Atlantic Specialty Insurance Company v. Randive Inc. of New Jersey

MOTION to Dismiss for Lack of Jurisdiction

E.D.N.Y.May 19, 2017

1 BETANCOURT VAN HEMMEN GRECO & KENYON LLC Attorneys for Defendant Randive, Inc. 151 Bodman Place, Red Bank NJ 07701 (732) 530-4646 Jeanne-Marie D. Van Hemmen (JV6414) UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ------------------------------------------------------ ATLANTIC SPECIALTY INSURANCE COMPANY, Plaintiff, v. RANDIVE INC. OF NEW JERSEY Defendants. ------------------------------------------------------- X : : : : : : : : : : X CASE NO.: 16-cv-1308(LDW)(AYS) NOTICE OF MOTION PLEASE TAKE NOTICE, that upon the Declaration of Jeanne-Marie D. Van Hemmen, dated May 19, 2017, and the Memorandum of Law, dated May 19, 2017, submitted herewith, counsel for Defendant Randive, Inc. of New Jersey will move on a date to be later set by the Court, at the courtroom of Honorable Leonard D. Wexler, U.S.D.J., for an order pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6) dismissing the Complaint or, in the alternative, for a stay of the instant litigation until the matter, Atlantic Specialty Insurance Co. v. Coastal Environmental Group, 14- cv-7403(LDW)(AYS) is fully and finally resolved. Dated: May 19, 2017 Red Bank, NJ 07701 Case 1:16-cv-01308-LDW-AYS Document 32 Filed 05/19/17 Page 1 of 2 PageID #: 337 2 BETANCOURT VAN HEMMEN GRECO & KENYON LLC Attorneys for Defendant Randive, Inc. By s/ Jeanne-Marie D. Van Hemman___________ Jeanne-Marie D. Van Hemmen (JV6414) 151 Bodman Place, Red Bank NJ 07701 (732) 530-4646 To: Duane Morris Attorneys for Plaintiffs One Riverfront Plaza 1037 Raymond Blvd. Newark, NJ 07102 (973) 424-2000 Case 1:16-cv-01308-LDW-AYS Document 32 Filed 05/19/17 Page 2 of 2 PageID #: 338 1 BETANCOURT VAN HEMMEN GRECO & KENYON LLC Attorneys for Defendant Randive, Inc. 151 Bodman Place, Red Bank NJ 07701 (732) 530-4646 Jeanne-Marie D. Van Hemmen (JV6414) UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ------------------------------------------------------ ATLANTIC SPECIALTY INSURANCE COMPANY, Plaintiff, v. RANDIVE INC. OF NEW JERSEY Defendants. ------------------------------------------------------- X : : : : : : : : : : X CASE NO.: 16-cv-1308(LDW)(AYS) DECLARATION OF JEANNE-MARIE D. VAN HEMMEN IN SUPPORT OF DEFENDANT RANDIVE, INC.’S MOTION PURSUANT TO FED. R. CIV. P. 12(b)(1) AND 12(b)(6) TO DISMISS PLAINTIFF’S COMPLAINT OR ALTERNATIVE MOTION TO STAY Jeanne-Marie D. Van Hemmen, an attorney admitted to practice before this Court, hereby declares under penalty of perjury as follows: 1. I am a member of the firm of Betancourt, Van Hemmen, Greco & Kenyon, LLC, attorneys for Defendant Randive, Inc. in the above-captioned matter and as such am familiar with the facts and circumstances surrounding this matter. 2. A true and correct copy of Coastal Environmental Group’s (“Coastal”) February 5, 2015 letter to Magistrate Shields, filed in the action titled Atlantic Specialty Insurance Company v. Coastal Environmental Equipment Group, et al., 2:14-cv-07403-LDW-AYS (E.D.N.Y. 2014) (“Related Federal Court Action”), with the document number 53, is attached hereto as Exhibit A. Case 1:16-cv-01308-LDW-AYS Document 32-1 Filed 05/19/17 Page 1 of 3 PageID #: 339 2 3. A true and correct copy of Coastal’s Complaint in the New York County Supreme Court for the County of Kings against Triton Structural Concrete, Inc. (“Triton”) in the action titled Coastal Environmental Group, Inc. v. Triton Structural Concrete, Inc., et al., Index No. 505766/2014 (N.Y. Sup. Ct. Kings County 2014), with the document number 1, is attached hereto as Exhibit B. 4. A true and correct copy of Atlantic Specialty Insurance Company’s Amended Complaint for Declaratory Judgment in Admiralty in the Related Federal Court Action, with the document number 5, is attached hereto as Exhibit C. 5. A true and correct copy of the Divers Report of Randive, Inc., dated June 20, 2013, and prepared in connection with the commercial diving services Randive performed relative to the salvage of the barge Mike B for Plaintiff herein, at the direction of Plaintiff’s counsel Mr. James Carbin, is attached hereto as Exhibit D. 6. Upon information and belief, some months after the removal of the Mike B from the seabed, Coastal and/or Triton incurred additional costs removing debris from the seabed. 7. A true and correct copy of the Declaration of James W. Carbin in Support of Motion to Compel Discovery, dated April 21, 2016, and relevant Exhibit, filed in the Related Federal Court Action, with the document number 62-3, is attached hereto as Exhibit E. 8. A true and correct copy of Coastal’s Answer with Counterclaim in the Related Federal Court Action, with the document number 14, is attached hereto as Exhibit F. 9. On May 23, 2016, this Honorable Court ordered the parties in the Related Federal Court action to mediation. On July 26, 2016, via electronic order, Randive was directed by this Honorable Court to participate in mediation. On December 12, 2016, this Court denied Randive’s Case 1:16-cv-01308-LDW-AYS Document 32-1 Filed 05/19/17 Page 2 of 3 PageID #: 340 3 original Motion to Dismiss without prejudice to renewal following mediation. Mediation went forward on December 13, 2016, without resolution for any party. To date, neither counsel for Coastal nor Atlantic has been able to articulate the value of either claim with any particularity whatsoever. 10. Because neither Coastal nor Atlantic has been able to articulate the value of either claim with any particularity, Randive has been placed at a disadvantage, as undersigned counsel cannot adequately advise Randive as to a cost-beneficial litigation strategy, whereby expensive motion and third-party practice could be disposed of in the event Atlantic’s claim is determined to be modest. 11. A true and correct copy of the Electronic Order dated May 12, 2017 in the Related Federal Court Action, whereby this Court continued the trial in the Related Federal Court Action due to a scheduling issues. Parties were instructed to submit new trial dates in September or October 2017 to the Court by May 19, 2017, attached as Exhibit G. I declare under penalty of perjury that the foregoing is true and correct. Executed at Red Bank, New Jersey this 19th day of May, 2017. /s/ Jeanne-Marie D. Van Hemmen Jeanne-Marie D. Van Hemmen Case 1:16-cv-01308-LDW-AYS Document 32-1 Filed 05/19/17 Page 3 of 3 PageID #: 341 EXHIBIT A Case 1:16-cv-01308-LDW-AYS Document 32-2 Filed 05/19/17 Page 1 of 6 PageID #: 342 WILLIAM L. JUSKA, JR. JAMES L. ROSS* ERIC E. LENCK JOHN J. WALSH* PATRICK J. BONNER* PETER J. GUTOWSKI MARK F. MULLER WAYNE D. MEEHAN* DON P. MURNANE, JR. THOMAS M. RUSSO THOMAS M. CANEVARI† MICHAEL FERNANDEZ* JOHN F. KARPOUSIS* MICHAEL E. UNGER*† WILLIAM J. PALLAS* GINA M. VENEZIA JUSTIN T. NASTRO* MANUEL A. MOLINA DANIEL J. FITZGERALD*† BARBARA G. CARNEVALE* JAN P. GISHOLT† SUSAN LEE* ERIC J. MATHESON* MICHAEL D. TUCKER* WILLIAM H. YOST YAAKOV U. ADLER * ALSO ADMITTED IN NEW JERSEY † ALSO ADMITTED IN CONNECTICUT  ALSO ADMITTED IN WASHINGTON, D.C.  