Psc Indus. Outsourcing v. the Burlington Ins. Co.
| Decision Date | 10 May 2011 |
| Docket Number | Civ. No. 11-00073 ACK-BMK,Civ. No. 11-00014 ACK-BMK,Civ. No. 10-00751 ACK-BMK |
| Parties | PSC Industrial Outsourcing, LP, Plaintiff, v. THE BURLINGTON INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — District of Hawaii |
Before the Court are objections from Defendant The Burlington Insurance Company ("Burlington") to the Magistrate Judge's Findings and Recommendation That Plaintiff's Motions to Remand Be Granted ("Findings and Recommendation"). The Court hereby adopts the Findings and Recommendation and remands these three actions to state court.
These three removed declaratory judgment actions stem from an industrial explosion at a used-oil recycling plant inKapolei, Hawai'i, operated by PSC Industrial Outsourcing, L.P. ("PSC"). On May 30, 2008, PSC entered into a contract agreement ("5/30/08 Contract") with a contractor, identified as "Pan Co," to perform work at the plant. Macario C. Panajon, as President, signed the 5/30/08 Contract on behalf of the contractor. Under this contract, Pan Co promised that it carried insurance and would include PSC as an additional insured.2 It also agreed to defend, indemnify, and hold harmless PSC and its agents and employees from and against any and all claims and damages arising out of the contract work.
On October 7, 2008, Sean Miguel Norva ("Sean Norva"), an employee of Pan Co or Panacorp, Inc., 3 was welding at the Kapolei plant when a nearby oil tank exploded. Joel Rehmer ("Rehmer"), a PSC operations manager, was also working at the plant that day. The explosion killed Sean Norva, injured David Kahookele, and caused damage to the plant and to Bomat, Ltd., d.b.a. Bonded Materials Company ("Bomat"), a concrete production facility nearby. On October 31, 2008, PSC notified "PanCo," attention "Mr. Mario Panajon," of claims arising from the explosion, asked for indemnification, and requested thatappropriate insurers be notified. At the time of the explosion, "Macario C. Panajon dba: Panco" was listed as a Named Insured under a commercial general liability policy ("Policy") issued by Burlington.
On December 10, 2009, Burlington informed PSC that it had no duty to defend or indemnify PSC under the Policy because the 5/30/08 Contract As described below, PSC has been sued in three separate state court actions.4
On November 9, 2009, Kahookele filed a personal injury action in the Circuit Court of the First Circuit, State of Hawai'i, against PSC and Panacorp, asserting claims of negligence and strict liability. Kahookele v. Panacorp, Inc., et al., Civ. No. 09-1-2616-11 RAN ("Kahookele"). PSC then asserted cross-claims against Panacorp and third-party claims against Panajonfor negligence, breach of contract, misrepresentation, indemnity, and contribution and equitable subrogation. In response, Panacorp cross-claimed and Panajon counterclaimed against PSC for negligence and indemnification.
On April 1, 2010, PSC filed third-party claims against Kimberly Anne Norva, Personal Representative of the Estate of Sean Miguel Norva (deceased) ("Norva's Estate") for negligence, implied indemnity, contribution, and equitable subrogation. PSC also asserted a third-party claim against Burlington, which sought a declaration that PSC is covered under the Policy.5 Burlington subsequently moved to sever PSC's third-party claim against Burlington, and the Kahookele court orally granted this motion at a November 10, 2010 hearing. The court entered a written order granting Burlington's motion to sever on December
8, 2010.
On December 16, 2010, Burlington filed a Notice of Removal in this Court, removing PSC's severed declaratory claim. PSC Industrial Outsourcing, LP v. The Burlington Insurance Company, Civ. No. 10-00751 ACK-BMK ("PSC I"). On January 14, 2011, PSC filed a Motion to Remand. Burlington filed a memorandum in opposition on February 3, 2011, and PSC filed a reply on February 10, 2011.
On September 24, 2009, Norva's Estate and survivors filed a personal injury action in the Circuit Court of the First Circuit, State of Hawai'i, against PSC and Rehmer. Norva, et al. v. PSC Industrial Outsourcing, LP, et al., Civ. No. 09-1-2157-09 PWB ("Norva"). PSC and Rehmer counterclaimed against Norva's Estate for negligence, indemnity, contribution, and reimbursement, and also asserted third-party claims against Panajon and Panacorp for negligence, breach of contract, misrepresentation, indemnity, contribution, and reimbursement. PSC also asserted third-party claims against Burlington, which sought, inter alia, a declaration that PSC is covered under the Policy.6
On November 29, 2010, the Norva court dismissed PSC's third-party complaint against Burlington without prejudice to PSC's asserting such claims against Burlington in a separate lawsuit. Consequently, on December 21, 2010, PSC filed a complaint against Burlington in the Circuit Court of the First Circuit, State of Hawai'i, for a declaration that PSC is covered under the Policy. PSC Industrial Outsourcing, LP v. Burlington Insurance Co., Civ. No. 10-1-2712-12 VLC.
