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Danaher Corporation v. Travelers Indemnity Co.

United States District Court, S.D. New York

December 12, 2014

DANAHER CORPORATION, Plaintiff,
v.
THE TRAVELERS INDEMNITY COMPANY, et al., Defendants.

OPINION AND ORDER

J. PAUL OETKEN, District Judge.

This is a suit brought by Danaher Corporation ("Danaher") to resolve disputes concerning 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 and Travelers Casualty and Surety Company (collectively, "Travelers") have a duty to defend such claims.

On April 17, 2014, Travelers filed a Second Amended Third Party Complaint (Dkt. No. 192 ("SAC")), which impleads five of the six insurers named in a previous version of the third party complaint: AIU Insurance Company ("AIU"), Century Indemnity Company ("Century Indemnity"), Liberty Mutual Fire Insurance Company ("Liberty Fire"), Trygg-Hansa Insurance Company, Ltd. ("Trygg-Hansa"), and Industria Insurance Company ("Industria") (collectively, the "Impleaded Insurers").

Currently before the Court are motions filed by AIU, Trygg-Hansa, and Industria (collectively, the "Moving Insurers") in response to the SAC. First, Industria moves to dismiss for lack of personal jurisdiction under Rule 12(b)(2); in the alternative, it moves to compel arbitration or to dismiss for failure to state a claim pursuant to Rule 12(b)(6). (Dkt. No. 215.) Second, Trygg-Hansa moves to compel arbitration or, in the alternative, to dismiss for failure to state a claim pursuant to Rule 12(b)(6). (Dkt. No. 205.) Third, AIU joins Trygg-Hansa's motion, but only as to its challenge under Rule 12(b)(6). (Dkt. No. 204.)

For the reasons that follow, Industria's motion to dismiss for lack of personal jurisdiction is denied; Trygg-Hansa's and Industria's motions to compel arbitration are denied; Trygg-Hansa's and AIU's motions to dismiss for failure to state a claim are granted; and Industria's motion to dismiss for failure to state a claim is denied.

I. Background

A. Factual Background[1]

The Court has summarized the factual underpinnings of this case in previous opinions, and familiarity with the prior proceedings is assumed. In brief, Danaher purchased Chicago Pneumatic, a tool company, in 1986. Chicago Pneumatic has been and is the defendant in silica- and asbestos-related products liability claims (the "Underlying Claims") throughout the United States. Danaher resold Chicago Pneumatic in 1987 to Atlas Copco North America ("Atlas Copco"), but retained liability for products liability losses arising from products manufactured by Chicago Pneumatic prior to the sale and obtained rights to receive the proceeds of insurance policies covering those losses.

Travelers issued comprehensive general liability policies to Chicago Pneumatic and/or Danaher for a number of years until 1987. A number of insurers issued various other insurance policies to Chicago Pneumatic during the time period in question. As a result of the Underlying Claims, Danaher has incurred defense and indemnity costs, for which it seeks reimbursement by Travelers and other insurers. In turn, Travelers seeks to distribute its costs for defending and indemnifying the Underlying Claims to other insurers that provided coverage to Chicago Pneumatic during the relevant timeframe.

B. Relevant Procedural Background

Danaher initiated this action against Travelers and another insurer on January 7, 2010. (Dkt. No. 1.) Travelers answered and impleaded Atlas Copco. (Dkt. No. 13.) On January 3, 2011, Danaher filed an amended complaint naming nine 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 January 15, 2013, Travelers amended its third-party complaint, impleading six insurers - AIU, Century Indemnity, Liberty Mutual Insurance Company, Liberty Fire, Trygg-Hansa, and Industria - and asserting claims for declaratory judgment, allocation, contribution, and equitable subrogation. (Dkt. No. 123 ("Am. Compl.").) On March 15, 2013, the six insurers impleaded by that complaint moved to dismiss Travelers' third-party complaint. (Dkt. Nos. 144, 149, 152, 154, 158.) In an amended opinion and order dated March 21, 2014, the Court granted the insurers' motions to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6), and Industria's motion to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2). Danaher Corp. v. Travelers Indem. Co., No. 10 Civ. 121 (JPO), 2014 WL 1133472 (S.D.N.Y. Mar. 21, 2014). The same order allowed the Travelers to amend the third-party complaint to correct the deficiencies identified in the opinion. Id. at *6. Accordingly, on April 17, 2014, Travelers filed the SAC, naming five of the same insurers: AIU, Century Indemnity, Liberty Fire, Trygg-Hansa, and Industria.[2]

Liberty Fire and Century Indemnity have answered the SAC. (Dkt. Nos. 203, 212.) AIU, Trygg-Hansa, and Industria have each filed the motions opposing the SAC presently before the Court. (Dkt. Nos. 204, 205, 215.) These motions seek, in various combinations, (1) dismissal for lack of personal jurisdiction; (2) an order compelling arbitration, and the stay or dismissal of this action; or (3) dismissal for failure to state a claim.

II. Discussion

A. Industria's 12(b)(2) Motion to Dismiss

On a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2), the plaintiff bears the burden of establishing personal jurisdiction. MacDermid, Inc. v. Deiter, 702 F.3d 725, 727 (2d Cir. 2012). Where the court relies on pleadings and affidavits, the plaintiff "need only make a prima facie showing of personal jurisdiction" to prevail. CutCo Indus., Inc. v. Naughton, 806 F.2d 361, 364 (2d Cir. 1986). All jurisdictional allegations "are construed in the light most favorable to the plaintiff and doubts are resolved in the plaintiff's favor." A.I. Trade Fin., Inc. v. Petra Bank, 989 F.2d 76, 79-80 (2d Cir. 1993). However, the Court will not "draw argumentative inferences in the plaintiff's favor, nor... accept as true a legal conclusion couched as a factual allegation." Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 673 F.3d 50, 59 (2d Cir. 2012) (citation and internal quotation marks omitted).

A district court sitting in diversity generally "may exercise personal jurisdiction to the same extent as the courts of general jurisdiction of the state in which it sits." Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 305 F.3d 120, 124 (2d Cir. 2002). District courts deciding a motion to dismiss for lack of personal jurisdiction thus engage in a two-part analysis, first deciding whether jurisdiction is proper under the laws of the forum state (here New York), and second determining whether the ...


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