Starr Indemnity & Liability Co. v. AGCS Marine Insurance Co.
| Decision Date | 14 July 2021 |
| Docket Number | 20 Civ. 5321 (KPF) |
| Parties | STARR INDEMNITY & LIABILITY COMPANY, Plaintiff, v. AGCS MARINE INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Southern District of New York |
Plaintiff Starr Indemnity & Liability Company (“Starr” or “Plaintiff”) and Defendant AGCS Marine Insurance Company (“AMIC” or “Defendant”), both insurers of non-party assured R.E. Staite Engineering, Inc. (“R.E. Staite”) dispute which of them is liable for the costs of defending R.E. Staite in a personal injury lawsuit filed in state court in California (the “California matter”). Starr defended R.E. Staite in the California matter until it was discontinued in June 2019; AMIC did not participate. Starr now seeks reimbursement from AMIC for $164, 053.77 in costs Starr incurred in the defense effort. AMIC has moved to dismiss Starr's Second Amended Complaint (the “SAC”), which is the operative pleading in this matter, pursuant to Federal Rule of Civil Procedure 12(b)(6) on the basis that the relevant insurance contracts did not impose upon AMIC a duty to defend R.E. Staite in the California matter and do not now entitle Starr to reimbursement of its incurred defense costs. For the reasons set forth in this Opinion, the Court denies AMIC's motion.
BACKGROUND[1]
Starr is a Texas company with its principal place of business in New York, New York. (SAC ¶ 1). At all relevant times, Starr was the assurer on R.E. Staite's Commercial Marine Liability Policy (the “CML Policy”). (Id. at ¶ 2).[2]AMIC is an Illinois corporation registered to do business in, among other places, California and New York, per the records of the California Department of Insurance and the New York State Department of Financial Services.[3] At all relevant times, AMIC was the lead assurer on R.E. Staite's Protection and Indemnity Policy (the “P&I Policy”). (Id. at ¶ 4). The other assurers on the P&I Policy were Starr and Zurich American Insurance Co. (Id. at ¶ 5). R.E. Staite is a California corporation with a business address in San Diego, California. (Lerma Compl. ¶ 3; see also CML Policy 2; P&I Policy 1).
On or about December 3, 2018, non-party Daniel A. Lerma filed an amended complaint against R.E. Staite in the Superior Court of the State of California for the County of San Diego, which complaint alleges that while standing on a barge in navigable waters in San Diego Harbor on December 23, 2015, Mr. Lerma was severely injured as a result of the negligent operation of a shoreside crane by employees of R.E. Staite. (Lerma Compl. ¶ 1). The barge on which Mr. Lerma stood was also owned by R.E. Staite. (SAC ¶ 13). At all times relevant, R.E. Staite was covered by the CML Policy and the P&I Policy. (Id. at ¶¶ 13, 15).
Starr was notified of the claim by brokers requesting coverage for the alleged incident under the CML Policy. (SAC ¶ 17). On May 13, 2019, Starr's Assistant Vice President & Regional Manager of Marine Claims was made aware that R.E. Staite was also insured under the P&I Policy, and concluded that coverage for defense costs existed under the P&I Policy. (Id. at ¶ 18). On May 14, 2019, Starr advised the broker that the claim should have been opened under the P&I Policy instead of the CML Policy, and, further, that it should have been handled by AMIC instead of Starr. (Id.). Upon being notified of the claim by the broker, AMIC rejected the tender of defense on behalf of R.E. Staite. (Id.).
Starr proceeded to defend R.E. Staite in the California matter, which matter was discontinued on June 27, 2019. (SAC ¶ 19). In total, Starr paid $164, 053.77 defending R.E. Staite. (Id. at ¶ 21). Starr reserved its rights to seek recovery from AMIC for legal fees that it accrued in its defense of R.E. Staite. (Id. at ¶ 20).
Starr filed the original complaint in this matter on July 10, 2020 (Dkt. #1), and an amended complaint on July 30, 2020 (Dkt. #9). On October 6, 2020, AMIC filed a pre-motion letter concerning its anticipated motion to dismiss the amended complaint (Dkt. #17), to which letter Starr responded on October 13, 2020 (Dkt. #22). The Court held the initial pretrial conference on October 14, 2020, during which conference the Court set a schedule for Starr to further amend its complaint and for briefing of AMIC's motion to dismiss. (Minute Entry for October 14, 2020). On October 23, 2020, Starr filed the SAC. (Dkt. #24). In accordance with a modified briefing schedule approved by the Court (see Dkt. #26), AMIC filed its motion to dismiss and supporting papers on November 27, 2020 (Dkt. #27-29); Starr filed its memorandum in opposition on December 30, 2020 (Dkt. #30); and AMIC filed its reply memorandum and declaration on January 8, 2021 (Dkt. #31-32). AMIC's motion is now fully briefed and ripe for resolution.