ALSO ADMITTED IN LOUISIANA LAW OFFICES OF FREEHILL HOGAN & MAHAR LLP 80 PINE STREET NEW YORK, N.Y. 10005-1759 TELEPHONE (212) 425-1900 FACSIMILE (212) 425-1901 E-MAIL: reception@freehill.com www.freehill.com NEW JERSEY OFFICE 549 SUMMIT AVENUE JERSEY CITY, N.J. 07306-2701 TELEPHONE (973) 623-5514 FACSIMILE (973) 623-3813 ___________ CONNECTICUT OFFICE 246 MARGHERITA LAWN STRATFORD, CT 06615 TELEPHONE: (203) 921-1913 FACSIMILE (203) 358-8377 ___________ OF COUNSEL GEORGE B. FREEHILL 445746.1 February 5, 2015 331-13/WDM/DPM Anne Y. Shields, U.S.M.J. United States District Court Eastern District of New York Long Island Courthouse 100 Federal Plaza Central Islip, NY 11722 Re: Atlantic Specialty Insurance Company v. Coastal Environmental Group and Sterling Equipment, Inc.; 14-cv-7403-LDW-GRB Hon. Magistrate Judge Shields, We represent defendant Coastal Environmental Group (“Coastal”) in the above captioned action which arises from the sinking of the barge “MIKE B.” We write in response to Plaintiff’s letter of February 4, 2016 to address the status of discovery in this matter. Further to the telephone conference held with Your Honor on December 29, 2015 Coastal produced documents as directed by Your Honor. In particular Plaintiff sought documents to substantiate Coastal’s damages claims. Your Honor directed Coastal to search for and to produce the documents requested by Plaintiff. Following the conference, Plaintiff’s counsel provided the undersigned with two documents, the first page of the claim submission covering e- mail prepared by Mr. Jonathan Spencer, and an e-mail containing a breakdown of certain costs items drafted by Mr. Joe Hedges, a Coastal Employee. Plaintiff requested that the rest of these e- mails and the associated attachments and documents related to Coastal’s claims be produced. Thereafter, Coastal produced documents bates stamped COASTAL 00095 - to 00688 (See Ex. A, cover letter to Coastal’s supplemental production which also provided an updated response to Plaintiff’s Interrogatories, as directed by the Court at the December 29, 2015 conference). That response and production was made to comply with your Honor’s Order, and Case 2:14-cv-07403-LDW-AYS Document 53 Filed 02/05/16 Page 1 of 5 PageID #: 424Case 1:16-cv-01308-LDW-AYS Document 32-2 Filed 05/19/17 Page 2 of 6 PageID #: 3 3 FREEHILL, HOGAN & MAHAR LLP 445746.1 2 was without waiver as to any rights, privilege, or protection extending to further documents or to persons. As the Court may recall, Mr. Jonathan Spencer is Coastal’s consulting expert in this matter. Mr. Spencer prepared the claim which Coastal submitted to the Plaintiff on August 21, 2014. Coastal’s supplemental production contained the documents attached to the Claim Submission, which included as a sub-item Mr. Hedges breakdown of costs. Among these documents were the spreadsheets used to calculate the value of the claim as well as the receipts and invoices which substantiated the claimed amounts. In sum and substance Mr. Spencer’s letter and attachments submitted to Plaintiff on August 21, 2014, and as produced by Coastal, is the breakdown of Plaintiff’s damages. Plaintiff served Coastal with an Amended Rule 30(b)(6) notice on January 12, 2016 which included additional areas of testimony sought, and as to which we advised we would provide additional 30(b)(6) witnesses. (See Ex. B) We scheduled Mr. Rick Silva to testify as one of those witnesses. In its letter, Plaintiff correctly points out that Mr Silva’s deposition was cancelled, but fails to mention that (as is clear from Exhibit 3 to Plaintiff’s Letter to the Court) the deposition was adjourned due to a death in the witness’s family. We are currently working on re-scheduling that deposition and have proposed a new date to Plaintiff. Plaintiff also demanded on Tuesday of this week, February 2, 2016, that Coastal produce documents related to a lawsuit between Coastal and Triton Structural Concrete which is proceeding in New York Supreme Court. In that letter, Plaintiff gave Coastal 2 days in which to respond, otherwise it would seek relief from Your Honor (Ex. C, Plaintiff’s letter of February 2, 2016). The undersigned’s firm does not represent Coastal in the action with Triton Structural Concrete, and was unaware of that action until counsel for Plaintiff mentioned it while at court in an unrelated matter. Moreover, Plaintiff did not demand documents from that action until the February 2, 2016 letter. Triton Structural Concrete was the prime contractor for the City of New York for the work done on the steeplechase pier. Coastal was a subcontractor of Triton engaged in performing work on the pier, including work for which Coastal chartered the barge MIKE B. We understand that the lawsuit in the Supreme Court between Coastal and Triton relates to the payments between those parties for work done on the pier. While Plaintiff asserts that the Triton action is related, the undersigned, unaware of the action until recently and not in possession of the documents related to that action, is not presently in a position to make a determination as to whether any of the subject matter of that action overlaps with the issues in this case, or documents in that case are responsive to any requests made in this case. However, following receipt of the February 2, 2016 letter, we immediately passed the same to our client and have subsequently been advised that counsel for Coastal in that matter will provide us with the documents from that case for our review. We communicated with our client on February 2, 3, and 4 in order to provide a prompt response to Plaintiff on the issues raised in its February 2 letter. Later in the evening on February 4, 2016 we provided Plaintiff with the attached letter (Ex. D) which substantively addresses the issues raised in Plaintiff’s letter of February 2, as well as its letter to Your Honor. Case 2:14-cv-07403-LDW-AYS Document 53 Filed 02/05/16 Page 2 of 5 PageID #: 425Case 1:16-cv-01308-LDW-AYS Document 32-2 Filed 05/19/17 Page 3 of 6 PageID #: 344 FREEHILL, HOGAN & MAHAR LLP 445746.1 3 Coastal has tendered two Rule 30(b)(6) witnesses, Mr. Rick Silva, and Mr. Joe Hedges, and proposed deposition dates within the next two weeks. These witnesses together will cover most of the areas of testimony sought. A third witness will be scheduled as soon as practicable. Further, we have been in contact with counsel for Coastal in the Triton matter and expect to receive their file by early next week. Once we have reviewed it, we will be in a position to produce relevant documents from that file. Plaintiff has also continued to assert inadequacy of Coastal’s production of documents, citing to documents and e-mails produced by third parties but not part of Coastal’s production. We have been advised by Coastal that a data loss of both its active and backup files in June of 2015 appears to cover electronically stored documents (in particular e-mail and attachments) which may be responsive to Plaintiff’s request for documents. We have, as an attachment to our February 4, 2016 letter (Ex. D), provided Plaintiff with a copy of the letter which Coastal received from its service provider following the loss of data. With respect to the damages issues in this case, Plaintiff will have the opportunity to examine the 30(b)(6) witnesses on these points. One of these witnesses, Mr. Hedges, is the author of the costs breakdown e-mail which Coastal produced and which formed part of its claim. With respect to Mr. Spencer, a claims adjuster, Coastal maintains that he is a consulting expert, retained by prior counsel, to assist counsel in this matter. Mr. Crivici is a surveyor who, like surveyors for Plaintiff and other parties, was on scene after the sinking and present during certain events relating to salvage. Mr. Crivici is also consulting expert, retained by prior counsel, to assist counsel in this matter. There is no basis for Plaintiff to compel testimony from either of these two persons, or to obtain their files. Though Coastal may ultimately nominate Mr. Spencer as a testifying expert to testify as to the damages aspect of this case, it is premature for him to testify at this point. It is similarly premature for testimony from Mr. Crivici to the extent that Coastal even decides to designate him as a testifying expert. Ultimately, Coastal respectfully submits that it is improper for Plaintiff to continue to press this issue which has now been raised for the third time before Your Honor. To the extent that Coastal elects to have Mr. Spencer or Mr. Crivici testify, Plaintiff will be entitled to depose them, but only after the expert reports are submitted in accordance with Fed. R. Civ. P. 26(a)(2). However, Plaintiff is clearly not entitled to depose them now. Accordingly, Coastal respectfully submits that the substance of the issues