OneBeacon America Insurance Company v. Fulton Boiler Works, Inc. et al
Filing
89
MEMORANDUM-DECISION AND ORDER denying 59 Motion for Partial Summary Judgment; denying 60 Motion for Partial Summary Judgment; denying 76 Motion for Partial Summary Judgment; denying 78 Motion for Partial Summary Judgment: The Court he reby ORDERS that Defendant Fulton Boiler Works, Inc.'s motion for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure (Dkt. No. 59) is DENIED as moot; and the Court further ORDERS that Defendant Fulton Boiler Works, I nc.'s motion for attorneys' fees and costs associated with their motion for partial summary judgment (Dkt. No. 59) is DENIED (Dkt. No. 56) ; and the Court further ORDERS that the Parties are directed to file a stipulation discontinuing Pl aintiff OneBeacon America Insurance Company's first cause of action against Fulton Boilers Works, Inc. within thirty (30) days of the date of this decision; and the Court further ORDERS that the Parties are directed to file a stipulation discon tinuing Defendant Insurance Company of Wausau/Nationwide Mutual Insurance Company's first cross-claim against Fulton Boiler Works, Inc. within thirty (30) days of the date of this decision; and the Court further ORDERS that, if the Parties f ail to file the stipulations discontinuing the identified claims, Defendant Fulton Boiler Works, Inc.'s motion for partial summary judgment (Dkt. No. 59) is DENIED; and the Court further ORDERS that Defendant Fulton Boiler Works, Inc.'s motion for partial summary judgment (Dkt. No. 60) is DENIED; and the Court further ORDERS that Defendant Travelers Casualty and Surety Company's motion for summary judgment (Dkt. No. 76) pursuant to Rule 56 of the Federal Rules of Procedure i s DENIED; and the Court further ORDERS that Defendant Travelers Casualty and Surety Company's motion for summary judgment (Dkt. No. 78) pursuant to Rule 56 of the Federal Rules of Procedure is DENIED; and the Court further ORDERS that the Clerk of the Court shall serve a copy of this Order on all parties in accordance with the Local Rules. Signed by U.S. District Judge Mae A. D'Agostino on 3/28/2016. (ban)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
____________________________________________
ONEBEACON AMERICAN
INSURANCE COMPANY,
Plaintiff,
vs.
5:13-cv-01525
(MAD/TWD)
FULTON BOILER WORKS, INC.,
EMPLOYERS INSURANCE COMPANY
OF WAUSAU, NATIONWIDE MUTUAL
INSURANCE COMPANY, and
TRAVELERS CASUALTY AND SURETY
COMPANY,
Defendants,
and
FULTON BOILER WORKS, INC.,
Third-Party Plaintiff,
vs.
BROWN & BROWN OF NEW YORK, INC.,
f/k/a THE YOUNG AGENCY,
Third-Party Defendant.
____________________________________________
APPEARANCES:
OF COUNSEL:
CARROLL MCNULTY & KULL, LLC
120 Mountain View Boulevard
Basking Ridge, New Jersey 07920
Attorneys for Plaintiff
KRISTIN V. GALLAGHER, ESQ.
JOANNA L. YOUNG, ESQ.
MCCARTER & ENGLISH, LLP
100 Mulberry Street
4 Gateway Center
Newark, New Jersey 07102
Attorneys for Defendant/Third-Party Plaintiff
BRIAN J. OSIAS, ESQ.
DAVID C. KANE, ESQ.
LAW OFFICES OF
GIALLEONARDO & HARTFORD
2150 Wehrle Drive
Suite 500B
Williamsville, New York 14221
Attorneys for Defendants Employers Insurance
Company of Wausau and Nationwide Mutual
Insurance Company
JENNIFER V. SCHIFFMACHER, ESQ.
GRAHAM CURTIN
4 Headquarters Plaza
Morristown, New Jersey 07962-1991
Attorneys for Defendant Travelers Casualty and
Surety Company
JENNIFER L. SCHOENBERG, ESQ.
ROBERT W. MAURIELLO, JR., ESQ.
STEPHEN V. GIMIGLIANO, ESQ.
