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Bedivere Insurance Co. v. Triangle Enterprises, Inc.

United States District Court, W.D. Kentucky, Louisville Division

February 15, 2017

BEVIDERE INSURANCE COMPANY PLAINTIFF
v.
TRIANGLE ENTERPRISES, INC., et al. DEFENDANTS

          MEMORANDUM OPINION AND ORDER

          Joseph H. McKinley, Jr., Chief Judge.

         This matter is before the Court on Defendant Triangle's Motion to Dismiss or Transfer [DN 46]. Fully briefed, this matter is ripe for decision.

         I. Background

         Plaintiff Bevidere's predecessor in interest, American Employers Insurance Company, issued three insurance policies to Defendant Triangle including two primary general liability policies and one umbrella policy. (Defs.' Redacted Mem. Supp. Mot. Dismiss [DN 106-2] at 3.) The first primary liability policy (Policy No. AZW 452806) was effective for the period of June 1, 1980 to June 1, 1983; however, this policy was cancelled effective June 1, 1982. (Id.) The second primary liability policy (Policy No. ASW 529081) was effective for the period of June 1, 1982 and June 1, 1985. (Id.) These policies each provided limits of liability for bodily injury in the amount of $500, 000 for each “occurrence” and $500, 000 in the aggregate. (Id. at 4.) The umbrella policy (Policy No. AZ 8500-113) was effective for the period of June 1, 1980 to June 1, 1981. (Id.) This policy provided a combined single limit of $1, 000, 000 for each “occurrence” and in the aggregate for bodily injury and property damage. (Id. at 3-4.)

         Triangle has been named as a defendant in hundreds of lawsuits across many states alleging bodily injury from exposure to asbestos from products distributed by Triangle and/or resulting from Triangle's installation of asbestos-containing insulation. (Id. at 6.) More than eighty of these underlying actions are still pending in five states, with the vast majority (sixty-one) in Illinois. (Id.)

         In February 2012, Bevidere entered into a confidential coverage in place agreement (hereinafter “CIP”) with Triangle, two of Triangle's other primary insurers (Defendants Allianz Global Risk U.S. Insurance Company and General Insurance Company of America), and the CNA Trust Fund. (Pl.'s Resp. [DN 68] at 3.) The CNA Trust fund is an entity established to receive and distribute amounts payable under primary general liability insurance policies issued to Triangle by the Continental Insurance Company. (Id. at 3-4.)

         Since entering the CIP, Bevidere claims that it has paid more than $2, 000, 000 in indemnity in order to settle underlying asbestos lawsuits against Triangle. (Defs.' Redacted Mem. [DN 106-2] at 3.) Bevidere asserts that its indemnity payments have exhausted the $500, 000 per occurrence limitation on liability applicable to the underlying claims against Triangle in each primary general liability policy and the $1, 000, 000 per occurrence limit of liability applicable to the underlying claims against Triangle in the umbrella policy. (Id.)

         Bevidere then commenced the instant declaratory action in this Court on June 3, 2016. (Id. at 2.) Bevidere requests that the Court declare that it has no further duty or obligation to defend or indemnify Triangle for the underlying actions. (Id.) Bevidere also seeks recoupment and reimbursement from Triangle and contribution and legal subrogation against all insurer Defendants and the CNA Trust. (Id. at 2-3.) In response to Bevidere's Amended Complaint, Triangle has filed the instant Motion to Dismiss, urging the Court to decline to exercise federal discretionary jurisdiction over this declaratory action. (Id. at 7.)

         II. Standard of Review

         This matter is an action for declaratory relief under the Federal Declaratory Judgment Act, which provides in relevant part:

In a case of actual controversy within its jurisdiction, . . . any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.

28 U.S.C. § 2201(a). A court's exercise of jurisdiction under the Declaratory Judgment Act is not mandatory. Bituminous Cas. Corp. v. J & L Lumber Co., Inc., 373 F.3d 807, 812 (6th Cir. 2004) (citing Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 494 (1942)). In determining whether to exercise such discretion, and thus whether a case is appropriate for declaratory judgment, this Court considers the five factors enumerated by the Sixth Circuit in Grand Trunk Western Railroad Co. v. Consolidated Rail Corp., 746 F.2d 323, 326 (6th Cir. 1984):

(1) whether the judgment would settle the controversy;
(2) whether the declaratory judgment action would serve a useful purpose in clarifying the legal relations at issue;
(3) whether the declaratory remedy is being used merely for the purpose of “procedural fencing” or “to provide an arena for a race for res judicata”;
(4) whether the use of a declaratory action would increase the friction between our federal and state courts and improperly encroach on state jurisdiction; and
(5) whether there is an alternative remedy that is better or more effective.

Bituminous, 373 F.3d at 813 (citing Scottsdale Ins. Co. v. Roumph, 211 F.3d 964, 968 (6th Cir. 2000)).

         The Sixth Circuit has “held in insurance coverage diversity cases that ‘declaratory judgment actions seeking an advance opinion on indemnity issues are seldom helpful in resolving an ongoing action in another court.'” Bituminous, 373 F.3d at 812 (quoting Manley,Bennett, McDonald & Co. v. St. Paul Fire & Marine Ins. Co., 791 F.2d 460, 463 (6th Cir. 1986)). Further, the Sixth Circuit has emphasized that ‚Äúsuch actions . . . should normally be filed, if at all, in the court that has jurisdiction over the litigation which gives rise to the indemnity problem. Otherwise confusing problems of scheduling, orderly presentation of fact ...


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