raised by Plaintiff’s letter to Your Honor are addressed in its document production and its letter to Plaintiff of February 4, 2016, which tendered witnesses and set forth that Coastal’s counsel in this matter will obtain the files from counsel for Coastal in the Triton matter and produce responsive documents. However, Plaintiff should not be permitted to open the door to vast discovery on unrelated issues between Coastal and Triton. Plaintiff’s attempt to foist a 2 day schedule for response and production on Coastal in Plaintiff’s February 2 letter is improper. Coastal respectfully suggests that as most of the issues raised by Plaintiff’s February 2, 2016 letter are resolved by Coastal’s February 4 letter, or shortly will be resolved, motion practice is not necessary. Case 2:14-cv-07403-LDW-AYS Document 53 Filed 02/05/16 Page 3 of 5 PageID #: 426Case 1:16-cv-01308-LDW-AYS Document 32-2 Filed 05/19/17 Page 4 of 6 PageID #: 345 FREEHILL, HOGAN & MAHAR LLP 445746.1 4 FREEHILL HOGAN & MAHAR, LLP Attorneys for Defendant COASTAL ENVIRONMENTAL GROUP By: _________________________________ Wayne D. Meehan Don P. Murnane, Jr. Eric J. Matheson Copy By ECF: P. Ryan McElduff James W. Carbin Duane Morris Attorneys for Atlantic Specialty Insurance Company One Riverfront Plaza 1037 Raymond Blvd., Suite 1800 Newark, New Jersey 07102-5429 Email: PRMcElduff@duanemorris.com JWCarbin@duanemorris.com Christopher M. Schierloh Casey & Barnett, LLC Attorneys for Sterling Equipment, Inc. 65 West 36th Street, 9th Floor New York, NY 10018 212-286-0225 Fax: 212-286-0261 Email: cms@caseybarnett.com George F. Meierhofer , Jr. Kaufman Dolowich & Voluck LLP Attorneys for Global Indemnity Insurance 60 Broad Street Suite 3600A New York, NY 10004 212-485-9600 Fax: 212-485-9700 Email: gmeierhofer@kdvlaw.com Case 2:14-cv-07403-LDW-AYS Document 53 Filed 02/05/16 Page 4 of 5 PageID #: 427Case 1:16-cv-01308-LDW-AYS Document 32-2 Filed 05/19/17 Page 5 of 6 PageID #: 346 FREEHILL, HOGAN & MAHAR LLP 445746.1 5 Peter T. Shapiro Lewis Brisbois Bisgaard & Smith LLP Attorneys for All Risks, Ltd. 77 Water Street Suite 2100 New York, NY 10005 212-232-1322 Fax: 212-232-1399 Email: peter.shapiro@lewisbrisbois.com Case 2:14-cv-07403-LDW-AYS Document 53 Filed 02/05/16 Page 5 of 5 PageID #: 428Case 1:16-cv-01308-LDW-AYS Document 32-2 Filed 05/19/17 Page 6 of 6 PageID #: 347 EXHIBIT B Case 1:16-cv-01308-LDW-AYS Document 32-3 Filed 05/19/17 Page 1 of 20 PageID #: 348 Case 1:16-cv-01308-LDW-AYS Document 32-3 Filed 05/19/17 Page 2 of 20 PageID #: 349 Case 1:16-cv-01308-LDW-AYS Document 32-3 Filed 05/19/17 Page 3 of 20 PageID #: 350 Case 1:16-cv-01308-LDW-AYS Document 32-3 Filed 05/19/17 Page 4 of 20 PageID #: 351 Case 1:16-cv-01308-LDW-AYS Document 32-3 Filed 05/19/17 Page 5 of 20 PageID #: 352 Case 1:16-cv-01308-LDW-AYS Document 32-3 Filed 05/19/17 Page 6 of 20 PageID #: 353 Case 1:16-cv-01308-LDW-AYS Document 32-3 Filed 05/19/17 Page 7 of 20 PageID #: 354 Case 1:16-cv-01308-LDW-AYS Document 32-3 Filed 05/19/17 Page 8 of 20 PageID #: 355 Case 1:16-cv-01308-LDW-AYS Document 32-3 Filed 05/19/17 Page 9 of 20 PageID #: 356 Case 1:16-cv-01308-LDW-AYS Document 32-3 Filed 05/19/17 Page 10 of 20 PageID #: 357 Case 1:16-cv-01308-LDW-AYS Document 32-3 Filed 05/19/17 Page 11 of 20 PageID #: 358 Case 1:16-cv-01308-LDW-AYS Document 32-3 Filed 05/19/17 Page 12 of 20 PageID #: 359 Case 1:16-cv-01308-LDW-AYS Document 32-3 Filed 05/19/17 Page 13 of 20 PageID #: 360 Case 1:16-cv-01308-LDW-AYS Document 32-3 Filed 05/19/17 Page 14 of 20 PageID #: 361 Case 1:16-cv-01308-LDW-AYS Document 32-3 Filed 05/19/17 Page 15 of 20 PageID #: 362 Case 1:16-cv-01308-LDW-AYS Document 32-3 Filed 05/19/17 Page 16 of 20 PageID #: 363 Case 1:16-cv-01308-LDW-AYS Document 32-3 Filed 05/19/17 Page 17 of 20 PageID #: 364 Case 1:16-cv-01308-LDW-AYS Document 32-3 Filed 05/19/17 Page 18 of 20 PageID #: 365 Case 1:16-cv-01308-LDW-AYS Document 32-3 Filed 05/19/17 Page 19 of 20 PageID #: 366 Case 1:16-cv-01308-LDW-AYS Document 32-3 Filed 05/19/17 Page 20 of 20 PageID #: 367 EXHIBIT C Case 1:16-cv-01308-LDW-AYS Document 32-4 Filed 05/19/17 Page 1 of 11 PageID #: 368 DM1\5266262.1 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ATLANTIC SPECIALTY INSURANCE COMPANY, Plaintiff, v. COASTAL ENVIRONMENTAL GROUP and STERLING EQUIPMENT, INC. Defendants. : : : : : : : : : : : 2:14-cv-7403-LDW-GRB AMENDED COMPLAINT FOR DECLARATORY JUDGMENT IN ADMIRALTY Plaintiff, Atlantic Specialty Insurance Company, (“Atlantic”), by its attorneys, Duane Morris LLC, as and for its Amended Complaint for a declaratory judgment against defendants COASTAL ENVIRONMENTAL GROUP (“Coastal”) and STERLING EQUIPMENT, INC. (“Sterling”) alleges on information and belief: JURISDICTION AND VENUE 1. Plaintiff brings this action for a declaratory judgment pursuant to 28 U.S.C. §2201 et seq. and Rule 57 of the Federal Rules of Civil Procedure. 2. This is an Admiralty and Maritime claim within the meaning of Rule 9(h) of the Federal Rules of Civil Procedure and within the Admiralty jurisdiction of this Court pursuant to 28 U.S.C. §1333. 3. Venue is proper in this district pursuant to 28 U.S.C. §1391. PARTIES 4. Plaintiff Atlantic is a legal entity organized and existing under the laws of the State of New York with an office and principal place of business at 601 Carlson Parkway, Suite 600, Minnetonka, Minnesota 55305. Case 2:14-cv-07403-LDW-AYS Document 5 Filed 12/30/14 Page 1 of 10 PageID #: 20Case 1:16-cv-01308-LDW-AYS Document 32-4 Filed 05/19/17 Page 2 of 11 PageID #: 369 2 DM1\5266262.1 5. Upon information and belief, Coastal is a corporation organized and existing under the laws of the State of New York with its principal office at 250 Executive Drive, Suite K, Edgewood, New York 11717. 6. Upon information and belief, Sterling is a corporation organized and existing under the laws of the Commonwealth of Massachusetts with a place of business at 2877 Richmond Terrace, Staten Island, New York, 10303. THE MARINE POLICY 7. All Risks, Ltd. of Maryland (“All Risks”) is a licensed insurance broker and acted as Coastal’s insurance broker at all material times herein. 8. In April 2013, Coastal approached Atlantic to add Marine Insurance coverage for a Barge named the MIKE B (the “Barge” or the “MIKE B”) to Atlantic Specialty Insurance Company Marine Hull & Machinery and Protection and Indemnity Policy No. B5JH11901, issued to Coastal effective January 26, 2013 to January 26, 2014 (the “Policy”). 9. The Barge MIKE B was owned and operated by Sterling. 10. Atlantic reviewed the information supplied to apply for the insurance, and based upon the information supplied, agreed to bind Marine Insurance for Coastal including Hull and Protection & Indemnity (“P&I”) insurance on the Barge. 11. A copy of the Policy is Exhibit 1 hereto, and is incorporated herein as if set forth at length. 12. The Policy provides coverage to Coastal against certain marine risks. 13. Sterling is not an insured on and has no rights under and had no rights under the Policy. 14. The coverage on the hull of the Barge MIKE B is for certain named perils. Case 2:14-cv-07403-LDW-AYS Document 5 Filed 12/30/14 Page 2 of 10 PageID #: 21Case 1:16-cv-01308-LDW-AYS Document 32-4 Filed 05/19/17 Page 3 of 11 PageID #: 370 3 DM1\5266262.1 15. When Coastal applied for the coverage for the MIKE B, the Barge was in a state of advanced deterioration and wastage and was not in a serviceable or in a seaworthy condition. 16. Coastal never disclosed the true condition or the advanced deterioration and wastage of the Barge to Atlantic. 17. Had Coastal disclosed the true condition of the Barge to Atlantic, the insurance would not have been agreed and the Policy would not have been issued. 18. On about April 12, 2013, the Barge is claimed to have sunk. 19. The claimed sinking and the need to raise the Barge was due to its deteriorated and wasted condition. 20. The claimed raising of the Barge was impeded and made more difficult and expensive due to the advanced deteriorated and wasted condition of the Barge. 