Greenwood et al v. Mepamsa SA et al
Filing
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MEMORANDUM OF DECISION AND ORDER, granting Motion for Entry of Rule 54(b) Judgment of Dismissal with Prejudice of Defendants XL Specialty Insurance Company and XL Insurance Switzerland 49 ; the Clerk is directed to enter final judgment as to Defenda nts XL Specialty Insurance Company and XL Insurance Switzerland; Plaintiffs' Cross-Motion for Stay of Claims 37 granted October 11, 2011 48 remains in force as to Plantiffs' claims against Defendant Mepamsa; requiring Plaintiffs to file a status report regarding the progress of this case through arbitration before the ICC; Plaintiffs' status report is due by 10/19/12. Signed by Senior Judge Stephen M McNamee on 9/14/12. (REW)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE DISTRICT OF ARIZONA
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Raymond Greenwood, et al.,
Plaintiffs,
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v.
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Mepamsa, SA, et al.,
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Defendants.
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No. CV-11-8040-PCT-SMM
MEMORANDUM OF DECISION AND
ORDER
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Before the Court is the Motion for Rule 54(b) Judgment of Dismissal with Prejudice
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of Defendants XL Specialty Insurance Company and XL Insurance Switzerland Ltd. (Doc.
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49.) The matter is fully briefed. (Doc. 49; Doc. 50; Doc. 51.)
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BACKGROUND
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Plaintiffs and their minor children were severely burned on December 10, 2007 by an
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allegedly defective product, the Olympian Wave 8 Catalytic Safety heater (“the heater”).
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(Doc. 26 ¶ 31.) On April 9, 2008, Plaintiffs filed suit in Apache County Superior Court of
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Arizona (the “underlying lawsuit”) against the heater’s manufacturer, Mepamsa, and its
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current and former distributors, Camco Manufacturing, Inc. (“Camco”) and U.S. Catalytic
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Corporation (“U.S. Catalytic”), respectively. (Doc. 26 ¶¶ 22, 26, 32.) At the time of
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Plaintiffs’ injuries, XL Insurance Switzerland was allegedly Mepamsa’s international liability
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insurer for products to be sold in the United States. (Doc. 26 ¶¶ 6, 8-9.) Camco and U.S.
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Catalytic contend that Mepamsa and XL Insurance Switzerland were under a duty to
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indemnify them for Plaintiffs’ claims pursuant to an Insurance Policy (the “Policy”) issued
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by XL Insurance Switzerland to Mepamsa through its parent company, and a
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Distributor/Agent Agreement and certificates of insurance furnished by Mepamsa. (Doc. 26
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¶¶ 22-28.)
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On March 10, 2011, Camco and U.S. Catalytic entered into a “Damron” agreement
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with Plaintiffs after Mepamsa, XL Insurance Switzerland, and XL Specialty Insurance
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allegedly refused to defend them in the underlying lawsuit. See Damron v. Sledge, 105 Ariz.
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151, 460 P.2d 997 (1969). Through this agreement, Camco and U.S. Catalytic assigned their
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indemnification claims to Plaintiffs. (Doc. 26 ¶ 1.) The Policy contained a forum selection
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clause stating that disputes arising from the Policy must be heard in Switzerland. (Doc. 39-1
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at 2.) Further, the Distributor/Agent Agreement between Mepamsa and Camco and U.S.
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Catalytic contained an arbitration provision stating that any disagreement must be submitted
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for arbitration to the International Chamber of Commerce (the “ICC”) in Paris, France. (Doc.
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26 ¶ 24.) Plaintiffs have commenced arbitration proceedings before the ICC. (Doc. 26 ¶ 70.)
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On July 13, 2011, Plaintiffs brought suit against XL Insurance Switzerland and XL
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Specialty Insurance (collectively “XL Defendants”), and Mepamsa, alleging six counts.
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(Doc. 26.) In Count I, Plaintiffs seek a declaratory judgment that XL Insurance Switzerland
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has a duty to indemnify Camco and U.S. Catalytic for costs incurred from the settlement of
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the underlying litigation with Plaintiffs. (Doc. 26 at 14-16.) Count II alleges breach of
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contract against XL Insurance Switzerland and XL Specialty Insurance. (Doc 26 at 16.)
