Searching over 5,500,000 cases.

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.

National Union Fire Insurance Co. v. Essex Insurance Co.

United States District Court, Third Circuit

December 5, 2013



MAUREEN P. KELLY, Magistrate Judge.

This action has been filed to determine Defendant Essex Insurance Company's ("Essex") obligation to remit defense costs allegedly owed to Plaintiffs National Union Fire Insurance Company of Pittsburgh, PA ("National Union") and American Home Assurance Company ("American Home") (collectively "Plaintiffs"). The defense costs were incurred by Plaintiffs in the course of representing a mutual insured, Earth Support Services, Inc., d/b/a Micon ("Micon"), in litigation filed against it for personal injuries arising out of exposure to a Micon product. Micon was insured during consecutive policy periods by each of the parties to this action. A related company, Micon Products International ("MPI"), was made a party to portions of the underlying litigation and was insured by Hartford Fire Insurance Company ("Hartford"). Hartford is not a party to this action. Plaintiffs seek relief pursuant to an agreement allegedly entered into by each of the four insurers to allocate defense costs, and pursuant to the Declaratory Judgment Act ("DJA"). 28 U.S.C. ยง2201(a). Alternatively, Plaintiffs seek recovery in equity for contribution.

Pending before the Court are "Defendant's Motions to Dismiss and for Joinder of a Required Party Pursuant to Rules 12(b)(6) 12(b)(7) and 19(a)." [ECF No. 10] For the reasons that follow, Defendants' motions are denied in part and granted in part.


Because this matter comes to the Court on a Rule 12(b)(6) Motion to Dismiss, the factual allegations set forth in Plaintiff's Amended Complaint are accepted as true. See Oshiver v. Levin, Fishbein, Sedran & Berman , 38 F.3d 1380, 1384 (3d Cir. 1994). In pertinent part, the Complaint alleges that Plaintiffs National Union and American Home and Defendant Essex are liability insurance companies, each of which provided coverage to their mutual insured, Micon. Essex provided coverage for certain periods prior to 1995, followed by National Union beginning in March 1, 1995, and then by American Home for the period March 1, 2000, through March 1, 2004.

In late 2001, Plaintiffs received notice that Micon had been sued by a group of coal miners in Alabama, alleging personal injuries resulting from work-place exposure to Micon's isocyanate-containing products. Over time, five lawsuits were filed, each by multiple plaintiffs. In 2001, two actions (Bice and Abernathy) were filed in Alabama state court. A third action (Acklin) was filed in Alabama state court in 2002. A fourth action (Tanner), filed in 2005 as a class action in the United States District Court for the Northern District of Alabama, was followed by a fifth action (Abbott) filed in West Virginia state court in 2008. The four state court lawsuits were settled in 2011 and the federal class action was dismissed in 2011.

Plaintiffs National Union and American Home did not concede coverage but agreed to provide a defense to Micon in each lawsuit pursuant to a reservation of rights.

As set forth in declarations filed in support and in opposition to Essex's joinder motion, in 2004, MPI, a company identified as related to Micon, was added to the Bice lawsuit as well as the two other Alabama state court actions. MPI was named as a defendant with Micon upon the filing of the West Virginia suit. Plaintiffs allege, and Essex concedes, that given the business connections between Micon and MPI, and their common interests in the defense of the lawsuits, National Union, American Home, Essex and Hartford consented to joint representation of Micon and MPI by attorneys retained in Alabama and Pennsylvania.

Until October 2006, Plaintiffs paid all defense costs. In information provided to the Court by the parties in support and opposition to the Rule 19 motion, in 2006, Hartford apparently agreed to participate in these expenses because MPI was identified as an insured pursuant to a vendor's agreement in policies issued by Hartford to its named insured, Flexible Products. Essex, however, denied coverage in 2002, relying upon a pollution exclusion contained in policies issued by it to Micon. After repeated requests by Micon and Plaintiffs, Essex reconsidered its position and in June 2007, and agreed to participate in Micon's defense.