21. Coastal hired Donjon Marine Co., Inc. (“Donjon”) to raise the Barge. 22. Coastal made claim under the Policy for the costs of raising the Barge and for the loss of or damage to the hull of the Barge. (the “Claim”). 23. Coastal requested that Atlantic guarantee Coastal’s payment to Donjon to raise the Barge. 24. Coastal’s Claim was based upon the mistaken assumption that the Policy was in effect. 25. If the Policy were not in effect, Coastal would have no basis to assert the Claim. 26. Atlantic agreed to guarantee Coastal’s contract payment. 27. If the Policy were not in effect, Atlantic would have no basis to agree to guarantee Coastal’s contract payment to Donjon. 28. Donjon removed the Barge and delivered it as instructed by Coastal. Case 2:14-cv-07403-LDW-AYS Document 5 Filed 12/30/14 Page 3 of 10 PageID #: 22Case 1:16-cv-01308-LDW-AYS Document 32-4 Filed 05/19/17 Page 4 of 11 PageID #: 371 4 DM1\5266262.1 29. On June 25, 2013, Atlantic paid Donjon $238,750.00 on behalf of Coastal, subject to its reservation as to questions of coverage with respect to the sinking. 30. Atlantic’s payment was predicated on the mistaken assumption that the Policy was in effect. 31. Coastal received the benefit of Atlantic’s payment. 32. Atlantic’s payment satisfied Coastal’s debt to Donjon. FIRST CAUSE OF ACTION 33. Atlantic repeats and realleges each and every allegation contained above as if fully set forth at length herein. 34. The Atlantic Policy is a one of marine insurance and is governed by United States federal Admiralty law and by the doctrine of Uberrimae Fidei. 35. Coastal had a duty to exercise the Utmost Good Faith when applying for and seeking the insurance from Atlantic. 36. Coastal breached its duty of Utmost Good Faith and the doctrine of Uberrimae Fidei, by, inter alia, failing to disclose material information about the risk when seeking the coverage and during the Policy period. 37. Coastal’s breach of its duty of Utmost Good Faith renders the Policy void ab initio. 38. Atlantic requests that the Court issue Judgment declaring the Policy void ab intio. SECOND CAUSE OF ACTION 39. Atlantic repeats and realleges each and every allegation contained above as if fully set forth at length herein. Case 2:14-cv-07403-LDW-AYS Document 5 Filed 12/30/14 Page 4 of 10 PageID #: 23Case 1:16-cv-01308-LDW-AYS Document 32-4 Filed 05/19/17 Page 5 of 11 PageID #: 72 5 DM1\5266262.1 40. Coastal misrepresented, concealed or omitted material facts it had a duty to disclose when seeking coverage. 41. Coastal’s misrepresentations, concealment or omissions breached its legal duties to disclose including the duty of Utmost Good Faith and the doctrine of Uberrimae Fidei. 42. As a result of Coastal’s material misrepresentations, concealment or omissions, Atlantic requests that the Court issue Judgment declaring the Policy void ab intio. THIRD CAUSE OF ACTION 43. Atlantic repeats and realleges each and every allegation contained above as if fully set forth at length herein. 44. Sterling is not an insured under the Policy. 45. Atlantic requests that the Court issue Judgment declaring that Sterling is not an insured under and has no rights under the Policy. FOURTH CAUSE OF ACTION 46. Atlantic repeats and realleges each and every allegation contained above as if fully set forth at length herein. 47. Sterling is not an insured under the Policy. 48. Atlantic requests that the Court issue Judgment declaring that Sterling has no rights or claim under the Policy. ALTERNATIVE FIFTH CAUSE OF ACTION 49. Atlantic repeats and realleges each and every allegation contained above as if fully set forth at length herein. 50. The Barge coverage is subject to the Absolute Warranty of Seaworthiness. 51. Coastal violated the Absolute Warranty of Seaworthiness precluding coverage. Case 2:14-cv-07403-LDW-AYS Document 5 Filed 12/30/14 Page 5 of 10 PageID #: 24Case 1:16-cv-01308-LDW-AYS Document 32-4 Filed 05/19/17 Page 6 of 11 PageID #: 373 6 DM1\5266262.1 52. Atlantic requests that the Court issue Judgment declaring there is no coverage for the Barge. ALTERNATIVE SIXTH CAUSE OF ACTION 53. Atlantic repeats and realleges each and every allegation contained above as if fully set forth at length herein. 54. The Barge coverage is subject to the Negative Implied Warranty of Seaworthiness. 55. Coastal violated the Negative Implied Warranty of Seaworthiness rendering the Policy Barge coverage unenforceable. 56. Atlantic requests that the Court issue Judgment declaring the Policy coverage for the Barge unenforceable. ALTERNATIVE SEVENTH CAUSE OF ACTION 57. Atlantic repeats and realleges each and every allegation contained above as if fully set forth at length herein. 58. The Barge MIKE B was not in a serviceable or seaworthy condition in violation of the Policy conditions which caused or contributed to the alleged sinking and salvage of the Barge. 59. Atlantic requests that the Court issue Judgment declaring there is no coverage for the Barge. ALTERNATIVE EIGHTH CAUSE OF ACTION 60. Atlantic repeats and realleges each and every allegation contained above as if fully set forth at length herein. Case 2:14-cv-07403-LDW-AYS Document 5 Filed 12/30/14 Page 6 of 10 PageID #: 25Case 1:16-cv-01308-LDW-AYS Document 32-4 Filed 05/19/17 Page 7 of 11 PageID #: 374 7 DM1\5266262.1 61. A Condition of Coverage under the Policy is that Coastal provide routine and necessary maintenance to the Barge failing which Atlantic is not responsible for any resulting loses. 62. Coastal failed to comply with the Condition of Coverage. 63. The failure to comply with the Condition of Coverage precludes coverage under the Policy relative to the claim. 64. Atlantic requests that the Court issue Declaratory Judgment that the breach(es) of the Condition(s) of Coverage relieve the Policy from responding for any aspect of the Claim. ALTERNATIVE NINTH CAUSE OF ACTION 65. Atlantic repeats and realleges each and every allegation contained above as if fully set forth at length herein. 66. The Policy only responds for fortuitous losses. 67. The claimed sinking of the Barge was not due to a fortuity. 68. The claimed costs of raising the Barge was not the result of a fortuity. 69. Atlantic requests that the Court issue Judgment declaring that the Claim is not covered for want of a fortuity. ALTERNATIVE TENTH CAUSE OF ACTION 70. Atlantic repeats and realleges each and every allegation contained above as if fully set forth at length herein. 71. The Barge coverage responds only for certain Named Perils. 72. The Claim was not due to a Named Peril. 73. Atlantic requests that the Court issue Judgment declaring that the Claim is not covered for want of a Named Peril. Case 2:14-cv-07403-LDW-AYS Document 5 Filed 12/30/14 Page 7 of 10 PageID #: 26Case 1:16-cv-01308-LDW-AYS Document 32-4 Filed 05/19/17 Page 8 of 11 PageID #: 375 8 DM1\5266262.1 ALTERNATIVE ELEVENTH CAUSE OF ACTION 74. Atlantic repeats and re-alleges each and every allegation contained above as if fully set forth at length herein. 75. The Barge was not in a serviceable or seaworthy condition in violation of the Policy conditions and which caused or contributed to the reported sinking and ensuing raising of the Barge. 76. Atlantic requests that the Court issue Judgment declaring the coverage for Barge void or unenforceable or the Claim not covered. ALTERNATIVE TWELFTH CAUSE OF ACTION 77. Atlantic repeats and realleges each and every allegation contained above as if fully set forth at length herein. 78. The claimed loss is not of the type covered by the Policy. 79. Atlantic requests that the Court issue Judgment declaring the coverage for the Barge is void or unenforceable or the Claim not covered. ALTERNATIVE THIRTEENTH CAUSE OF ACTION 80. Atlantic repeats and re-alleges each and every allegation contained above as if fully set forth at length herein. 