SATTERLEE STEPHENS BURKE &
BURKE LLP
230 Park Avenue
Suite 1130
New York, New York 10169
Attorneys for Third-Party Defendant
SARAH M. GILBERT, ESQ.
THOMAS J. CAHILL, ESQ.
JAMES F. RITTINGER, ESQ.
Mae A. D'Agostino, U.S. District Judge:
MEMORANDUM-DECISION AND ORDER
I. INTRODUCTION
On December 11, 2013, OneBeacon America Insurance Company ("OneBeacon")
commenced this declaratory judgment action pursuant to 28 U.S.C.§ 2201. See Dkt. No. 1. In the
complaint, Plaintiff has brought the following claims: (1) declaratory judgment action against
Defendant Fulton Boiler Works, Inc. ("Fulton") declaring that, for the periods of time when
Fulton was uninsured due to the insolvency of an insurer, Fulton is required to contribute to the
litigation defense costs associated with underlying lawsuits; (2) declaratory judgment action
against Fulton declaring that, for the periods of time when Fulton was uninsured – whether due to
the insolvency of its insurer or its failure to satisfy a condition precedent to coverage, Fulton is
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required to contribute a pro rata share of its indemnity costs incurred in connection with the
underlying lawsuits, (3) a declaratory judgment action against Fulton declaring that OneBeacon is
entitled to an award from Fulton in the amount equal to Fulton's allocable share of defense or
indemnity costs, if it is determined that OneBeacon has paid or is required to pay in the future
more than its equitable share of the costs; and (4) a declaratory judgment action against
Defendant Travelers Casualty and Surety Company ("Travelers") that OneBeacon is entitled to an
award from Travelers in the amount equal to Travelers' allocable share of defense or indemnity
costs, if it is determined that OneBeacon has paid, or is required to pay in the future, more than its
appropriate share. See id.
Defendants Employers Insurance Company of Wausau and Nationwide Mutual Insurance
Company ("Wausau/Nationwide") filed their answer and asserted the following cross claims: (1)
a declaratory judgment action against Fulton declaring that, for the period of time Fulton was
uninsured due to the insolvency of its insurer, Fulton is required to contribute a pro rata share of
the litigation defense costs associated with the underlying lawsuits; (2) a declaratory judgment
action against Fulton declaring that, for the period of time Fulton was uninsured, Fulton is
required to contribute a pro rata share of the indemnity costs associated with the underlying
lawsuits; (3) a declaratory judgment action against Fulton that Wausau/Nationwide are entitled to
an award from Fulton in the amount equal to Fulton's allocable share of defense or indemnity
costs that have been paid by Wausau/Nationwide because of the insolvency of American
Motorists Insurance Company and American Manufacturers Mutual Insurance Company
(collectively "Kemper" or "AMICO"); (4) a declaratory judgment action against Travelers
declaring that if Wausau/Nationwide have paid in excess of their share for the defense or
indemnity costs as a result of Travelers' failure to contribute towards these costs, then
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Wausau/Nationwide are entitled to an award from Travelers in the amount equal to Travelers'
allocable share of defense or indemnity costs that have been paid by Wausau/Nationwide; and (5)
a declaratory judgment action against Fulton and Travelers declaring that Fulton and Travelers
are obligated to participate and contribute to the ongoing costs of defense and indemnity incurred
as a result of the underlying lawsuits, including any and all future payments, in an amount to be
determined. See Dkt. No. 14 at ¶¶ 9-22.1 On January 6, 2014, Travelers filed its answer to
OneBeacon without any counterclaims or cross-claims. See Dkt. No. 11. Likewise, on January
27, 2014, Fulton filed its answer to OneBeacon without any counterclaims or cross-claims. See
Dkt. No. 16.
This Court has jurisdiction pursuant to 28 U.S.C. § 1332 because there is complete
diversity of citizenship between the parties and the amount in controversy exceeds $75,000. See
Dkt. No. 1 at ¶ 17. Currently pending before the Court is a motion for partial summary judgment
pursuant to Rule 56 of the Federal Rules of Civil Procedure ("Rule 56") brought by Fulton
seeking a declaratory judgment on OneBeacon's first cause of action against it. See Dkt. No. 59.