DISCUSSION[4]
AMIC moves for dismissal of the SAC under Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted. (Def. Br. 1). To survive a motion to dismiss pursuant to Rule 12(b)(6), a plaintiff must plead sufficient factual allegations “to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (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 (2009). In determining the viability of Plaintiff's claims, the Court must accept as true all well-pleaded factual allegations in the complaint. Id. at 678. Additionally, the Court may consider not only the complaint itself, but also any written instrument attached to the complaint as an exhibit, any statements or documents incorporated by reference in the complaint, and documents that are “integral” to the complaint even if they are not incorporated by reference. See Chambers v. Time Warner, Inc., 282 F.3d 147, 152-53 (2d Cir. 2002); see generally Goel v. Bunge, Ltd., 820 F.3d 554, 559 (2d Cir. 2016) ().
Maritime contracts, including the CML Policy and the P&I Policy at issue in this case, are governed by general federal maritime law. See Wilburn Boat Co. v. Fireman's Ins. Co., 348 U.S. 310, 313 (1955). However, “[i]n the field of maritime contracts … the National Government has left much regulatory power in the States.” Id. Because there is “no specific federal rule governing construction of maritime insurance contracts, ” Com. Union Ins. Co. v. Flagship Marine Servs., Inc., 190 F.3d 26, 30 (2d Cir. 1999), “federal courts look to state law for principles governing maritime insurance policies, and apply federal maritime choice of law rules to determine which state's law to apply, ” Id. (internal citations omitted) (citing Wilburn Boat, 348 U.S. at 319-21; Advani Enters., Inc. v. Underwriters at Lloyds, 140 F.3d 157, 162 (2d Cir. 1998); Sundance Cruises Corp. v. Am. Bureau of Shipping, 7 F.3d 1077, 1080 (2d Cir. 1993)).
In Lauritzen v. Larsen, 345 U.S. 571 (1953), the Supreme Court directed that in order to determine which state law applies to a maritime insurance policy, courts must “ascertain[] and valu[e] points of contact between the transaction [giving rise to the cause of action] and the states or governments whose competing laws are involved.” Id. at 582. These points of contacts include “[i] any choice-of-law provision contained in the contract; [ii] the place where the contract was negotiated, issued, and signed; [iii] the place of performance; [iv] the location of the subject matter of the contract; and [v] the domicile, residence, nationality, place of incorporation, and place of business of the parties.” Advani Enters., 140 F.3d at 162. See also State Trading Corp. of India, Ltd. v. Assuranceforeningen Skuld, 921 F.2d 409, 417 (2d Cir. 1990) ().
Because this dispute implicates the parties' respective duties under the CML Policy and the P&I Policy, the Court considers these points of contact with respect to both contracts. With respect to the CML Policy, to which Starr and R.E. Staite are parties: (i) the contract does not contain a choice-of-law provision (see generally CML Policy); (ii) the contract was signed in San Francisco, California (id. at 1); (iii) notice of covered occurrences is to be sent to entities located in California (id. at 24); (iv) the location of the subject matter of the contract is San Diego, California (id. at 3, 34); and (v) Starr is a Texas corporation with its principal place of business in New York, New York (SAC ¶ 1), and R.E. Staite is a California corporation with a business address in San Diego, California (Lerma Compl. ¶ 3). With respect to the P&I Policy, to which R.E. Staite, AMIC, Starr, and non-party Zurich American Insurance Co. are parties: (i) the contract does not contain a choice-of-law provision (see generally P&I Policy); (ii) the contract issued from Seattle, Washington (P&I Policy, Dkt. #24-1 at 3); (iii) the place of performance in this case is California, where the California matter was litigated (see generally Lerma Compl.); (iv) the geographic scope of coverage under the P&I Policy is unclear (see generally P&I Policy) but indisputably includes San Diego, where the subject accident occurred; and (v) AMIC is an Illinois corporation registered to do business in both California and New York.
Although these...
To continue reading
Request your trial