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Lamorak Insurance Co. v. Celanese Corp.

Superior Court of Massachusetts, Suffolk, Business Litigation Session

September 20, 2018

LAMORAK INSURANCE COMPANY
v.
CELANESE CORPORATION et al.

          File Date: September 24, 2018

          DECISION AND ORDER REGARDING DEFENDANT CELANESE CORPORATION’S MOTION TO DISMISS OR, IN THE ALTERNATIVE, MOTION TO STAY PENDENTE LITE (DOCKET ENTRY NO. 16.0)

          Brian A. Davis, Associate Justice of the Superior Court

          This is another in a long series of battles between plaintiff Lamorak Insurance Company, the legal successor to Commercial Union Insurance Company and OneBeacon America Insurance Company (collectively, "Plaintiff" or "Lamorak"), and one of its insureds, defendant Celanese Corporation ("Defendant" or "Celanese"), concerning their respective rights and obligations under certain primary, umbrella, and excess insurance policies that Lamorak (through its corporate predecessors) issued to Celanese between 1965 and 1972 (the "Policies"). The parties have locked horns over the Policies on multiple occasions because Celanese has sought, and continues to seek, coverage for a string of asbestos-related bodily injury lawsuits pending in various jurisdictions around the United States ("Underlying Suits"). Lamorak and Celanese have litigated issues pertaining to the Policies and their associated side-agreements on at least three prior occasions dating back to 2006; twice in the Massachusetts courts (in 2006 and 2010), and again most recently in the Texas courts (in 2014). This present action, which Lamorak filed on February 9, 2018 (the "Massachusetts Action"), represents at least the parties’ fourth court battle over the Policies. A nearly identical fifth action was filed by Celanese on February 12, 2018 (i.e., three days after the commencement of this action) in the District Court of Dallas County, Texas (the "Texas Action"), and remains pending. The question now facing this Court is where will the parties resolve their current disputes, Massachusetts or Texas?

         Some additional factual background is necessary in order to fully appreciate the current state of affairs. At one time, Lamorak was organized and based in Massachusetts. In 2014, however, Lamorak was re-domesticated in Pennsylvania. As a result, Lamorak no longer has any direct ties to Massachusetts. Celanese has been, at all relevant times, a Delaware corporation that is based in Texas. The Policies were issued to Celanese in New York and are, according to Lamorak, generally governed by New York law.

         The parties’ present disputes arise in large part from a bodily injury lawsuit filed against Celanese in Texas back in 2015. See Olga Gonzalez, Ventura Gonzalez, III, and Lisa Saenz, Individually and as Representative of the Estate of Ventura Gonzalez, II, Deceased v. CNA Holdings, Inc. f/k/a Celanese Corporation, Cause No. 2015-4174-ABS, District Court of Kleberg County, Texas (the "Gonzalez Suit"). In the Gonzalez Suit, the plaintiffs sought damages arising out of Ventura Gonzalez’s alleged exposure to asbestos between 1966 and 1980 while he worked at a Celanese plant located in Bishop, Texas. Celanese tendered the Gonzalez Suit to Lamorak for defense and indemnity under the Policies, and Lamorak agreed to defend the Gonzalez Suit, purportedly without reserving the right to deny coverage in the future. According to Celanese, Lamorak and Resolute Management, Inc. ("Resolute"), Lamorak’s third-party claims administrator, later informed Celanese on February 2, 2018 (i.e., more than two years after the Gonzalez Suit was filed and just ten days prior to trial of that action) that the Policies afforded less coverage for a judgment or settlement in the Gonzalez Suit than Celanese believed to be the case.[1] This announcement by Lamorak and Resolute triggered an immediate round of apparently tense discussions and negotiations between the parties.

          While those discussions and negotiations were taking place, Lamorak filed its original eight-page complaint in this action on Friday, February 9, 2018, naming just Celanese as a defendant and seeking only a judicial declaration regarding the liability limits that apply under the Policies to the claims asserted against Celanese in the Gonzalez Suit, and to similar claims made against Celanese in the other Underlying Suits. See Complaint (Docket Entry No. 1.0). On Monday, February 12, 2018, one business day after the filing of the Massachusetts Action, Celanese commenced the Texas Action against Lamorak, Resolute, and four excess insurers in Texas state court. See Celanese Corporation v. Resolute Management, Inc., Cause No. DC-18-01990, 44th Judicial District, Dallas County, Texas. Celanese’s more extensive and comprehensive petition in the Texas Action seeks monetary damages from Lamorak for anticipatory breach of the Policies, violation of the Texas Insurance Code, and violation of the Texas Deceptive Trade Practice Act in connection with the Gonzalez Suit, monetary damages against the excess insurers and Lamorak for anticipatory breach of their policies in connection with the Gonzalez Suit, and monetary damages against Resolute for tortious interference. Celanese’s petition also seeks declaratory relief regarding Lamorak’s and the excess insurer’s obligations under their respective policies in connection with the Gonzalez Suit and the other Underlying Suits.

