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American Home Products Corp. v. Adriatic Ins. Co.

December 11, 1995

AMERICAN HOME PRODUCTS CORPORATION; AMERICAN HOME FOODS, INC.; AYERST LABORATORIES, INC.; AYERST-WYETH PHARMACEUTICALS, INC.; SHERWOOD MEDICAL COMPANY; AND WYETH LABORATORIES, INC., PLAINTIFFS/RESPONDENTS
v.
ADRIATIC INSURANCE COMPANY (ALSO KNOWN AS RIUNIONE ADRIATICA DI SICURTA); THE AETNA CASUALTY & SURETY COMPANY; AFFILIATED FM INSURANCE COMPANY; AIU INSURANCE COMPANY; ALLIANZ UNDERWRITERS INSURANCE COMPANY; ALLSTATE INSURANCE COMPANY (AS SUCCESSOR TO NORTHBROOK EXCESS AND SURPLUS INSURANCE COMPANY AND NORTHBROOK INSURANCE COMPANY); AMERICAN HOME ASSURANCE COMPANY; AMERICAN REINSURANCE COMPANY; BIRMINGHAM FIRE INSURANCE COMPANY OF PENNSYLVANIA; CALIFORNIA UNION INSURANCE COMPANY; CENTRAL NATIONAL INSURANCE COMPANY OF OMAHA; CITY INSURANCE COMPANY; CONTINENTAL CASUALTY COMPANY; THE CONTINENTAL INSURANCE COMPANY; FIRST STATE INSURANCE COMPANY; FORUM INSURANCE COMPANY;GENERAL REINSURANCE CORPORATION GOVERNMENT EMPLOYEES INSURANCE COMPANY GRANITE STATE INSURANCE COMPANY; HARTFORD ACCIDENT AND INDEMNITY COMPANY; THE HOME INSURANCE COMPANY; INSURANCE COMPANY OF NORTH AMERICA; INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA; INTERNATIONAL INSURANCE COMPANY; INTERNATIONAL SURPLUS LINES INSURANCE COMPANY; LEXINGTON INSURANCE COMPANY; LIBERTY MUTUAL INSURANCE COMPANY; LONDON GUARANTEE AND ACCIDENT COMPANY OF NEW YORK; NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA.; NEW ENGLAND INSURANCE COMPANY; NORTH STAR REINSURANCE CORPORATION; PACIFIC INSURANCE COMPANY; PROTECTIVE NATIONAL INSURANCE COMPANY OF OMAHA; ROYAL INDEMNITY COMPANY; SAFETY MUTUAL CASUALTY CORPORATION; UNIGARD SECURITY INSURANCE COMPANY; UNIONE ITALIANA REINSURANCE COMPANY OF AMERICA; UNITED STATES FIRE INSURANCE COMPANY; CERTAIN UNDERWRITERS AT LLOYD'S, LONDON AND LONDON MARKET INSURANCE COMPANIES; ALTE LEIPZIGER VERSICHERUNG A.G.; COLONIA INSURANCE COMPANY (ALSO KNOWN AS COLONIA VERSICHERUNG A.G.); GOTHAER VERSICHERUNGSBANK VVAG; AND HAFTPFLICHTVERBANK DER DEUTSCHEN INDUSTRIES V.A.G., DEFENDANTS/APPELLANTS. AMERICAN CENTENNIAL INSURANCE COMPANY; ATLANTA INTERNATIONAL INSURANCE COMPANY (AS SUCCESSOR TO DRAKE INSURANCE COMPANY OF NEW YORK); COMMERCIAL UNION INSURANCE COMPANY (FORMERLY KNOWN AS EMPLOYERS' COMMERCIAL UNION INSURANCE COMPANY OF AMERICA); EMPLOYERS' LIABILITY ASSURANCE CORPORATION, LIMITED (DOING BUSINESS AS COMMERCIAL UNION INSURANCE COMPANY); FEDERAL INSURANCE COMPANY FIREMAN'S FUND INSURANCE COMPANY; GIBRALTAR CASUALTY COMPANY; LUMBERMEN MUTUAL CASUALTY COMPANY; NATIONAL CASUALTY COMPANY; NEW ENGLAND REINSURANCE CORPORATION; PRUDENTIAL REINSURANCE COMPANY; PURITAN INSURANCE COMPANY (FORMERLY KNOWN AS MANHATTAN FIRE AND MARINE INSURANCE COMPANY); REPUBLIC INSURANCE COMPANY; TRANSAMERICA INSURANCE COMPANY; THE TRAVELERS INDEMNITY COMPANY; LE ASSICURAZIONI D'ITALIA; ASSURANCES GENERALES DE FRANCE I.A.R.T.; BERMUDA FIRE AND MARINE INSURANCE COMPANY, LTD.; LE CENTRE MUTUEL; CHEMICAL INSURANCE COMPANY; COMPAGNIE NOUVELLE D'ASSURANCES; EISEN UND STAHL; EXCESS INSURANCE COMPANY, LTD.; LA FONCIERE COMPAGNIE D'ASSURANCES ET DE REASSURANCES; GERLING-KONZERN ALLEGEMEINE VERSICHERUNGS-AG; GROUPE D'ASSURANCES MUTUELLES; INSCO, LIMITED; MENTOR INSURANCE LIMITED, UK; NISSHIN FIRE & MARINE; NORTHUMBERLAND GENERAL INSURANCE COMPANY; LA PRESERVATRICE; ROYALE BELGE I.R.S.A. D'ASSURANCE; LE SECOURS; SOCIETE LILLOISE D'ASSURANCE; SWISS REINSURANCE COMPANY; L'UNION DES ASSURANCES DE PARIS I.S.R.D.; ZURICH INTERNATIONAL LTD., DEFENDANTS.



