Mutual Service Ins. Co. v. Frit Industries, Inc., No. 00-15856.
| Decision Date | 06 February 2004 |
| Docket Number | No. 00-15856. |
| Citation | 358 F.3d 1312 |
| Parties | MUTUAL SERVICE INSURANCE COMPANY, Plaintiff-Counter-Defendant, Mutual Service Casualty Insurance Company, Plaintiff-Counter-Defendant-Appellee-Cross-Appellee-Cross-Appellant, v. FRIT INDUSTRIES, INC., Defendant-Counter-Claimant-Cross-Claimant-Appellee, First State Insurance Company, Employers Insurance of Wausau, Defendants-Cross-Claimants-Cross-Appellants, Inter-Industry Insurance Company, Ltd., Insurco International, Ltd., Agrichem Insurance Company, Ltd., Defendants-Cross-Defendants-Appellants-Cross-Appellees. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Robert Joseph Filteau, Filteau, Sullivan & O'Rourke, P.C., Houston, TX, Scott A. Lazar, Barrett, Lazar & Lincoln, LLC, Maywood, NJ, for Defendants.
Clyde C. Owen, Jr., Ball, Ball, Matthews & Novak, P.A., Roger S. Morrow, Morrow, Romine & Pearson, P.C., Montgomery, AL, Jonathan A. Berkelhammer, Allison O. Lanningham, Smith Moore LLP, Greensboro, NC, E. Spencer Parris, Michaels & Jones, Raleigh, NC, for Plaintiffs.
Appeals from the United States District Court for the Middle District of Alabama.
Before EDMONDSON, Chief Judge, and KRAVITCH and JOHN R. GIBSON*, Circuit Judges.
Inter-Industry Insurance Company, Insurco International, and Agrichem Insurance Company appeal from the district court's denial of their motion to dismiss for lack of personal jurisdiction, from the district court's declaration that they have a duty to defend their insured, Frit Industries in product liability suits filed against Frit in North Carolina state courts, and from the ruling that they waived their objection to a request for attorneys' fees. Inter-Industry appeals from the district court's issuance of a permanent injunction against litigation initiated by Inter-Industry in the Isle of Man. Mutual Service Casualty Insurance Company appeals the district court's partial denial of prejudgment interest. Frit Industries cross-appeals the district court's denial of attorneys' fees. We affirm the district court's denial of the motion to dismiss for lack of personal jurisdiction, its grant of summary judgment to Frit Industries on the duty to defend issue, and its issuance of the permanent injunction. We reverse and remand for consideration of whether Frit is entitled to attorneys' fees based on the offshore insurers' failure to admit they had a duty to defend, for a determination of the reasonableness of Mutual Service's attorneys' fees, and for an additional award of prejudgment interest to Mutual Service.
This case involves an insurance dispute that remained in the district court for nearly ten years and that included a prior interlocutory appeal to this court. Frit Industries is an Alabama corporation that manufactures micronutrients for fertilizers. In 1990, three product liability actions were filed against Frit in North Carolina state court, alleging that exposure to a certain herbicide in Frit's micronutrient mix caused the plaintiffs' cancer. Those lawsuits were removed to federal court, and Frit was ultimately granted summary judgment in all cases, which the Fourth Circuit recently affirmed. Marsh v. W.R. Grace & Co., 80 Fed.Appx. 883 (4th Cir. 2003) (unpublished).
The exposure periods of the North Carolina plaintiffs to the alleged carcinogen in Frit's product ranged from 1984 to at least 1988. Over these years, Frit had numerous insurance policies providing both primary and umbrella coverage. First State Insurance Company provided insurance from April 30, 1983, to April 30, 1986. Employers Insurance of Wausau provided insurance from May 1, 1984, to May 1, 1986. Agrichem Insurance Company, Ltd.1 provided insurance from April 30, 1984, to June 1, 1987. Inter-Industry Insurance Company, Ltd. provided insurance from June 1, 1987 and continued to provide it at the commencement of this lawsuit. Mutual Service Casualty Insurance Company provided insurance from April 30, 1988, to April 30, 1992. Frit gave notice of the product liability lawsuits to all of these insurers and requested that they protect Frit's interests. After receiving notice of the lawsuits, Wausau acknowledged its duty to provide coverage for and defend Frit. Insurco, Agrichem and Inter-Industry ("the offshore insurers")2 initially contacted counsel to defend Frit, but subsequently withdrew and denied that they had any duty to defend Frit. First State and Mutual Service defended Frit under a reservation of rights.
