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Zurich American Insurance Co. v. Fluor Corp.

United States District Court, E.D. Missouri, Eastern Division

November 1, 2019

ZURICH AMERICAN INSURANCE COMPANY, Plaintiff,
v.
FLUOR CORPORATION, et al., Defendants.

          MEMORANDUM AND ORDER

          E. RICHARD WEBBER, SENIOR UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on Defendant/Counter-Claimant Hartford Accident and Indemnity Company's Motion to Dismiss Plaintiff/Counter-Defendant Zurich American Insurance Company's Fourth Cause of Action [256].

         BACKGROUND

         Beginning in the 1950's, St. Joseph Lead Company ("St. Joseph Lead") conducted certain lead mining operations. ECF No. 1 at ¶ 7. In 1970, St. Joseph Lead's name was changed to St. Joe Minerals. From 1981 to 1994, Defendant/Counter-Claimant Fluor Corporation owned St. Joe Minerals, (“St. Joe”), which operated a lead smelter facility in Herculaneum, Missouri. Id. at ¶ ¶ 7, 12. In 1994, Fluor sold its interest in St. Joe to the Renco Group, Inc., which renamed the company The Doe Run Resources (“Doe Run”). Id. at ¶ 7.

         Zurich American Insurance Company issued general liability policies at certain periods from December 31, 1958, to June 1, 1985 (the "Zurich Policies"), to St. Joseph Lead and St. Joe Minerals. ECF No. 1 at ¶ 12. In addition, Hartford Accident and Indemnity Company issued certain primary liability policies to Fluor from 1981 to 1987 (the "Hartford Policies"), under which Doe Run, as successor to St. Joseph Lead and St. Joe Minerals, is an additional insured. Id. at ¶ 19.

         Commencing in 1995, various parties, including Fluor and Doe Run, were sued for bodily injury and property damage claims arising from St. Joe's lead smelter facility in Herculaneum, Missouri (hereafter referred to as the “Herculaneum Claims”). Id. at ¶¶ 22-23. In 1998, Zurich filed suit against Hartford for contribution to the defense and indemnity of Doe Run and Fluor in the Herculaneum Claims, in Zurich Insurance Company v. Hartford Accident & Indemnity Company, et al., Orange County Superior Court, California, No. 791336. Id. at ¶ 21. In 2004, a final judgment was entered holding that Hartford provide coverage for Doe Run and Fluor (and contribution to Zurich) once certain retrospective premiums in the Hartford Policies were satisfied. Id. Those retrospective premiums have been satisfied. Id.

         In 2005, certain residents of Herculaneum filed claims against Fluor, Doe Run, and others in the Missouri Circuit Court, Twenty-Second Judicial Circuit in the City of St. Louis, Missouri, for alleged injuries arising from the operation of the smelter, including the period 1981 through 1994. Id. at ¶ 23. In September 2005, Fluor tendered seven lawsuits (the “Herculaneum Lawsuits”), including Alexander, et al. v. Fluor Corporation, et al., Heilig, et al. v. Fluor Corporation, et al., Pedersen, et al. v. Fluor Corporation, et al. (the “Alexander/Pedersen/Heilig Litigation) to Zurich for a “full and complete defense” under each of the Zurich Policies. Fluor's Statement of Uncontroverted Material Facts in Support of its Motion for Partial Summary Judgment (“FSUMF”), ECF No. 221-1 at ¶ ¶ 5-11. Zurich agreed to defend Fluor in these lawsuits pursuant to a reservation of rights. Id. at ¶¶ 15-21.

         On November 18, 2010, a mediation of the Herculaneum Lawsuits involving representatives from Fluor, Doe Run, Zurich, and the underlying plaintiffs was conducted. Id. at ¶ 28. After this mediation, on December 13, 2010, Doe Run reached a settlement with plaintiffs in the remaining Herculaneum Claims, including the plaintiffs in the Alexander/Pedersen/Heilig Litigation (“Doe Run Settlement”). ECF No. 1 at ¶ 24. Fluor was not included in the Doe Run Settlement. Id. at ¶ 25. Fluor never requested Zurich fund any settlement on its behalf at that mediation nor at any subsequent mediation of the Alexander/Pedersen/Heilig litigation. Id. In March 2012, Zurich made payments to Doe Run through a settlement (the "Zurich-Doe Run Global Settlement") to resolve disputes with regard to coverage for the Doe Run Settlement. Id. at ¶ 29. Zurich alleges the Zurich-Doe Run Global Settlement payments exhausted the Zurich Policies for the Herculaneum Claims. Id. at ¶ 30.

         The claims against Fluor in the Alexander/Pedersen/Heilig Litigation proceeded to trial and resulted in a judgment against Fluor for $38, 527, 186 in compensatory damages, and $320 million in punitive damages. Id. at ¶ 26. In October 2014, Fluor entered into a settlement with plaintiffs from the Herculaneum Lawsuits (that had settled separately with Doe Run in December 2010) for approximately $300 million (the “Fluor Global Settlement”). FSUMF, ECF No. 221-1 at ¶ 32.[1]

         On March 29, 2016, Zurich filed suit in this Court, asserting five separate claims in its Complaint. Under its Fourth Cause of Action, Zurich seeks a declaration it has no obligation to provide contribution or indemnity to Hartford as the Zurich Policies were exhausted by virtue of the Global Settlement with regard to the Herculaneum Claims. Id. at ¶¶ 1, 46. The Fourth Cause of Action reads in relevant part: “Zurich seeks a judicial determination that the Zurich Policies were exhausted by virtue of the Zurich-Doe Run Global Settlement with regard to the Herculaneum Claims and the personal injury coverage in the Zurich Policies. Upon information and belief, Fluor and Hartford dispute Zurich's contention.” Id. at ¶¶ 46-47. None of Zurich's other claims are asserted against Hartford. Hartford has filed a Motion to Dismiss [256] Zurich's fourth cause of action from its Complaint for lack of subject-matter jurisdiction pursuant to Fed. R. Civ. Pro. 12(b)(1).

         I.HARTFORD'S MOTION TO DISMISS

         In its Motion, Hartford asks the Court to dismiss Zurich's Fourth Cause of Action against Hartford from its Complaint for lack of subject-matter jurisdiction. According to Hartford, Zurich's claim seeking a declaration that its Policies are exhausted is not ripe for adjudication because it rests on contingent future events.

         Legal Standard - Motion to Dismiss

         Hartford's Motion to Dismiss is brought pursuant to Federal Rule of Civil Procedure 12(b)(1). See Wax'n Works v. City of St. Paul,213 F.3d 1016, 1020 (8th Cir. 2000) (indicating that whether a claim is ripe for adjudication goes to a court's subject matter jurisdiction under the case or controversy clause of Article III of the federal Constitution). “A district court has the authority to dismiss an action for lack of subject matter jurisdiction on any one of three separate bases: (1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed ...


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