Hanover Ins. Co. v. Weirfield Coal, Inc.
| Decision Date | 24 July 2020 |
| Docket Number | 1:19-CV-04456 (AMD) (ST) |
| Citation | 474 F.Supp.3d 564 |
| Parties | HANOVER INSURANCE COMPANY, Plaintiff, v. WEIRFIELD COAL, INC. f/k/a Weirfield Coal & Oil, Inc., Penn-Star Insurance Company, U.S. Underwriters and Insurance Company, Katherine Carbajal, Individually and as Parent and Natural Guardian of MC, and Marvin Carbajal, Individually, Defendants. Penn-Star Insurance Company, Counterclaimant, v. Hanover Insurance Company, Counterclaim Defendant. Penn-Star Insurance Company, Cross-Complainant, v. Weirfield Coal, Inc., Cross-Defendant. Penn-Star Insurance Company, Third-Party Plaintiff, v. Markel Insurance Company, et al., Third-Party Defendants. |
| Court | U.S. District Court — Eastern District of New York |
Joanna Lyn Young, Kennedy's CMK LLP, New York, NY, Daniel Pickett, Kennedys CMK LLP, Basking Ridge, NJ, for Plaintiff/Counterclaim Defendant.
Charles Bergin, Tressler LLP, New York, NY, for Third-Party Defendants Markel Insurance Company, Markel International Insurance Company Limited.
Annie Erin Causey, Woods Lonergan & Read PLLC, New York, NY, for Third-Party Defendant Poma Realty Co., Inc.
Brad Curtis Westlye, Brad Westlye, Attorney at Law, New York, NY, for Defendant/Counterclaimant/Cross-Complainant/Third-Party Plaintiff Penn-Star Insurance Company.
Annie Erin Causey, James F. Woods, Woods Lonergan & Read PLLC, New York, NY, for Defendant Weirfield Coal, Inc.
Steven Verveniotis, Miranda Sambursky Slone Sklarin Verveniotis LLP, Mineola, NY, for Defendant U.S. Underwriters Insurance Co.
Daniel John Woodard, Melissa Lea Stewart, Yitzchak M. Fogel, Phillips & Paolicelli, LLP, New York, NY, for Defendants Katherine Carbajal, Marvin Carbajal.
This declaratory judgment action stems from a complex insurance dispute among several different insurance carriers seeking to determine which insurance policy—if any—is operative for a state court personal injury action. On August 2, 2019, Hanover Insurance Company filed a complaint seeking a declaration that it has no obligation to indemnify or defend the underlying state court action. (ECF Nos. 2-3.) On September 11, 2019, Penn-Star Insurance Company ("Penn-Star") answered and filed a third-party complaint against other insurers not originally named in this action seeking a declaration that it has no obligation to indemnify or defend the underlying action. (ECF Nos. 20-21.) On January 6, 2020, one of the third-party defendants, Markel Insurance Company ("MIC"), moved to dismiss Penn-Star's third-party complaint, and Penn-Star opposed. (ECF Nos. 62-64.) For the reasons that follow, MIC's motion to dismiss is granted in its entirety.
On April 8, 2016, Katherine and Marvin Carbajal filed a personal injury action in Kings County Supreme Court, both individually and on behalf of their son, M.C., in connection with the family's alleged exposure to coal pollutants released by defendant Weirfield Coal's coal distribution business in Brooklyn (the "Carbajal Action"). See Carbajal v. Weirfield Coal, et al. , Ind. No. 505469/2016 (N.Y. Sup. Ct. 2016) (ECF No. 62-3). At the time, the Carbajals lived on the same street as Weirfield Coal's coal sale, storage and distribution facility. (ECF No. 62-3 ¶ 10.) In their complaint, they allege that Weirfield Coal and its management company, Poma Realty, exposed them to toxic fugitive coal dust, (id. ¶¶ 25-47), and that Ms. Carbajal was exposed to these pollutants during her pregnancy, which caused her son to develop a congenital heart defect and other serious medical conditions requiring ongoing treatment and care. (Id. ¶¶ 37-55.)
