On appeal from the Superior Court of New Jersey, Law Division, Morris County, L-1873- 96.
Before Judges Baime, Carchman and Lintner.
The opinion of the court was delivered by: Lintner, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
On June 3, 1996, the plaintiffs, Exxon Research and Engineering (ER&E), Exxon Services Company (ESC) and Exxon Services Venezuela Inc. (ESV), (hereinafter referred to collectively as Exxon plaintiffs), filed a complaint against reinsurers, Industrial Risk Insurers (IRI), New Hampshire Insurance Company (NHI), International Oil Insurers (IOI), and CIGNA Corporation, A.K.A. CIGNA Worldwide and CIGNA Insurance Company of Europe (CIGNA). In part, plaintiffs sought a declaration that they were not liable for damages resulting from a fire that occurred at a Venezuela oil refinery in 1989. They also sought an injunction against defendants from enforcing, in any jurisdiction, a judgment yet to be rendered, arising from a 1991 Venezuela lawsuit dealing with the fire. After almost three years of discovery on the issues of comity, jurisdiction, and forum selection, Judge Miniman granted summary judgment dismissing plaintiffs' complaint with prejudice, on the grounds of international comity and the forum selection clause appearing in the Technical Service Agreement.
We affirm Judge Miniman's order dismissing plaintiffs' complaint based upon application of principles of international comity. We decline to consider the appropriateness of the dismissal based solely upon the forum selection provisions of the relevant contracts, but instead consider the contractual provisions as a factor bearing upon the comity analysis. Likewise, because we defer to the Venezuela court on comity grounds, we need not, at this time, consider the appropriateness of the judge's finding that plaintiffs failed to properly prosecute its declaratory judgment action by omitting necessary parties. We affirm the dismissal of plaintiffs' complaint against CIGNA. However, we modify the dismissal with prejudice of plaintiffs' complaint against all defendants and enter, in its place, a dismissal without prejudice.
In the 1970s, plaintiff ER&E designed a process known as Flexicoking for converting crude oil into light petroleum products. ESC licensed Flexicoking for use at the Amuay Refinery in Venezuela. The refinery was owned and operated by Lagoven, a subsidiary of the national oil company of Venezuela, Petroleos de Venezuela, S.A. (PDVSA). Plaintiff-intervenor, Fluor Daniel (Fluor), provided engineering, construction, and technical assistance. The construction of the Flexicoking Unit at Amuay Refinery was completed in 1982 and, in 1986, ESC agreed to provide technical assistance for its operation. In 1989, a fire started in the unit causing damage estimated at almost $40,000,000. However, pursuant to a settlement agreement, Lagoven was paid $20,000,000 by its insurance companies (Seguros Caracas), which in turn were reimbursed that sum by their reinsurance consortium (twenty-one companies). In 1991, the reinsurers assigned their rights to Desarrolos Oriflama (Oriflama), a corporation set up for the sole purpose of litigating the matter. Oriflama then filed an action against the Exxon plaintiffs in Venezuela, alleging that their faulty design and flawed technical assistance were responsible for the fire.
Plaintiffs' 1996 complaint named the four lead reinsurers, covering approximately seventy-five percent of the loss, as defendants. The complaint essentially alleged that (1) plaintiffs were not liable for the damages resulting from the fire; (2) the Venezuela litigation did not provide an adequate forum for a fair resolution of the Amuay fire dispute; (3) Oriflama was a sham corporation and alter ego of defendant reinsurers; (4) the assignment of the reinsurers' rights to Oriflama was invalid; and (5) defendants should be responsible for reimbursing plaintiffs for the costs of defending the Venezuela action in the event plaintiffs prevailed. Fluor was permitted to intervene as a plaintiff.*fn1
On December 11, 1996, Judge Ahto denied, without prejudice, defendants' motion to dismiss the complaint or, alternatively, stay the action on the ground of comity, and permitted discovery to proceed on the issues of comity and jurisdiction. On January 31, 1997, defendants filed an answer denying the allegations and asserting ten affirmative defenses, including the doctrines of comity and forum non conveniens, lack of personal jurisdiction, and the failure to join an indispensable party (Oriflama). Plaintiffs filed a motion to strike the defense of lack of personal jurisdiction, in response to which defendants CIGNA and IOI filed a cross-motion to dismiss the complaint for lack of personal jurisdiction. On April 18, 1997, plaintiffs' motion to strike was granted, and defendants' motion to dismiss was denied. We denied defendants' motion for leave to file an interlocutory appeal on June 10, 1997.