81. Atlantic fulfilled all obligations to Coastal that it had or may have had, under the Policy or otherwise, in all respects related to the Barge MIKE B, its sinking or its being raised, and has no further obligation. 82. Atlantic requests the Court declare that Atlantic has fulfilled all obligations to Coastal, that it had or may have had, under the Policy or otherwise, in all respects related to the Barge MIKE B, its sinking or its being raised or Coastal’s Claim, and has no further obligation. Case 2:14-cv-07403-LDW-AYS Document 5 Filed 12/30/14 Page 8 of 10 PageID #: 27Case 1:16-cv-01308-LDW-AYS Document 32-4 Filed 05/19/17 Page 9 of 11 PageID #: 376 9 DM1\5266262.1 FOURTEENTH CAUSE OF ACTION 83. Atlantic repeats and re-alleges each and every allegation contained above as if fully set forth at length herein. 84. Atlantic paid $238,750.00 on behalf of Coastal. 85. Coastal benefited from Atlantic’s payment to Donjon. 86. Because the Policy is void ab initio, Coastal is not entitled to the benefit of the payment or the Policy coverage. 87. Coastal has been unjustly enriched by Atlantic’s payment on its behalf. 88. Coastal is indebted to Atlantic in the amount of the $238,750.00 paid. 89. Coastal has not repaid Atlantic despite due demand. 90. Atlantic is entitled to reimbursement of the $238,750.00 paid, plus interest, costs and attorney’s fees. ALTERNATIVE FIFTEENTH CAUSE OF ACTION 91. Atlantic repeats and re-alleges each and every allegation contained above as if fully set forth at length herein. 92. That if Sterling somehow is found to have standing under the Policy, any claim of Sterling is void and properly declined for each of the separate and independent reasons set forth in the causes of action alleged as to Coastal. 93. Atlantic alternatively requests that, assuming Sterling somehow qualifies as an insured under the Policy, that the Court issue Judgment declaring that any coverage for Sterling is void ab initio, or it has no rights under the Policy, or that any claim is not covered. Case 2:14-cv-07403-LDW-AYS Document 5 Filed 12/30/14 Page 9 of 10 PageID #: 28Case 1:16-cv 01308-LDW-AYS Document 32-4 il 05/19/ 7 10 of 11 PageID #: 377 10 DM1\5266262.1 WHEREFORE, Atlantic prays that this Court issue Judgment: (1) declaring the Policy to be void ab initio; (2) ordering Coastal to pay Atlantic $238,750.00 plus interest, costs and attorney’s fees; (3) declaring that Sterling is not insured under and no rights or claim under the Policy; (4) or in the alternative, declaring that there is no coverage for the Barge or the Claim under the Policy or otherwise, for any party; (5) awarding Atlantic its legal fees and expenses and costs incurred herein; and (6) for such other and further relief as the Court deems just and proper. DUANE MORRIS LLP A Delaware Limited Liability Partnership Dated: December 30, 2014 By: /s/ James W. Carbin James W. Carbin P. Ryan McElduff One Riverfront Plaza 1037 Raymond Blvd., Suite 1800 Newark, New Jersey 07102-3889 (973) 424-2000 JWCarbin@duanemorris.com Counsel for Plaintiff Atlantic Specialty Insurance Company Case 2:14-cv-07403-LDW-AYS Document 5 Filed 12/30/14 Page 10 of 10 PageID #: 29Case 1:16-cv-01308-LDW-AYS Document 32-4 Filed 05/19/17 Page 11 of 11 PageID #: 378 EXHIBIT D Case 1:16-cv-01308-LDW-AYS Document 32-5 Filed 05/19/17 Page 1 of 2 PageID #: 379 COPY OF AUTHORIZED SIGNATURE REPORT ATTACHED. 1 Randive Inc. of New Jersey COMMERCIAL DIVING SERVICES 1160 State Street, Bldg. 5B • Perth Amboy, NJ 08861 (732) 324-1144 • Fax (732) 324-1555 Email: divingservices@randive.com MEMBER Association Of Diving Contractors ACKNOWLEDGEMENT / DIVERS REPORT DATE DIVE PERFORMED: 6-20-2013 DPIC: A. SECALLUS LOCATION: CONEY ISLAND, NY DIVER: R. CUNLIFFE/B. PENDER CLIENT: INTERNATIONAL MARINE UNDERWRITERS STAND-BY DIVER/TENDER: SAME AS ABOVE DIVE WITNESSED BY: BILLY KRATZ TIME STARTED: 0530 TRAVEL TIME: UNDERWATER VISIBILITY: +/- 5’ TIME FINISHED: 1730 TOTAL HOURS: 12 TYPE OF WORK PERFORMED: SURVEY SEA BOTTOM IN WAY OF REMOVED WRECK REMARKS: EQUIPMENT/MATERIALS UTILIZED: “JESSICA ANN”/200’ 3/8 LINE/SMALL DOWN WEIGHTS DIVERS REPORT: The dive team was requested to inspect the sea bottom off Coney Island Pier. In way of the salvaged Barge “MIKE B”, the divers inspected from N 40° 34.177 / W 73° 59.006 to N 40° 34.203/ W 73° 59.012 out 65’. The diver found several targets that were marked with down weights and buoys. Once search area was completed, the crane barge “NEWARK BAY” clam shelled the areas marked removing the rest of the material. Once the crane was completed, the divers re-inspected the area. The divers noted no other items found above the mud line at this time. The divers were in the water at 1236 Hours. The divers used a Jack stay search pattern with down weight and down weight buoys, 65’ long moving it every 5’. Visibility was +/- 5’, the divers searched both sides of the Jack stay line with no other obstructions noted within the above mentioned search area at this time. Case 1:16-cv-01308-LDW-AYS Document 32-5 Filed 05/19/17 Page 2 of 2 PageID #: 380 EXHIBIT E Case 1:16-cv-01308-LDW-AYS Document 32-6 Filed 05/19/17 Page 1 of 16 PageID #: 381 Case 2:14-cv-07403-LDW-AYS Document 62-3 Filed 04/21/16 Page 1 of 32 PageID #: 6711 6 13 8 3 6 5 19 7 2 16 382 Case 2:14-cv-07403-LDW-AYS Document 62-3 Filed 04/21/16 Page 2 of 32 PageID #: 6721 6 13 8 3 6 5 19 7 3 16 383 Case 2:14-cv-07403-LDW-AYS Document 62-3 Filed 04/21/16 Page 11 of 32 PageID #: 681Case 1:16-cv-01308-LD -AYS Docu ent 32-6 Filed 05/19/17 Page 4 of 16 PageID #: 384 Case 2:14-cv-07403-LDW-AYS Document 62-3 Filed 04/21/16 Page 12 of 32 PageID #: 682Case 1:16-cv-01308-LD -AYS Docu ent 32-6 Filed 05/19/17 Page 5 of 16 PageID #: 385 Case 2:14-cv-07403-LDW-AYS Document 62-3 Filed 04/21/16 Page 13 of 32 PageID #: 683Case 1:16-cv-01308-LD -AYS Docu ent 32-6 Filed 05/19/17 Page 6 of 16 PageID #: 386 Case 2:14-cv-07403-LDW-AYS Document 62-3 Filed 04/21/16 Page 14 of 32 PageID #: 684Case 1:16-cv-01308-LD -AYS Docu ent 32-6 Filed 05/19/17 Page 7 of 16 PageID #: 387 Case 2:14-cv-07403-LDW-AYS Document 62-3 Filed 04/21/16 Page 15 of 32 PageID #: 685Case 1:16-cv-01308-LD -AYS Docu ent 32-6 Filed 05/19/17 Page 8 of 16 PageID #: 388 Case 2:14-cv-07403-LDW-AYS Document 62-3 Filed 04/21/16 Page 16 of 32 PageID #: 686Case 1:16-cv-01308-LD -AYS Docu ent 32-6 Filed 05/19/17 Page 9 of 16 PageID #: 389 Case 2:14-cv-07403-LDW-AYS Document 62-3 Filed 04/21/16 Page 17 of 32 PageID #: 6871 6 13 8 3 6 5 19 7 0 16 390 Case 2:14-cv-07403-LDW-AYS Document 62-3 Filed 04/21/16 Page 18 of 32 PageID #: 6881 6 13 8 3 6 5 19 7 1 16 391 Case 2:14-cv-07403-LDW-AYS Document 62-3 Filed 04/21/16 Page 19 of 32 PageID #: 6891 6 13 8 3 6 5 19 7 2 16 392 Case 2:14-cv-07403-LDW-AYS Document 62-3 Filed 04/21/16 Page 20 of 32 PageID #: 6901 6 13 8 3 6 5 19 7 13 16 3 3 Case 2:14-cv-07403-LDW-AYS Document 62-3 Filed 04/21/16 Page 21 of 32 PageID #: 6911 6 13 8 3 6 5 19 7 14 16 3 4 Case 2:14-cv-07403-LDW-AYS Document 62-3 Filed 04/21/16 Page 22 of 32 PageID #: 6921 6 13 8 3 6 5 19 7 15 16 3 5 Case 2:14-cv-07403-LDW-AYS Document 62-3 Filed 04/21/16 Page 23 of 32 PageID #: 6931 6 13 8 3 6 5 19 7 16 16 3 6 EXHIBIT F Case 1:16-cv-01308-LDW-AYS Document 32-7 Filed 05/19/17 Page 1 of 13 PageID #: 397 1 432874.2 331-13/WDM FREEHILL, HOGAN & MAHAR, LLP Attorneys for Defendants COASTAL ENVIRONMENTAL GROUP Wayne D. Meehan Don P. Murnane Jr. 80 Pine Street New York, New York 10005-1759 Telephone No: (212) 425-1900 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ATLANTIC SPECIALTY INSURANCE COMPANY, Plaintiff, v. COASTAL ENVIRONMENTAL GROUP and STERLING EQUIPMENT, INC. Defendants. 2:14-cv-7403-LDW-GRB DEFENDANT COASTAL ENVIRONMENTAL GROUP’s ANSWER WITH COUNTERCLAIM Defendant COASTAL ENVIRONMENTAL GROUP (“Coastal”), by and through its undersigned counsel, hereby submits its Answer with Counterclaim to the Plaintiff ATLANTIC SPECIALTY INSURANCE COMPANY’s (“Atlantic”) Amended Complaint (“Complaint”). JURISDICTION AND VENUE 1. Paragraph 1 of the complaint does not require a response. 