Catholic Foreign Mission Soc'y of Am., Inc. v. Arrowood Indem. Co.
| Decision Date | 29 December 2014 |
| Docket Number | No. CIV. 14–00420 HG–BMK.,CIV. 14–00420 HG–BMK. |
| Citation | 76 F.Supp.3d 1148 |
| Court | U.S. District Court — District of Hawaii |
| Parties | CATHOLIC FOREIGN MISSION SOCIETY OF AMERICA, INC., aka Maryknoll Fathers and Brothers, Plaintiff, v. ARROWOOD INDEMNITY COMPANY, formerly known as Royal Indemnity Company, as successor to Royal Globe Insurance Company and The Travelers Companies, Inc., Defendants. |
James C. McWhinnie, Tred R. Eyerly, Damon Key Leong Kupchak Hastert, David R. Harada–Stone, Richard B. Miller, Tom Petrus & Miller LLLC, Honolulu, HI, Courtney Elizabeth Scott, Tressler LLP, New York, NY, for Plaintiff.
Sheree A. Kon–Herrera, Wesley H.H. Ching, Fukunaga Matayoshi Hershey Ching & Kop, Honolulu, HI, for Defendants.
ORDER GRANTING PLAINTIFF'S MOTION FOR REMAND (ECF No. 7) AND DENYING DEFENDANTS' MOTION TO DISMISS OR TRANSFER (ECF. No. 13)
This case involves a request for declaratory relief as to insurance coverage for several underlying Hawaii state court lawsuits alleging sexual abuse by members of the clergy. Plaintiff filed a declaratory judgment action in Hawaii state court. Defendants removed the action to the Federal District Court for the District of Hawaii. Plaintiff moves for remand, requesting that the Court exercise its discretion to decline to exercise jurisdiction as the nature of the case is one for declaratory relief under the Declaratory Judgment Act.
Defendants have moved to dismiss or transfer this action because of a pending declaratory judgment action, filed by Defendant Arrowood, in the United States District Court for the Southern District of New York.
The Court declines to exercise jurisdiction.
Plaintiff's Motion to Remand (ECF No. 7) is GRANTED.
Defendants' Motion to Dismiss or Transfer (ECF No. 13) is DENIED.
On August 14, 2014, Plaintiff Catholic Foreign Mission Society of American, Inc., aka Maryknoll Fathers and Brothers (“Maryknoll”) filed a Complaint against Defendants Arrowood Indemnity Company (“Arrowood”) and The Travelers Companies, Inc. (“Travelers”) in the Circuit Court of the First Circuit, State of Hawaii.
On August 29, 2014, Plaintiff filed a First Amended Complaint against Defendants Arrowood Indemnity Company and The Travelers Companies, Inc. in the Circuit Court of the First Circuit, State of Hawaii.
On September 16, 2014, Defendants Arrowood and St. Paul Fire and Marine Insurance Company (“St. Paul”) filed a Joint Notice of Removal in the United States District Court for the District of Hawaii. (ECF No. 2.) Defendants contend that Plaintiffs incorrectly sued The Travelers Companies, Inc., rather than its subsidiary St. Paul.
On October 6, 2014, Plaintiff Maryknoll filed a Motion for Remand. (ECF No. 7.)
On October 7, 2014, Plaintiff Maryknoll filed a Motion for Leave to File Second Amended Complaint. (ECF No. 8.) Hearing on Plaintiff's Motion for Leave to File Second Amended Complaint is set for January 21, 2015.
On October 15, 2014, Defendant Arrowood filed a Motion to Dismiss or Transfer, in which Defendant St. Paul joined. (ECF No. 13, 14.)
On November 10, 2014, Defendants Arrowood filed an Opposition to Plaintiff's Motion to Remand, in which Defendant St. Paul joined. (ECF No. 21, 22.)
On November 10, 2014, Plaintiff Maryknoll filed an Opposition to Defendant Arrowood and St. Paul's Motion to Dismiss or Transfer, in which Defendant St. Paul joined. (ECF No. 23.)
On December 4, 2014, Defendant Arrowood filed a Reply to Plaintiff's Motion to Remand, in which Defendant St. Paul joined. (ECF No. 28, 29.)
On December 4, 2014, Plaintiff Maryknoll filed a Reply to Defendants' Opposition to Plaintiff's Motion to Remand. (ECF No. 30.)
Plaintiff's Motion to Remand and Defendants' Motion to Dismiss or Transfer came on for hearing on December 22, 2014.
Plaintiff's Complaint for Declaratory Judgment filed in Hawaii State Court.
August 29, 2014, Plaintiff Maryknoll filed a First Amended Complaint (“FAC”) for declaratory judgment against Defendants Arrowood and Travelers in the Circuit Court of the First Circuit, State of Hawaii. (ECF No. 2–2.) The FAC contains two counts. Count I seeks a declaratory judgment as to the Defendants' duty to defend and Count II seeks a declaratory judgment as to the Defendants' duty to indemnity.