Travelers opposed Fulton's motion (Dkt. No. 59) and cross moved for partial summary judgment
pursuant to Rule 56 seeking a declaratory judgment in its favor. See Dkt. No. 78. Fulton filed a
second motion for partial summary judgment pursuant to Rule 56 seeking declaratory judgment
against Travelers. See Dkt. No. 60. Travelers opposed Fulton's second motion for partial
summary judgment (Dkt. No. 60) and cross moved for a declaratory judgment in its favor (Dkt.
No. 76).
The Court notes that OneBeacon and Wausau/Nationwide captioned their claims against
Travelers as contribution, but, however, the claim in the pleadings are clearly seeking declaratory
judgment.
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II. BACKGROUND
Fulton, OneBeacon, Wausau/Nationwide, and Travelers were parties to a prior declaratory
judgment action involving the same insurance policies at issue here.2 See Fulton Boiler Works,
Inc. v. Am. Motorists Ins. Co., 828 F. Supp. 2d 481 (N.D.N.Y. 2011); Fulton Boiler Works, Inc. v.
Am. Motorists Ins. Co., No. 5:06–CV–1117, 2010 WL 1257943, *1-9 (N.D.N.Y. Mar. 25, 2010).
The factual history, as set forth in that decision, is unchanged. See Dkt. Nos. 59-2; 78-4; 82-1.
During the years of 1949 through the mid-1970s, Fulton manufactured boilers that allegedly
contained asbestos. See Futon, 828 F. Supp. 2d at 486.
[I]t is generally agreed that a combination of comprehensive
general liability policies issued by AMICO, OneBeacon, Travelers,
and Wausau covered Fulton for asbestos exposure risks from 1976
until 1993. Specifically, Fulton was covered by Travelers from
October 1976 through October 1980, OneBeacon from October
1980 through October 1983, Wausau from October 1983 through
October 1984, and AMICO from October 1984 through September
1993—when an asbestos liability exclusion was added to the policy.
Id. at 486-87. In the early 1990s, Fulton was named as a defendant in thousands of lawsuits
involving asbestos exposure from their boilers, and the number of these lawsuits increased in
1998. See id. at 487. In 1991, Fulton initially tendered the underlying lawsuits to Kemper and
OneBeacon, which were the policies known by Fulton at that time. See id. at 487; Dkt. No. 82-1
at ¶ 4. OneBeacon and Kemper entered into a cost-sharing agreement for the defense costs with
OneBeacon paying 25% and Kemper paying 75%. See Fulton, 828 F. Supp. 2d at 487. The
agreement allowed for modification if new insurers were identified. See id. The Travelers
American Motorist Insurance Company and American Manufacturers Mutual Insurance
Company (collectively "Kemper" or "AMICO") were also parties to that action but, subsequent to
the 2011 decision, those companies have been placed in liquidation. See Dkt. No. 82-1 at ¶ 26.
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insurance policy was discovered in October 2001, and the Wausau insurance policy was
discovered in December 2005. See id.
In that prior action, the parties were seeking judgment declaring their obligations to
defend and indemnify Fulton in connection with thousands of lawsuits filed against Fulton (the
"underlying lawsuits"). See generally id. at 481-99; Fulton, 2010 WL 1257943, at *1-9. There,
Fulton brought claims against OneBeacon, Wausau/Nationwide, and Travelers. See Fulton, 828
F. Supp. 2d at 485. OneBeacon filed a counterclaim against Fulton and cross-claims against
Wausau/Nationwide and Travelers. See id. Travelers filed a counterclaim against Fulton and a
cross-claim against OneBeacon. See id. Together, the 2010 and 2011 Fulton decisions addressed
and resolved the following summary judgment or partial summary judgment motions: (1) Fulton's
motion declaring that OneBeacon, Wausau/Nationwide, and Travelers have an obligation to pay
100% of the defense costs associated with litigation of the underlying lawsuits; (2) motions by
OneBeacon, Wausau/Nationwide, and Travelers seeking a declaration that Plaintiff is required to
contribute an equitable pro rata share to its own defense for periods of uninsured or self-insured
periods; (3) Travelers' motion for a declaration that Fulton was obligated to pay a pro rata share of
indemnity costs related to years it was uninsured; (4) Fulton's motion for a declaration that
OneBeacon and Kemper must continue to fully indemnify Fulton and that Fulton cannot be
allocated any share of indemnity costs; (5) OneBeacon's motion for a declaration that Fulton is
obligated to pay a pro rata share of the indemnity costs for years it was uninsured; (6)
OneBeacon's motion for a declaration that Travelers received proper notice of all underlying
lawsuits and must contribute a pro rata share of defense and indemnity costs based on its four
years of coverage; (7) Wausau/Nationwide's cross-motion ordering Fulton to contribute to the
indemnity costs; and (8) Travelers' cross-motion for a declaration that it cannot be allocated
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defense or indemnity costs related to claims for which it was not provided proper notice. See
Fulton, 828 F. Supp. 2d at 486-99; Fulton, 2010 WL 1257943, at *3-9.
