United States District Court, D. New Hampshire
United States Fire Insurance Company et al.
Equitas Insurance Limited et al.
B. MCCAFFERTY UNITED STATES DISTRICT JUDGE.
United States Fire Insurance Company (“U.S.
Fire”) and The North River Insurance Company
(“North River”) bring suit against several
insurance companies,  seeking damages for breach of contract and
a declaratory judgment arising out of defendants' refusal
to pay plaintiffs amounts they claim are due under certain
insurance contracts. Defendants move to dismiss or stay the
case (doc. no. 33), and plaintiffs object. Plaintiffs move to
strike portions of defendants' memorandum in support of
their motion to dismiss (doc. no. 50), and defendants object.
1972 to 1985, U.S. Fire and North River, both New Jersey
companies, issued twelve umbrella and excess umbrella
liability policies to Mine Safety Appliances Company
(“MSA”), a Pennsylvania corporation that
manufactured and sold products such as respiratory protection
equipment and asbestos-containing personal protective
products. The policies had combined limits of
approximately $244 million (the “MSA Policies”).
that same timeframe, plaintiffs entered into reinsurance
contracts that covered the twelve MSA Policies (the
“Reinsurance Contracts”). In their complaint,
plaintiffs allege that they entered into at least one
Reinsurance Contract with each defendant, other than Equitas.
They allege, however, that Equitas assumed obligations of its
predecessors-in-interest under the Reinsurance Contracts
“pursuant to a transaction approved by the English High
Court of Justice on or about June 30, 2009.” Doc. no. 5
at ¶ 8. Each of the Reinsurance Contracts was entered
into in the United Kingdom. Plaintiffs allege that RiverStone
Claims Management LLC (“RiverStone”), a New
Hampshire-based company that is not a party to this
litigation, managed the claims under the Reinsurance
in the 1990s, MSA sought insurance coverage from plaintiffs
under the MSA Policies for hundreds of bodily injury claims
based on exposure to asbestos, coal, and silica dust.
MSA's attempts to have plaintiffs provide coverage under
the MSA Policies resulted in many litigations, none of which
was in New Hampshire.
October 2016, MSA obtained a jury verdict in Pennsylvania
state court against plaintiffs for breach of three of the MSA
Policies and violation of Pennsylvania's bad faith
statute. Plaintiffs paid a substantial portion of the claims
tendered by MSA in 2017, and then fully resolved its disputes
with MSA in mid-2018 in a confidential settlement.
in March 2017 and continuing through 2018, plaintiffs,
through RiverStone, billed defendants for amounts they
claimed were due under the Reinsurance Contracts on account
of the MSA settlement payments. Certain defendants, as well
as other reinsurers not named as defendants in this case,
paid some of the reinsurance billings subject to a full
reservation of rights, including the right to recoup any
payments. Eventually, certain defendants refused to pay
additional billings. On December 21, 2018, plaintiffs brought
this suit, alleging breach of several of the Reinsurance
Contracts and seeking a declaratory judgment arising out of
defendants' refusal to pay the additional billings.
New Jersey Action
December 21, 2018, less than an hour before plaintiffs
initiated the instant lawsuit, certain underwriters at
Lloyd's of London (“Underwriters”), along
with Tenecom, Winterthur, Sompo, and Berkshire (collectively,
the “New Jersey Plaintiffs”) sued North River and
U.S. Fire in the Complex Business Litigation Program of the
New Jersey Superior Court (the “New Jersey
Action”). The complaint in the New Jersey Action
alleges claims for breach of contract and breach of the
implied covenant of good faith and fair dealing.
Specifically, the New Jersey Plaintiffs, who have made
payments to North River and U.S. Fire pursuant to the
Reinsurance Contracts under a reservation of rights, seek
reimbursement of those amounts. In addition, like plaintiffs
in this action, the New Jersey Plaintiffs seek a declaratory
judgment regarding the parties' “respective rights
and liabilities” and “rights, duties, and
obligations” under the Reinsurance Contracts.
in this case, the Underwriters are parties in the New Jersey
Action. In addition, Equitas, a defendant in this case, is
not a party in the New Jersey Action.
move to dismiss or stay this case. They advance several
arguments, including: (1) the court should exercise its
discretion to dismiss or stay this case pursuant to the
prior-pending action doctrine or the related first-filed
doctrine in light of the New Jersey Action; (2) abstention is
warranted under the Colorado River doctrine in light of the
New Jersey Action; and (3) the court should dismiss the case
because the Underwriters are indispensable parties under