United States District Court, S.D. New York
STANDEX INTERNATIONAL CORPORATION and BAKERS PRIDE OVEN CO., LLC f/k/a BPOC ACQUISITION CO., INC., Plaintiffs,
QCP, INC. f/k/a BAKERS PRIDE OVEN CO., INC., Defendant/Third-Party Plaintiff,
APW/WYOTT FOODSERVICE EQUIPMENT COMPANY and ASSOCIATED AMERICAN INDUSTRIES, INC., Third-Party Defendants.
OPINION AND ORDER
KATHERINE POLK FAILLA United States District Judge.
Standex International Corporation (“Standex”) and
Bakers Pride Oven Co., LLC (“Bakers Pride, ” and
with Standex, “Plaintiffs”), brought this action
against Defendant QCP, Inc. (“QCP” or
“Defendant”), seeking (i) a declaratory judgment
affirming Plaintiffs' interpretation of the parties'
Asset Purchase Agreement (the “APA”), and (ii)
damages for QCP's breach of its APA indemnification
obligations. QCP asserted counterclaims against Plaintiffs,
pursuing (i) a declaratory judgment affirming QCP's
interpretation of the APA, (ii) reimbursement for its legal
costs, and (iii) a declaration of Plaintiffs' Plaintiffs
to remit the same to QCP and/or QCP's insurers. QCP also
brought an action against APW/Wyott Foodservice Equipment
Company (“APW”) and Associated American
Industries, Inc. (“AAI, ” and with APW,
“Third-Party Defendants”) to obtain similar
relief: (i) a declaratory judgment affirming QCP's
interpretation of the APA, (ii) reimbursement for QCP's
legal costs, and (iii) a declaration of Third-Party
Defendants' indemnification or contribution obligations
and a court order directing Third-Party Defendants to remit
the same to QCP and/or QCP's insurers.
Standex has moved to dismiss the counterclaims against it
under Federal Rule of Civil Procedure 12(b)(6); AAI and APW
have moved to dismiss Defendant's Third-Party Complaint
on the same basis. For the reasons set forth herein, both
motions are granted.
The APA Between QCP and Bakers Pride
summer of 1995,  QCP, its shareholders, and Bakers Pride
“entered into [the APA] for the sale of certain defined
assets, including tangible personal property and equipment,
inventory, accounts receivable, the ‘Baker's
Pride' corporate name, and other assets.” (Compl.
¶ 9; TPC ¶¶ 26-27).Various subsections of the
APA detailed the terms of the exchange: Section 1.03 governed
the retention of liabilities and established that as of the
APA's Effective Date, Bakers Pride would “assume
and agree to pay only the liabilities and
obligations” of QCP that were “listed on Schedule
1.03.” (Compl. ¶ 11 (emphasis added); see also
Id. at Ex. A; TPC, Ex. A). These liabilities included,
as relevant here, “[p]roduct liabilities based on
events that occurred after the Closing Date” of July
20, 1995. (Compl., Ex. A; TPC, Ex A). Section 1.03 also
emphasized the exclusivity of these listed liabilities,
noting that Bakers Pride would “not assume or be liable
for any other liabilities or obligations” of QCP except
as otherwise specified by the APA. (Compl., Ex. A; TPC, Ex.
VI of the APA addressed the issue of indemnification. Section
6.01 dictated that QCP and its shareholders
agree[d] to indemnify, defend and hold harmless [Bakers
Pride] and its officers, directors, agents, attorneys and
affiliates from and against all losses, claims, obligations,
demands, assessments, penalties, liabilities, costs, damages,
reasonable attorneys' fees and expenses (collectively,
“Damages”) asserted against or incurred by them
by reason of or resulting from ... [a]ny product liability
based on events that occurred on or prior to the Closing
Date; ... [or] [a]ny liability of [QCP] not specifically
assumed by [Bakers Pride in the APA].
(Compl., Ex. A; TPC, Ex. A). Section 6.02, in turn, outlined
Bakers Pride's corresponding indemnification obligations,
stating that Bakers Pride
agree[d] to indemnify, defend and hold harmless [QCP] and
[its] Shareholders and [QCP's] officers, directors,
agents, attorneys and affiliates from and against all Damages
asserted against or incurred by them by reason of or
resulting from ... the failure of [Bakers Pride] to pay,
perform and discharge when due any Assumed Liabilities.
(Compl., Ex. A; TPC, Ex. A).
