Illinois National Insurance Company et al v. Tutor Perini Corporation

Filing 35

MEMORANDUM AND ORDER: The motion to dismiss the MTA is GRANTED. (Docket #20.) The Clerk is directed to terminate the motion and to amend the caption to reflect that the Metropolitan Transportation Authority is not longer a plaintiff. (Signed by Judge P. Kevin Castel on 10/7/2011) (ft)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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ILLINOIS NATIONAL INSURANCE
COMPANY, THE INSURANCE COMPANY
OF THE STATE OF PENNSYLVANIA,
NATIONAL UNION FIRE INSURANCE
COMPANY OF PENNSYLVANIA and
METROPOLITAN TRANSPORTATION
AUTHORITY,
Plaintiffs,
11 Civ. 431 (PKC)
-againstMEMORANDUM
AND ORDER
TUTOR PERINI CORPORATION,
Defendant.
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P. KEVIN CASTEL, District Judge:
Defendant Tutor Perini Corporation (“Tutor Perini”) has moved, pursuant to
Rules 12(b)(1), 12(h)(3) and 12(f), Fed. R. Civ. P., to dismiss or strike plaintiff Metropolitan
Transit Authority (the “MTA”) as a plaintiff in this action. For the reasons explained, the
Complaint does not assert a justiciable claim on behalf of the MTA, and the motion is granted.
BACKGROUND
The First Amended Complaint (the “Complaint”) seeks a declaration that the
three plaintiff insurers – Illinois National Insurance Company (“Illinois National”), The
Insurance Company of the State of Pennsylvania (“ICSOP”) and National Union Fire Insurance
Company of Pennsylvania (“National Union”) (collectively, “Chartis”) – are not obligated to
cover losses suffered by Tutor Perini arising out of work on an MTA bus depot. (Compl. ¶¶
71-88.) The Complaint does not seek relief in favor of plaintiff MTA. Jurisdiction is premised
on diversity of citizenship, 28 U.S.C. § 1332(a). (Compl. ¶ 7.)

According to the Complaint, in May 2000, Tutor Perini entered into a contract
with the MTA for the construction of a bus terminal on 100th Street in New York City, and
substantially completed the work by July 31, 2003. (Compl. ¶¶ 9-10.) On or about April 22,
2008, the MTA wrote a letter to Tutor Perini, asserting that the bus depot’s façade was buckling
and needed repair. (Compl. ¶ 11.) The MTA then retained a non-party architecture firm to
investigate the façade, and the firm concluded that the façade was poorly constructed. (Compl.
¶ 14.) Tutor Perini has claimed that the cost of repairing the façade has totaled more than $8
million. (Compl. ¶ 21.) Chartis has denied any coverage obligation to Tutor Perini. (Compl.
¶¶ 16-20, 35-38.)
When Chartis commenced this action on January 20, 2010, the complaint did not
include the MTA as a party. (Docket # 1.) After a pretrial conference of June 21, 2011, the
Court enter a case management plan and scheduling order, which granted leave to amend “to
add” the MTA. (Docket # 17.) On June 28, 2011, Chartis filed the now-operative Complaint,
which added the MTA as a plaintiff. (Docket # 18.) According to the Complaint, the MTA
is named as a plaintiff because, as described below, it is the
named insured under the Illinois National Policy, and if there is
found to be coverage under the Illinois National Policy for Tutor
Perini’s Claim, then the MTA will have financial responsibility
with respect thereto. Accordingly, Illinois National and the
MTA have the same ultimate interest in the Court finding that
there exists no coverage under the Illinois National policy. On
information and belief, it is the MTA’s position that there is no
coverage under the Illinois National Policy for Tutor Perini’s
Claim.
(Compl. ¶ 5.) The Complaint later reiterates that if, pursuant to a policy endorsement, Illinois
National is required to provide coverage of Tutor Perini’s loss, “then the MTA will have
financial responsibility with respect thereto.” (Compl. ¶ 26.)
Tutor Perini has moved to dismiss or strike the MTA’s claim. (Docket # 20.)
The MTA’s only submission in opposition is a five-paragraph declaration by one of its
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attorneys, which asserts that the MTA has reviewed the Complaint, ratifies the assertions
contained therein, and consents to its inclusion as a plaintiff. (Hanley Dec. ¶¶ 3-5.) The
declaration does not address the justiciability of the MTA’s claim.
RULE 12(B)(1) STANDARD.
Justiciability is properly raised on a motion under Rule 12(b)(1). Aiello v.
Kellogg, Brown & Root Services, Inc., 751 F. Supp. 2d 698, 702 (S.D.N.Y. 2011) (collecting
cases). A motion to dismiss under Rule 12(b)(1) is decided under the same standards as a
motion to dismiss for failure to state a claim under Rule 12(b)(6). See Lerner v. Fleet Bank,
N.A., 318 F.3d 113, 128 (2d Cir. 2003) (Sotomayor, J.). However, “[i]n resolving a motion to
dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) a district court may consider
evidence outside the pleadings.” Morrison v. Nat’l Australia Bank Ltd., 547 F.3d 167, 170 (2d
Cir. 2008). Additionally, in opposing a Rule 12(b)(1) motion, “[t]he plaintiff bears the burden
of proving subject matter jurisdiction by a preponderance of the evidence.” Aurecchione v.
Schoolman Transp. Sys., Inc., 426 F.3d 635, 638 (2d Cir. 2005).
THE COMPLAINT HAS NOT ALLEGED A JUSTICIABLE CLAIM BY THE MTA
AGAINST TUTOR PERINI.
Counts I, II and III of the Complaint seek a declaration that the three Chartis
entities have no coverage obligation to the defendant. (Compl. ¶¶ 71-88.) The Complaint does
not seek a declaration as to the MTA’s obligations to any party, or assert that the MTA is
otherwise entitled to relief. According to the Complaint, the MTA is a plaintiff because it is the
named insured under the Illinois National policy. (Compl. ¶ 5.) The Complaint asserts that if
Illinois National has coverage obligations to Tutor Perini, the MTA “will have financial
responsibility with respect thereto.” (Compl. ¶¶ 5, 26.) Its “financial responsibility” is not
further alleged. The Chartis defendants, but not the MTA, have filed a memo in opposition to

