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D.C. v. Ace American Insurance Co.

United States District Court, D. Massachusetts

July 8, 2019

FIREMEN'S INSURANCE COMPANY OF WASHINGTON, D.C., Plaintiff,
v.
ACE AMERICAN INSURANCE COMPANY, THOMAS J. STORY and AEROTEK, INC., Defendants. WEGMANS FOOD MARKETS, INC., MP MASONRY INC., JOSEPH F. HOLGUIN and LAURA HOLGUIN, Interested Parties. ACE AMERICAN INSURANCE COMPANY, Counter Claimant,
v.
FIREMEN'S INSURANCE COMPANY OF WASHINGTON, D.C., Counter Defendant.

          MEMORANDUM & ORDER

          Nathaniel M. Gorton United States District Judge

         This case arises out of a dispute between two insurance companies as to which one will be required to pay attorneys' fees incurred and any judgment that may be entered in an underlying personal injury lawsuit pending in the Massachusetts Superior Court (“the State Action”). The plaintiff-counter defendant is Firemen's Insurance Company of Washington, D.C. (“Firemen's” or “plaintiff”) and the defendant-counter claimant is ACE American Insurance Company (“ACE”). Before this Court is the motion of co-defendants Aerotek, Inc. (“Aerotek”) and Thomas J. Story (“Story”) to dismiss the complaint for failure to state a claim or, in the alternative, to transfer venue to the United States District Court for the Western District of New York.

         I. Background

         A. The Parties and the Accident

         Firemen's and ACE are insurance providers that offer various kinds of insurance to businesses, including commercial general liability insurance. Wegmans Food Markets, Inc. (“Wegmans”), an interested party, is a supermarket chain with numerous locations throughout New England headquartered in Rochester, New York. MP Masonry Inc. (“MP Masonry”) is a subcontractor that provides commercial masonry services in the New England area. Aerotek is a global recruiting and staffing agency that situates employees with employers to perform particular services. One of its employees was Story. Firemen's provides general liability insurance for MP Masonry under a policy that includes an “additional insured” endorsement to add any person or entity with which MP Masonry agrees contractually but only with respect to liability for bodily injury. ACE provides general liability insurance for Aerotek in a policy that allegedly includes Wegmans as an “additional assured” and affords “insured contract” coverage for the contractual defense and indemnity obligations owed by Aerotek to Wegmans.

         In February, 2012, Wegmans entered into a “Temporary Labor Procurement Agreement” with Aerotek (“the Staffing Agreement”) whereby Aerotek became obligated to select and assign Aerotek employees (so-called “Vendor Assigned Employees”) to perform services for Wegmans. In May, 2014, Wegmans entered into a “Standard Contract for Construction” with MP Masonry (“the Construction Subcontract”) whereby MP Masonry agreed to perform masonry work at a Wegmans supermarket being constructed in Burlington, Massachusetts. Pursuant to the Staffing Agreement, Aerotek assigned several employees to provide construction supervision services for the project. Among those assigned employees was Story who acted as foreman for the construction project. A diagram may be worth a thousand words.

         (Image Omitted)

         In July, 2014, Joseph Holguin (“Holguin”), an employee of MP Masonry, sustained serious injuries when a scaffold collapsed at the project site. He subsequently received substantial workers' compensation benefits. In August, 2015, Holguin and his wife filed claims for 1) negligence, 2) loss of consortium and 3) vicarious liability against Wegmans, Aerotek and Story. Only Wegmans and Story remain as defendants in the State Action. In that case, Wegmans has demanded that MP Masonry defend and indemnify it pursuant to an indemnification clause in the Construction Subcontract. Firemen's asserts that, on behalf of its insured (MP Masonry), it has paid over $78, 000 in defense costs incurred thus far by Wegmans in the State Action.

         B. The Relevant Contractual Provisions

         The Staffing Agreement defines the relationship between Aerotek's assigned employees and Wegmans as follows:

[T]he relationship between both [Aerotek] and each of its Vendor Assigned Employees, respectively, vis-à-vis Wegmans hereunder is that of an independent contractor, and nothing set forth herein shall be deemed to render the parties as joint venturers, partners or employer and employee.

         The Staffing Agreement also requires Aerotek to maintain commercial general liability insurance that names Wegmans as an additional insured and obligates Aerotek to defend and indemnify Wegmans and its agents against any claims related to services provided under the agreement. Finally, the Staffing Agreement contains the following forum-selection clause:

[W]ith respect to any matter arising under this Agreement, the parties specifically consent and agree that the courts of the State of New York and/or the Federal Courts located in the State of New York will have exclusive jurisdiction over each of the parties and over the subject matter of any such proceedings, and that the venue of any such action will be in Monroe County, New York and/or the U.S. District Courts for the Western District of New York.

         Similarly, the Construction Subcontract requires MP Masonry to maintain general liability insurance protecting itself and Wegmans as an additional insured against claims for bodily injury arising from services performed under the contract. The Construction Subcontract also obligates MP Masonry to defend and indemnify Wegmans and its agents, employees and representatives against all such claims. Finally, the Construction Subcontract provides that

[MP Masonry] hereby voluntarily and irrevocably submits itself to the jurisdiction and venue of any court of competent jurisdiction over the subject matter of this Agreement located within the State of New York . . . [and] [a]ny litigation brought by [MP Masonry] based on or arising out of this Agreement shall be brought only in the Supreme Court of the State of New York sitting in Monroe County or in any Federal District Court in the City of Rochester, New York.

         C. Procedural History

         In January, 2019, Firemen's filed this action for declaratory relief pursuant to 28 U.S.C. § 2201 in an effort to recover from ACE, Aerotek and/or Story portions of the costs Firemen's incurred in the State ...


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