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Metso Automation USA, Inc. v. ITT Corp.

United States District Court, D. Massachusetts

September 22, 2014

METSO AUTOMATION USA, INC., Plaintiff,
v.
ITT CORPORATION, Defendant.

MEMORANDUM AND ORDER ON PLAINTIFF'S MOTION TO VACATE AND DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

F. DENNIS SAYLOR, IV, District Judge.

This is a dispute concerning an indemnification agreement. Jurisdiction is based on diversity of citizenship. Plaintiff Metso Automation USA, Inc. and defendant ITT Corporation each seek contractual indemnification from the other for damages incurred defending asbestosrelated product-liability suits. The parties both rely on an indemnity clause contained in an agreement executed in 1983 between their predecessors-in-interest.

The complaint originally stated a claim for, among other things, declaratory judgment as to the parties' rights under the 1983 Agreement. On August 13, 2012, the Court dismissed Metso's declaratory judgment claim on the ground that it was duplicative of the other substantive claims in the complaint. Metso has moved to vacate the Court's previous ruling on the declaratory judgment claim and enter declaratory judgment interpreting the 1983 Agreement in general terms. ITT opposes vacating the Court's previous ruling and has moved for summary judgment on the contractual indemnification claims.

For the following reasons, the motions will be granted in part and denied in part.

I. Background

A. Factual Background

The following facts are undisputed unless otherwise noted.

1. The 1983 Agreement

ITT is an Indiana corporation with a principal place of business in White Plains, New York. (Docket No. 1 ¶ 3).[1] Metso Automation USA, Inc. is a Delaware corporation with a principal place of business in Shrewsbury, Massachusetts. ( Id. ).

ITT is the successor-in-interest to ITT-Grinnell Valve Co., Inc. (Docket No. 66 ¶ 1). From 1958 to 1984, ITT-Grinnell manufactured valves under the name "Hammel Dahl." ( Id. ). At least some of those valves may have contained asbestos.

Pursuant to an agreement dated December 15, 1983 (the "1983 Agreement"), ITT-Grinnell sold its Hammel Dahl assets to Hammel Dahl, Inc., a Rhode Island corporation. ( Id. ¶ 2). The transaction closed on January 26, 1984. ( Id. ).

Article IV of the 1983 Agreement apportioned liability between Hammel Dahl and ITT-Grinnell for product-liability claims. ( Id. ¶ 3). Specifically, § 4.1 states in relevant part:

The Purchaser shall, by an instrument to be executed and delivered at the Closing... agree to perform, pay or discharge, to the extent not theretofore performed, paid or discharged, the following liabilities and obligations of the Seller:
...
(c) Liabilities of the Seller on account of any product liability claim with respect to products of the Division shipped after the Closing Date, provided, however, that all products, regardless of their actual date of shipment, shall be presumed to have been shipped after the Closing Date unless the Purchaser can show that a particular product was shipped prior to the Closing Date.... The Purchaser further agrees that, upon request of the Seller, the Purchaser will fully cooperate with and assist the Seller in defending any product liability claims that may be brought against Seller, provided, however, that the Seller shall reimburse the Purchaser for any expenses (including salaries and travel expenses of its employees) incurred by the Purchaser in providing such assistance.
Except as expressly provided in this Section 4.1, the Purchaser shall not be obligated to assume or become liable for any of the Seller's liabilities, obligations, debts, contracts or other commitments of any kind whatsoever, known or unknown, fixed or contingent.

(Docket No. 66, Ex. 1). Sections 4.2 and 4.3 defined the parties' indemnification rights under the agreement. Section 4.2 states in relevant part:

The Seller shall indemnify the Purchaser against and hold it harmless from any and all liabilities in respect of suits, proceedings, demands, judgments, damages, expenses and costs (including, without limitation, reasonable counsel fees) which the Purchaser may suffer or incur by reason of (i) the Seller's failure to pay, discharge or perform any of its liabilities or obligations which are not expressly assumed by the Purchaser under this Agreement....

( Id. ). Section 4.3 states:

The Purchaser shall indemnify the Seller against and hold it harmless from any and all liabilities in respect of suits, proceedings, demands, judgments, damages, expenses and costs (including, without limitation, reasonable counsel fees) which the Seller may suffer or incur by reason of (i) the Purchaser's failure to pay, discharge or perform any of its liabilities or obligations which are expressly assumed by the Purchaser under this Agreement; and (ii) breaches of or inaccuracies in the covenants, representations and warranties made by the Purchaser in this Agreement.

