Cannelton Industries, Inc. v. Aetna Cas. & Sur. Co. of America

• Decision Date: 08 December 1994
• Docket Number: No. 22015,22015
• Citation: 194 W.Va. 186,460 S.E.2d 1
• Court: West Virginia Supreme Court
• Parties: CANNELTON INDUSTRIES, INC., Plaintiff Below, Appellant v. The AETNA CASUALTY & SURETY COMPANY OF AMERICA, et al., Defendants Below, Appellees.

Page 1

460 S.E.2d 1

194 W.Va. 186

CANNELTON INDUSTRIES, INC., Plaintiff Below, Appellant v. The AETNA CASUALTY & SURETY COMPANY OF AMERICA, et al Defendants Below, Appellees.

No. 22015.

Supreme Court of Appeals of West Virginia.

Submitted Sept. 27, 1994.

Decided Dec. 8, 1994.

[194 W.Va. 187] Syllabus by the Court

1. "The common law doctrine of forum non conveniens is simply that a court may, in its sound discretion, decline to exercise jurisdiction to promote the convenience of witnesses and the ends of justice, even when jurisdiction and venue are authorized by the letter of a statute." Syllabus point 1, Norfolk & Western Railway Co. v. Tsapis, 184 W.Va. 231, 400 S.E.2d 239 (1990).

2. "The common law doctrine of forum non conveniens is available to courts of record in this State. The doctrine accords a preference to the plaintiff's choice of forum, but the defendant may overcome this preference by demonstrating that the forum has only a slight nexus to the subject matter of the suit and that another available forum exists which would enable the case to be tried substantially more inexpensively and expeditiously. To the extent that Gardner v. Norfolk & Western Railway Co., 179 W.Va. 724, 372 S.E.2d 786 (1988), cert. denied, 489 U.S. 1016, 109 S.Ct. 1132, 103 L.Ed.2d 193 (1989), declined to apply this doctrine, it is overruled." Syllabus point 3, Norfolk & Western Railway Co. v. Tsapis, 184 W.Va. 231, 400 S.E.2d 239 (1990).

3. A circuit court's decision to invoke the doctrine of forum non conveniens will not be reversed unless it is found that the circuit court abused its discretion.

4. "In a case involving the interpretation of an insurance policy, made in one state to be performed in another, the law of the state of the formation of the contract shall govern, unless another state has a more significant relationship to the transaction and the parties, or the law of the other state is contrary to the public policy of this state." Syllabus, Liberty Mutual Insurance Co. v. Triangle Industries, Inc., 182 W.Va. 580, 390 S.E.2d 562 (1990).

5. The phrase in a service of suit clause stating the insurer "will submit to the jurisdiction of any Court of competent jurisdiction within the United States of America" does not restrict the insurer from bringing an action in another forum and from subsequently filing a forum non conveniens motion in a forum selected by the insured. Moreover, the phrase "and all matters arising hereunder shall be determined in accordance with the law and practice of such Court" includes a determination in accordance with the doctrine of forum non conveniens if the doctrine is available to the court.

6. " 'Ambiguous and irreconcilable provisions of an insurance policy should be construed strictly against the insurer and liberally in favor of the insured, although such construction should not be unreasonably applied to contravene the object and plain intent of the parties.' Point 2, Marson Coal Co. v. Insurance Co., W.Va. , 210 S.E.2d 747 (1974)." Syllabus Point 2, Prete v. Merchants Property Insurance Company of Indiana, 159 W.Va. 508, 223 S.E.2d 441 (1976).

Gale R. Lea, John L. McClaugherty, W. Warren Upton, Jackson & Kelly, Charleston, for appellant.

Charles W. Browning, Detroit, MI, Michele Grinberg, Flaherty, Sensabaugh & Bonasso, Charleston, for appellee Aetna Cas. & Sur. Co. of America.

Andrew S. Zettle, Huddleston, Bolen, Beatty, Porter & Copen, Huntington, Stephen M. Kelley, Detroit, MI, for appellees St. Paul Fire and Marine Ins. Co. and St. Paul Surplus Lines Ins. Co.

Chauncey H. Browning, Jr., Charleston, for appellee Affiliated-FM Ins. Co.

James R. Sheatsley, Gorman & Sheatsley & Co., Beckley, John G. McAndrews, Olympia Daskalakis, Mendes & Mount, New York City, for appellee Lloyd's of London.