Standex, AAI, and APW
is no dispute that the remaining parties to this litigation -
Standex, AAI, and APW - were not signatories to the APA.
(Compl. ¶ 16; Pl. Br. 3; Def. Opp. 8). But BPOC
Acquisition Company, Inc., which was a signatory, is alleged
to have been formed by “certain members of APW, ”
for the purpose of entering into the APA. (TPC ¶ 13). It
is further alleged that at some point after the execution of
the APA, both Bakers Pride and APW became subsidiaries of
AAI. (Id. at ¶ 33; TPC, Ex. B at 3; Ans., Ex. B
January 9, 2007, Standex and AAI entered into a Stock
Purchase Agreement (the “SPA”), through which
Standex purchased all shares of AAI, including all shares of
Bakers Pride. (TPC ¶¶ 15-18; id. at Ex.
B). QCP contends that this purchase made Standex “a
corporate affiliate of [Bakers Pride]” (Compl.
¶¶ 22-23), and, by extension, made Bakers Pride a
Standex subsidiary, “a member of the [Standex] family
of companies, ” and “a division of
[Standex]” (TPC ¶¶ 17-18; see also
Id. at ¶¶ 34-36).
The Asbestos Litigations
“have been named and anticipate that they will continue
to be named as defendants in numerous claims alleging bodily
injury from exposure to asbestos allegedly contained in
‘Bakers Pride' ovens manufactured, distributed,
sold, or installed by QCP ... prior to the Closing Date of
the APA.” (Compl. ¶ 25). QCP has been named as a
defendant in these claims as well, and is also likely to
continue to be. (Id. at ¶ 26).
disclaim liability for these claims. They allege that all of
the asbestos-related claims are premised on
“events” that occurred “a decade or more
prior to the Closing Date of the APA.” (Compl. ¶
28). Moreover, in the years since that date, Bakers Pride
“has not manufactured, distributed, sold or installed
any ‘Baker's Pride' ovens containing
asbestos.” (Id. at ¶ 29). Therefore,
“[f]or nearly 20 years, [Plaintiffs] tendered the
Asbestos Claims that name[d] them as defendants to QCP and/or
its agents, and QCP and/or its agents defended and resolved
[them].” (Id. at ¶ 32). It was not until
2015 that “QCP and/or its agents” began
“fail[ing] and refus[ing] to indemnify, defend and hold
harmless Standex and [Bakers Pride] from and against the
Asbestos Claims.” (Id. at ¶ 35).
April 23, 2015, QCP filed a complaint in this District, which
was docketed at number 15 Civ. 3243 (GBD). (TPC ¶ 37;
Ans. ¶ 93). But before the case progressed very far, and
“[i]n order to allow the parties to seek an amicable
resolution of the issues, ” the parties agreed that the
case “would be dismissed without prejudice, ”
with leave to “be refiled if a resolution was not
attained and on twenty days[‘] notice.”
(Id. at ¶ 38; see also Ans. ¶ 94;
TPC, Ex. C; Ans., Ex. C). The parties also entered into a
tolling agreement with regard to any applicable statute of
limitations. (TPC ¶ 43; Ans. ¶ 95). That agreement
specified that “any claim which was timely asserted in
the first filed action would be considered timely [in any
later-filed action] even if in the intervening time period a
Statute of Limitations may have expired.” (Id.
at ¶ 44; see also Id. at Ex. D; Ans., Ex. D).
- who were defendants in the earlier litigation - filed their
Complaint in this action on January 22, 2016 (Dkt. #1), and
an Amended Complaint on February 5, 2016 (Dkt. #11-12). In
the interim, on January 29, 2016, QCP provided the notice
required by the parties' Tolling Agreement. (TPC ¶
39). QCP answered on March 4, 2016, asserting counterclaims
against Plaintiffs. (Dkt. #19). Both parties then filed a
series of letters between March 21, 2016, and April 5, 2016,
advising the Court that QCP wished to reopen the prior case
between the parties, in order to name parties that Plaintiffs
had omitted from their Complaint, and that Plaintiffs opposed
this reopening. (Dkt. #26-27, 29-30). The Court directed the
parties to appear at a conference to discuss this dispute.
conference held on April 20, 2016, the Court discussed with
the parties their intentions regarding this litigation. (Dkt.
#36). The Court directed QCP to file an Amended Answer and
Third-Party Complaint within 30 days of the conference.
(Id.). The Court also gave Plaintiff Standex leave
to file a motion to dismiss both QCP's counterclaims
against it, and gave QCP's ...