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the motion to dismiss. In essence, the MTA has made no attempt to satisfy its burden of
establishing a justiciable case. Aurecchione, 426 F.3d at 638.
The Declaratory Judgment Act states in relevant part: “In a case of actual
controversy within its jurisdiction . . . any 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). A justiciable Declaratory Judgment Act claim must be “‘definite and concrete,
touching the legal relations of parties having adverse legal interests,’” as well as “‘real and
substantial’ and ‘admi[t] of specific relief through a decree of a conclusive character, as
distinguished from an opinion advising what the law would be upon a hypothetical state of
facts.’” MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007) (quoting Aetna Life
Ins. Co. v. Haworth, 300 U.S. 227, 240-41 (1937)).
“‘The difference between an abstract question and a “controversy” contemplated
by the Declaratory Judgment Act is necessarily one of degree, and it would be difficult, if it
would be possible, to fashion a precise test for determining in every case whether there is such
a controversy.’” Certain Underwriters at Lloyd’s, London v. St. Joe Minerals Corp., 90 F.3d
671, 675 (2d Cir. 1996). “‘That the liability may be contingent does not necessarily defeat
jurisdiction of a declaratory judgment action. Rather, courts should focus on the practical
likelihood that the contingencies will occur[ ].” Employers Ins. of Wausau v. Fox Entm’t Grp.,
Inc., 522 F.3d 271, 278 (2d Cir. 2008) (alteration in original; quoting E.R. Squibb & Sons, Inc.
v. Lloyd’s & Cos., 241 F.3d 154, 177 (2d Cir. 2001)). It is undisputed that “an insurance
company [may] bring a declaratory judgment action to determine the validity of insurance
policies,” Calderon v. Ashmus, 523 U.S. 740, 746 (1998), and that an insurance coverage

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dispute may be resolved with a declaratory judgment, even when liability may be contingent.
Associated Indem. Corp. v. Fairlchild Indus., Inc., 961 F.2d 32, 35 (2d Cir. 1992).
Here, the MTA seeks no relief from Tutor Perini, declaratory or otherwise. The
Complaint does not allege that, under any contingency, Tutor Perini is or could be liable to the
MTA. Instead, the Complaint alleges that the MTA could “have financial responsibility” to its
fellow plaintiff, Illinois National, in the event that a coverage obligation arises. (Compl. ¶¶ 5,
26.) The nature of this financial responsibility is not explicitly alleged. While the Complaint
cites policy language potentially relevant to the plaintiffs’ coverage obligations going toward
Tutor Perini, it sets forth no relevant policy language going toward any obligation between the
MTA and Tutor Perini.
Assuming the truth of the Complaint, there is no justiciable case or controversy
between the MTA and Tutor Perini. The MTA simply seeks no relief in the Complaint.
Moreover, by electing not to submit papers opposition to the motion, the MTA has not set forth
a position as to whether it has a justiciable case or controversy, and has failed to satisfy its
burden under Rule 12(b)(1).1 The MTA’s only submission in opposition consists of the fiveparagraph attorney declaration, which states that the MTA has reviewed and “ratifie[d]” the
allegations of the Complaint. (Hanley Dec. ¶ 5.) The declaration does not speak to whether the
Complaint “touch[es] the legal relations of parties having adverse legal interests.’”
MedImmune, 549 U.S. at 127.
For the foregoing reasons, the defendant’s motion is granted.

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I note that the Complaint is unsigned by any counsel or representative of the MTA. The defendant separately
moves to strike the MTA because it has not signed the Complaint, and argues that the failure to sign violates Rule
11(a), Fed. R. Civ. P. Because the Complaint does not allege a justiciable case or controversy implicating the
MTA, I do not reach this issue. Moreover, assuming arguendo that the Complaint fails to satisfy Rule 11(a), such
an infirmity could be easily resolved by an order directing the Complaint to be re-filed with a signature. See, e.g.,
Jenkins v. Sladkus, 226 F.R.D. 206 (S.D.N.Y. 2005)

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CONCLUSION
The motion to dismiss the MT A is GRANTED. (Docket #20.) The Clerk is
directed to tenninate the motion and to amend the caption to reflect that the Metropolitan
Transportation Authority is not longer a plaintiff.
SO ORDERED.

P. Kevin Castel
United States District Judge
Dated: New York, New York
October 7, 2011

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