Tucker v. Am. Int'l Group Inc.

• Decision Date: 08 October 2010
• Docket Number: Array
• Citation: 745 F.Supp.2d 53
• Court: U.S. District Court — District of Connecticut
• Parties: Teri TUCKER, Plaintiff,v.AMERICAN INTERNATIONAL GROUP, INC.; National Union Fire Insurance Company of Pittsburgh, PA., A Subsidiary of American International Group, Inc., Defendants.No. 3:09–CV–1499 (CSH).

745 F.Supp.2d 53

Teri TUCKER, Plaintiff,

v.AMERICAN INTERNATIONAL GROUP, INC.; National Union Fire Insurance Company of Pittsburgh, PA., A Subsidiary of American International Group, Inc., Defendants.No. 3:09–CV–1499 (CSH).

Sept. 30

2010.

United States District Court, D. Connecticut.

Jeffrey S. Bagnell, Scott R. Lucas, Lucas Bagnell LLC, Westport, CT, for Plaintiff.Dennis O. Brown, Julia K. Ulrich, Edwards Angell Palmer & Dodge, Hartford, CT, John D. Hughes, Edwards Angell Palmer & Dodge LLP, Boston, MA, for Defendants.

MEMORANDUM AND ORDER

HAIGHT, Senior District Judge:

Plaintiff Teri Tucker (“Plaintiff” or “Tucker”) brings this action to recover damages from her former employer's insurers, American International Group, Inc. (“AIG”) and National Union Fire Insurance Company of Pittsburgh, PA (“National Union”) (collectively “Defendants”), arising from her unlawful discharge in 2003. In this action, she seeks to collect from the defendant insurers the $4 million judgment rendered in her favor in Tucker v. Journal Register East, Doc. # 3:06–CV–307 (SRU) (herein “Tucker I”), the prior action against her employer, Journal Register East.

Pending before the Court is Defendants' Motion to Dismiss the action pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Doc. # 18. Defendants request this Court to dismiss Plaintiff's Complaint on the grounds that each count falls outside the Court's subject matter jurisdiction and/or fails to state a claim upon which relief may be granted. See Fed.R.Civ.P. 12(b)(1) and 12(b)(6).¹ Defendants base their motion on three separate arguments.

First, Defendants contend that Plaintiff lacks standing to bring her action against them as insurers under Connecticut's Direct Action Statute, Conn. Gen.Stat. § 38a–321, because she has not obtained a “final judgment” against the insured, as required by the terms of that statute. Second, Defendants argue that Plaintiff's action fails to state a valid claim against them because that action is outside the scope of Bankruptcy Judge Allan L. Gropper's ruling when he granted a modification of the bankruptcy stay. See In Re Journal Register Co., et al., No. 09–10769(ALG), Memorandum of Judge Allan L. Gropper (June 22, 2009). Third, Defendants contend that the Complaint should be dismissed against AIG because AIG is not a proper party to the action. Specifically, Defendants assert that AIG is not a party to the employment practices liability insurance policy (“EPL Policy”) at issue, and Plaintiff has failed to set forth sufficient factual allegations to justify the piercing of AIG's corporate veil as the parent company of National Union. I address these arguments in turn.

I. FACTS

The Court previously set forth a detailed recitation of the facts of this case in its Order dated August 4, 2010, 728 F.Supp.2d 114, 2010 WL 3058687, denying Defendants' Motion to Transfer this case to Judge Stefan R. Underhill in the Bridgeport Division of this District, [Doc. # 39], familiarity with which is assumed. However, additional facts must be noted for the purposes of this motion.

Since the Court's ruling of August 4, 2010, denying transfer of this case, Plaintiff and Journal Register East have moved to reopen the Judgment in Tucker I, the underlying action of Teri Tucker v. Journal Register East, Doc. # 3:06–CV–307 (SRU). To that end, they filed a Joint Motion to Reopen Case and Enter Judgment in Accordance with Stipulation on August 30, 2010. Tucker I, Doc. # 130. The motion states that the parties, Tucker, Journal Register East, Plaintiff's former employer,² and its parent company, Journal Register Company, have “reached an agreement resolving the Proof of Claim, the Debtors' objections thereto and Tucker's right to receive a distribution” pursuant to the reorganization Plan confirmed in the bankruptcy proceeding of debtor Journal Register Company and its affiliate debtor companies, including Journal Register East. Id., p. 5, ¶ 20; see also In re Journal Register Co., et al., No. 09–10769(ALG).

