Essex Insurance Company v Detroit Bulk Storage, et al

Filing 219

ORDER DECLINING SUPPLEMENTAL JURISDICTION AND DISMISSING CASE - Signed by District Judge Paul D. Borman. (DTof)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

DETROIT BULK STORAGE, INC.
Case No. 11-13277
Cross Plaintiff,
v.

Paul D. Borman
United States District Judge

FRANKENMUTH MUTUAL INSURANCE
COMPANY, UNITED STATES STEEL CORP.,
and PRAXAIR, INC.
Cross Defendants.
_____________________________/
ORDER DECLINING SUPPLEMENTAL JURISDICTION OVER PLAINTIFF DETROIT
BULK STORAGE’S CROSS COMPLAINT AGAINST DEFENDANTS FRANKENMUTH
MUTUAL INSURANCE COMPANY, UNITED STATES STEEL CORP. AND PRAXAIR,
INC. (Dkt. No. 55)
This action arises from the structural failure of a dock which collapsed and created an
open void on January 28, 2011. (Dkt. No. 118, giving date of incident). In addition to the
structural failure of the dock, salt which had been unloaded on to the dock prior to the collapse,
fell into the void.
The action was originally filed by Plaintiff Essex Insurance (“Essex”) on July 27, 2011
against Defendants Detroit Bulk Storage (“DBS”) and Morton Salt Company (“Morton”). (Dkt.
No. 1). Essex amended its complaint on August 17, 2011 and added United States Steel Corp.
and Praxair, Inc. as additional defendants. (Dkt. No. 7, Am. Compl.). In the Amended
Complaint, Essex sought a declaratory judgment from this Court that DBS and Morton were not
entitled to coverage under a marine insurance contract for the collapse of the dock, and also
asserting that any claim for damages asserted by Defendants Praxair or US Steel against DBS or
Morton were excluded under that same policy.

Thereafter, there was a flurry of cross and counter complaints filed in this action as well
as litigation over the proper forum for the proceeding.1 (See Dkt. No. 47, Order denying Motion
to Dismiss and finding admiralty jurisdiction applies to the insurance contract at issue, at 6-7).
Significantly, DBS filed a counter complaint against Essex and also a cross complaint against
Frankenmuth Mutual Insurance Company (“Frankenmuth”),2 US Steel, and Praxair. (Dkt. No.
55). Morton is no longer a party in this action as it dismissed its all of its claims and Essex
dismissed its claims against Morton. (See Dkt. Nos. 52, 123, 174 & 176). Additionally, US
Steel dismissed its cross claim against DBS. (Dkt. Nos. 36, 131). Therefore after the dust
settled, Essex’s declaratory judgment against Defendants DBS, Praxair, and US Steel (Dkt. No.
7) and DBS’s cross action against Essex, Praxair, Frankenmuth, and US Steel (Dkt. No. 55) were
the only remaining actions.
On July 23, 2014, this Court entered an Opinion and Order granting Essex’s motion for
summary judgment and dismissing DBS’s counter claims against Essex. (Dkt. No. 218). As set
forth in that Opinion and Order, the Court declared that DBS is not entitled to coverage pursuant
to the Wharfinger Legal Liability Insurance Policy for the January 28, 2011 dock failure. (Id.).

