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The Netherlands Insurance Company and Excelsior Insurance v. Precision Electronic Glass

December 10, 2012

THE NETHERLANDS INSURANCE COMPANY AND EXCELSIOR INSURANCE COMPANY, PLAINTIFFS,
v.
PRECISION ELECTRONIC GLASS, INC., PHILIP ROSSI, AND ADDISON: AUTOMATICS, INC. DEFENDANTS.



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

OPINION

Currently pending before the Court are two motions: (1) Defendant Addison Automatic Inc.'s ("Addison") Motion to Dismiss for Lack of Personal Jurisdiction; and (2) the Joint Motion of Defendants Addison, Precision Electronic Glass, Inc. ("PEG") and Philip Rossi ("Rossi") to Dismiss Pursuant to the Abstention Doctrine. [Doc. No. 12.]*fn1 For the reasons that follow, the Joint Motion of all Defendants based on federal abstention will be granted and Addison's Motion to Dismiss for Lack of Personal Jurisdiction will be denied as moot.

I. FACTUAL AND PROCEDURAL BACKGROUND

In this matter, two insurance companies request the Court to

declare their rights and responsibilities under several insurance policies previously issued to one of the defendants. Plaintiffs The Netherlands Insurance Company ("Netherlands") and Excelsior Insurance Company ("Excelsior") are general and excess liability insurers. Defendant PEG is a manufacturer of glass and quartz components, and Defendant Rossi is its principal and president. Defendant Addison is a manufacturer of automatic pedestrian door parts.

Between 2005 and 2008, Netherlands issued three general liability policies and Excelsior issued three commercial umbrella liability policies to PEG. (Am. Compl. ¶¶ 7,8.) In August of 2010, Addison, as class representative, filed a class action suit against PEG in Illinois state court*fn2 alleging violations of the Telephonic Consumer Protection Act, 47 U.S.C. § 227, the Illinois Consumer Fraud and Deceptive Business Practices Acts, and common law conversion, on the basis that PEG sent unsolicited "junk" facsimiles to members of the class. (Id. ¶¶ 9, 10, 11.) In September of 2010, Netherlands disclaimed coverage under its issued policies with respect to the action pending in Illinois. (Id. ¶ 13.) In July of 2011, PEG tendered its claim to Excelsior, alleging that, even if the underlying Netherlands policies did not provide it with coverage, Excelsior should nonetheless cover it under the umbrella policies. (Id. ¶ 15.)

On November 4, 2011, Addison filed a lawsuit in the Superior Court of the Commonwealth of Massachusetts, seeking a declaration of the rights and obligations arising under the insurance policies issued to PEG with respect to the Illinois action. (Defs.' Mot. Dismiss, Ex. B, "Addison Mass. Compl.")

On December 8, 2011, Netherlands and Excelsior filed the instant action before this Court, seeking a declaration of their obligations under the policies they previously issued to PEG.*fn3

On March 9, 2012, Addison filed a Motion to Dismiss for Lack of Personal Jurisdiction. [Doc. No. 12.] On the same date, Defendants Addison, PEG, and Rossi filed a Joint Motion to Dismiss based on federal abstention doctrine with respect to the current action pending in Massachusetts. [Doc. No. 12.] The plaintiff insurers filed their Responses in Opposition on April 23, 2012. [Doc. No. 21.] Defendants replied on the 4th and 7th of May, 2012, and Plaintiffs filed a Sur-Reply on May 21, 2012. [Doc. Nos. 23, 24, & 26.] This matter is now ripe for judicial consideration.

II. FEDERAL JURISDICTION

This Court has federal jurisdiction over this matter pursuant to the federal diversity statute, 28 U.S.C. § 1332. All plaintiffs and defendants in the instant matter are diverse from one another. Netherlands and Excelsior are New Hampshire companies with their principal places of business in Boston, Massachusetts. PEG is incorporated and maintains its principal place of business in New Jersey, and Rossi is a citizen here as well. Addison is incorporated and maintains its principal place of business in Illinois. Finally, the amount in controversy in the instant dispute exceeds the requisite $75,000.00.

III. STANDARD OF REVIEW

Pursuant to Federal Rule of Civil Procedure 12(b)(2), a defendant bears the initial burden of raising the defense of lack of personal jurisdiction. Sportscare of Amer., P.C. v. Multiplan, Inc., No. Civ.A.10-4414, 2011 WL 589955, at *1 (D.N.J. Feb. 10, 2011). Once the defense has been raised, the burden then shifts to the plaintiff to demonstrate that jurisdiction in fact exists. Id. In assessing motions to dismiss pursuant to Rule 12(b)(2), the court should accept as true the allegations of the plaintiff and should resolve any factual disputes in favor of the non-moving party. Voltaix, LLC v. NanoVoltaix, Inc., No. Civ.A.09-142, 2009 WL 3230887, at *1 n.1 (D.N.J. Oct. 1, 2009) (citing Toys "R" Us, Inc. v. Step Two, S.A., 318 F.3d 446, 457 (3d Cir. 2003)). In order to properly establish jurisdiction, however, the plaintiff cannot rely on bare pleadings alone. Wartsila NSD N. Amer., Inc. v. Hill Int'l, Inc., 269 F.Supp.2d 547, 552 (D.N.J. 2003). Rather, the plaintiff must respond with actual proofs, such as through sworn affidavits and competent evidence. Id. "A plaintiff can meet its burden of proof and present a prima facie case for the court's exercise of personal jurisdiction by establishing with reasonable particularity sufficient contacts between each defendant and the forum state." Id. (citing Mellon Bank (East) P.S.F.S. v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992)). If the plaintiff meets this burden, the defendant must then show other considerations that would render jurisdiction unreasonable. De Lage Landen Fin. Servs., Inc. v. Rasa Floors, LP, No. Civ.A.08-00533, 2008 WL 4822033, at *3 (E.D. Pa. Nov. 4, 2008) (citing Carteret Sav. Bank v. Shushan, 954 F.2d 141, 150 (3d Cir. 1992)).

Motions to dismiss based on federal abstention doctrine are treated as motions to dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1). See Luender v. N.J. Bd. of Nursing, No. Civ.A.99-5744, 2000 WL 959490, at *4 (D.N.J. July 11, 2000); Pappas v. Twp. of Galloway, 565 F.Supp.2d 581, 585 (D.N.J. June 27, 2008) (Simandle, J.). Challenges to subject matter jurisdiction under Rule 12(b)(1) may be "facial" or "factual." Id. "Facial attacks challenge the sufficiency of the Complaint's allegations, so a court adjudicating a facial attack must accept those allegations as true." Id. (citing Emerson Elec. Co. v. Le Carbone Lorraine, 500 F.Supp.2d 437, 443 (D.N.J. 2007)). Similar to motions made under Rule 12(b)(2), when assessing a facial attack for lack of subject matter jurisdiction under 12(b)(1), the court should accept as true all of the plaintiff's material allegations and should construe the complaint in favor of the non-moving party. Luender, 2000 WL 959490 at *4. "The court's focus must not be on whether the factual ...


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