In the 2010 decision, the Court declared that Fulton was entitled to all of its defense costs
related to the litigation of the underlying lawsuits that had been brought to date, deferring the
question of whether Fulton must contribute to defense costs until such time as the underlying
lawsuits are shown to involve occurrences during self-insured periods. See Fulton, 2010 WL
1257943, at *8. The Court also advised, but did not order, that pro rata allocation of expenses
among the insurers is the applicable method, and the Court further advised that OneBeacon,
Wausau/Nationwide, and Travelers owe defenses in future underlying lawsuits where the
allegations could conceivably result in liability covered by a policy at issue. See id.
The 2011 decision addressed the allocation of the indemnity costs, noting that the 2010
decision regarding the defense costs has no bearing on indemnity allocation. See Fulton, 828 F.
Supp. 2d at 488. To properly allocate the indemnity costs, the Court determined that the
underlying lawsuits "must be considered as multiple independent occurrences rather than grouped
into a single broad occurrence." Fulton, 828 F. Supp. 2d at 489. The Court found that all
insurance policies in effect are triggered during a progressive bodily disease "with injury-in-fact
recurring throughout the disease process," even if "injury was also shown to have occurred in an
earlier period covered by a prior policy." Id. After the time period of the claim is determined,
then the liability for each claim is prorated among the insurers according to their coverage during
the overall period of time the injury-in-fact was occurring. See id. at 490.
Notably, the Court stated "Fulton must be assigned a pro rata share of indemnity costs for
any uninsured or insufficiently insured portion of a particular claimant's injury." Id. The Court
declared that, for the time period from 1949 through October 1976, Fulton is allocated with its
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share of indemnity costs for claims alleging injury-in-fact prior to October 1976. See id. at 491.
Fulton is obligated to pay, without indemnification from the insurers, for claims alleging injuryin-fact that began after October 1, 1993, but "Fulton cannot be allocated with any share of
indemnity costs for the portion of a claimant's injury-in-fact – which began prior to October 1,
1993 – that continues after October 1, 1993." Id. at 494.
With regard to the summary judgment motions and cross-motions on matters of
contribution, Kemper, OneBeacon, and Wausau, each sought a declaration that Travelers must
contribute for its pro rata share of defense and indemnity costs made after October 10, 2001. See
id. at 494-95. Travelers argued to the Court that it did not receive notice pursuant to its policy
provisions and cross moved for a declaratory judgment stating that proper notice was not
provided. See id. at 495. Because compliance with the notice provisions of an insurance policy is
a condition precedent to the insurer's liability under the policy, an insurer is relieved of its duties
to defend and indemnify if proper notice was not provided. See id. at 495 (citing Webster ex rel.
Webster v. Mount Vernon Fire Ins., 368 F.3d 209, 214 (2d Cir. 2004)). The policy between
Fulton and Travelers contained a notice provision, which required:
In the event of an occurrence, written notice containing particulars
sufficient to identify the insured and also reasonably obtainable
information with respect to the time, place and circumstances
thereof and the names and addresses of the injured and of available
witnesses shall be given by or for the insured to the Company or
any of its authorized agents as soon as practicable.
If claim is made or suit is brought against the insured, the insured
shall immediately forward to the Company every demand, notice,
summons or other process received by him or his representative.
Id. (internal quotation marks and citation omitted).