On March 5, 1992, Mutual Service3 brought this declaratory judgment action in the Middle District of Alabama against Frit, Insurco, Agrichem, Inter-Industry, First State, and Wausau, seeking a determination of each insurer's duties under their respective policies in the product liability actions. Frit filed counter-claims against Mutual Service and cross-claims against the offshore insurers. First State and Wausau (who were defending Frit in the product liability lawsuits along with Mutual Service) filed cross-claims against the offshore insurers.
The parties filed numerous motions, but we will refer only to those relevant to this appeal. The offshore insurers made an initial motion to dismiss based on lack of personal jurisdiction, which the district court denied. Both Frit and the offshore insurers moved for summary judgment. In April, 1993, the district court granted Frit's motion and denied the offshore insurers' motion, finding that under Alabama law the offshore insurers had a duty to defend Frit in the product liability lawsuits. However, the district court did not include in its order a ruling on Mutual Service's initial claim for reimbursement of defense costs already incurred in the product liability actions.
Mutual Service and Frit each moved in May, 1993 to alter or amend the judgment under Federal Rule of Civil Procedure 59(e). Mutual Service sought pro rata reimbursement of the amount it had spent defending Frit in the product liability actions and a declaration that all of the insurers would proportionally share in the ongoing costs of defending Frit. To protect their right to enforce the district court's judgment, both Mutual Service and Frit sought a permanent injunction against litigation Inter-Industry had initiated in the Isle of Man.4
The district court did not rule on these motions until 1998. It granted Frit's motion to extend and make permanent the relief by enjoining Inter-Industry from seeking adjudication in the Isle of Man of the district court's ability to rule or to seek a substantive ruling on the duty to defend issue. The district court also granted Mutual Service's request for allocation of defense costs among the insurers, but directed the parties to provide additional information with respect to the amount owed to Mutual Service. Frit requested attorneys' fees under Federal Rule of Civil Procedure 37, which the district court denied.
The parties raise a number of issues on appeal. The offshore insurers appeal the district court's denial of their motion to dismiss for lack of personal jurisdiction, the grant of summary judgment to Frit, the issuance of the permanent injunction against the Isle of Man litigation, and the ruling that they waived their objection to Mutual Service's request for attorneys' fees. Mutual Service appeals the partial denial of its request for prejudgment interest. Frit appeals the denial of its request for attorneys' fees. We address each claim in turn.
The offshore insurers first argue that the district court lacked personal jurisdiction over them. We review the denial of a motion to dismiss for lack of personal jurisdiction de novo. Cable/Home Communication Corp. v. Network Prods., Inc., 902 F.2d 829, 855 (11th Cir.1990).
An analysis of whether personal jurisdiction exists requires a two-step inquiry. First, we determine whether the exercise of jurisdiction is appropriate under the forum state's long-arm statute. Sculptchair, Inc. v. Century Arts, Ltd., 94 F.3d 623, 626 (11th Cir.1996). Second, we examine whether the exercise of personal jurisdiction over the defendant would violate the Due Process Clause of the Fourteenth Amendment to the United States Constitution, which requires that the defendant have minimum contacts with the forum state and that the exercise of jurisdiction over the defendant does not offend "traditional notions of fair play and substantial justice." Id. (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)).5
Alabama's long-arm statute authorizes Alabama courts to assert jurisdiction to the fullest extent constitutionally permissible. See Ala. R. Civ. P. 4.2(a)(2); Sieber v. Campbell, 810 So.2d 641, 644 (Ala.2001). Thus, as the offshore insurers concede, the sole contested issue in our personal jurisdiction analysis is whether Alabama's exercise of jurisdiction over the offshore insurers violates due process.
The offshore insurers argue that they have insufficient contacts with Alabama to justify Alabama's assertion of personal jurisdiction over them. They rely on affidavits of the companies' secretaries who assert that each is a foreign corporation with its principal place of business in the Cayman Islands or the Isle of Man, and that neither has conducted business in Alabama.
The district court, however, relied upon the affidavit of Carl E. Schauble, Executive Vice-President of Frit, to find jurisdiction over Insurco, Agrichem and Inter-Industry. Schauble listed each of the liability policies the offshore insurers issued to Frit in Alabama with the dates of coverage, and he asserted that Frit had paid in aggregate over $1,100,000 in insurance premiums to the offshore insurers from Alabama.6
Sufficient minimum contacts exist to justify Alabama's exercise of jurisdiction. As we have previously noted, ...
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