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Eaton Corporation v. Westport Insurance Co.

United States District Court, E.D. Wisconsin

October 27, 2017

EATON CORPORATION, Plaintiff,
v.
WESTPORT INSURANCE COMPANY, AIU INSURANCE COMPANY, GRANITE STATE INSURANCE COMPANY, NEW HAMPSHIRE INSURANCE COMPANY, and NORTH RIVER INSURANCE COMPANY Defendants.

          DECISION AND ORDER

          LYNN ADELMAN UNITED STATES DISTRICT JUDGE

         When the plaintiff, Eaton Corporation, initiated this suit, it named Westport Insurance Company as the sole defendant. Eaton alleged that Westport breached its duty to provide excess insurance coverage to Eaton for asbestos-related claims under a policy that Westport's predecessor had issued to Eaton's predecessor, Cutler-Hammer, Inc., in 1978. Westport moved to dismiss the suit under the doctrine of forum non conveniens or to transfer the case to the United States District Court for the Northern District of Ohio. I denied that motion. Several months later, Eaton filed an amended complaint. The amended complaint adds four insurance companies as defendants: AIU Insurance Company, Granite State Insurance Company, New Hampshire Insurance Company, and North River Insurance Company. Eaton alleges that these four insurers, like Westport, issued excess insurance policies that cover the asbestos claims arising out of Cutler-Hammer's business. These four insurance companies now move to dismiss the amended complaint, arguing that I should either abstain from exercising jurisdiction over the case or dismiss it under forum non conveniens.

         I. BACKGROUND

         As I explained in my opinion on Westport's motion to dismiss, Cutler-Hammer, Inc., was a manufacturer of electrical equipment and headquartered in Milwaukee, Wisconsin. On March 30, 1979, Cutler-Hammer merged into Eaton, with Eaton as the surviving entity. Eaton is an Ohio corporation having its principal place of business in Cleveland, Ohio.

         By the 1980s, various lawsuits had been filed against Eaton alleging personal injuries caused by exposure to asbestos. Some of these suits alleged exposure to asbestos contained in products manufactured by Cutler-Hammer before it merged into Eaton, and by Eaton in the continuation of the Cutler-Hammer's business. But other suits were not connected to Cutler-Hammer. These suits alleged personal injuries caused by exposure to asbestos at Eaton's premises or in products manufactured by Eaton's other divisions.

         In March 2013, Eaton filed a lawsuit in state court in Cleveland, Ohio, against a number of insurance companies that had issued liability policies to Eaton. That suit is pending. In the Ohio suit, Eaton seeks a declaration of its rights to coverage for asbestos-related claims that are not connected to Cutler-Hammer products. The Ohio lawsuit primarily involves asbestos claims arising out of Eaton's axle-brake business.

         Three of the insurance companies that Eaton has recently added to this Wisconsin case are also defendants in the Ohio case-Granite State, New Hampshire, and North River. These three insurance companies issued excess insurance policies directly to Eaton at various times in the 1970s and 1980s. Eaton alleges in the Ohio suit that those policies cover the asbestos claims arising out of Eaton's axle-brake business. In the Wisconsin suit, Eaton alleges that Granite State and New Hampshire issued different excess insurance policies directly to Cutler-Hammer, which were in force prior to the date on which Cutler-Hammer merged into Eaton, and which cover the asbestos claims arising out of Cutler-Hammer's business. In the Wisconsin suit, Eaton also alleges that AIU Insurance Company and Westport issued policies to Cutler-Hammer that were in force before the merger and that cover Cutler-Hammer asbestos claims. Neither AIU nor Westport is currently a party to the Ohio Suit-however, as I discuss below, motions have been filed in the Ohio case that, if granted, would make them parties.

         Eaton's claims against North River Insurance Company are different than its claims against the other insurers. With respect to North River, Eaton alleges that it issued four policies directly to Eaton that cover both Cutler-Hammer asbestos claims and Eaton axle-brake asbestos claims. Eaton has alleged claims against North River under these four policies in both the Ohio suit and the Wisconsin suit. However, in its complaint in the Ohio suit, Eaton alleges that it is not, in that suit, seeking a determination of coverage under the North River policies for Cutler-Hammer asbestos claims. Rather, its claims in that case under the North River policies are limited to coverage for asbestos claims relating to Eaton's axle-brake business. In the Wisconsin case, Eaton seeks a determination of coverage under the North River policies for Cutler-Hammer asbestos claims.

         After Eaton filed its amended complaint adding AIU, Granite State, New Hampshire, and North River to this case, those insurers filed motions in the Ohio case seeking to have AIU and Westport added as parties. On March 21, 2017, AIU filed a motion to intervene in the Ohio case as a defendant, counterclaimant, and third-party plaintiff. On the same day, Granite State, New Hampshire, and North River filed a motion for leave to file a third-party compliant against Westport. The point of filing these motions is to graft the Cutler-Hammer claims that Eaton has asserted in the Wisconsin case onto the Ohio case, with the result that the Ohio case would become “parallel” to the Wisconsin case, in the sense that both cases would encompass the same Cutler-Hammer insurance claims. (The Ohio case would also continue to encompass the Eaton axle-brake insurance claims.) However, as far as the record in this case reveals, the Ohio court has not yet decided either AIU's motion to intervene or the other insurers' motion to add Westport as a defendant.

         After the four insurers filed their Ohio motions, they filed in this case the present motion, in which they argue that I should either abstain from exercising jurisdiction over this case or dismiss it under forum non conveniens. They argue that either abstention or a forum non conveniens dismissal is appropriate because it would be more efficient to litigate all of Eaton's claims relating to excess insurance coverage for asbestos claims in a single forum than to have separate suits for the Cutler-Hammer claims and the axle-brake claims. The four insurers note that, although I previously declined to dismiss this case in favor of the Ohio case when Westport asked me to do so, things are different now that Eaton has asserted in this case claims against North River under policies that are also at issue in the Ohio case. I consider these arguments below.

         II. DISCUSSION

         The four newly added insurers assert two grounds for dismissing this action in favor of the Ohio state-court action: (1) abstention under what is known as Wilton/Brillhart abstention, and (2) forum non conveniens.

         A. Wilton/Brillhart Abstention

         The doctrine known as Wilton/Brillhart abstention is an application of the Declaratory Judgment Act, 28 U.S.C. § 2201.[1] That doctrine recognizes that the text of the Act states that a federal court “may declare the rights and other legal relations” of the parties, which implies that the court has discretion to decline to entertain a suit seeking declaratory relief. 28 U.S.C. § 2201(a)(emphasis added); see also Med. Assurance Co., Inc. v. Hellman, 610 F.3d 371, 377-79 (7th Cir. 2010). One well-recognized reason for abstaining under Wilton/Brillhart is that “parallel state proceedings are ongoing.” Envision Healthcare, Inc. v. PreferredOne Ins. Co., 604 F.3d 983, 986 (7th Cir. 2010). Here, the four insurers argue that the Ohio state-court action encompassing Eaton's axle-brake insurance claims is a parallel proceeding and that therefore abstention under Wilton/Brillhart is appropriate. One can debate whether the Ohio action is truly a parallel proceeding to this one, given that the Ohio court has not yet granted the insurers' ...


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