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Wausau Underwriters Insurance Co. v. State Automobile Mutual Insurance Co.

November 30, 2007


The opinion of the court was delivered by: Irenas, Senior District Judge



This matter relates to a state court action currently pending before the New Jersey Superior Court. Subsequent to the initiation of the state court litigation, Wausau Underwriters Insurance Company ("Underwriters") and Employers Insurance Company of Wausau ("Employers")(collectively "Wausau" or "plaintiff"), provided liability coverage pursuant to policies under which a defendant in both the federal and state actions, Schuylkill Stone, Inc. ("Schuylkill"), claims to be insured.*fn1

As the plaintiff in this action, Wausau raise five claims for relief, three of which are impacted by the motion to dismiss currently before the Court. Plaintiff first seeks a declaratory judgment requiring Defendants, Erie Insurance Company ("Erie") and State Automobile Mutual Insurance Company ("State Auto"),*fn2 participate with Wausau in the defense of Schuylkill. (Compl. ¶ 43).*fn3 Wausau also seeks a monetary award in an amount sufficient to cover its outstanding and future expenses resulting from its defense of Schuylkill in the underlying New Jersey Superior Court action. (Compl. ¶¶ 47-49) Lastly, Wausau seeks to recover attorney's fees incurred as a result of prosecuting the instant action. (Compl. ¶ 51)

Presently before the Court is Erie's motion to dismiss Wausau's complaint pursuant to Fed. R. Civ. P. 12(b)(2)(lack of jurisdiction over the person) and Fed. R. Civ. P. 12(b)(5), (insufficiency of service of process).*fn4 For the reasons set forth in this Opinion, we will deny Erie's motion in its entirety.


On October 25, 2005, the Townhomes at Laurel Creek Country Club Condominium Association initiated litigation in New Jersey Superior Court against Toll Brothers, Inc. and Bell Supply Co. seeking damages for Toll Brothers' use of allegedly defective stone fascia in constructing the development.*fn5 (Compl. ¶ 15)

Subsequently, Bell Supply filed a Third-Party Complaint against Schuylkill Stone, Inc., Eldorado Stone, LLC, and Edward Murphy for providing Bell Supply with the allegedly defective stone facia. (Compl. ¶ 22)

As a result of the Third-Party Complaint, Schuylkill wrote to Wausau requesting a defense in the state court action. (Compl. ¶ 26) Upon receipt of the request, Wausau advised Schuylkill that it would provide a defense, subject to a complete reservation of rights. (Compl. ¶ 28) By letter dated August 20, 2006, Wausau advised Erie and State Auto, the insurers that provided Schuylkill with coverage prior to April 1, 2003, the date upon which Wausau's commercial general liability policy became effective, of the state court litigation and requested that each confirm liability coverage for Schuylkill. (Compl. ¶ 34) Both Erie and State Auto disclaimed coverage. (Compl. ¶¶ 35-36)

Upon receiving both Erie and State Auto's responses disclaiming coverage, Wausau filed a Complaint in this Court against Erie, State Auto and Schuylkill seeking monetary and declaratory relief relating to the question of which carrier offers coverage to Schuylkill in the state court case.

On March 28, 2007, Wausau served the Summons and Complaint on Erie by delivering a copy to Mr. L. Chan at Erie's branch office located at 120 Corporate Woods in Rochester, New York. (Opp'n Aff. Ex. 2) Wausau obtained the location of Erie's New York branch office from the website of the New York State Insurance Department. (Opp'n Aff. Ex. 3) In effecting service, Wausau relied upon the State of New York's laws governing service of process upon corporate defendants. Upon receiving a copy of Wausau's Summons and Complaint, Erie filed its Answer and Separate Defenses to Plaintiff's Complaint on May 29, 2007, and just over one month later filed the Rule 12(b)(2) and (b)(5) motion currently before the Court. Erie's answer specifically raised the lack of in personam jurisdiction as a separate defense. It did not, however, make any reference to any alleged inadequacy of service of process on Erie.


When considering a motion to dismiss, the Court must accept as true all well-pleaded allegations in the Complaint and view them in the light most favorable to the nonmoving party. See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250, 1261 (3d Cir. 1994). The Court must accept as true any and all reasonable inferences derived from those facts. See Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1384 (3d Cir. 1994). In addition to the allegations of the Complaint, the Court may consider documents attached to or specifically referenced in the Complaint, and matters of public record, without converting the motion to dismiss into one for ...

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