CLECKLEY, Justice:

This appeal is brought from a final order entered September 28, 1993, in the Circuit Court of Kanawha County, which dismissed a declaratory judgment action brought by Cannelton Industries, Inc. (Cannelton), the plaintiff below and appellant herein. On July 1, 1992, Cannelton initiated the declaratory judgment action in the circuit court against approximately 56 insurance companies alleging breaches of contracts. ¹ The circuit court found that all the defendants filing answers by February 1, 1993, except the West Virginia Insurance Guaranty Association (WVIGA), concurred or joined in a motion to dismiss Cannelton's action based upon the doctrine of forum non conveniens. On appeal, Cannelton requests this Court to reverse the final order of the circuit court and remand the case to allow further proceedings on the action. ²

I. ADDITIONAL ACTIONS

Several other actions were filed outside of West Virginia by some of the defendants. On May 15, 1992, a month and a half prior to Cannelton's instituting its action in Kanawha County, Commercial Union filed suit in the United States District Court for the Western District of Michigan. On July 13, 1992, St. Paul Fire and Marine Insurance Company and St. Paul Surplus Lines Insurance Company (collectively, St. Paul) also filed an action in the United States District Court for the Western District of Michigan. By order dated August 3, 1993, the district court stayed these cases pending resolution of the action in West Virginia. ³

In September, 1993, St. Paul voluntarily had its case dismissed, without prejudice, pursuant to Rule 41(a)(1) of the Federal Rules of Civil Procedure. Then, on September 27, 1993, St. Paul filed another action in the Circuit Court of Chippewa County, Michigan, against Cannelton; Algoma Steel Corporation, Limited, n/k/a 108668 Ontario, Ltd. (Algoma); the Michigan Property and Casualty Guaranty Association (MPCGA); Doe Insurers 1 through 100; and all the defendants in West Virginia, except the WVIGA and certain insolvent London Market insurers. On November 18, 1993, Commercial Union amended its complaint in the district court to include all the defendants in West Virginia and the Doe Insurers. ⁴ Thereafter, by order dated December 16, 1993, this Court directed the defendants not to file any additional actions against Cannelton or Algoma in any other courts. ⁵

II. FACTS

Cannelton is incorporated in West Virginia and has its principal place of business in Charleston, West Virginia. Cannelton states that its primary business and activities involve coal mining. According to the briefs, Cannelton's predecessor corporation is Cannelton Holding Company. Until March of 1991, Cannelton Holding Company was a wholly owned subsidiary of Algoma. Algoma is a limited liability company organized in Ontario, Canada, and has its principal place of business in Sault Sainte Marie, Ontario, Canada. In March of 1991, Algoma sold Cannelton Holding Company to AMAX Coal Industries, Inc., which is a subsidiary of AMAX Energy, Inc., which, in turn, was a subsidiary of AMAX, Inc. By virtue of a merger in 1993, AMAX, Inc., became Cyprus Amax Minerals Company, Inc. The name subsequently was changed to Cyprus Amax Coal Industries, Inc. ⁶

Cannelton asserts that on June 9, 1964, it acquired title to property in Sault Sainte Marie, Michigan, where Northwestern Leather Company operated a tannery from 1900 to 1958. Cannelton claims it never conducted any operations on the property. However, the United States Environmental Protection Agency (USEPA) and the Michigan Department of Natural Resources (MDNR) seek to hold Cannelton, as the present owner of the property, liable for the clean-up of hazardous waste allegedly left on the property by the tannery. Cannelton states that the USEPA estimated Cannelton's liability to be $19.7 million, but its liability could reach $51.5 million or more.

Cannelton alleges that each of the defendants sold insurance policies either to it or to its former parent, Algoma. All the defendants have denied coverage of the claims made by the USEPA and the MDNR. As a result, on July 1, 1992, Cannelton filed a declaratory judgment action in the circuit court against the defendants to require them to defend and/or indemnify it against the claims of the USEPA and MDNR.

Cannelton maintains all the policies were arranged through brokers in West Virginia, Canada, and England, and none of the policies were issued or delivered in Michigan. According to Cannelton, its broker from the 1940s until the late 1970s was Flat Top Insurance Agency located in Bluefield, West Virginia. In approximately 1978, McDonough-Caperton-Shepherd-Goldsmith, n/k/a McDonough Caperton Insurance Group, which is located in Charleston, West Virginia, became Cannelton's broker. At the end of 1978, Cannelton placed its account with Marsh & McLennan Limited which had an office in Toronto, Canada, and an office in Charleston. Cannelton states that representatives from the Toronto office traveled to Charleston to conduct business with it. In 1985, McDonough Caperton Insurance Group again became Cannelton's broker.

Cannelton submitted affidavits on its behalf in opposition to the defendants' forum non conveniens motion. In those affidavits, William C. Miller II, Cannelton's General Counsel, stated that Cannelton does not have any offices in Michigan and all its records that are relevant to the declaratory judgment action are either in its Charleston office or in its lawyers' Charleston offices. Furthermore, Mr. Miller averred that all the documents involving the property in Michigan were transferred to Charleston when Cannelton was sold. He also claimed that some of the copies of Algoma's insurance policies that cover the property are in Charleston.

III. FORUM NON CONVENIENS ANALYSIS

Cannelton argues that the circuit court erred in applying the doctrine of forum non conveniens to the facts of this case. We adopted this common law doctrine in Norfolk & Western Railway Co. v. Tsapis, 184 W.Va. 231, 400 S.E.2d 239 (1990). We stated in Syllabus Points 1 and 3 of Tsapis:

"1. The common law doctrine of forum non conveniens is simply that a...