2. Admits that this is an Admiralty and Maritime claim within the meaning of Rule 9(h) of the Federal Rules of Civil Procedure and within the Admiralty jurisdiction of this Court pursuant to 28 U.S.C. §1333. 3. Admits that venue is proper in this district. Case 2:14-cv-07403-LDW-AYS Document 14 Filed 04/24/15 Page 1 of 12 PageID #: 115Case 1:16-cv-01308-LDW-AYS Document 32-7 Filed 05/19/17 Page 2 of 13 PageID #: 398 2 432874.2 PARTIES 4. Denies knowledge and information sufficient to form a belief with respect to the allegations contained in paragraph 4 of the Complaint. 5. Admitted. 6. Denies knowledge and information sufficient to form a belief with respect to the allegations contained in paragraph 6 of the Complaint. THE MARINE POLICY 7. Denies knowledge and information sufficient to form a belief with respect to the allegations contained in paragraph 7 of the Complaint. 8. Admits that Coastal Requested Atlantic add the barge “Mike B” to Coastal’s policy, but except as admitted denies knowledge and information with respect to the remaining allegations contained in paragraph 6 of the Complaint. 9. Admits that the barge Mike B was owned by Sterling Equipment, Inc., but except as admitted, denies the remaining allegations of paragraph 9 of the Complaint. 10. Denies knowledge and information sufficient to form a belief with respect to the allegations contained in paragraph 10 of the Complaint. 11. Denies knowledge and information sufficient to form a belief with respect to the allegations set forth in paragraph 11 of the Complaint. 12. Denies knowledge and information sufficient to form a belief with respect to the allegations set forth in paragraph 12 of the Complaint. 13. Denies knowledge and information sufficient to form a belief with respect to the allegations contained in paragraph 13 of the Complaint. Case 2:14-cv-07403-LDW-AYS Document 14 Filed 04/24/15 Page 2 of 12 PageID #: 116Case 1:16-cv-01308-LDW-AYS Document 32-7 Filed 05/19/17 Page 3 of 13 PageID #: 399 3 432874.2 14. Denies knowledge and information sufficient to form a belief with respect to the allegations contained in paragraph 14 of the Complaint. 15. Denies the allegations contained in paragraph 15 of the Complaint. 16. Denies the allegations contained in paragraph 16 of the Complaint. 17. Denies knowledge and information sufficient to form a belief with respect to the allegations contained in paragraph 17 of the Complaint. 18. Admits that on or about April 12, 2013 that part of the barge Mike B’s hull was resting on the sea floor, but except as admitted, denies the remaining allegations of paragraph 18 of the Complaint. 19. Denies the allegations contained in paragraph 19 of the Complaint. 20. Denies knowledge and information sufficient to form a belief with respect to the allegations contained in paragraph 20 of the Complaint. 21. Admits that Donjon Marine Co. Inc., (“Donjon”) was involved in removal of the barge, but except as admitted, denies the remaining allegations of paragraph 21 of the Complaint. 22. Admits that Coastal properly and timely made a claim under the policy. 23. Admits that Coastal requested and Atlantic guaranteed payment to Donjon for removal of the barge. 24. Denies the allegations contained in paragraph 24 of the Complaint. 25. Denies that the policy was not in effect, the remaining allegations in paragraph 25 call for a legal conclusion to which no response is required. 26. Admits that Atlantic guaranteed payment to Donjon for removal of the barge. Case 2:14-cv-07403-LDW-AYS Document 14 Filed 04/24/15 Page 3 of 12 PageID #: 117Case 1:16-cv-01308-LDW-AYS Document 32-7 Filed 05/19/17 Page 4 of 13 PageID #: 400 4 432874.2 27. Denies that the policy was not in effect, the remaining allegations in paragraph 27 call for a legal conclusion to which no response is required. 28. Admits that Donjon Marine Co. Inc., (“Donjon”) was involved in removal of the barge, but except as admitted, denies the remaining allegations of paragraph 28 of the Complaint. 29. Denies knowledge and information sufficient to form a belief with respect to the allegations contained in paragraph 29 of the Complaint. 30. Denies knowledge and information sufficient to form a belief with respect to the allegations contained in paragraph 30 of the Complaint. 31. Denies knowledge and information sufficient to form a belief with respect to the allegations contained in paragraph 31 of the Complaint. 32. Denies knowledge and information sufficient to form a belief with respect to the allegations contained in paragraph 32 of the Complaint. FIRST CAUSE OF ACTION 33. Coastal repeats and realleges each and every response to the allegations 1-33 of the complaint as if set forth at length herein. 34. Admits that the Atlantic issued a marine insurance policy to Coastal covering the barge Mike B, the remaining allegations in paragraph 34 call for a legal conclusion to which no response is required. 35. Paragraph 35 of the Complaint is legal question, no response is required. 36. Denies the allegations set forth in paragraph 36 of the Complaint. 37. Denies the allegations set forth in paragraph 37 of the Complaint. 38. Paragraph 38 is a request for relief, no response is required. Case 2:14-cv-07403-LDW-AYS Document 14 Filed 04/24/15 Page 4 of 12 PageID #: 118Case 1:16-cv-01308-LDW-AYS Document 32-7 Filed 05/19/17 Page 5 of 13 PageID #: 401 5 432874.2 SECOND CAUSE OF ACTION 39. Coastal repeats and realleges each and every response to the allegations 1-38 of the complaint as if set forth at length herein. 40. Denies the allegations set forth in paragraph 40 of the Complaint. 41. Denies the allegations set forth in paragraph 41 of the Complaint. 42. Paragraph 42 is a request for relief, no response is required. THIRD CAUSE OF ACTION 43. Coastal repeats and realleges each and every response to the allegations 1-42 of the complaint as if set forth at length herein. 44. Denies knowledge and information sufficient to form a belief with respect to the allegations contained in paragraph 44 of the Complaint. 45. Paragraph 45 is a request for relief, no response is required. FOURTH CAUSE OF ACTION 46. Coastal repeats and realleges each and every response to the allegations 1-45 of the complaint as if set forth at length herein. 47. Denies knowledge and information sufficient to form a belief with respect to the allegations contained in paragraph 47 of the Complaint. 48. Paragraph 48 is a request for relief, no response is required. ALTERNATIVE FIFTH CAUSE OF ACTION 49. Coastal repeats and realleges each and every response to the allegations 1-48 of the complaint as if set forth at length herein. 50. Paragraph 50 of the Complaint is legal question, no response is required. 51. Denies the allegations set forth in paragraph 51 of the Complaint. Case 2:14-cv-07403-LDW-AYS Document 14 Filed 04/24/15 Page 5 of 12 PageID #: 119Case 1:16-cv-01308-LDW-AYS Document 32-7 Filed 05/19/17 Page 6 of 13 PageID #: 402 6 432874.2 52. Paragraph 52 is a request for relief, no response is required. ALTERNATIVE SIXTH CAUSE OF ACTION 53. Coastal repeats and realleges each and every response to the allegations 1-52 of the complaint as if set forth at length herein. 54. Paragraph 54 of the Complaint is legal question, no response is required. 55. Denies the allegations set forth in paragraph 55 of the Complaint. 56. Paragraph 56 is a request for relief, no response is required. ALTERNATIVE SEVENTH CAUSE OF ACTION 57. Coastal repeats and realleges each and every response to the allegations 1-56 of the complaint as if set forth at length herein. 58. Denies the allegations set forth in paragraph 58 of the Complaint. 59. Paragraph 59 is a request for relief, no response is required. ALTERNATIVE EIGHTH CAUSE OF ACTION 60. Coastal repeats and realleges each and every response to the allegations 1-59 of the complaint as if set forth at length herein. 61. Paragraph 61 of the Complaint is legal question, no response is required. 