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Walter E. Campbell Co. v. Hartford Financial Services Group, Inc.

United States District Court, District of Columbia

August 13, 2013

WALTER E. CAMPBELL COMPANY, Plaintiff,
v.
HARTFORD FINANCIAL SERVICES GROUP, INC., et al., Defendants

Page 167

For WALTER E. CAMPBELL COMPANY, A Maryland Corporation, Plaintiff: Steven A. Luxton, LEAD ATTORNEY, MORGAN, LEWIS & BOCKIUS LLP, Washington, DC.

For HARTFORD FINANCIAL SERVICES GROUP, INC., A Connecticut Corporation, Defendant: Edward B. Parks, II, James Pio Ruggeri, LEAD ATTORNEYS, SHIPMAN & GOODWIN, LLP, Washington, DC.

For GENERAL INSURANCE, A New Hampshire Corporation, Defendant: Benjamin R. Dryden, Lori Allison Rubin, LEAD ATTORNEYS, FOLEY & LARDNER, LLP, Washington, DC.

For CONTINENTAL INSURANCE COMPANY, A Pennsylvania Corporation, NATIONAL INDEMNITY COMPANY, A Nebraska Corporation, Defendants: Prashant Kumar Khetan, LEAD ATTORNEY, TROUTMAN SANDERS LLP, Washington, DC.

For FEDERAL INSURANCE COMPANY, An Indiana Corporation, UNITED STATES FIRE INSURANCE COMPANY, A Delaware Corporation, Defendants: Jacob C. Cohn, William P. Shelley, LEAD ATTORNEYS, GORDON & REES, LLP, Philadelphia, PA; Jennifer Winter Persico, LEAD ATTORNEY, GORDON & REES, LLP, Washington, DC.

For ST. PAUL FIRE & MARINE INSURANCE COMPANY, A Minnesota Corporation, Defendant: Harry Lee, LEAD ATTORNEY, STEPTOE & JOHNSON LLP, Washington, DC.

For PENNSYLVANIA MANUFACTURERS ASSOCIATION INSURANCE COMPANY, A Pennsylvania Corporation, Defendant: Jeffrey Robert DeCaro, LEAD ATTORNEY, DECARO, DORAN, SICILIANO, GALLAGHER & DEBLASIS, LLP, Bowie, MD; John C. Sullivan, PRO HAC VICE, POST & SCHELL, P.C., Philadelphia, PA.

For PROPERTY & CASUALTY INSURANCE GUARANTY CORPORATION, A Maryland Corporation, Defendant: Albert J. Mezzanotte, LEAD ATTORNEY, WHITEFORD, TAYLOR & PRESTON, LLP, Baltimore, MD; John J. Hathway, LEAD ATTORNEY, WHITEFORD, TAYLOR & PRESTON, LLP, Bethesda, MD.

OPINION

AMY BERMAN JACKSON, United States District Judge.

Page 168

MEMORANDUM OPINION

Plaintiff Walter E. Campbell Company (" WECCO" ) - a Maryland Corporation with its principal place of business in Maryland - brings this action against eight diverse corporations, and Property and Casualty Insurance Guaranty Corporation (" PCIGC" ) - another Maryland Corporation with its principal place of business in Maryland. WECCO originally filed its complaint in Superior Court for the District of Columbia. Original File [Dkt. # 24-1] at 34-43. In the Superior Court, PCIGC moved to dismiss all claims against it or, in the alternative, for summary judgment, for lack of personal jurisdiction. Id. at 8-22. With the consent of PCIGC, the other eight defendants then removed the action to this Court on February 11, 2013, under the theory that WECCO had fraudulently joined PCIGC to the action in order to sever complete diversity and prevent jurisdiction in the federal court system. Id. at 1-3. See generally Mem. of Points and Authorities in Support of Certain Defs.' Opp. to Pl.'s Mot. to Remand [Dkt. # 39] (" Defs.' Mem." ). In this Court, six of the defendants have moved to dismiss the action or, in the alternative, for a stay pending the resolution of a related action in the United States District Court for the District of Maryland. Certain Defs.' Mot. to Dismiss or, in the Alternative, to Stay [Dkt. # 19]. WECCO has now moved to remand the action back to the Superior Court. Mot. to Remand [Dkt. # 28]. Both of those motions are fully briefed and currently pending. Because the Court finds that defendants have not met their burden of proving that WECCO fraudulently joined PCIGC as a defendant to defeat diversity jurisdiction in the federal courts, the Court lacks subject matter jurisdiction over this matter and will, therefore, remand the action to the Superior Court for the District of Columbia.

BACKGROUND

WECCO is a Maryland corporation that deals in insulation materials. Compl., Dkt. # 24-1] at 35-43, ¶ 4. Its principal place of business is in Maryland. Id. According to the complaint, WECCO was " headquartered" in the District of Columbia until 1968, and " [t]hroughout its history, WECCO's business centered on the District of Columbia, and in the immediately surrounding areas." Id. ¶ ¶ 4, 15.

The complaint in this action alleges that for many decades, WECCO handled, installed, disturbed, removed, and sold asbestos-containing insulation material. Compl. ¶ 4. Defendants are insurance companies that either themselves provided, or guaranteed other now-insolvent insurance companies that had provided, liability insurance to WECCO. Id. ¶ ¶ 5-14. The sole cause of action in the complaint before this Court arises from an insurance dispute between WECCO and defendants concerning coverage for bodily injury and wrongful death lawsuits that have been filed against WECCO alleging exposure to asbestos during WECCO's work. Id. ¶ ¶ 30-36. The complaint alleges that according to the asbestos plaintiffs' bar, WECCO used asbestos-containing materials in its work throughout the period comprising the insurance policies at issue in this action. Id. ¶ 4. WECCO seeks a declaration that the personal injury suits are within the general liability portion of the policies at issue and subject only to the " per occurrence" limits of liability in those policies, and that the present and future asbestos suits against WECCO arise out of

Page 169

multiple " occurrences" as that term is used in the policies. ...


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