking a factual basis, Hayden v. Paterson, 594 F.3d 150, 160-61 (2d Cir. 2010), or "[t]hreadbare recitals of the elements of a cause of action" amounting to no more than legal conclusions, Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The only materials the Court may consider in addition to the complaint are those which are attached, incorporated by reference, or integral to the complaint. Clopay Plastic Prods. Co., Inc. v. Excelsior Packaging Group, Inc., No. 12 Civ. 5262 (JPO), 2013 WL 6388444, at *2 (S.D.N.Y. Dec. 6, 2013) (quoting Sira v. Morton, 380 F.3d 57, 67 (2d Cir. 2004)). ...

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