The Stipulation states that the debtors, including Journal Register East, waive any protections afforded by the bankruptcy proceedings ( i.e., the automatic stay and/or discharge injunction arising under the confirmed reorganization plan). Tucker I, Doc. # 130–1, p. 5, ¶ 2. Furthermore, the parties stipulate and request the Court's approval of a “Reduced Judgment,” a reduction and entry of the judgment in favor of Tucker against the Journal Register East in the amount of $1 million in compensatory damages and $2 million in punitive damages.³ Id., p. 6, ¶ 3. In addition, the Stipulation provides that the parties' post-trial motions “shall be deemed denied with prejudice.” Id., p. 6, ¶ 4(a)-(b).⁴

The Stipulation further states that the Journal Register Company and its subsidiaries “irrevocably assign and transfer to Tucker, ... any and all of their claims and rights pursuant to and under the EPL Policy.” Id., p. 7, ¶ 7. Moreover, the Stipulation is declared “a public document and may be used by Tucker in the Coverage Action [Tucker II] and any related actions or attempts to obtain coverage and/or payment of the Judgment from National Union and any third party.” Id., p. 8, ¶ 9. In this Stipulation, Journal Register East thus waives its right to protection under the permanent discharge injunction to resolve Tucker's claim; and Tucker sets forth her intention to present evidence of the extent of damages she is owed in the present action through the Stipulation and Reduced Judgment.

II. STANDARD OF REVIEWA. Rule 12(b)(1)—Lack of Subject Matter Jurisdiction

Under Fed.R.Civ.P. 12(b)(1), “[a] case is properly dismissed for lack of subject matter jurisdiction ... when the district court lacks the statutory or constitutional power to adjudicate it.” Makarova v. United States, 201 F.3d 110, 113 (2d Cir.2000); accord Nowak v. Ironworkers Local 6 Pension Fund, 81 F.3d 1182, 1187 (2d Cir.1996). It is generally the plaintiff's burden to prove by a preponderance of the evidence that subject matter jurisdiction exists. Makarova, 201 F.3d at 113; Aurecchione v. Schoolman Transp. System, Inc., 426 F.3d 635, 638 (2d Cir.2005). When subject matter jurisdiction is challenged under Rule 12(b)(1), both “the movant and the pleader may use affidavits and other pleading materials to support and oppose such motions,” without converting the motion to one for summary judgment. Golnik v. Amato, 299 F.Supp.2d 8, 13 (D.Conn.2003) (internal citations omitted); accord Makarova, 201 F.3d at 113 (“under Rule 12(b)(1), a district court ... may refer to evidence outside the pleadings”).

B. Rule 12(b)(6)—Failure to State A Claim

The standards for dismissal under Fed.R.Civ.P. 12(b)(1) and 12(b)(6) are “substantively identical.” Kroposki v. F.A.A., No. 3:08CV01519 (AWT), 2009 WL 2710223, at *1 (D.Conn. Aug. 26, 2009) (citing Lerner v. Fleet Bank, N.A., 318 F.3d 113, 128 (2d Cir.2003) and Moore v. PaineWebber, Inc., 189 F.3d 165, 169 n. 3 (2d Cir.1999)). On a motion to dismiss pursuant to Rule 12(b)(6), the court accepts all well-pleaded allegations in the complaint as true, drawing all reasonable inferences in the plaintiff's favor. In order to survive a motion to dismiss, a complaint must allege a plausible set of facts “sufficient to raise a right to relief above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); accord Ashcroft v. Iqbal, ––– U.S. ––––, 129 S.Ct. 1937, 1949–50, 173 L.Ed.2d 868 (2009). See also Operating Local 649 Annuity Trust Fund v. Smith Barney Fund Management LLC, 595 F.3d 86, 91 (2d Cir.2010).

The factual allegations necessary to survive a motion to dismiss must consist of more than “labels and conclusions” or “a formulaic recitation of the elements of a cause of action,” Twombly, 550 U.S. at 555, 127 S.Ct. 1955, and must tender more than “naked assertion[s] devoid of further factual enhancement,” Iqbal, 129 S.Ct. at 1949 (2009) (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955) (internal quotation marks omitted).⁵ Rather, “[f]actual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all allegations in the complaint are true (even if doubtful in fact).” Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (internal citations omitted).

In sum, the plaintiff must plead “only enough facts to state a claim to relief that is plausible on its face.” Id. at 570, 127 S.Ct. 1955; accord Iqbal, 129 S.Ct. at 1949 (in order “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face’ ”). A claim “has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 129 S.Ct. at 1949 (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955).

In ruling on a Rule 12(b)(6) motion, “a district court must limit itself to facts stated in the complaint or in documents attached to the complaint as exhibits or incorporated in the complaint by reference.” Newman & Schwartz v. Asplundh Tree Expert Co., Inc., 102 F.3d 660, 662 (2d Cir.1996); see also Samuels v. Air Transp. Local 504, 992 F.2d 12, 15 (2d Cir.1993). The court may also consider “matters of which judicial notice may be taken” and documents of which plaintiff “had knowledge and relied on in bringing suit.” Brass v. American Film Technologies, Inc., 987 F.2d 142, 150 (2d Cir.1993).

III. DISCUSSIONA. Whether Plaintiff has standing to sue under Connecticut's Direct Action Statute

Defendants' first ground for dismissal is that Plaintiff lacks standing to bring her action against them as insurers under Connecticut's Direct Action Statute, Conn. Gen.Stat. § 38a–321, because she has not obtained a “final judgment,” as required by the terms of that statute. Defendants argue that a final judgment did not enter in...