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State National Insurance Company v. the County of Camden and Assistant County Counsel Donna Whiteside

December 17, 2010

STATE NATIONAL INSURANCE COMPANY, PLAINTIFF,
v.
THE COUNTY OF CAMDEN AND ASSISTANT COUNTY COUNSEL DONNA WHITESIDE, DEFENDANTS.
THE COUNTY OF CAMDEN, COUNTERCLAIMANT AND THIRD-PARTY PLAINTIFF,
v.
STATE NATIONAL INSURANCE COMPANY, COUNTERCLAIM-DEFENDANT AND
NICHOLAS M. ANDERSON, THIRD-PARTY DEFENDANT, AND
SCIBAL ASSOCIATES, INC., THIRD-PARTY DEFENDANT AND THIRD-PARTY COUNTERCLAIMANT.
SCIBAL ASSOCIATES, INC., FOURTH-PARTY PLAINTIFF,
v.
DONNA WHITESIDE AND MEADOWBROOK INSURANCE GROUP, FOURTH-PARTY DEFENDANTS.
THE INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA, INTERVENING PLAINTIFF,
v.
THE COUNTY OF CAMDEN AND SCIBAL ASSOCIATES, DEFENDANTS.



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

OPINION

This matter concerns the determination of which entity or person is liable to pay for a multi-million dollar state court jury verdict in favor of a plaintiff who sued the County of Camden, New Jersey for injuries he sustained when he drove off the road and into a guardrail owned and maintained by the County. Presently before the Court is the motion of Commerce Insurance Services to dismiss fourth-party plaintiff Scibal Associates, Inc.'s claims against it. For the reasons expressed below, Commerce's motion to dismiss will be granted.

BACKGROUND

As summarized before in the Court's several previous Opinions in this case, on December 23, 2004, Nicholas Anderson was driving on Raritan Avenue in Waterford, New Jersey when he drove off the road and hit a guardrail. Anderson sustained serious injuries, including an amputated leg and nearly amputated arm. On December 20, 2006, Anderson filed suit in New Jersey state court against the County of Camden (the "County"), which owned and maintained the road and guardrail. Anderson claimed that the County's negligent maintenance of the road and guardrail were the proximate cause of his injuries. The case went to trial, and on October 17, 2008, the jury returned a $31 million verdict against the County.*fn1

On October 20, 2008, State National Insurance Company ("State National") filed a declaratory judgment action in this Court against the County,*fn2 seeking a declaration that it does not owe coverage to the County for the Anderson lawsuit under an excess liability insurance contract. State National contends that the County's delay in notifying it of the lawsuit, its repeated representation that the case was within the County's $300,000 self-insured retention, its errors in investigating and defending the case, and its revaluation of the case four days into trial, breached the insurance contract's notice provision and the adequate investigation and defense condition to coverage.

State National's declaratory judgment action has spawned numerous counterclaims, third-party and fourth-party complaints, and an intervening plaintiff complaint. Presently before the Court is the motion of Commerce Insurance Services ("Commerce")*fn3 to dismiss the fourth-party complaint filed against it by Scibal Associates, Inc. ("Scibal"). Commerce is the broker who procured for the County an excess insurance policy from intervenor Insurance Company of the State of Pennsylvania ("ICSOP"). Scibal is the County's claims administrator. Scibal filed suit against Commerce based on Scibal's potential liability to the County and to ICSOP.*fn4

In the County's third-party complaint, the County asserts claims against Scibal for breach of its duties as the County's claims administrator. The County claims that pursuant to their Professional Services Agreement ("PSA"), Scibal agreed to perform services for the County, including reporting all claims to the County's excess carrier and reinsurers in accordance with those entities' reporting requirements and preparing and providing claim reports reasonably required by the excess insurance carriers. The County claims that Scibal breached these duties by failing to notify its insurance carriers that the Anderson lawsuit was filed. The County also claims that should it be found liable to State National on its claims against the County, Scibal is partially or fully responsible based on the principles of contribution and indemnification due to Scibal's breach of the PSA.

Similarly, ICSOP has filed claims against Scibal, alleging that Scibal breached the notice provision of the ICSOP policy, and indemnification and contribution against Scibal in the event ICSOP is deemed liable to the County.

Based on the County's and ICSOP's claims against Scibal, Scibal advances its claims against Commerce.*fn5 Scibal contends that Commerce promised to the County that it would inform Scibal that it procured the ICSOP policy, but that Commerce failed to do so. Scibal contends that it was the intended third-party beneficiary of that agreement between Commerce and the County, and, therefore, Commerce's failure to notify Scibal about the ICSOP policy makes Commerce liable (in contract and tort) to Scibal for any liability that is imposed on Scibal for its failure to notify ICSOP about the Anderson lawsuit. Commerce has moved to dismiss these claims against it. Scibal has opposed the motion.

DISCUSSION

A. Jurisdiction

This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332 because there is complete diversity of citizenship between the parties and the amount in controversy exceeds $75,000.

B. Standard for Motion to Dismiss

When considering a motion to dismiss a complaint for failure to state a claim upon which relief can be granted pursuant to Fed. R. Civ. P. 12(b)(6), a court must accept all well-pleaded allegations in the complaint as true and view them in the light most favorable to the plaintiff. Evancho v. Fisher, 423 F.3d 347, 351 (3d Cir. 2005). It is well settled that a pleading is sufficient if it contains "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Under the liberal federal pleading rules, it is not necessary to plead evidence, and it is not necessary to plead all the facts that serve as a basis for the claim. Bogosian v. Gulf Oil Corp., 562 F.2d 434, 446 (3d Cir. 1977). However, "[a]lthough the Federal Rules of Civil Procedure do not require a claimant to set forth an intricately detailed description of the asserted basis for relief, they ...


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