Forum Ins. Co. v. Bristol-Myers Squibb Co., BRISTOL-MYERS
| Decision Date | 19 September 1996 |
| Docket Number | No. 09-96-015,BRISTOL-MYERS,09-96-015 |
| Citation | 929 S.W.2d 114 |
| Parties | FORUM INSURANCE COMPANY, Appellant, v.SQUIBB COMPANY and Medical Engineering Corporation, Appellees. CV. |
| Court | Texas Court of Appeals |
Robert L. Klawetter, Lewis E. Henderson, Eastham, Watson, Dale & Forney, Houston, for appellant.
Robert Q. Keith, Keith & Weber, Johnson City, Thomas Ladd, McCarter & English, Newark, NJ, for appellees.
Before WALKER, C.J., and BURGESS and STOVER, JJ.
Appellees Bristol-Myers Squibb (BMS) and Medical Engineering Corporation (MEC) filed this underlying lawsuit on March 19, 1993 against numerous insurance companies, seeking insurance coverage for breast implant claims made against appellees. Following filing of suit, all matters were voluntarily stayed by consent of all parties until October 1993 in an effort to facilitate settlement discussions. On August 13, 1993, ten defendants to this Texas lawsuit filed a declaratory judgment lawsuit in the State of New York, seeking a denial of coverage for breast implant claims. The New York trial court stayed that lawsuit, however, on October 26, 1995, the trial court ordered stay was reversed by an intermediate appellate court (Supreme Court, Appellate Division-First Department). Further appeal has been taken to New York's highest appellate level.
Following appellate court reversal of the trial court's stay order, appellees promptly filed an application for a temporary anti-suit injunction in the 58th Judicial District Court in and for Jefferson County, State of Texas. It is in this 58th District Court that appellees original lawsuit was filed. Appellees sought a temporary anti-suit injunction to prohibit the insurance companies from proceeding with the New York lawsuit, or filing other duplicate lawsuits.
The trial court granted the temporary injunction after hearing on December 19, 1995. Although the injunction applies to approximately eighty (80) named parties, Forum Insurance Company, appellant, is the single party to this appeal.
In 1982, appellee BMS acquired appellee MEC, a manufacturer of smooth-walled silicone breast implants. MEC continues to be a wholly owned subsidiary of BMS. In 1988, MEC purchased the Natural-Y and Aesthetech companies from Cooper Companies. MEC succeeded to the rights and various liabilities of these businesses, which manufactured and distributed polyurethane-covered breast implants. Natural-Y and Aesthetech no longer exist as separate corporate entities.
BMS and MEC have been sued in thousands of lawsuits in Texas and other states, alleging more than 17,000 claims for bodily injury, wrongful death and other damages arising out of silicone breast implants manufactured or sold by MEC, Natural-Y, Aesthetech and others. BMS and MEC filed this lawsuit against numerous insurance companies on March 19, 1993, in Jefferson County, Texas, seeking insurance coverage for these breast implants claims. Though the parties voluntarily stayed this lawsuit to facilitate settlement discussions, the failure of these discussions resulted in a lifting of the stay in the fall of 1993. Appellant, Forum Insurance Company, is a defendant in this lawsuit.
Prior to the stay being lifted, on August 13, 1993, ten of the insurance companies named as defendants in the 58th District Court, filed a declaratory judgment action in New York County, New York. Forum was not a plaintiff in the New York lawsuit but was named as a defendant in that suit. Forum did however file a cross-claim against BMS and Aesthetech alleging certain defensive issues. 1
The New York plaintiffs (not Forum) named Cooper Companies as a defendant. However those plaintiffs agreed in writing to dismiss Cooper from the New York lawsuit after the Texas court ruled on pending forum non conveniens motions. Appellant Forum specifically denied in the New York case that it ever issued an insurance policy to Cooper, and Forum never filed a cross-claim or any other claim against Cooper in the New York case. Forum's only cross-claims in New York are against BMS and Aesthetech.
