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Portadam, Inc. and Robert Gatta v. Seabright Insurance Company

January 6, 2011

PORTADAM, INC. AND ROBERT GATTA,
PLAINTIFFS,
v.
SEABRIGHT INSURANCE COMPANY, DEFENDANT.



The opinion of the court was delivered by: Honorable Joseph E. Irenas

OPINION

This matter appears before the Court on Defendant's Motion to Dismiss pursuant to Federal Rules of Civil Procedure 12(b)(3), (6) and (7).*fn1 For the reasons sets forth below, the Court will deny the Motion.

I.

The Complaint alleges that Plaintiff Portadam, Inc. ("PAD") entered into an insurance contract (the "Policy") with Defendant Seabright Insurance Company ("Seabright") on October 12, 2006. (Complaint ¶ 6) The Policy covered worker's compensation claims and employer liability. (Id. at 10) PAD paid the appropriate premium and satisfied all other conditions precedent under the Policy. (Id. at 7, 12) The term of the Policy was initially from October 12, 2006 to October 12, 2007, and was extended to cover the period from October 12, 2007 to October 31, 2007. (Id. at 9)

On October 30, 2007, PAD was operating at a work site in Utah. (Id. at 13) Timothy Loveria ("Loveria"), a diver working on that project for PAD, suffered a heart attack while under water and died as a result. (Id. at 14-15)

Loveria's estate brought a claim under the New Jersey Workers' Compensation Act ("NJWCA"), N.J.S.A. § 34:15-1, et. seq.*fn2 (Id. at 16-17) Loveria's estate also brought a wrongful death and survival action (the "New York Action") in the United States District Court for the Northern District of New York against PAD, Plaintiff Robert Gatta ("Gatta"), and Timothy Brearman ("Brearman")*fn3 . (Id. at 18)

PAD and Gatta notified Seabright of the workers compensation claim and the New York Action in a timely manner. (Id. at 19) Seabright has admitted that Loveria's death was in the course and scope of his employment with PAD. (Id. at 20) Nonetheless, Seabright has refused to defend or indemnify PAD or Gatta in the New York Action. (Id. at 21)

On May 12, 2010, PAD and Gatta filed the Complaint in the United States District Court for the Eastern District of Pennsylvania. Count I of the Complaint seeks a declaratory judgment declaring that Seabright is obligated to defend the New York Action, compensate PAD and Gatta for counsel fees and costs and pay defense counsel going forward. Count II seeks a declaratory judgment declaring that Seabright is obligated to indemnify any claims in the New York Action, reimburse PAD and Gatta for costs and pay costs going forward. Count III is a claim for breach of the Policy. Count IV is a claim for bad faith.

On June 8, 2010, Seabright filed the Motion to Dismiss currently before the Court. Seabright argued that the Complaint should be dismissed for improper venue, failure to join an indispensable party, and failure to state a cause of action upon which relief can be granted. On June 17, 2010, Seabright also filed a Motion to Transfer Venue, requesting that the case be transferred to the United States District Court for the District of New Jersey.

On September 29, 2010, Judge Fullam of the United States District Court for the Eastern District of Pennsylvania granted Seabright's Motion to Transfer Venue. Judge Fullam also dismissed with prejudice Seabright's Motion to Dismiss based on improper venue, and dismissed without prejudice the remainder of Seabright's Motion to Dismiss.

On October 29, 2010, Seabright renewed their Motion to Dismiss in this Court.

II.

Federal Rule of Civil Procedure 12(b)(7) provides that an action may be dismissed due to the plaintiff's failure to join an indispensable party pursuant to Rule 19. Federal Rule of Civil Procedure 19, in turn, provides the standard the Court must employ in determining whether a case may proceed without the joinder of certain persons, and requires that the Court undertake a three-part analysis to evaluate the indispensability of the absent parties.*fn4 The Court must decide (1) whether it is necessary that the absent party be joined; (2) whether it is possible for the absent necessary party to be joined; and (3) if joinder of the absent party is not feasible, whether "in equity and good conscience the action should proceed among the parties before it, or should be dismissed, the absent person being thus regarded as indispensable." Id. "If the party is indispensable, the action therefore cannot go forward." Janney Montgomery Scott, Inc. v. Shepard Niles, Inc., 11 F.3d 399, 404 (3d Cir. 1993). The question of an absent person's indispensability is a fact-specific issue that "can only be determined in the context of the particular litigation." Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 118 (1968).

Federal Rule of Civil Procedure 12(b)(6) provides that a court may dismiss a complaint "for failure to state a claim upon which relief can be granted." In order to survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a complaint must allege facts that raise a right to ...


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