Plaintiffs allege Essex failed to honor its original decision to participate in defense costs or honor subsequent informal cost sharing agreements, and further failed to participate in the agreed upon reallocation of defense costs after the conclusion of the underlying actions. Plaintiffs allege that pursuant to the terms of the Essex policies at issue, Plaintiffs are entitled to contribution for costs expended in defending Micon in each of the underlying actions. Plaintiffs therefore seek contribution/indemnity and declaratory relief in the form of a declaration that Essex is obligated to contribute or "indemnify/reimburse" Plaintiffs for Essex's fair share of defense costs incurred in connection with the underlying actions, as well as an award of attorneys' fees, interest, delay damages and costs. [ECF No. 1, p. 8].

Essex has responded to the Complaint with the instant motion to dismiss as well as a motion for an order requiring the involuntary joinder of Hartford to this action. Essex contends that Hartford is a necessary party so that Hartford's obligation to remit defense costs can be determined. Essex further argues that to the extent Plaintiffs may have settled their claim against Hartford for a share of defense costs, Hartford is a necessary party so that Hartford's payments to Plaintiffs can be disclosed and an appropriate reduction can be made for Essex's benefit.


In assessing the sufficiency of the complaint pursuant to a Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6), the Court must accept as true all material allegations in the complaint and all reasonable factual inferences must be viewed in the light most favorable to the plaintiff. Odd v. Malone , 538 F.3d 202, 205 (3d Cir. 2008). The Court, however, need not accept bald assertions or inferences drawn by the plaintiff if they are unsupported by the facts set forth in the complaint. See California Public Employees' Retirement System v. The Chubb Corp. , 394 F.3d 126, 143 (3d Cir. 2004), citing Morse v. Lower Merion Sch. Dist. , 132 F.3d 902, 906 (3d Cir. 1997). Nor must the Court accept legal conclusions set forth as factual allegations. Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 555 (2007). Rather, "[f]actual allegations must be enough to raise a right to relief above the speculative level." Id., citing Papasan v. Allain , 478 U.S. 265, 286 (1986). Indeed, the United States Supreme Court has held that a complaint is properly dismissed under Fed.R.Civ.P. 12(b)(6) where it does not allege "enough facts to state a claim to relief that is plausible on its face, " id. at 570, or where the factual content does not allow the court "to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009). See Phillips v. County of Allegheny , 515 F.3d 224, 231 (3d Cir. 2008) (finding that, under Twombly, "labels, conclusions, and a formulaic recitation of the elements of a cause of action" do not suffice but, rather, the complaint "must allege facts suggestive of [the proscribed] conduct" and that are sufficient "to raise a reasonable expectation that discovery will reveal evidence of the necessary element[s] of his claim").

With regard to Defendant's Motion to Strike Plaintiff's Declaratory Judgment Claim as "redundant, " under Rule 12(f) of the Federal Rules of Civil Procedure, a "court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Fed.R.Civ.P. 12(f). Motions to strike are "not favored and usually will be denied unless the allegations have no possible relation to the controversy and may cause prejudice to one of the parties, or if the allegations confuse the issues." Pennington v. Wells Fargo Bank, No. 11-2896, 2013 WL 2370584 *2 (E.D. Pa. May 30, 2013) (quoting N. Penn. Transfer, Inc. v. Victaulic Co. of Am. , 859 F.Supp. 154, 158 (E.D.Pa. 1994) and River Road Devel. Corp. v. Carlson Corp., No. 89-7037 , 1990 WL 69085, at *2 (E.D.Pa. May 23, 1990)). "Indeed, striking a pleading is a drastic remedy to be resorted to only when required for the purposes of justice' and should be used sparingly.'" DeLa Cruz v. Piccari Press , 521 F.Supp.2d 424, 428 (E.D. Pa.2007) (quoting N. Penn. Transfer , 859 F.Supp. at 158). "To prevail, the moving party must demonstrate that the allegations have no possible relation to the controversy and may cause prejudice to one of the parties, or [that] the allegations confuse the issues.'" Id . (quoting River Road Devel. Corp. , 1990 WL 69085, at *3).

Finally, with regard to Defendant's Motion for Joinder of a required party, Essex claims that Hartford in a required party to this action because Hartford has paid Plaintiff unknown sums for a portion of the defense costs incurred by Plaintiffs and that in Hartford's absence as a party to this action, duplicative payment could occur. Federal Rule of Civil Procedure 19 requires joinder of a party "in whose absence the court cannot accord complete relief, or whose interest in the dispute is of such a nature that to proceed ...

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.