On appeal from the Superior Court of New Jersey, Law Division, Hudson County.

Approved for Publication December 11, 1995. Counsel Amended February 9, 1996.

Before Judges King, Landau and Kleiner. The opinion of the court was delivered by King, P.j.a.d.

The opinion of the court was delivered by: King

The opinion of the court was delivered by

KING, P.J.A.D.

We granted leave to appeal, R. 2:2-3(b); R. 2:5-6(a), on June 5, 1995 to review the order of the Law Division which declined to dismiss or stay this insurance coverage action on comity grounds, in deference to an earlier action pending in New York's state court. We conclude that the plaintiffs have shown sufficient "special equities" to justify retention of jurisdiction over this New Jersey action. We affirm the March 20, 1995 decision of the Law Division Judge declining to dismiss or stay this action.

I.

American Home Products Corporation (AHP), incorporated in Delaware, is a manufacturer and distributor of agricultural, food and healthcare products throughout the United States and abroad. When the insurance contracts involved in this case were negotiated and issued, AHP's corporate headquarters and insurance department were located in New York. AHP had usually litigated coverage disputes with its carriers in New York.

In April 1991, AHP and its subsidiaries filed actions in the Delaware state court against seventy-seven or more insurers, the defendants here, seeking a declaration that these insurers were required to defend and indemnify AHP for liability incurred in connection with environmental claims at thirty-plus cleanup sites in eleven states. AHP also sought money damages for remediation costs already incurred.

Two months later, in June 1991, Employers Insurance of Wausau (Wausau), an excess-liability carrier and a defendant in the Delaware actions, filed a declaratory judgment action in New York state court against AHP, several of its subsidiaries, and the seventy-six other insurers named as defendants in Delaware. The New York action was essentially identical to the Delaware action in legal import, including the same parties, waste sites, and insurance policies.

In July 1991, Wausau and other insurers moved to dismiss AHP's Delaware actions on forum non conveniens grounds. Their motion was granted in November 1991. Upon termination of the case in Delaware, the New York trial-level court dismissed as moot AHP's then-pending motion to dismiss the New York action.

On June 1, 1992 AHP and its subsidiaries filed the present action in New Jersey, seeking declaratory relief against eighty insurance companies. The appellants in the present appeal (the insurers) are forty-three of these defendant insurance companies. This action is substantially similar to the case pending in New York; it involves the same issues and virtually the same parties. *fn1 AHP concedes that any claims it may have against any of the parties here are pending in or could be joined in the action in New York.

One month after this New Jersey action was filed, AHP moved to dismiss the New York action on forum non conveniens grounds. Wausau and other insurance companies opposed AHP's motion and cross-moved for an order enjoining AHP from proceeding in any jurisdiction other than New York. In December 1992, the New York trial-level Judge dismissed the action, except as to the single New York site, on forum non conveniens grounds.

Several insurance companies appealed. On December 15, 1994 New York's Appellate Division reversed the forum non conveniens dismissal of the claims arising from the non-New York sites and reinstated the New York action in its entirety. AHP's attempt to have the New York action dismissed on forum non grounds was effectively ended when AHP's motion for reargument and its motion for leave to appeal to the Court of Appeals were denied. The New York court, however, refused to enjoin AHP from proceeding in New Jersey, considering that issue ...


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