62. Denies the allegations set forth in paragraph 62 of the Complaint. 63. Paragraph 63 of the Complaint is legal question, no response is required. 64. Paragraph 64 is a request for relief, no response is required. ALTERNATIVE NINTH CAUSE OF ACTION 65. Coastal repeats and realleges each and every response to the allegations 1-64 of the complaint as if set forth at length herein. 66. Paragraph 66 of the Complaint is legal question, no response is required. Case 2:14-cv-07403-LDW-AYS Document 14 Filed 04/24/15 Page 6 of 12 PageID #: 120Case 1:16-cv-01308-LDW-AYS Document 32-7 Filed 05/19/17 Page 7 of 13 PageID #: 4 3 7 432874.2 67. Denies the allegations contained in paragraph 67 of the Complaint. 68. Denies the allegations contained in paragraph 68 of the Complaint. 69. Paragraph 69 is a request for relief, no response is required. ALTERNATIVE TENTH CAUSE OF ACTION 70. Coastal repeats and realleges each and every response to the allegations 1-69 of the complaint as if set forth at length herein. 71. Paragraph 71 of the Complaint is legal question, no response is required. 72. Denies the allegations contained in paragraph 72 of the Complaint. 73. Paragraph 73 is a request for relief, no response is required. ALTERNATIVE ELEVENTH CAUSE OF ACTION 74. Coastal repeats and realleges each and every response to the allegations 1-74 of the complaint as if set forth at length herein. 75. Denies the allegations set forth in paragraph 75 of the Complaint. 76. Paragraph 76 is a request for relief, no response is required. ALTERNATIVE TWELFTH CAUSE OF ACTION 77. Coastal repeats and realleges each and every response to the allegations 1-76 of the complaint as if set forth at length herein. 78. Denies the allegations set forth in paragraph 78 of the Complaint. 79. Paragraph 79 is a request for relief, no response is required. ALTERNATIVE THIRTEENTH CAUSE OF ACTION 80. Coastal repeats and realleges each and every response to the allegations 1-79 of the complaint as if set forth at length herein. 81. Denies the allegations set forth in paragraph 81 of the Complaint. Case 2:14-cv-07403-LDW-AYS Document 14 Filed 04/24/15 Page 7 of 12 PageID #: 121Case 1:16-cv-01308-LDW-AYS Document 32-7 Filed 05/19/17 Page 8 of 13 PageID #: 404 8 432874.2 82. Paragraph 82 is a request for relief, no response is required. FOURTEENTH CAUSE OF ACTION 83. Coastal repeats and realleges each and every response to the allegations 1-82 of the complaint as if set forth at length herein. 84. Denies knowledge and information sufficient to form a belief with respect to the allegations contained in paragraph 84 of the Complaint. 85. Denies knowledge and information sufficient to form a belief with respect to the allegations contained in paragraph 85 of the Complaint. 86. Denies the allegations set forth in paragraph 86 of the Complaint. 87. Denies the allegations set forth in paragraph 87 of the Complaint. 88. Denies the allegations set forth in paragraph 88 of the Complaint. 89. Denies the allegations set forth in paragraph 89 of the Complaint. 90. Denies the allegations set forth in paragraph 90 of the Complaint. ALTERNATIVE FIFTEENTH CAUSE OF ACTION 91. Coastal repeats and realleges each and every response to the allegations 1-90 of the complaint as if set forth at length herein. 92. Denies the allegations set forth in paragraph 92 of the Complaint. 93. Paragraph 93 is a request for relief, no response is required. AFFIRMATIVE DEFENSES FIRST AFFIRMATIVE DEFENSE 94. The contract of marine insurance between Coastal and Atlantic does not permit Atlantic to recover from Coastal amounts paid under the policy. SECOND AFFIRMATIVE DEFENSE Case 2:14-cv-07403-LDW-AYS Document 14 Filed 04/24/15 Page 8 of 12 PageID #: 122Case 1:16-cv-01308-LDW-AYS Document 32-7 Filed 05/19/17 Page 9 of 13 PageID #: 405 9 432874.2 95. The Complaint fails to state a claim of action upon which relief can be granted. THIRD AFFIRMATIVE DEFENSE 96. The Complaint fails to join a necessary party, specifically, Global Indemnity Insurance. COUNTERCLAIM AGAINST PLAINTIFF ATLANTIC SPECIALTY INSURANCE COMPANY 97. Plaintiff Atlantic either issued a policy to Coastal or added the barge Mike B to an existing insurance policy for Coastal’s benefit. 98. Coastal retained an independent surveyor who surveyed the barge Mike B on April 8, 2013 for general condition and valuation. 99. The April 8, 2013 survey and general examination of the vessel, conducted while afloat, found the hull and equipment to be in satisfactory condition for operation on inland waters with a crawler crane and equipment on deck. 100. Coastal provided Atlantic with all relevant facts known to Coastal with respect to the condition of the barge Mike B. 101. Coastal, at all times relevant, satisfied all conditions of and for coverage under the policy 102. Coastal satisfied all pre-requisites and requirements for bringing a claim under the policy. 103. Coastal provided Atlantic with proper Notice as required by the policy. 104. Coastal timely brought its claim under the policy to Atlantic. 105. Coastal fully cooperated with Atlantic with respect to the claim under the policy relating to the Mike B that is the subject of this action. 106. Coastal provided Atlantic with all documents requested with respect to Coastal’s claim under the policy relating to the Mike B that is the subject of this action. Case 2:14-cv-07403-LDW-AYS Document 14 Filed 04/24/15 Page 9 of 12 PageID #: 123Case 1:16-cv-01308-LDW-AYS Document 32-7 il 5/19/ 7 10 of 13 PageID #: 406 10 432874.2 107. On April 13, 2013 the barge Mike B, while spudded down at Coney Island, experienced gale force conditions. 108. As a result of these gale force conditions, the barge Mike B sustained damage. 109. Coastal fully complied with the claims requirements under the policy in seeking payment for damages and for removal of the barge Mike B. 110. Atlantic breached the contract of marine insurance in failing to take action, make payment, and/or otherwise fulfill or carry out its obligations under the policy covering Coastal and/or the barge Mike B. 111. Plaintiff Atlantic commenced this declaratory judgment action, naming Coastal as a defendant, and seeking to recover amounts paid out under the policy for claims arising from the the damage to the Mike B on April 12, 2013. 112. The commencement of this action required Coastal to defend its rights under the policy and placed Coastal in a defensive posture by the legal steps Atlantic undertook in an effort to free itself from its policy obligations. 113. Atlantic further breached the Contract of Maritime Insurance in failing to act in good faith with respect to its obligations under the policy. 114. As a result of Atlantic’s breach of contract in failing to provide coverage under the policy, seeking to recover amounts paid from the insured, and commencing a the instant declaratory judgment action, Defendant Coastal suffered and continues to suffer damages which it is entitled to recover from Coastal. 