On August 12, 2016, Weirfield Coal filed a breach of contract action against one of its insurers, Penn-Star Insurance Company, in Pennsylvania state court. (ECF No. 21 ¶ 13.)1 In its complaint, Weirfield Coal alleged that Penn-Star owed a duty to defend and indemnify Weirfield Coal in the Carbajal Action. (Id. ) Pennsylvania's First Judicial Department issued an interim order ruling that Penn-Star owed a duty to defend Weirfield in the Carbajal Action. (Id. ¶¶ 13-15.)
After the Pennsylvania state court's decision, Penn-Star tendered coverage to Hanover Insurance Company for the Carbajal Action. (Id. ¶ 16.) On August 2, 2019, Hanover filed a declaratory judgment action in this Court seeking a declaration that it did not owe a duty to defend or indemnify the Carbajal Action.2 (ECF No. 2.) On September 11, 2019, Penn-Star filed a third-party complaint against other alleged insurers, including Markel Insurance Company ("MIC"), as "necessary and indispensable parties" under Rule 19 of the Federal Rules of Civil Procedure. (ECF No. 21 ¶ 17.)3 Penn-Star alleges that its policies are "not concurrent with the date of loss" and that other insurers, including MIC, are liable for some or all of Weirfield's costs in the Carbajal Action. (Id. ) Penn-Star seeks "a declaration finding that Markel Insurance is required to reimburse Penn-Star for its defense and/or indemnity costs that have been or may be incurred in the defense of the underlying tort action, along with a declaration of whose policy(ies) are primary in relation to the others." (Id. ¶ 30.) On January 6, 2020, MIC moved to dismiss Penn-Star's third-party complaint. (ECF No. 62.)
In 2017, MIC issued a pollution liability insurance policy to Weirfield Coal.4 The policy took effect on June 30, 2017, and covered occurrences between June 30, 2017 and June 30, 2018. (ECF No. 62-5.) MIC's policy covers "bodily injury" and "property damage" under the following conditions:
(ECF No. 62-5 at 36-37.) The policy also excludes coverage for "Known Circumstances and Non Disclosure," defined as:
"Bodily injury" or "property damage" arising from any "pollution condition" caused by "your work" which occurred prior to the inception date of this policy, if any "responsible insured" knew or could have reasonably foreseen that such "pollution condition" would give rise to a "claim" and did not disclose such to us.
(Id. at 37.)
To survive a motion to dismiss, a complaint must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Pleadings must be construed in the light most favorable to the non-moving party. Hayden v. Paterson , 594 F.3d 150, 160 (2d Cir. 2010).
A court reviewing a Rule 12(b)(6) motion to dismiss "is generally limited to the facts as presented within the four corners of the complaint, to documents attached to the complaint, or to documents incorporated within the complaint by reference." Williams v. Time Warner, Inc. , 440 F. App'x 7, 9 (2d Cir. 2011) (quoting Taylor v. Vt. Dep't of Educ. , 313 F.3d 768, 776 (2d Cir. 2002) ); see also Stinnett v. Delta Air Lines, Inc. , 278 F. Supp. 3d 599 (E.D.N.Y. 2017) () (citations and quotations omitted); McLennon v. City of New York , 171 F. Supp. 3d 69, 88 (E.D.N.Y. 2016) () (citation and quotations omitted).
When a party submits additional evidence in connection with a motion to dismiss, "a district court must either ‘exclude the additional material and decide the motion on the complaint alone’ or ‘convert the motion to one for summary judgment under Fed. R. Civ. P. 56 and afford all parties the opportunity to present supporting material.’ " Potente v. Citibank, N.A. , 282 F. Supp. 3d 538, 543 (E.D.N.Y. 2017) (citations omitted). Both parties include exhibits with their motion papers, but neither party requests that I convert this motion into a summary judgment motion. I therefore consider only exhibits that are integral to the complaint or incorporated in it by reference: (1) the Carbajals’ state court complaint and (2) MIC's policy with Weirfield Coal.6
MIC argues that the third-party complaint should be dismissed because its insurance agreement with Weirfield Coal took effect a year after the Carbajal Action was filed, and explicitly excludes coverage for both occurrences that happened before the policy period and occurrences known to the insured party before coverage took effect. Penn-Star opposes and argues that dismissal is premature because the scope of MIC's coverage cannot be determined as a matter of law.
A court resolving a dispute over insurance coverage must start with the language of the policy. See Parks Real Estate Purchasing Grp. v. St. Paul Fire & Marine Ins. Co. , 472...
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