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North American Specialty Insurance Co. v. Diantonio

United States District Court, D. New Jersey

February 25, 2015

NORTH AMERICAN SPECIALTY INSURANCE COMPANY, Plaintiff,
v.
CHRISTOPHER P. DIANTONIO, et al., Defendants.

Patrick Joseph Shea, Esquire, Susan M. Valinis, Esquire, Reilly Janiczek & McDevitt PC, Merchantville, New Jersey, Counsel for Plaintiff.

William J. Martin, Esquire, Martin, Gunn & Martin, Westmont, New Jersey Counsel for Defendant Christopher P. DiAntonio.

Edward R. Petkevis, Esquire, Edward R. Petkevis PC, Roebling, New Jersey Counsel for Defendants Michael McBride and Donna McBride.

OPINION

NOEL L. HILLMAN, District Judge.

Plaintiff, North American Specialty Insurance Company, filed this declaratory judgment action requesting a determination as to whether or not it has a duty to defend and indemnify Defendant Christopher P. DiAntonio in a separate federal court action, McBride v. DiAntonio, Civil Action No. 13-6082 (NLH/AMD), which is also pending before the undersigned. Defendant DiAntonio now moves to dismiss the declaratory judgment action pursuant to Federal Rule of Civil Procedure 12(b)(6). The Court has considered the moving papers, including the opposition filed by Plaintiff, [1] and has decided this matter pursuant to Federal Rule of Civil Procedure 78.

For the reasons that follow, Defendant's motion to dismiss is denied.

I. JURISDICTION

The Court has subject matter jurisdiction over Plaintiff's declaratory judgment action pursuant to 28 U.S.C. § 1333, because the claim concerns a marine insurance contract and therefore falls under the Court's admiralty jurisdiction. Centennial Ins. Col. v. Lithotech Sales, LLC, 187 F.Supp.2d 214, 217 (D.N.J. 2001)("this action for declaratory judgment respecting a marine insurance contract was brought under the court's admiralty jurisdiction pursuant to 28 U.S.C. § 1333.").

II. BACKGROUND

This case arises out of a Charter Vessel insurance policy issued by Plaintiff to Defendant for the M/V Anejo, bearing policy number 58-M0001078-00, for the policy period of June 2, 2012 to June 2, 2013. (Compl. ¶ 11.) The M/V Anejo is a Hatteras 42' Convertible motor vessel. (Id. ¶ 7.) Michael McBride, while a paying passenger aboard the M/V Anejo on or about August 17, 2012, purportedly fell and sustained a serious personal injury. (Id. ¶ 17.) As a result of the alleged personal injury, Michael McBride and his wife, Donna McBride, have instituted a civil action against Defendant DiAntonio and the M/V Anejo. (Id. ¶¶ 6, 22.)[2] As noted above, the action is captioned McBride v. DiAntonio, Civil Action No. 13-6082 (NLH/AMD) (the "Underlying Action"), and is also pending before the undersigned.

Defendant DiAntonio demanded that Plaintiff defend and indemnify him in the Underlying Action. (Id. ¶ 24.) Plaintiff, however, contends that it has no obligation to cover claims against DiAntonio under the policy. (Id. ¶¶ 28, 29.) Specifically, Plaintiff argues that the policy provided that the vessel must not be used to carry more than six passengers, yet the vessel was carrying ten passengers at the time of Mr. McBride's alleged injury. (Id. ¶¶ 13-18.) Even though Plaintiff takes the position that it need not provide a defense or indemnification, Plaintiff "pursuant to a reservation of rights, is currently providing Diantonio and the M/V Anejo with a defense in the Underlying Action." (Id. ¶ 25.)

Defendant DiAntonio seeks dismissal of the complaint on the basis that Plaintiff, by undertaking and controlling the defense of the Underlying Action without a valid reservation of rights, is estopped from denying coverage of the claim in the Underlying Action. In support, Defendant relies upon five letters, which he attaches to the motion to dismiss, from Plaintiff concerning coverage of the claims in the Underlying Action. According to Defendant, through these letters it is clear that Plaintiff controlled the defense in the Underlying Action for seven months before seeking to reserve its rights. (Br. in Supp. of Mot. to Dismiss under Fed.R.Civ.P. 12(b)(6) 3.) Defendant cites New Jersey case law for the proposition that an insurer who defends an action without a valid reservation of rights is estopped from later denying coverage. (Id. at 5.)

Plaintiff does not address the substance of Defendant's arguments but rather disputes the procedural mechanism by which Defendant raises such arguments. Plaintiff contends that it is improper for the Court to consider the five letters submitted by Defendant in connection with a motion under Rule 12(b)(6), as they are extraneous to the pleadings. (Pl.'s Br. in Opp. to Def. DiAntonio's Mot. to Dismiss under Fed.R.Civ.P. 12(b)(6) 6-7.) Plaintiff notes that although the Court may consider documents upon which a complaint is based, the claim in this case is purportedly not based on the reservation of rights letters. (Id. at 8.) According to Plaintiff, the claim is based instead on the language of the policy and the specific facts surrounding the trip that gave rise to Mr. McBride's purported injury. (Id.) Plaintiff notes that the Court may grant a Rule 12(b)(6) motion based on an affirmative defense, but the predicate establishing the defense must be apparent from the face of the complaint. (Id.) In this case, Plaintiff argues, any affirmative defenses of estoppel or waiver are not apparent from the face of the complaint. (Id. at 9.)

Defendant responds in reply that the letters attached to his motion are not mere correspondence, but are, together with the insurance policy, the documents that form the basis of Plaintiff's claim. (Reply Br. in Supp. of Mot. to Dismiss under Fed.R.Civ.P. 12(b)(6) 6.) Thus, Defendant argues, the letters should have been attached to the complaint with the insurance policy. ...


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