After reviewing the record, the Court denied all the parties' motions on this issue and held
that Travelers' contribution for its pro rata share of defense and indemnity costs requires "a case8
by-case analysis of the underlying claims and documents provided to Travelers." Id. at 497. The
Court ruled that "for claims of which [Travelers] received, within a reasonable time, a complaint
and/or letter identifying Fulton as the insured and any reasonably obtainable information
regarding the injured parties and the nature of the occurrences, Travelers must contribute its pro
rata share of defense and indemnity costs. Id. In the 2011 decision, the Court specifically
advised that the 2010 decision together with the 2011 decision serve "as direction for the parties
going forward" and to bind the parties when resolving past, pending, and future underlying
lawsuits. Id.
Since the time of those decisions, Kemper has been placed in liquidation. See Dkt. No.
82-1 at ¶ 26. On June 19, 2013, the Superintendent of Financial Services of the State of New
York was appointed as ancillary receiver (the "Ancillary Receiver") of Kemper. See Dkt. No. 821 at ¶ 28. On October 22, 2013, the Supreme Court of New York, County of New York, entered
orders establishing November 10, 2014 as the deadline to file proof of claims, including
contingent claims, and November 10, 2015 as the deadline to file supporting documents for
contingent claims with the Director of Insurance of the State of Illinois. See id. at ¶ 29. The New
York court also ordered the Ancillary Receiver to provide notice of the claim filing deadlines to
all creditors, claimants, and interested persons located in the State of New York. See id.
Travelers believes that Fulton has applied to the New York Liquidation Bureau for payment of
Kemper's share of allocated defense and indemnity costs for the underlying lawsuits. See Dkt.
No. 78-4 at ¶ 30. Travelers also states that, under a reservation of rights, it has been paying a
percentage share of Kemper's allocated defense costs since the time of Kemper's insolvency. See
id. at ¶ 31.
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OneBeacon, Wausau/Nationwide, and Fulton have entered into a settlement agreement,
and they no longer are seeking a declaration from this Court that Fulton must contribute its pro
rata share of defense costs for those periods in which Fulton was uninsured due to the insolvency
of Kemper. See Dkt. Nos. 82-1 at ¶ 38; 71; 73. OneBeacon has one cause of action pending
against Travelers where it alleges that Travelers has refused, and continues to refuse, to pay or
reimburse OneBeacon for amounts paid toward the defense and/or indemnity of Fulton in certain
underlying lawsuits that are attributable to Travelers, but for which Travelers has refused to
contribute due to Fulton's alleged failure to provide timely notice of the claim or suit. See Dkt.
No. 1 at ¶ 83. Wausau/Nationwide also has cross-claims pending against Travelers, on its own
behalf, seeking the same relief against Travelers. See Dkt. No. 14 at ¶¶ 18-20.
Currently pending before the Court are (1) Fulton's motion for partial summary judgment
(Dkt. No. 59) seeking declaration that Fulton has no obligation to contribute to the litigation costs
associated with the defense of the underlying claims against them and seeking an award of
attorneys' fees and costs incurred in connection with this current motion; (2) Travelers' crossmotion for partial summary judgment (Dkt. No. 78) seeking a declaration that Travelers does not
have an obligation to contribute to the defense and indemnity costs allocated to the policy periods
of Kemper; (3) Fulton's motion for partial summary judgment against Travelers' (Dkt. No. 60)
seeking a declaration that Travelers received proper notice of certain underlying lawsuits and,
therefore, must provide insurance coverage for them; and (4) Travelers' cross-motion for partial
summary judgment (Dkt. No. 76) seeking a declaration that Fulton did not provide timely notice
to Travelers for over 13,000 underlying lawsuits and also seeking to dismiss OneBeacon's and
Wausau/Nationwide's declaratory judgment actions. For the reasons stated, the Court denies all
the parties' motions.
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III. DISCUSSION
A.
