Travelers Indem. Co. v. PR Mallory & Co.

• Decision Date: 30 July 2002
• Docket Number: No. 54A05-0111-CV-507.,54A05-0111-CV-507.
• Citation: 772 N.E.2d 479
• Parties: The TRAVELERS INDEMNITY COMPANY and Travelers Casualty and Surety Company, Appellants-Defendants, v. P.R. MALLORY & COMPANY, Appellees-Plaintiffs, v. American States Insurance Company, et al., Defendants.
• Court: Indiana Appellate Court

772 N.E.2d 479

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

No. 54A05-0111-CV-507.

Court of Appeals of Indiana.

July 30, 2002.

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

(Pro Hac Vice), Kraft Foods North America, Inc., Northfield, IL, Attorneys for Appellees.

OPINION

FRIEDLANDER, Judge.

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 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 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 when there is in place a provision governing the conduct and order of the case, as is in the CMO2, the standard practice must yield to the orders governing the particular case. What is standard practice is of no avail to AMICO and Allstate under the CMO2.

* * * * * *

The court finds that the filing of the Cook County, Illinois case duplicated the action filed in Montgomery County, Indiana in large part. The court further finds that to the extent the Cook County case duplicated the Montgomery County case, the filing of it violated the spirit, meaning, and intent and clear meaning of CMO2 paragraph III C. The filing of the Cook County case required plaintiffs to litigate the same issues in two courts causing them damages in terms of expenditure of attorneys' time, associated costs, and perhaps other damages. The pendency of the Cook County case constitutes a continuing immediate irreparable harm for which there is no adequate relief at law.

The court finds that AMICO and Allstate should immediately dismiss or withdraw the Cook County Illinois case as to all issues and all parties as are presently involved in the Montgomery County, Indiana case. The court further finds that AMICO and Allstate and all other parties to the Montgomery case should immediately cease any and all litigation in the Cook County case involving issues and parties that are presently involved in the Montgomery County case. The court further finds that the issues of sanctions against AMICO and Allstate for violation of the CMO2 and any damages plaintiffs reserved for further hearing and consideration.

IT IS THEREFORE ORDERED that AMICO and Allstate immediately dismiss or withdraw the Cook County, Illinois case as to all issues and all parties presently involved in the Montgomery County, Indiana case.

IT IS THEREFORE ORDERED that AMICO and Allstate and all other parties to the Montgomery County case immediately cease any and all litigation in the Cook County case involving issues and parties presently involved in the Montgomery County case.

Appellants' Appendix at 39-41.

1.

Kraft contends upon cross-appeal that Travelers Casualty lacks standing to appeal the ruling on the competing motions to dismiss and the request for injunctive relief, for two reasons. First, Travelers...