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Count III alleges breach of covenant of good faith and fair dealing against XL Insurance
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Switzerland and XL Specialty Insurance. (Doc. 26 at 16-18.) Count IV alleges breach of
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covenant of good faith and fair dealing against Mepamsa. (Doc. 26 at 19-21.) Count V seeks
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common law indemnity against Mepamsa. (Doc. 26 at 21.) Count VI seeks statutory
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indemnity against Mepamsa. (Doc. 26 at 22.)
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On October 11, 2011, the Court issued Orders granting XL Insurance Switzerland and
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XL Specialty Insurance Co.’s Motions to Dismiss pursuant to Rule 12(b)(3), finding that
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Switzerland is the exclusive forum for disputes under the Policy. (Doc. 48.)
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Mepamsa also sought dismissal on grounds that its dispute with Plaintiffs must be
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resolved in its entirety through arbitration before the ICC. (Doc. 33.) The Court ordered a
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stay of Plaintiffs’ claims against Mepamsa pending the outcome of ongoing arbitration
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proceedings. (Doc. 48.)
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DISCUSSION
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Rule 54(b) allows a court to direct the entry of a final judgment as to one or more but
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fewer than all of the claims or parties only upon an express determination that there is no just
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reason for delay and upon an express direction for the entry of judgment. Fed. R. Civ. P.
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54(b). In determining whether to direct the entry of final judgment on a claim under Rule
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54(b), a district court first must determine whether it is dealing with a final judgment.
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Curtiss-Wright Corp. v. Gen Elec. Co., 446 U.S. 1, 7 (1980). A final judgment is a decision
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where either a separate claim for relief has been completely resolved in a multiple claim
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action or the rights and liabilities of at least one party has been completely resolved in a
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multiple party action. Id. Once finality is established, the court may direct the entry of final
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judgment only by making an “express determination that there is no just reason for delay.”
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Fed. R. Civ. P. 54(b); Wood v. GCC Bend, LLC, 422 F.3d 873, 878 (9th Cir. 2005).
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The Court finds that the judgment dismissing Plaintiffs’ claims against XL Defendants
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is a final one. In granting XL Defendants’ Motion to Dismiss, the Court determined that
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Plaintiffs’ claims against XL Defendants under the Policy were subject to the Forum
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Selection Clause contained in the Policy. (Doc. 48).
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Additionally, the Court finds that there is no just reason for delay. The legal issue
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considered in XL Defendants’ Motion to Dismiss, whether the Forum Selection Clause
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contained in the Policy obligated Plaintiffs to pursue their claim against XL Defendants in
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Switzerland, is distinct from the issue of whether Plaintiffs’ indemnification claims against
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Mepamsa will be fully resolved by the ongoing ICC arbitration. See Frank Briscoe Co. v.
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Morrison-Knudsen Co., 776 F.2d 1414, 1416 (9th Cir. 1985) (stating that findings by the
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district court should include “a determination whether, upon any review of the judgment
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entered under the rule, the appellate court will be required to address legal or factual issues
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that are similar to those contained in the claims still pending before the trial court”). The
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appellate court will not have to decide the same issues more than once if a subsequent appeal
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is taken. Thus, the Court finds that entry of a Rule 54(b) final judgment is appropriate.
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Accordingly,
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IT IS HEREBY ORDERED GRANTING Motion for Entry of Rule 54(b) Judgment
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of Dismissal with Prejudice of Defendants XL Specialty Insurance Company and XL
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Insurance Switzerland. (Doc. 49.)
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IT IS FURTHER ORDERED that the Clerk of the Court is directed to enter final
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judgment as to Defendants XL Specialty Insurance Company and XL Insurance Switzerland.
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IT IS FURTHER ORDERED that Plaintiffs’ Cross-Motion for Stay of Claims (Doc.
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37) granted October 11, 2011 (Doc. 48) remains in force as to Plantiffs’ claims against
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Defendant Mepamsa.
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IT IS FURTHER ORDERED requiring Plaintiffs to file a status report regarding the
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progress of this case through arbitration before the ICC. Plaintiffs’ status report is due by
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October 19, 2012.
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DATED this 14th day of September, 2012.
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