Mitsui Sumitomo Insurance USA Inc. v. Gibson Guitar Corporation, et al, No. 1:2011cv00295 - Document 77 (S.D.N.Y. 2011)
Court Description: MEMORANDUM AND OPINION re: Defendant Gibson's motion (Dkt. No. 46) to dismiss the complaint is granted. MitsuiS cross-mot ion (Dkt. No. 43) for injunction of any prosecution of the action now pending in the Chancery Court for Davidson County, Te nnessee, is denied. The clerk will enter judgment dismissing the complaint, with costs and disbursements to defendants according to law. So ordered. 46 MOTION to Dismiss Notice of Motion to Dismiss or, in the alternative, Transfer filed by Gibson Guitar Corporation, 43 MOTION for Permanent Injunction enjoining Gibson from prosecuting its duplicative action filed in Tennessee (docketed as Civil Action No. 3:11-cv-00370 filed by Mitsui Sumitomo Insurance Company of America. (Signed by Judge Louis L. Stanton on 9/8/2011) (jmi)
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IillS DC SDNY - ~ .l ORIGI~J/\L . 1\ .. \ DOCUMENT ./ . I~ED 1\ i.ELECTRON.ICALLY F. ... \DOC#:__ . UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK x ILDATE FILE!?~'> X~ l':::::::~~= MITSUI SUMITOMO INSURANCE USA INC., Plaintiff, ......~-- /J_ 11 Civ. 295 (LLS) against - OPINION AND ORDER GIBSON GUITAR CORP. and THE CONTINENTAL INSURANCE CO., Defendants. -x Mi tsui insurer, Sumi tomo Insurance losses ("Gibson" ) as a sustained result manufacturing facilities Dist Inc. an excess ct by defendant of severe Nashville, flooding Tennessee. Tennessee under 28 U.S.C. Guitar at Corp. Gibson's Gibson moves a Tennessee state court l against Insurance Co. ("CNA"), insurance brokers Inc. and of In Tennessee its relief tsui cross an action it has pending tsui, defendant Continental parties Willis declaratory flood occurrences two 1404(a). § moves to enjoin Gibson from prosecut Tennessee, Gibson complaint or to transfer the case to the Middle ss damages ("Mitsui"), seeks a declaratory judgment that it is not liable to cover to di USA Michigan, unnamed this Inc. , and litigation, concerning case: Willis Gibson same of seeks underlying insurance coverage issues as those raised Gibson commenced that action shortly after Mitsui brought this suit. Mitsui removed it to the federal district court, which remanded it to the Chancery Court for Davidson County, Tennessee, for lack of federal jurisdiction. 1 II In this matter. For the reasons which granted and Mit low, Gibson's motion to dismiss is 's cross-motion to enjoin is denied. BACKGROUND Gibson manufactures guitars in Nashville, other places. See Sec. Am. ~ Compl. 2, 8, Tennessee, 29 . among In May 2010, Gibson experienced severe flooding at its warehouses 1 641 and suf 643 Massman Drive in Nashville (the ng roughly $17 million in losses. rd. This dispute concerns the liabili insurance business broker Willis and to cover those its affiliates at "Massman Si te") , ~~ 28, 40. of various firms in the losses. Through (together, insurance "Willis"), Gibson had procured a primary insurance policy from CNA to cover losses of the kind Willis had Gibson 1 suffered at the Massman Site. so procured an additional from Mitsui to cover "excess" ts covered in the primary policy. Shortly after the flooding, through Willis, Willis, and Gibson, buildings, Nos. on 13. ill insurance those ~~ 23 among turning primari 641 and 643, losses, Gibson filed sputes prompting layer of Id. {if rd. above for the 26. insurance claims the two whether insurers, the two should be treated as two locations or as a single physical location with two addresses. 38. - 2 Id. ~~ 29 The Tennessee state court action comprises is not a party here. complexity, for de The (if who ite suggestions it applies), Willis that Willis acted uri Willis ction States in District remanding to as the a plaintiff is the agent Tennessee Judge to state create litigation. Trauger of court, the as see Tenn. Code Ann. of the spute is highlighted by Mitsui's unsuccessful realign lit the Which side is Willis's principal adds a of Gibson, under Tennessee law, 6 l15 (b) only ion of Willis, matter at issue here but also the partic not insurer. attempt Nonetheless to federal United court, characteri ion's primary purposes: The court finds that Gibson correctly zes this suit's purpose as "the allocat of respons lity among insurers and brokers for Gibson's $17 million loss." The claims asserted by Gibson and the relevant case law both support this formulation. First, taking the claims as a "'lhole, it is clear that Gibson seeks to recover money from one, two, or 1 of the defendants to compensate it for its losses at the Massman Drive Facility. It is true that Gibson is pursuing certain of its claims in the alternativej specific ly, if Gibson recovers on its claims that its losses are covered under policies' terms, it necessarily cannot recover under the theory that Willis was igent in procuring the