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Utica Mutual Insurance Co. v. Rohm and Haas Co.

February 5, 2010

UTICA MUTUAL INSURANCE CO., PLAINTIFF,
v.
ROHM AND HAAS CO., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Gene E.K. Pratter, District Judge

MEMORANDUM

Utica Mutual Insurance Company ("Utica") seeks a declaration as to the scope of its obligations, if any, to make defense and/or indemnity payments on behalf of Defendants Rohm and Haas Company ("Rohm and Haas") and Morton International, Inc. (both defendants collectively, "Morton") with respect to certain lawsuits against Morton (the "Underlying Suits"), some of which have already been settled. Utica began its litigation efforts with a complaint that sought the recovery of settlement payments made by Utica on Morton's behalf. Morton moved to dismiss part of that initial complaint and the Court held oral argument on the motion. Before the Court ruled on the Morton motion, Utica filed a First Amended Complaint.*fn1

The First Amended Complaint contains 13 counts, which can be grouped into two general categories. Counts I through IX seek either a declaration that Utica has no obligation to make payments for defense or indemnity on behalf of Morton with respect to the Underlying Suits or that any such obligation is restricted or limited. Each of these nine counts presents a different ground upon which Utica claims such relief. Counts X-XIII present causes of action for the reimbursement of certain defense and/or indemnity costs that Utica already paid in some or all of the Underlying Suits.

Morton's Motion to Dismiss in Part the First Amended Complaint is now before the Court. For the reasons set forth below, the Court will grant Morton's Motion.

I. STANDARD OF REVIEW

A Rule 12(b)(6) motion to dismiss tests the sufficiency of a complaint. Conley v. Gibson, 355 U.S. 41, 45-46 (1957). Although Rule 8 of the Federal Rules of Civil Procedure requires only "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), in order to "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests," Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley, 355 U.S. at 47), a plaintiff must provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. (citations omitted). Specifically, "[f]actual allegations must be enough to raise a right to relief above the speculative level . . . ." Id. To survive a motion to dismiss, a complaint must allege "factual content [that] allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009).

The Court "must only consider those facts alleged in the complaint and accept all of those allegations as true." ALA, Inc. v. CCAIR, Inc., 29 F.3d 855, 859 (3d Cir. 1994) (citing Hishon v. King & Spalding, 467 U.S. 69, 73 (1984)); see also Twombly, 550 U.S. at 555 (stating that courts must assume that "all the allegations in the complaint are true (even if doubtful in fact)"). The Court must also accept as true all reasonable inferences that may be drawn from the allegations, and view those facts and inferences in the light most favorable to the non-moving party. Rocks v. Philadelphia, 868 F.2d 644, 645 (3d Cir. 1989). The Court, however, need not accept as true "unsupported conclusions and unwarranted inferences," Doug Grant, Inc. v. Greate Bay Casino Corp., 232 F.3d 173, 183-84 (3d Cir. 2000) (citing City of Pittsburgh v. West Penn Power Co., 147 F.3d 256, 263 n.13 (3d Cir. 1998)), or the plaintiff's "bald assertions" or "legal conclusions," Morse v. Lower Merion Sch. Dist., 132 F.3d. 902, 906 (3d Cir. 1997).

II. STATEMENT OF FACTS

For the purposes of this Motion to Dismiss, the facts alleged in the First Amended Complaint are considered to be true. Conley, 355 U.S. at 45. On that basis, the facts are as follows.

Utica and Morton-Norwich Products, Inc. entered into one-year general liability insurance contracts (the "Contracts") with effective dates of 3/31/78, 3/31/79, and 3/31/80, respectively. (1st A. Compl. ¶ 7.) Utica admits that it has not located complete copies of the Contracts,*fn2 but alleges that the Contracts include the following requirements: Morton must provide timely notice to Utica of any claims, suits, and occurrences; Morton is barred from assigning its rights under the Contracts; the Contracts cover only such bodily injury and property damage that takes place, or is caused by an occurrence, during the effective period of the Contracts; and that the Contracts do not apply to bodily injury or property damage that arises from the discharge, dispersal, release, or escape of pollutants. (See 1st A. Compl. ¶ 10-13.) Utica claims that Morton has, or may have, violated material terms and conditions of the Contracts by, among other things, failing to provide timely written notice of the Underlying Suits to Utica. (1st A. Compl. ¶ 39.)

Accordingly, Utica seeks a declaration as to whether Morton is entitled to defense or indemnity with respect to lawsuits arising out of (1) alleged exposures to asbestos at Weeks Island, Louisiana and Newark, California (the "Asbestos Suits"); (2) alleged bodily harm injury sustained by workers at a factory in Texas as a result of alleged exposure to toxic chemicals manufactured or sold by Morton or its predecessors (the "Brooks Suit"); (3) alleged bodily injury sustained by workers at a factory in New Jersey allegedly as a result of exposure to toxic chemicals manufactured or sold by Morton or its predecessors (the "Perez suit"); and (4) alleged contamination at the H.O.D. landfill in Antioch, Illinois allegedly caused by Morton or its predecessors (the "Antioch suit"). (See 1st A. Compl. ¶¶ 1, 15-19.) Utica also seeks recovery of defense and settlement payments already made in the Underlying Suits on the grounds that Morton's failure to re-pay such amounts constitutes either breach of an implied contract or unjust enrichment. (1st A. Compl. ¶ 1.)

A. The Underlying Lawsuits

1. The Asbestos Suits

Most of the Underlying Suits concern claims arising out of alleged exposure to asbestos caused by Morton at Weeks Island, Louisiana, a site owned by Morton and/or its affiliated companies. Some of the Underlying Suits also involve claims arising out of alleged exposure to asbestos caused by Morton at another site in Louisiana. Other Underlying Suits arise out of alleged exposure to asbestos at the Morton Salt plant in Newark, California. (1st A. Compl. ¶ 15.)

Utica had agreed to pay a share of defense costs for the Asbestos Suits on behalf of Morton, subject to an express reservation of Utica's rights and defenses, which reservation was communicated to Morton. (1st A. Compl. ¶ 21.) Morton did nothing to make clear to Utica that it was not accepting that Utica had agreed to pay defense costs subject to this reservation of rights. (1st A. Compl. ¶ 21.)

Utica also agreed to contribute an allocated share of indemnity payments to resolve some of the Asbestos Suits. (1st A. Compl. ΒΆ 23.) This agreement was also based upon an express reservation of Utica's rights and defenses, which reservation ...


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