Travelers Indem. Co. v. PR Mallory & Co., 54A05-0111-CV-507.

Docket NºNo. 54A05-0111-CV-507.
Citation772 N.E.2d 479
Case DateJuly 30, 2002
CourtCourt of Appeals of Indiana

772 N.E.2d 479

The TRAVELERS INDEMNITY COMPANY and Travelers Casualty and Surety Company, Appellants-Defendants,
P.R. MALLORY & COMPANY, Appellees-Plaintiffs,
American States Insurance Company, et al., Defendants

No. 54A05-0111-CV-507.

Court of Appeals of Indiana.

July 30, 2002.

772 N.E.2d 480
Kenneth T. Roberts, Tasha R. Roberts, Roberts & Bishop, Indianapolis, IN, Attorneys for Appellants

John S. Capper, IV, Berry Capper & Tulley, Crawfordsville, IN, Thomas M. Giller

772 N.E.2d 481
(Pro Hac Vice), Kraft Foods North America, Inc., Northfield, IL, Attorneys for Appellees



The lawsuit underlying this appeal finds on one side Kraft Foods, Inc. and approximately thirty-five other companies (hereinafter collectively referred to as "Kraft" unless otherwise indicated) that Kraft Foods has acquired over the years. On the other side are more than seventy liability insurers, including the appellant in this action, Travelers Casualty and Surety Company (Travelers Casualty). As a result of various business operations conducted by Kraft and its co-plaintiffs, Kraft has been required to undertake costly environmental cleanup activities in numerous locations in several different states. Kraft sought indemnity and reimbursement for those cleanup activities from the aforementioned liability insurers. Disputes arose between insured and insurers, and Kraft filed suit in the Montgomery Circuit Court in Montgomery County, Indiana.

The specific matter before us comes by way of interlocutory appeal, and concerns an order issued by the Montgomery Circuit Court that is descriptively captioned, "Order Enjoining Allstate Insurance Company and American Motorists Insurance Company From Violating Case Management Order No. 2 (Injunction Order)." Appendix of Appellants the Travelers Indemnity Company and Travelers Casualty and Surety Company (hereinafter Appellants' Appendix) at 36. Although Travelers Casualty is the appellant in this action, we must first address two threshold issues presented by Kraft on cross-appeal. We restate those issues as follows:

1. Does Travelers Casualty have standing to appeal the Injunction Order?

2. Is the issue of the correctness of the Injunction Order moot?

Travelers Casualty presents the following restated issues for review:

3. Did the trial court err in enjoining the parties from proceeding on the Illinois lawsuit on the ground that such was proscribed by paragraph III(C) of the Second Case Management Order?

4. Does the trial court's ruling represent an anti-suit injunction, and if so, do the circumstances justify such a ruling?

5. Is the injunction overly broad?

We reverse and remand.

For purposes of this appeal, we need expand only a little on the preliminary facts set out in the opening paragraph of this opinion. Kraft filed suit in Montgomery Circuit Court on May 22, 2000 and then filed an amended complaint approximately three months later. Thereafter, the parties conferred and agreed to terms that would assist in the efficient management of the litigation. Those terms were reduced to writing and entered on January 24, 2001 by a court order that was styled "Second Case Management Order" (CMO2). Paragraph III(C) of CMO2 lies at the heart of instant dispute, and provides as follows:

All defendant insurers have asserted or take the position that each has the right to assert cross-claims against each other and against plaintiffs for contribution and indemnity. Plaintiffs assert the right to bring cross-claims in response. Accordingly, all such cross-claims by defendant insurers against each other and as against plaintiffs, and by plaintiffs in response thereto, are hereby further deemed to have been denied pursuant to a general denial, without the necessity of
772 N.E.2d 482
explicitly pleading such cross-claims and denials. Furthermore, having been pleaded and denied, such cross-claims are hereby stayed and all applicable limitations periods and other time bars are tolled until further order of the Court. Such cross-claims shall be adjudicated by the Court, to the extent necessary, by the parties holding such cross-claims, in a subsequent phase of this litigation.

Appellants' Appendix at 85.

On August 1, 2001, Allstate Insurance Company (Allstate) and American Motorists Insurance Company (AMICO) filed an action in the Circuit Court of Cook County, Illinois that raised virtually the same issues and involved the same parties as the Montgomery County, Indiana case. In essence, AMICO and Allstate asserted as affirmative causes of action in the Illinois case that which they had offered as affirmative defenses in the Indiana action. In addition, they asserted cross-claims in the Illinois action against all of the other insurer defendants. AMICO and Allstate do not dispute that the Illinois action was filed in anticipation of a motion to dismiss the Indiana action on forum non conveniens grounds. AMICO and Allstate did indeed file such a motion in the Montgomery Circuit Court in early August of 2001, asking that court to dismiss the Indiana action because the Illinois forum was more convenient. Shortly thereafter, Kraft filed a motion to enjoin Allstate and AMICO from what it alleged were violations of the CMO2. The "violations" identified by Kraft included the filing of the Illinois lawsuit. Allstate and AMICO opposed Kraft's request for an injunction, but no other defendant joined in opposing the motion. On August 21, 2001, Kraft filed a motion in opposition to Allstate and AMICO's motion to dismiss on forum non conveniens grounds.

On October 24, 2001, the Montgomery Circuit Court issued its ruling on the competing motions to dismiss and Kraft's request for injunctive relief. It is from that order that the instant appeal arises. The following portions of that order are germane to this appeal:

The court finds that the plain language of the CMO2 contemplates that all the issues between all the parties to the Montgomery County case raised by the Montgomery County complaint, including all cross-claims and counterclaims, be litigated and determined in the Montgomery County court. The common sense notions of economical and efficient use of human and material resources support such an interpretation. The Montgomery County case was filed more than a year before the Cook County case was filed.
The Cook County case clearly seeks relief against the plaintiffs in the Montgomery County case. The plaintiffs clearly have standing to ask this court to enjoin the defendants in the Montgomery County case from proceeding with litigation of the same issues in another court. The immediate and direct injury suffered by plaintiffs is the necessity of defending and prosecuting actions, which involve the identical issues and parties, in two separate and disparate forums. There is no adequate relief to the injury and damages plaintiffs suffer as a result of the filing of the second and duplicitous action at law and equity offers the most direct and effective relief.

AMICO and Allstate's contention that the CMO2 contemplates an alternative forum by the phasing and staging discovery, forum and venue issues is not an accurate interpretation of the CMO2. The issue is whether Montgomery Count is the proper venue and forum for this action. Whether there is an alternative forum is a secondary issue. Even if the

772 N.E.2d 483
CMO2 could be read as contemplating an alternative forum, whether that forum should be utilized cannot be determined, or anticipated, until the issue is decided, given the plain meaning of the language of paragraph III C of the CMO2
Next AMICO and Allstate contend that filing a competing action is standard practice when the original venue is contested. That may well be. But

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