Declaratory Judgement Act
OneBeacon has commenced an action for declaratory judgment against Fulton seeking a
declaration that, for those periods of time when Fulton was uninsured due to the insolvency of an
insurer, Fulton is required to contribute to the litigation defense costs associated with underlying
lawsuits. See Dkt. No. 1 at ¶¶ 73-74. In response, Fulton filed a motion for partial summary
judgment seeking a declaration that Fulton has no obligation to contribute to the litigation costs
associated with the defense of underlying claims against them. See Dkt. No. 59-1. Thereafter,
the Court received notification that OneBeacon and Fulton had resolved their differences
concerning this issue of the duty to defend, and OneBeacon advised that it would be dismissing
this cause of action. See Dkt. No. 71. The Court then received notification from
Wausau/Nationwide that they also resolved their differences with Fulton concerning the issue of
the duty to defend. See Dkt. No. 73. Under these circumstances, the Court denies Fulton's
motion for summary judgment as moot based upon the representations of OneBeacon and
Wausau/Nationwide that they are dismissing these claims against Fulton.
Separately, Fulton also moved for partial summary judgment seeking a declaration that
Travelers received timely notice of certain underlying lawsuits, and Travelers filed two crossmotions. See Dkt. Nos. 60, 76, 78. The first cross-motion is seeking a declaratory judgment that
Travelers is not responsible to contribute for Kemper's share of defense and indemnity costs. See
Dkt. No. 78. The second cross-motion for summary judgment is seeking, in part, a declaratory
judgment that Travelers was only responsible for the defense and indemnity costs for the claims
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that Fulton provided proper notice, as listed by Travelers in a compilation of properly tendered
claims. See Dkt. No. 76.
"[A]ny court of the United States, upon the filing of an appropriate pleading, may declare
the rights and other legal relations of any interested party seeking such declaration, whether or not
further relief is or could be sought." 28 U.S.C. § 2201(a); see also Duane Reade, Inc. v. St. Paul
Fire & Marine Ins. Co., 411 F.3d 384, 389 (2d Cir. 2005). The declaratory judgment action
enables the court to decide disputes between parties having adverse legal interests when there is a
substantial controversy that has not yet resulted in a violation of one of the parties' rights. See
Storms v. United States, No. 13-CV-811, 2015 WL 1196592, *20 (E.D.N.Y. Mar. 16, 2015)
(quoting Golden v. Zwickler, 394 U.S. 103, 108 (1969)).
A court "may declare the rights and other legal relations of any interested party seeking
such declaration" only after the party has filed "an appropriate pleading." 28 U.S.C. § 2201(a).
The Federal Rules of Civil Procedure "govern the procedure for obtaining a declaratory judgment
under 28 U.S.C. § 2201." FED. R. CIV. P. 57. Therefore, since an "action for a declaratory
judgment is an ordinary civil action, a party may not make a motion for declaratory relief, but
rather, the party must bring an action for a declaratory judgment." Int'l Bhd. of Teamsters v. E.
Conference of Teamsters, 160 F.R.D. 452, 456 (S.D.N.Y. 1995) (citation omitted); see also
Thomas v. Blue Cross & Blue Shield Ass'n, 594 F.3d 823, 830 (11th Cir. 2010); Kam-Ko BioPharm Trading Co., Ltd.-Australasia v. Mayne Pharma (USA) Inc., 560 F3d 935, 943 (9th Cir.
2009). It is appropriate to bring a declaratory judgment action in a complaint, or the action can be
brought in a cross-claim or a counterclaim. See Bisnews AFE (Thailand) Ltd. v. Aspen Research
Grp. Ltd., No. 11 Civ. 3108, 2012 WL 3283479, *2 (S.D.N.Y. Aug. 13, 2012) (citing FED. R. CIV.
P. 13) (ruling that the language contained with the counterclaim did not comply with the pleading
12
requirements of Rule 8 of the Federal Rules of Civil Procedure and did not provide fair notice to
the other party that a declaratory judgment action was asserted).
In this case, Fulton and Travelers – the moving parties – did not assert any cross-claims or
counterclaims in their answers against any party. Procedurally, Fulton and Travelers are asking
the Court to grant partial summary judgment on declaratory judgment actions that they both failed
to plead in their answers. The failure by Fulton and Travelers to assert cross-claims or
counterclaims for declaratory judgment "procedurally forecloses [their] access to such relief."
Bisnews, 2012 WL 3283479, at *3. Where the parties are seeking declaratory relief but have not
commenced an action for declaratory judgment, the Court is without jurisdiction to act under 28
U.S.C. § 2201.