policies. Mit argues that this means that any cl against Willis is secondary to the claims against Mitsui and Continental. But Mitsui s t fact that, at this stage, it appears entirely poss e Gibson to recover against all three defendants-if Gibson recovers against Willis on negligent procurement claim, it may still recover t Mitsui and - 3 56 diversi Tennessee aptly § an Continental on the "breach contract by estoppel" claim, because both claims are premised on the representations made by Willis rather than on terms of the polic Thus, is not true that recovery against Willis is necessarily mutually exclus with recovery against t two insurance companies, nor is it true that Willis' and Gibson's interests are entire aligned. This supports a broader formulation of Gibson's primary purpose. * * * Here, Gibson seeks compensation from Willis and/or Mitsui and Continental to cover losses it suffered at the Massman Drive Facility. That is the primary purpose of suit from the aintiff's ive, and, in that regard, the plaintiff is adverse to all three defendants and is properly igned against them. It is immaterial that, on certain claims in certain respects, Gibson's and Willis' erests might overlap. Accordingly, the parties to this suit should not be igned, and the suit should be remanded to state court cause there is not complete divers between the aintiff and the fendants. Gibson . v. Mitsui Sumitomo Ins. Of Am., No. 11 Civ . -----------------~.-------~------------------------------00370, 3566408, at *3-4 (M.D. Tenn. Aug. 15, 2011 ) (citations omitted) (footnotes omitted) . .~ 1. The Supreme Court stated the governing principle: Ordinarily it would be uneconomical, as well as vexatious, for a f court to proceed in a aratory judgment suit where another suit is pending in a state court presenting the same issues, not governed by federal law, tween the same parties. Gratuitous rference with the orderly and comprehensive disposition a state court litigation should be avoided. Brillhart v. Excess Ins. Co. Am., ~~~~~~------------~----~----------S. Ct. 1173, 1175 76 (1942). - 4 316 U.S. 491, 495, 62 Over 50 years later, Wilton v. 2141 Court re-affirmed the Seven Falls Co., (1995), saying that, 515 U.S. 277, 283, court might be indulging in holding (515 federal U.S. Di ct Court for declaratory opportunity underway \ [g] ratuitous S. 115 Ct. where ventilat the primary purposes that they require t All the issues the Tennessee. t and only that, proceedings, are ar force liti pp. see s \\ action presenting were ion this case, (as accurately 3-4), to the extent cannot effected in the absence of Willis. Tennessee state court. ies are before Tennessee before estate which is the insurer proceed," in staying presence of Willis, ion because this lit Tennessee if it state court." described by Judge Trauger, the strict of the same state law issues, principle applies with parti for to at 2144) parallel a interference,' action acted wi thin its bounds f 2137, ventilation 0:: state court, declaratory at 290, reI Ct. "At least where another suit involving the same state law issues is pending the S. 115 the same parties and presenting opportunity tt nciple in ect state All court. real ion is in Nashville, the lit A question in the litigation is the effect of the law holding an not the insured. insurance broker No f - 5 is an agent law is at issue. of the Under sound principles of Brillhart and Wilton, cline to issue a declaratory judgment on this court will se matters. 2. tsui's prosecution Anti-I request of the unct Tennessee Act, "A court an i unct Act 22 U.S.C. § against cannot 2283, be forbids the Uni ted States may not grant Gibson's granted. it. an The It states I inj unction to stay proceedings In a State court except as expressly authorized by of Act s, juri ction, U.S.C. § or where or to protect necessary or ef uate in its of d judgments. its 22 fI 2283. injunction as request When the motions were brought, would have been against prosecution of temporarily in federal situation. It has been remanded that to is state no longer the where its court, oined. cannot be prosecut but court, Tennessee case then 3. For the reasons stated above, all seized lit ion. this court. it needs Indeed, No use it to the Tennessee court is determine the principal matters ly in is in a better position to do so purpose would jurisdiction, by staying, rather than dismiss 6 served by retaining the case. CONCLUSION Defendant complaint is Gibson's ed. motion Mit I (Dkt. No. 46) cross-mot ion S to (Dkt. ss No. 43) for unction of any prosecution of the action now pending in the Chancery Court for Davidson County, Tennessee, is denied. clerk 11 enter judgment smissing the complaint, with costs and disbursements to defendants according to law. So ordered. Dat New York, New York September 8, 2011 ~L..~ LOUIS L. STANTON U.S.D.J. 7
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