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DBS and Morton also filed suit in Wayne County Circuit Court against Essex and
Frankenmuth alleging breach of insurance contract and seeking a declaratory judgment based on
the same incident, however the state court granted Essex’s motion for summary disposition and
dismissed the action. (See Dkt. No. 128, Pl.’s Mot. for Clarification, Ex. A State Court Order,
case no. 11-010712-CZ). Defendant Praxair also filed in state court asserting claims against
Morton and DBS. (See Dkt. No 216, Ex. W, Praxair State Complaint against DBS and Morton
Salt, Inc., filed on October 1, 2012). Defendant US Steel thereafter intervened in the Praxair
action (and as a result dismissed its cross claim in this Court as duplicitous). (See Dkt. No. 119,
Ex. B, US Steel Motion to Intervene & Dkt. No. 131, Order granting voluntary dismissal).
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Frankenmuth is the carrier of DBS’s general commercial insurance policy. (Dkt. No.
55, Cross Complaint at ¶¶ 18, 19).
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Now, after addressing the ultimate claim in this action, whether DBS was entitled to coverage
under the marine insurance contract and finding Essex entitled to summary judgment, the only
viable claims remaining are those asserted by DBS in its cross complaint against Frankenmuth,
Praxair and US Steel. (Dkt. No. 55).
In its cross complaint, DBS requests a declaratory judgment as to Frankenmuth regarding
the coverage of a commercial general liability policy (Id., Count IV, at ¶¶ 62-67) and also asserts
a breach of contract claim against Frankenmuth (Id., Count II, at ¶¶ 49-57).3 However, where
the parties are not diverse and no federal claims are asserted, there is no independent basis for
jurisdiction to support DBS’s remaining cross claims. (See Id., at ¶ 2, DBS is a Michigan
Corporation, with its principal place of business in River Rouge, Michigan; ¶ 4, Frankenmuth is
a Michigan corporation with its principal place of business in Frankenmuth, Michigan).
Therefore, as acknowledged by DBS in the cross complaint, jurisdiction for these claims are
supported solely by supplemental jurisdiction pursuant to 28 U.S.C. § 1367. (Id., at ¶ 7, “this
Court has supplemental jurisdiction over all related claims addressed by this Counter-Complaint
and Cross-Claims under 28 U.S.C. § 1367).
The lack of any other jurisdictional basis was also noted by the Court in an earlier order:
“[t]he sole basis for federal jurisdiction that has been asserted in this matter is [Essex’s] claim of
admiralty jurisdiction under 18 U.S.C. § 1333(1). There are no claims arising under federal
statutes, and there is no diversity of citizenship among [any of] the parties.” (Dkt. No. 113, at 5).
The Court further noted that:

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The Court notes that DBS did not articulate any specific claims against Praxair (or US
Steel) in its cross complaint but appears to believe Praxair is a necessary party. (See Dkt. No.
77, DBS Response to Praxair’s motion to dismiss).
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[Essex]’s claims in the instant matter are [] limited to the dispute regarding
coverage of the marine insurance policy between [Essex] and Defendants DBS
and Morton. This is not a general negligence action. Furthermore, neither
Defendants Praxair nor Frankenmuth [nor US Steel] is a party to the contract of
marine insurance at issue.
(Id.). It was for these reasons, that the Court previously limited the relevant inquiry to whether
the Essex was liable under the admiralty wharfinger insurance contract at issue and stayed all
other pending matters. (Id. at 6). This stay included Praxair’s pending Motion to Dismiss
DBS’s Cross Claims. (Dkt. No. 67).
“Supplemental jurisdiction is a doctrine of discretion not of plaintiff’s right.” Habich v.
City of Dearborn, 331 F.3d 524, 535 (6th Cir. 2003). Pursuant to 28 U.S.C. § 1367, a court has
supplemental jurisdiction over “all other claims that are so related to claims in the action within
such original controversy under Article III of the United States Constitution. Such supplemental
jurisdiction shall include claims that involve the joinder or intervention of additional parties.” 28
U.S.C. § 1367(a). A court, however, may decline to exercise supplemental jurisdiction over
claims under four enumerated circumstances:
(1)
(2)
(3)
(4)

the claim raises a novel or complex issue of State law,
the claim substantially predominates over the claim or claims over which
the district court has original jurisdiction,
the district court has dismissed all claims over which it has original
jurisdiction, or
in exceptional circumstances, there are other compelling reasons for
declining jurisdiction.

28 U.S.C. § 1367(c).
In the instant case, this Court has dismissed all claims over which it had original
admiralty jurisdiction. (Dkt. No. 218). As there is no other basis for federal jurisdiction,
pursuant to 28 U.S.C. § 1367(c)(4) the Court DECLINES supplemental jurisdiction over the

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remaining claims against Praxair, US Steel, and Frankenmuth in DBS’s Cross Complaint. This
order closes the case.
SO ORDERED.

s/Paul D. Borman
PAUL D. BORMAN
UNITED STATES DISTRICT JUDGE
Dated: July 28, 2014

CERTIFICATE OF SERVICE
The undersigned certifies that a copy of the foregoing order was served upon each attorney or
party of record herein by electronic means or first class U.S. mail on July 28, 2014.

s/Deborah Tofil
Case Manager

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