         Lamorak served Celanese with its original complaint in the Massachusetts Action on February 14, 2018. Celanese served Lamorak with its original petition in the Texas Action the next day. In early March 2018, Lamorak amended its complaint in the Massachusetts Action to add allegations seeking declaratory relief from this Court regarding the obligations of the excess insurers named in the Texas Action. A few weeks later, Celanese amended its petition in the Texas Action to reflect the settlement of the Gonzalez Suit, to replace its claim for anticipatory breach against Lamorak with one for actual breach, to remove an excess insurer as a party, and to add a breach of fiduciary duty claim against Resolute.[2]

         Celanese responded to Lamorak’s amended complaint in this Massachusetts Action by serving a motion to dismiss the case under the doctrine of forum non conveniens, or in the alternative, for an order staying the case pendent lite, that is pending resolution of the Texas Action (the "Motion to Dismiss"). Lamorak opposes Celanese’s Motion to Dismiss motion. Notwithstanding that opposition, Lamorak has responded to Celanese’s petition in the Texas Action by filing an answer.[3]

         Given the relative procedural postures of the parties, it is no surprise that the Texas Action has moved forward at a much quicker pace than the Massachusetts Action. The parties to the Texas Action already have commenced written discovery, already have briefed and argued a summary judgment motion filed by Resolute, and already have received a trial date of March 25, 2019.[4] In contrast, no discovery has been taken as of yet in the Massachusetts Action and no trial date has been set.

         Celanese’s Rule 9A package containing its Motion to Dismiss the Massachusetts Action was filed with this Court on May 16, 2018. The Court conducted a hearing on Celanese’s Motion to Dismiss on August 7, 2018. Both sides appeared and argued. Upon consideration of the written submissions of the parties and the oral arguments of counsel, Celanese’s Motion to Dismiss is ALLOWED for the reasons stated on the record at the hearing and summarized, briefly, below.[5]

          The doctrine of forum non conveniens, as interpreted and applied under Massachusetts law, permits a court to dismiss an action if it "finds that in the interest of substantial justice the action should be heard in another forum." G.L.c. 233A, § 5. See also Gianocostas v. Interface Group-Massachusetts, Inc., 450 Mass. 715, 723 (2008) ("In general terms, the doctrine of forum non conveniens provides that, where in a broad sense the ends of justice strongly indicate that the controversy may be more suitably tried elsewhere, then jurisdiction should be declined and the parties relegated to relief to be sought in another forum") (internal quotations and citation omitted). Whether to dismiss a particular action on forum non conveniens grounds lies within the sound discretion of the motion judge. Gianocostas, 450 Mass. at 723. The judge’s decision, however, requires an assessment of various private and public factors that "cannot be made by applying a universal formula, and depends greatly on the specific facts of the proceeding before the court." Oxford Global Resources, LLC v. Hernandez, 2018 WL 4266795 at *7 (Mass. Sept. 7, 2018) (quoting W.R. Grace Co. v. Hartford Accident & Indem. Co., 407 Mass. 572, 577 (1990)). The private factors to be considered include "the practical problems that do or do not make a trial easy, expeditious and inexpensive, such as the ease of access to proof, the availability of compulsory process, and the cost of attendance of witnesses." Id. at *8 (internal quotation marks and citation omitted). The public factors include "administrative burdens caused by litigation that has its origins elsewhere and the desirability of the trial of a case in a forum that is at home with the governing law," as well as the relative interests of the potential forums in which the matter might be litigated. Id. at *8-9 (internal quotation marks and citation omitted). While it has been said that a plaintiff’s forum choice "should rarely be disturbed," id. at *8 (internal quotation marks and citation omitted), dismissal is appropriate "if there is an alternative forum in which justice may be had, and if the balance of private and public concerns strongly favor the defendant’s motion." Gianocostas, 450 Mass. at 723.

         In this case, it is not disputed that Texas presents "an alternative forum in which justice may be had" between Lamorak and Celanese. Id. The question presented by Celanese’s Motion to Dismiss is whether the claims asserted in this Massachusetts Action should be litigated in Texas "in the interest of substantial justice ..." G.L.c. 233A, § 5.

         As required, the Court has weighed the private and public factors implicated by Celanese’s Motion to Dismiss. The private factors, on the whole, favor Texas as the appropriate forum. Access to the likely sources of proof is available in both Massachusetts and Texas, but that access can be more readily had in Texas, where much of the evidence and many of the witnesses involved in the Gonzalez Suit are located. The same also is true with respect to the other Underlying Actions, nine of which are pending in Texas, but only one of which is pending in Massachusetts.[6] More ready access to the evidence in Texas makes it likely that the cost of litigating this matter in that forum will be less.

         The public factors, on the other hand, strongly favor the resolution of the parties’ present disputes in Texas. Celanese has its principal place of business in Texas and substantially more of the injured plaintiffs in the Underlying Suits reside in Texas. Certainly most, if not all of the interested parties to the Gonzalez Suit reside in Texas. As such, Texas has a clear interest in protecting its resident policy holders and injured claimants. Texas also was the location of the parties’ most recent litigation skirmish in 2014.[7] Massachusetts, conversely, "has very little interest in the outcome of this lawsuit" given the relative dearth of affected claimants living in this Commonwealth and Lamorak’s recent re-domestication in Pennsylvania.[8] See Oxford Global Resources, LLC, 2018 WL 4266795, at *9. And there is no reason to believe that the Texas courts are less better equipped than this Court to decide any questions that ...


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