In New York, BMS and MEC filed a motion to dismiss or stay the New York case until the Texas case was resolved. The New York trial court granted the motion, and on March 7, 1994, stayed the New York case based on the "service of suit" provisions in the insurance policies. The New York stay remained in effect until October 26, 1995, when an intermediate appellate court overruled prior case law and reversed the trial court. BMS has appealed that decision to the New York Court of Appeals (New York's highest appellate court). All insurance companies in the New York case which had not previously been sued in Texas were added to the Texas lawsuit. The generic basis of both the Texas lawsuit and the New York lawsuit involves the question of insurance coverage. 2
Following the dissolution of the New York trial court's stay, by intermediate appellate court decision entered October 26, 1995, BMS and MEC promptly filed an Application for Temporary Injunction in the 58th District Court, triggering a rapid sequence of events:
On November 6, 1995, BMS and MEC filed an Application for Temporary Injunction in the 58th District Court to prohibit the defendants from prosecuting the New York case;
On November 9, 1995, a hearing was held in the 58th District Court at which time representations were made to the court that no need for immediate action was necessary regarding the Application for Temporary Injunction since defendants did not plan to take any action in New York which would affect the Texas court's jurisdiction. No defendant at this hearing objected or disagreed. Therefore, the 58th District Court set the hearing on the Application for Temporary Injunction for December 19, 1995. Forum denies its attendance at the November 9th hearing or that it agreed not to take action in New York;
On November 21, 1995, in New York, Forum requested an immediate restraining order and a show cause order to prohibit BMS and MEC from going forward with the December 19, 1995 hearing scheduled in the 58th District Court. The New York court denied the restraining order, but did issue an Order to Show Cause, ordering BMS and MEC to show cause why the New York court should not enter an injunction prohibiting them from attempting to obtain an injunction in Texas. The New York court set its show cause hearing for December 8, 1995, eleven days before the scheduled hearing in Texas;
On November 22, 1995, Forum filed an identical request for a restraining order in the New York Court Appellate Division. The New York appellate court denied an immediate restraining order, instead, ordered the parties to file briefs by December 8, indicating it would render an expedited ruling by December 15, four days prior to the scheduled Texas hearing;
On December 5, 1995, BMS and MEC requested the 58th District Court of Texas to enter a Temporary Restraining Order prohibiting Forum from taking further action in the New York lawsuit, including the show cause hearing scheduled for December 8, or any other action that would prevent the 58th District Court from going forward with the previously scheduled December 19 hearing;
On December 19, 1995, the 58th District Court held a hearing and orally granted the application for Temporary Injunction, prohibiting Forum and all other defendants from prosecuting the New York lawsuit or filing additional lawsuits concerning the same insurance policies and issues involved in this lawsuit;
On January 2, 1996, the 58th District Court, Judge James Mehaffy Presiding, signed a written Temporary Injunction against named defendants; and
On January 31, 1996, at Forum's request, the trial court entered Findings of Facts and Conclusions of Law. We give special notice to the following findings: 3
4. Plaintiffs face an immediate threat that certain defendants will prosecute the New York lawsuit, and nothing prevents other defendants from filing more duplicate lawsuits in other jurisdictions. If the New York lawsuit is prosecuted or additional duplicate lawsuits are filed in other jurisdictions, the orderly proceeding of this lawsuit will be disrupted and plaintiffs will effectively be deprived of their right to choose the forum to decide their claims. This will result in a multiplicity of lawsuits and vexatious litigation, and will cause irreparable harm to plaintiffs.
5. This court is empowered to enjoin defendants from filing or prosecuting subsequent lawsuits in state and federal courts in Texas and other states, and in the courts of other countries. This court is entitled to proceed to judgment in this case and should protect its jurisdiction by enjoining the filing or prosecution of subsequent lawsuits involving the same controversy.
The preceding findings were made prior to and without benefit of Golden Rule Ins. Co. v. Harper, 925 S.W.2d 649 (Tex. 1996). Harper now explains, restricts and modifies the criteria and basis for entry of anti-suit injunction. Though Harper does not address the standard for reviewing trial court action in issuing anti-suit injunction, we recognize the unchanged standard as that of abuse of discretion, i.e., given the inherent power to issue the anti-suit injunction 4, did Judge James Mehaffy properly, under the totality of circumstances, both in fact and law, clearly abuse his discretion by acting arbitrarily and unreasonably, without reference to guiding rules or principles, or did he misapply the law to the facts?
The question presented in Harper was whether our Fourteenth Court of Appeals (Houston) correctly affirmed the 113th District Court's entry of anti-suit injunction, on the basis the enjoined suit was vexatious and brought to harass. See Harper, 925 S.W.2d at 650-51. In reversing the Court of Appeals and dissolving the injunction, our highest court clearly defined those disjunctive...
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