Accordingly, on procedural and jurisdictional grounds, the Court denies (1) Travelers'
cross-motion for partial summary judgment (Dkt. No. 78) seeking a declaration that Travelers
does not have an obligation to contribute to the defense and indemnity costs allocated to the
policy periods of Kemper, (2) Fulton's motion for partial summary judgment against Travelers'
(Dkt. No. 60) seeking a declaration that Travelers received proper notice of certain identified
asbestos claims and that Travelers must provide coverage in connection with those claims, and (3)
that part of Travelers' cross-motion for partial summary judgment (Dkt. No. 76) against Fulton
seeking a declaration that Fulton did "not provide timely notice to Travelers for over 13,000
underlying Asbestos Claims."3 In addition to denying Fulton's motion for partial summary
Travelers opposes Fulton's motion for partial summary judgment and cross moves for
partial summary judgment in the same papers. See Dkt. No. 76. Although the motion papers are
ambiguous, the Court interprets Traveler's cross-motion as seeking a declaration that it was not
provided with proper notice of the claims, and, based upon that declaration, Travelers seeks to
dismiss on summary judgment the claims brought by OneBeacon and Wausau/Nationwide. See
Dkt. No. 76-1 at 20-30.
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judgment (Dkt. No. 59) as moot, the Court also denies Fulton's motion, which seeks a declaratory
judgment, on the grounds that Fulton has not brought a declaratory judgment action against any
other party to this action.
B.
Summary Judgment
The party moving for summary judgment bears the initial burden of establishing its
entitlement to judgment. See Salahuddin v. Goord, 467 F.3d 263, 272 (2d Cir. 2006) (citing
Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). Where the nonmovant would bear the burden
of proof at trial,
the movant may show prima facie entitlement to summary judgment
in one of two ways: (1) the movant may point to evidence that
negates its opponent's claims or (2) the movant may identify those
portions of its opponent's evidence that demonstrate the absence of
a genuine issue of material fact, a tactic that requires identifying
evidentiary insufficiency and not simply denying the opponent's
pleadings.
Id. at 272-73. Only if the movant meets this initial showing will the burden then shift to the
nonmovant to direct the Court to a genuine issue of material fact in the record. See id. If the
nonmovant does not discharge that initial burden then that party is not entitled to judgment. See
Adickes v. S.H. Kress & Co., 398 U.S. 144, 161 (1970).
With regard to Traveler's cross-motion for partial summary judgment (Dkt. No. 76),
Travelers states in its notice of cross-motion that it is seeking to dismiss any claims against
Travelers for any defense or indemnity costs incurred for any underlying lawsuit that has not been
identified on its list of tendered claims.4 See Dkt. No. 76. As noted by the Court, OneBeacon and
Wausau/Nationwide have pending claims against Travelers, both seeking a declaration that if
Travelers' motion for partial summary judgment is directed toward Fulton, which does
not have any claims against Travelers in this action. See Dkt. Nos. 16, 76. Any dispute between
Fulton and Travelers are not properly presented to this Court for resolution.
4
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OneBeacon or Wausau/Nationwide have paid or will pay Travelers' share of the defense or
indemnity cost due to Kemper's insolvency, then OneBeacon and Wausau/Nationwide will be
entitled to equitable contribution. See Dkt. No. 1 at ¶¶ 82-84; Dkt. No. 14 at ¶¶ 18-22. In its
motion for summary judgment, Travelers asks the Court to, first, declare that it did not receive
proper notice from Fulton for any claim that was not included in the "Travelers May 2013 List of
Tendered Claims" ("list of tendered claims"). Dkt. No. 78-1 at 26-27. Travelers then seeks to
rely on that declaration for the dismissal of OneBeacon's and Wausau/Nationwide's claims. See
Dkt. Nos. 76-1 at 27-30. Travelers concludes that since it has participated in the defense of all the
properly notice claims, as contained on Travelers' list of tendered claims, OneBeacon and
Wausau/Nationwide do not have valid causes of action against it. See id. at 27-30.
As discussed, the Court denies Travelers' "motion" for a declaratory judgment seeking a
declaration that the only properly noticed claims are contained in its list of tendered claims. This
was the only basis submitted by Travelers for its entitlement to dismissal on summary judgment.