On May 29, 1998, Fluor filed a motion seeking to enforce a settlement agreement between itself and defendants, including Oriflama. After taking testimony from witnesses, Judge Miniman granted defendants' motion, which was memorialized in her order of March 2, 1999.
On February 19, 1999, defendants filed a motion for summary judgment or, in the alternative, a motion to stay the action pending final resolution of the Venezuela litigation. On March 31, 1999, plaintiffs filed a cross-motion for summary judgment for a declaration that "decennial" liability did not attach, and that they did not give negligent advice. Plaintiffs also sought a declaration holding defendant reinsurers responsible for any liability for plaintiffs' legal fees assessed against Oriflama, in the event plaintiffs were successful in defending the Venezuela litigation. Judge Miniman issued a written decision on March 29, 2000, and on the same day entered an order dismissing the complaint with prejudice.
In ruling in defendants' favor, the judge found that comity required dismissal of the action because the Venezuela suit was filed first; both cases involved substantially the same parties, claims, and legal issues; the Venezuela courts provided an opportunity for adequate relief for plaintiffs; and plaintiffs had not established any special equities justifying retaining the action in New Jersey. She also found that declaratory judgment was inappropriate because it would not terminate the proceedings in Venezuela, and plaintiffs had not joined Oriflama or the seventeen other reinsurers providing twenty-five percent of the total coverage. She also based her ruling on the existence of the forum selection clause in the Technical Assistance Agreement. Finally, she found that defendant CIGNA Corporation was a stock holding company, not an insurance company, and had neither sold nor otherwise provided reinsurance covering the Amuay Refinery.
Plaintiffs appeal, raising the following points:
THE COURT BELOW ABUSED ITS DISCRETION BY DISMISSING THE COMPLAINT OF THE EXXON PLAINTIFFS FOR FAILURE TO STATE A CLAIM UNDER THE NEW JERSEY DECLARATORY JUDGMENT ACT.
THERE ARE NO ABSENT PARTIES WHOSE RIGHTS CANNOT BE ADJUDICATED BY A DECLARATORY JUDGMENT.
CIGNA CORPORATION IS A PROPER PARTY TO THIS ACTION.
THE DEFENDANT REINSURERS ARE NOT ENTITLED TO A STAY OR DISMISSAL BASED UPON THE RULES OF INTERNATIONAL COMITY IN AN IN PERSONAM ACTION.
A. The Parties in the Venezuelan proceeding and in the matter in the New Jersey Superior Court are not substantially the same.
B. The Claims and Legal Issues in the Venezuelan proceeding and the matter in the New Jersey Superior Court are not substantially the same.
C. Adequate relief is not available to the Exxon plaintiffs in the Venezuelan proceeding.
D. Promotion of judicial efficiency leans to New Jersey.
E. Fairness to all parties negates entry of a stay.
F. Temporal filing favors New Jersey action.
THE COURT BELOW ABUSED ITS DISCRETION IN FINDING THAT THE EXXON PLAINTIFFS FAILED TO DEMONSTRATE "SPECIAL EQUITIES" SUFFICIENT TO WARRANT CONTINUATION OF PROCEEDINGS IN NEW JERSEY.
THE TECHNICAL SERVICE AGREEMENT DOES NOT PROVIDE FOR EXCLUSIVE JURISDICTION IN VENEZUELA.
DISMISSAL OF THE COMPLAINT WITH PREJUDICE BECAUSE OF THE PENDING SUIT IN ...