( Id. ). The 1983 Agreement is governed by Rhode Island law. ( Id. § 16.10).

Metso is Hammel Dahl, Inc.'s successor-in-interest under the agreement. (Docket No. 66 ¶ 6). In 2002, Metso sold all Hammel Dahl assets to Koso America, Inc. As part of that sale, Metso agreed to indemnify Koso for product-liability claims.

2. Product-Liability Lawsuits Against Koso

Metso has defended ten lawsuits filed against Koso alleging injury from Hammel Dahl valves (the "Metso actions"). (Docket No. 66 ¶ 7). Those cases are as follows:

(1) Andrew et al. v. Alco Div. of Nitram Energy Inc., et al., No. 10-L-538 (Ill. Cir. Ct.);
(2) Dombrowski, et al. v. Alfa Laval, Inc., et al., No. 08-1938 (Mass. Super. Ct.);
(3) Horsham, et al. v. A.O. Smith, et. al, No. 113364/2006 (N.Y. Sup.Ct.);
(4) Range, et al. v. Owens Illinois, Inc., et al., No. XXXXXXXXX (Pa. Ct. Com. Pl.);
(5) Sether, et al. v. AGCO Corp., et al., No. 07-L-865 (Ill. Cir. Ct.);
(6) Stephenson v. Asbestos Defendants, et al., No. 07-274108 (Cal. Super. Ct.);
(7) Carmine, et al. v. 4520 Corp., Inc., et al., No. N10C-10-281 (Del. Super. Ct.);
(8) Sumner, et al. v. American Blower Co., et al., Noo. N11C-04-024 (Del. Super. Ct.);
(9) Mahar, et al. v. Allied-Chalmers Corp. Prod. Liab. Trust, et al., No. 07-274434 (Cal. Super. Ct.); and (10) Bludworth, et al. v. Anderson Brooksbank Valves USA LLC, et al., No. 09-06722 (Tex. Dist. Ct.).

( Id. ¶ 7; Docket No. 18 ¶ 1; Docket No. 44 ¶ 8).

All of those actions, save Carmine and Bludworth, have been dismissed. (Docket No. 66 ¶ 8).[2] Metso has not paid any settlement or judgment as a result of those cases. ( Id. ¶ 9).

a. Andrew

The complaint in Andrew was filed on May 18, 2010, against Koso and a number of other defendants. (Docket No. 78, Ex. 42). The complaint alleged that the plaintiff was exposed to asbestos while serving in the U.S. Navy from 1944 to 1946 and working as a farmer in Texas from the 1940s to the 1980s. ( Id. ¶ 4). According to an affidavit submitted by former counsel for Metso and a predecessor, no Hammel Dahl valves were sold for use by farmers since at least the 1983 Agreement. (Docket No. 78, Ex. 24 ¶ 14).

b. Dombrowski

The complaint in Dombrowski was filed on May 16, 2008, against Koso and a number of other defendants. (Docket No. 78, Ex. 43). The complaint alleged that the plaintiff was exposed to asbestos while serving in the U.S. Navy from 1960 to 1964. ( Id. ¶ 9).

c. Horsham

The complaint in Horsham was filed on September 18, 2006, against Koso and a number of other defendants. (Docket No. 78, Ex. 44A). At his deposition, the plaintiff in that case testified that he was exposed to asbestos in the 1950s and 1960s. (Docket No. 78, Ex. 44 at 58-62, 88).

d. Range

The complaint in Range was filed on July 22, 2010, against Koso and a number of other defendants. (Docket No. 78, Ex. 46A). At his deposition, the plaintiff in that case testified that he was exposed to asbestos while serving in the U.S. Navy from 1962 to 1968. (Docket No. 78, Ex. 46 at 7, 69-72).

e. Sether

The complaint in Sether was filed on April 20, 2009, against Koso and a number of other defendants. (Docket No. 78, Ex. 47). The complaint alleged that the plaintiff was exposed to asbestos while serving in the U.S. Navy from 1942 to 1962 and while working at the Electric Boat Company from 1962 to 1985. ( Id. ¶¶ 1, 3). According to Metso, the ...


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