See id. Travelers did not submit any further evidence, or advance any other contention, in support
of its cross-motion for partial summary judgment dismissing these claims. Accordingly,
Travelers has not met its initial burden of establishing that there are no material facts in dispute,
and, therefore, the Court denies its partial summary judgment to dismiss OneBeacon's and
Wausau/Nationwide's claims.
C.
Attorney's Fees
Fulton also moves for an award of attorneys' fees and costs incurred in filing its motion for
partial summary judgment seeking the Court to declare that Fulton has no obligation to contribute
to the litigation cost associated with the defense of underlying claims against them. See Dkt. No.
59-1 at 10-11.
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"It is well settled in New York that a prevailing party may not
recover attorneys' fees from the losing party except where
authorized by statute, agreement or court rule." U.S. Underwriters
Ins. Co. v. City Club Hotel, LLC, 3 N.Y.3d 592, 597, 789 N.Y.S.2d
470, 822 N.E.2d 777 (N.Y.2004) (citations omitted). "However, an
insured who is cast in a defensive posture by the legal steps an
insurer takes in an effort to free itself from its policy obligations,
and who prevails on the merits, may recover attorneys' fees incurred
in defending against the insurer's action ... including a defense
against an insurer's declaratory judgment action." U.S.
Underwriters Ins. Co., 3 N.Y.3d at 597, 789 N.Y.S.2d 470, 822
N.E.2d 777 (quoting Mighty Midgets, Inc. v. Centennial Ins. Co., 47
N.Y.2d 12, 21-22, 416 N.Y.S.2d 559, 389 N.E.2d 1080 [N.Y.1979]
).
Fulton Boiler Works, Inc. v. Am. Motorists Ins. Co., No. 5:06-CV-1117, 2010 WL 1257943, *6
(N.D.N.Y. Mar. 25, 2010). In this case, Fulton's motion is denied as moot and also denied on
procedural and jurisdictional grounds. Therefore, Fulton has not prevailed on the merits, and the
Court denies Fulton's motion seeking its attorneys' fees and costs associated with its motion
partial for summary judgment (Dkt. No. 59).
IV. CONCLUSION
After carefully reviewing the entire record in this matter, the parties' submissions, and the
applicable law, and, for the above-stated reasons, the Court hereby
ORDERS that Defendant Fulton Boiler Works, Inc.'s motion for summary judgment
pursuant to Rule 56 of the Federal Rules of Civil Procedure (Dkt. No. 59) is DENIED as moot;
and the Court further
ORDERS that Defendant Fulton Boiler Works, Inc.'s motion for attorneys' fees and costs
associated with their motion for partial summary judgment (Dkt. No. 59) is DENIED (Dkt. No.
56) ; and the Court further
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ORDERS that the Parties are directed to file a stipulation discontinuing Plaintiff
OneBeacon America Insurance Company's first cause of action against Fulton Boilers Works, Inc.
within thirty (30) days of the date of this decision; and the Court further
ORDERS that the Parties are directed to file a stipulation discontinuing Defendant
Insurance Company of Wausau/Nationwide Mutual Insurance Company's first cross-claim against
Fulton Boiler Works, Inc. within thirty (30) days of the date of this decision; and the Court further
ORDERS that, if the Parties fail to file the stipulations discontinuing the identified
claims, Defendant Fulton Boiler Works, Inc.'s motion for partial summary judgment (Dkt. No. 59)
is DENIED; and the Court further
ORDERS that Defendant Fulton Boiler Works, Inc.'s motion for partial summary
judgment (Dkt. No. 60) is DENIED; and the Court further
ORDERS that Defendant Travelers Casualty and Surety Company's motion for summary
judgment (Dkt. No. 76) pursuant to Rule 56 of the Federal Rules of Procedure is DENIED; and
the Court further
ORDERS that Defendant Travelers Casualty and Surety Company's motion for summary
judgment (Dkt. No. 78) pursuant to Rule 56 of the Federal Rules of Procedure is DENIED; and
the Court further
ORDERS that the Clerk of the Court shall serve a copy of this Order on all parties in
accordance with the Local Rules.
IT IS SO ORDERED.
Dated: March 28, 2016
Albany, New York
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