In particular, in the FAC, Maryknoll seeks a declaratory judgment that Arrowood and Travelers have a duty to provide insurance coverage regarding several cases filed in the Circuit Court of the First Circuit of Hawaii. (FAC ¶ 1.) Maryknoll alleges that it is a not-for-profit corporation incorporated in the State of New York, with its principle place of business in New York. (FAC ¶ 3.) As to Defendants, Maryknoll alleges that Defendant Arrowood is a Delaware corporation with its principle place of business located in Charlotte, North Carolina and that Defendant Travelers is a Minnesota Corporation with its principle place of business in New York. (FAC ¶¶ 4, 5.)
Insurance policies
In the FAC, Plaintiff Maryknoll seeks a declaration as to coverage under a number of insurance policies issued to Plaintiff Maryknoll by either Defendant Arrowood or Defendant Travelers (through its subsidiary, St. Paul), in the 1960s and 1970s. (FAC ¶¶ 9, 17–22.) Plaintiff alleges that, upon information and belief, the Umbrella Excess Liability policy issued by St. Paul is now administered by Travelers. (FAC ¶ 22.) As discussed further below, Defendant St. Paul disputes that Travelers is a proper party and has appeared in this matter as Defendant St. Paul “incorrectly sued herein as The Travelers Companies, Inc.”.
According to Maryknoll's proposed Second Amended Complaint, there are fourteen underlying State court lawsuits filed in the Circuit Court for the First Circuit, State of Hawaii. The lawsuits name Maryknoll and members of the clergy as defendants. The lawsuits allege sexual abuse by members of the clergy, that Maryknoll failed to warn the plaintiffs, and that Maryknoll was negligent in continuing to employ and failing to properly supervise accused members of the clergy.
On June 5, 2014, prior to the filing of Plaintiff's suit before this Court, Defendant Arrowood filed a declaratory judgment action in the United States District Court for the Southern District of New York. (See Arrowood Indemnity Company v. Catholic Foreign Mission Society of America Inc. a/k/a Maryknoll Fathers and Brothers, Civil Action No. 14 CV 4089 (“New York Lawsuit”)). In the New York Lawsuit, Defendant Arrowood seeks a declaration that it owes neither a duty to defend nor a duty to indemnity Maryknoll in the underlying lawsuits filed in Hawaii state court. On September 16, 2014, Arrowood amended its complaint in the New York Lawsuit to include St. Paul as a Defendant and to seek declaratory relief with respect to additional underlying lawsuits tendered by Maryknoll to Arrowood and St. Paul after the filing of the New York Lawsuit. Travelers is not a party to the New York lawsuit. The Federal District Court in New York has issued a scheduling order in the New York Lawsuit. Maryknoll filed a motion to dismiss or stay the New York Lawsuit. As of the date of the hearing before this Court, Maryknoll's motion to dismiss or stay has not been ruled upon.
Plaintiff Maryknoll's proposed Second Amended Complaint includes four additional insurance carriers and ten additional underlying lawsuits pending in the First Circuit Court, State of Hawaii. Hearing on Plaintiff's Motion for Leave to File Second Amended Complaint has been deferred until after the Court rules on the pending motions—Plaintiff's Motion to Remand and Defendants' Motion to Dismiss or Transfer, to allow a ruling on the Court's exercise of jurisdiction in this matter.
In their notice of removal, Defendants assert diversity jurisdiction. (ECF No. 2.) It is undisputed that Defendant Arrowood, as alleged in the FAC, is incorporated in Delaware and his its principle place of business in Charlotte, North Carolina. (Id. ) The Notice of Removal is also filed by St. Paul, which describes itself as a Defendant and says that it has been sued incorrectly as The Travelers Companies, Inc. (Id. ) St. Paul is a corporation organized under the laws of Connecticut with its principal place of business in Connecticut. St. Paul received the initial complaint through service upon CSC, the registered agent for service in Hawaii for the subsidiaries of The Travelers Companies, Inc., including St. Paul. Defendants point out that the policy at issue in the FAC as to Travelers/St. Paul, states, on its face, that it was issued by St. Paul Fire and Marine Insurance Company.
Travelers, the named defendant in the FAC, is alleged to be a Minnesota Corporation with its principle place of business in New York. (FAC ¶ 5.) Plaintiff Maryknoll is a New York corporation with its principle place of business in New York. With Travelers named as a defendant, Plaintiff Maryknoll and Defendant Travelers are citizens of the same state, such that there is no diversity jurisdiction.
In support of their argument that St. Paul, and not Travelers, is the proper party, Defendants have filed the Affidavit of Peter Schwartz in Support of Removal. Mr. Schwartz is the Senior Vice President, Group General Counsel Corporate Litigation and Assistant Corporate Secretary of The Travelers Companies, Inc. (Affidavit of Peter Schwartz, (“Schwartz Aff.”), ECF No. 2–1.) Mr. Schwartz avers that Plaintiff's allegation that the St. Paul policy is “now administered by The Travelers Corporation” is incorrect. (Schwartz Aff. ¶¶ 5–7.) According to Schwartz, Travelers has not and does not administer insurance policies or claims for St. Paul or any other insurer. (Id. ) Mr. Schwartz further explains that Travelers is not an insurer, does not issue policies of insurance and is not authorized...
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