Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Keller Foundations, LLC v. Zurich American Insurance Co.

United States District Court, S.D. New York

March 28, 2018

KELLER FOUNDATIONS, LLC, HAYWARD BAKER, INC., and KELLER GROUP, PLC, Plaintiffs,
v.
ZURICH AMERICAN INSURANCE COMPANY, Defendant.

          OPINION & ORDER

          PAUL A. ENGELMAYER UNITED STATES DISTRICT JUDGE.

         Plaintiffs Keller Foundations, LLC ("Keller"), Hayward Baker, Inc. ("HBI"), and Keller Group, PLC ("Keller Group") bring claims against defendant Zurich American Insurance Company ("Zurich") for breach of contract and breach of the contractual and statutory implied covenants of good faith and fair dealing. The Court previously dismissed plaintiffs' complaint for failure to state a claim. The dismissal was without prejudice, and plaintiffs have since repleaded their claims. Zurich now moves again to dismiss plaintiffs' Amended Complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6).

         This suit arises out of Zurich's 2013 settlement with a third party under an insurance policy between plaintiffs and Zurich. Plaintiffs claim, as before, that Zurich did not have the authority under the insurance policy to enter into the settlement agreement with the third party, and that Zurich unlawfully damaged plaintiffs by doing so. Zurich counters that it was permitted to settle with the third party under the Policy, and that, in any event, its decision to do so did not violate plaintiffs' rights under the policy or harm them.

         For the reasons that follow, Zurich's motion is granted, but without prejudice to plaintiffs' ability to bring an amended complaint or a new lawsuit against Zurich to the extent that factual developments postdating the Amended Complaint so justify.

         I. Background

         A. Factual Background[1]

         1. The Parties

         Keller is a Delaware limited liability construction company that maintains its principal place of business in Hanover, Maryland. Dkt. 28 (“Amended Complaint” or “AC”) ¶ 3.

         HBI is a Delaware construction services corporation that maintains its principal place of business in Hanover, Maryland. Id. ¶ 4.

         Keller Group is a public limited ground engineering company organized under the laws of the United Kingdom that maintains its principal place of business in London, England. Id. ¶ 5. Keller Group is the parent company of both Keller and HBI. Id. ¶ 6. It is also the parent of Capital Insurance Company (“Capital”), a “captive reinsurer”[2] that is fully funded by Keller Group, id. ¶ 28, but which is not a party to this action.

         Zurich is an insurance company organized under the laws of New York that maintains its principal place of business in Schaumburg, Illinois. Id. ¶ 7.

         2. The Policy

         Zurich issued a commercial general liability policy, No. GLO 3373933-06, effective June 1, 2009 to June 1, 2010. Id. ¶ 22, Ex. A (the “Policy”). Construction companies Keller and HBI were named insureds under the policy, but their parent, Keller Group, was not. Id. ¶¶ 22-23. Under the terms of the Policy, Zurich was to provide insurance coverage to Keller, HBI, and other named insureds-as well as to certain additional insureds not specifically named in the Policy-for claims of property damage or bodily injury. Id. ¶¶ 22-24. Specifically, the Policy required Zurich to:

[P]ay those sums that the insured becomes legally obligated to pay as damages because of “bodily injury” or property damage” to which this insurance applies. We will have the right and duty to defend the insured against any “suit” seeking those damages.

         Policy at 51.

         The Policy also stated that Zurich “may, at [Zurich's] discretion, investigate any ‘occurrence' and settle any claim or ‘suit' that may result.” Id. The Policy provided limits of liability in the amount of $5 million per occurrence, and $5 million in the aggregate. Id. at 18.

         3. The Reinsurance Agreement

         A portion of Zurich's risk under the Policy was covered by a “captive reinsurance agreement” issued by Capital. AC ¶ 25; id., Ex. B (the “Reinsurance Agreement”).

         The Reinsurance Agreement provided that Capital would reimburse Zurich £450, 000 per loss on the Policy in excess of a £50, 000 deductible. AC ¶ 27; Reinsurance Agreement at 1.

         4. The Diaz/HBI Suit

         In May 2009, HBI entered into a contract (the “Contract”) with Diaz Fritz Isabel (“Diaz”), to serve as a subcontractor at the University Community Hospital Carrollwood Surgery/ICU expansion project in Tampa, Florida (the “Project”), where Diaz was a general contractor. AC ¶ 15. In August 2009, groundwater seeped into the existing portions of the hospital, causing damage to the Project. Id. ¶ 16. On August 5, 2011, Diaz sued HBI for breach of contract relating to the flood damage. Id. ¶ 17. HBI asserted counterclaims for money that it claimed it was owed for its work as subcontractor. See The Diaz/Fritz Group, Inc. (d/b/a/ Diaz Fritz Isabel) v. Hayward Baker, Inc., Case No. 11 09772, Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County, Florida (the “Diaz/HBI Suit”); AC ¶¶ 17-21.

         5. The Diaz/Zurich Suit and the Settlement Agreement

         On December 20, 2011, Diaz, through its counsel, made a demand by letter to Zurich for indemnity and defense, claiming to be an additional insured under the Policy. AC ¶ 35. On February 10, 2012, Zurich, through its counsel, replied by letter, denying Diaz additional insured coverage under the Policy. Id. ¶ 36.

         On February 15, 2012, Diaz filed a lawsuit against Zurich. See The Diaz/Fritz Group, Inc. v. Zurich American Insurance Company, No. 12 Civ. 716 (RAL) (EAJ), (M.D. Fla., filed Apr. 4, 2012) (the “Diaz/Zurich Suit”); AC ¶ 37. The Diaz/Zurich Suit was later removed to the United ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.