On January 6, 2011, Burlington filed a Notice of Removal in this Court, removing PSC's re-filed declaratory claim against Burlington. PSC Industrial Outsourcing, LP v. The Burlington Insurance Company, Civ. No. 11-00014 ACK-BMK ("PSC II"). On February 3, 2011, PSC filed a Motion to Remand. Burlington filed a memorandum in opposition on February 14, 2011, and PSC filed a reply on February 18, 2011.
On September 30, 2010, Bomat and Great American Insurance Company filed a negligence, strict liability, and nuisance action in the Circuit Court of the First Circuit, State of Hawai'i, against PSC d.b.a Phillips Services Hawaii, PSC Industrial Services, and Panacorp. Bomat, Ltd. v. PSC Industrial Outsourcing, LP, et al., Civ. No. 10-1-2090-09 RAT ("Bomat"). PSC asserted cross-claims against Panacorp and third-party claims against Panajon for negligence, breach of contract, misrepresentation, implied indemnity, and contribution and equitable subrogation. In response, Panacorp cross-claimed and Panajon counterclaimed against PSC for negligence and indemnification. PSC also filed third-party claims against Norva's Estate for negligence, indemnity, contribution, and equitable subrogation. Lastly, PSC filed a third-party claim against Burlington, which sought a declaration that PSC is covered under the Policy.7
Burlington subsequently moved to sever PSC's third-party claim against Burlington, and the Bomat court orally granted this motion at a January 18, 2011 hearing. It appears that the court has yet to enter a written order granting Burlington's motion to sever.
On January 31, 2011, Burlington filed a Notice of Removal in this Court, removing PSC's severed declaratory claim. PSC Industrial Outsourcing, LP v. The Burlington Insurance Company, et al., Civ. No. 11-00073 ACK-BMK ("PSC III"). On February 7, 201 1, PSC filed a Motion to Remand. Burlington filed a memorandum in opposition on February 14, 2011, and PSC filed a reply on February 18, 2011.
Magistrate Judge Kurren held a hearing on PSC's motions to remand on February 24, 2011, and issued a Findings and Recommendation to grant these motions on March 18, 2011. The Findings and Recommendation found that Burlington's Notice of Removal in PSC I was "untimely under 28 U.S.C. § 1446(b), which requires a notice of removal [to] be filed within thirty days from when it can first be ascertained that a case is removable." Findings and Recommendation at 3. It then found, "[i]n addition and subsequent to the timeliness issue addressed [with respect to PSC I], that the factors under the Declaratory Judgment Act weigh in favor of remanding all three actions [i.e., PSC I, PSC II and PSC III] to state court." Id. Burlington filed objections to the Findings and Recommendation on April 1, 2011 ("Objection"), and PSC filed responses to Burlington's objections on April 15, 2011.8
This Court treats a motion to remand as a dispositive motion, requiring the issuance of a findings and recommendation by the magistrate judge. See Keown v. Tudor Ins. Co., 621 F.Supp. 2d 1025, 1029 (D. Haw. 2008); Sylvester v. Menu Foods, Inc., Civ. No. 07-00409 ACK-KSC, 2007 WL 4291024, at *2 (D. Haw. Dec. 5, 2007). A district court reviews de novo those portions of a magistrate judge's findings and recommendation to which an objection is made and may accept, reject, or modify, in whole or in part, the findings and recommendation made by the magistrate judge. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b); D. Haw. Local Rule 74.2. The district court may accept those portions of the findings and recommendation that are not objected to if it is satisfied that there is no clear error on the face of the record. Stow v. Murashige, 288 F. Supp. 2d 1122, 1127 (D. Haw. 2003). The district court may receive further evidence or recommit the matter to the magistrate judge with instructions. 28 U.S.C. § 636(b)(1). It may also consider the record developed before the magistrate judge. D. Haw. Local Rule 74.2. The district court must arrive at its own independent conclusions about those portions of the magistrate judge's report to which objections are made, but a de novo hearing is not required. United States v. Remsing, 874 F.2d 614, 618 (9th Cir. 1989).
The Court finds that a hearing in this matter is neither necessary nor appropriate. See D. Haw. Local Rule 7.2(d).
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