United States District Court, D. Massachusetts
MEMORANDUM AND ORDER ON DEFENDANTS' MOTION TO DISMISS OR TO STAY
F. DENNIS SAYLOR IV, District Judge.
This is a declaratory judgment action arising from an insurance coverage dispute. Plaintiff OneBeacon America Insurance Company has filed suit against defendant Celanese Corporation. OneBeacon seeks a declaratory judgment that it does not have a duty to indemnify Celanese as to judgments and settlements in underlying claims. Celanese has moved to dismiss the action or, alternatively, stay it in favor of a similar action now pending in the Northern District of Texas. For the following reasons, defendant's motion will be granted in part, and this action will be stayed pending further developments in the Texas litigation.
OneBeacon is a Pennsylvania corporation with a principal place of business in Minnesota. (Am. Compl. ¶ 3). Until 2013, OneBeacon was organized under the laws of the Commonwealth of Massachusetts. (Id. ). It is licensed to do business in Massachusetts. (Id. ). Celanese Corporation is a Delaware corporation with a principal place of business in Texas. (Am. Compl. ¶ 5).
B. Underlying Product Liability Lawsuits
Currently, there are various product liability lawsuits pending against Celanese in different jurisdictions. (Am. Compl. ¶ 8). The plaintiffs in those lawsuits seek recovery from Celanese for personal injuries that are alleged to arise from exposure to Celanese's products or premises. (Id. ¶ 9).
C. Insurance Policies
Commercial Union Insurance Company of New York issued a series of four primary liability policies to Celanese Corporation of America covering the period from June 1, 1965, to January 1, 1972. (Id. ¶¶ 10-11). OneBeacon is the successor to Commercial Union. All of the policies provided in part as follows:
I. COVERAGE - BODILY INJURY LIABILITY. [Insurer agrees] [t]o pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury caused by an occurrence as defined herein and arising out of:
A. the ownership, maintenance, operation, use loading or unloading of any automobile; and
B. all other operations of the insured and such other activities as may be incidental thereto other than the ownership, maintenance, operation, use, loading or unloading of an automobile.
(Id. ¶ 12). The policies defined an "occurrence" as "an event, or continuous or repeated exposure to conditions, which unexpectedly causes bodily injury or property damage during the policy period." (Id. ¶ 13). Each of the policies contained an "Assistance and Cooperation of the Insured" condition, which provided as follows:
The insured shall cooperate with the company and, upon the company's request, shall attend hearings and trials and shall assist in effecting settlements, securing and giving evidence, obtaining the attendance of witnesses and in the conduct of suits. The insured shall not, except at its own cost, voluntarily make any payment, assume any obligation or incur any expenses other than for such immediate medical and surgical relief to others as shall be necessary at time of accident.
(Id. ¶ 14).
The policies do not contain a choice-of-law provision. At the time they were issued, it appears that the insurer (Commercial Union) and insured (Celanese) were both based in New York.
D. 1998 Cost-Sharing Agreement
In 1998, Celanese and OneBeacon entered into an agreement to share the costs of defending against certain claims. (Pl.'s Opp. Mot. Dismiss 3). Under that agreement, OneBeacon "generally agreed to pay a one-sixth share of Celanese's defense costs as to claims covered by that agreement." (Id. ). In exchange, OneBeacon was released ...