115. Atlantic has failed to make certain payments due under the policy without reservation, and failed to make other payments due under the policy. Case 2:14-cv-07403-LDW-AYS Document 14 Filed 04/24/15 Page 10 of 12 PageID #: 124Case 1:16-cv-01308-LDW-AYS Document 32-7 Filed 05/19/17 Page 11 of 13 PageID #: 407 11 432874.2 WHEREFORE, Defendant Coastal prays: (a) That the Complaint against Coastal be dismissed; (b) That Atlantic be denied Declaratory Judgment as to each and every count in the Complaint; (c) That the Court grant judgment in favor of Coastal on its counterclaim against Atlantic; (d) That Coastal be awarded damages, costs, fees, and attorney’s fees as a result of Atlantic’s wrongful denial of coverage and commencement of the instant action that placed Coastal in defense posture and violated Atlantic’s obligations under the contract and/or as an insurer; (e) That Coastal be awarded the value of the vessel, which as best as may presently be estimated is a sum of $400,000.00; (f) That Coastal be awarded indemnity or contribution from Atlantic for any amounts which Coastal is liable to any 3rd party for, which arise from the action forming the subject of the Complaint. (g) That Coastal be awarded such other, further, and different relief as may be deemed just, proper and equitable in the premises. Case 2:14-cv-07403-LDW-AYS Document 14 Filed 04/24/15 Page 11 of 12 PageID #: 125Case 1:16-cv-01308-LDW-AYS Document 32-7 Filed 05/19/17 Page 2 of 13 PageID #: 408 12 432874.2 Dated: New York, New York April 24, 2015 FREEHILL, HOGAN & MAHAR LLP Attorneys for Defendant COASTAL ENVIRONMENTAL GROUP By: _/s/Wayne D. Meehan _ Wayne D. Meehan Don P. Murnane Jr. 80 Pine Street New York, New York 10005 (212) 425-1900 Patrick Ryan McElduff James W. Carbin Attorneys for Atlantic Specialty Insurance Company Duane Morris LLP One Riverfront Plaza 1037 Raymond Blvd., Suite 1800 Newark, NJ 07102-5429 973-424-2000 Fax: 973-424-2001 Email: prmcelduff@duanemorris.com Email: jwcarbin@duanemorris.com Christopher M. Schierloh Casey & Barnett, LLC Attorneys for Sterling Equipment, Inc. 65 West 36th Street, 9th Floor New York, NY 10018 212-286-0225 Fax: 212-286-0261 Email: cms@caseybarnett.com Case 2:14-cv-07403-LDW-AYS Document 14 Filed 04/24/15 Page 12 of 12 PageID #: 126Case 1:16-cv-01308-LDW-AYS Document 32-7 Filed 05/19/17 Page 13 of 13 PageID #: 409 Case 1:16-cv-01308-LDW-AYS Document 32-8 Filed 05/19/17 Page 1 of 4 PageID #: 410 Case 1:16-cv-01308-LDW-AYS Document 32-8 Filed 05/19/17 Page 2 of 4 PageID #: 411 Case 1:16-cv-01308-LDW-AYS Document 32-8 Filed 05/19/17 Page 3 of 4 PageID #: 412 Case 1:16-cv-01308-LDW-AYS Document 32-8 Filed 05/19/17 Page 4 of 4 PageID #: 413 BETANCOURT VAN HEMMEN GRECO & KENYON LLC Attorneys for Defendant Randive, Inc. 151 Bodman Place, Red Bank NJ 07701 (732) 530-4646 Jeanne-Marie D. Van Hemmen (JV6414) UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK -----------------------------------------------------------X ATLANTIC SPECIALTY INSURANCE : CASE NO.: 1:16-CV-1308(LDW)(AYS) COMPANY, : : Plaintiff, : : v. : : RANDIVE INC. OF NEW JERSEY : : Defendants. : -----------------------------------------------------------X MEMORANDUM OF LAW IN SUPPORT OF DEFENDANT’S MOTION TO DISMISS PURSUANT TO FED. R. CIV. P. 12(b)(1) and 12(b)(6) OR ALTERNATIVE MOTION TO STAY Case 1:16-cv-01308-LDW-AYS Document 32-9 Filed 05/19/17 Page 1 of 24 PageID #: 414 i TABLE OF CONTENTS Table of Authorities ........................................................................................................................ ii Preliminary Statement ......................................................................................................................2 Statement of Facts ............................................................................................................................3 Argument Point I The Complaint Fails to State a Claim for which Relief can be Granted ..............................................................................6 Point II Atlantic’s Claim Fails to Allege an Actual Controversy and Accordingly Must Be Dismissed for Lack of Subject Matter Jurisdiction ..................................................8 Point III The Current Suit Should be Stayed Pending Resolution of the Related Federal Court Action ....................................................15 Conclusion .....................................................................................................................................19 Case 1:16-cv-01308-LDW-AYS Document 32-9 Filed 05/19/17 Page 2 of 24 PageID #: 415 ii TABLE OF AUTHORITIES Case Page Advanced Cardiovascular Systems, Inc., v. Scimed Life Systems, Inc., 988 F.2d 1157 (Fed. Cir. 1993)............................................................................................6 Aetna Life Ins. Co. of Hartford, Conn. v. Haworth, 300 U.S. 227 (1937) ...........................................................................................................11 Andrulonis v. United States, 26 F.3d 1224 (2d Cir. 1994) ........................................................................................12, 13 Ashwander v. Tennessee Valley Authority, 297 U.S. 288 (1936) ...........................................................................................................11 Atlantic Richfield Co. v. Interstate Oil Transp. Co., 784 F.2d 106 (2d Cir. 1986).................................................................................................7 Building Indus. Elec. Contractors Ass’n v. City of New York, 678 F.3d 184 (2d Cir. 2012).................................................................................................6 Caspian Investments, Ltd. v. Vicom Holdings, Ltd., 770 F. Supp. 880, 884 (S.D.N.Y.1991) .............................................................................16 Charter Oak Fire Ins. Co. v. Bolding, No. 08-CV-02632(KAM), 2009 WL 3246116 (E.D.N.Y. Oct. 1, 2009) ...................8, 9, 11 Cohen v. Koenig, 25 F.3d 1168 (2d Cir. 1994).................................................................................................6 Consol. Edison Co. of N.Y., Inc. v. Royal Indem. Co., 41 A.D.2d 37 (1st Dep’t 1973) .........................................................................................12 C.T. Shipping, Ltd. v. DMI (U.S.A.) Ltd., 774 F. Supp. 146 (S.D.N.Y. 1991).......................................................................................7 Esposito v. Great Lakes Dredge & Dock Co., 2003 A.M.C. 2753 (E.D.N.Y. 2003) .................................................................................14 Goldstein v. Time Warner N.Y. City Cable Grp., 3 F.Supp.2d 423, 437-38 (S.D.N.Y.1998) ........................................................................15 In Re M/V DG HARMONY, No. 98 Civ. 8394(DC), 2009 WL 3241238 (S.D.N.Y. Sept. 30, 2009) ...............................7 Case 1:16-cv-01308-LDW-AYS Document 32-9 Filed 05/19/17 Page 3 of 24 PageID #: 416 iii Kappel v. Comfort, 914 F. Supp. 1056, 1058 (S.D.N.Y. 1996) ........................................................................16 Krause v. American Guarantee and Liability Insurance Co., 22 N.Y.2d 147 (1968) .................................................................................................12, 13 Landis v. N. Am. Co., 299 U.S. 248, 254, 57 S.Ct. 163, 81 L.Ed. 153 (1936) ...............................................15, 16 Louis Vuitton Malletier S.A. v. LY USA, Inc., 676 F.3d 83, 96 (2d Cir. 2012) ..........................................................................................15 MBIA Inc. v. Certain Underwriters at Lloyd’s, London, 33 F. Supp.3d 344 (S.D.N.Y. 2014) .....................................................................................6 Nat’l Org. for Marriage, Inc. v. Walsh, 714 F.3d 682 (2d Cir. 2013).................................................................................................8 O’Brien v. Key Bank, 223 A.D.2d 830 (3d Dep’t 1996) ......................................................................................12 Oldcastle Precast, Inc. v. U.S. Fid. & Guar. Co., 458 F. Supp.2d 131 (S.D.N.Y. 2006) ...............................................................................8, 9 See Readick v. Avis Budget Group, Inc., 2014 WL 1683799 at *3-6 (S.D.N.Y. 2014) .....................................................................17 RLI Insurance Co. v. Turner/Santa Fe, 58 A.D.3d 413 (1st Dep’t 2009) .......................................................................................13 SC Note Acquisitions, LLC v. Wells Fargo Bank, N.A., 548 F. App’x 741 (S.D.N.Y. 2014) ......................................................................................8 State of New York v. Syracuse Rigging Co., 249 A.D.2d 758 (3d Dep’t 1998) .........................................................................................7 St. Clair v. City of Chico, 880 F.2d 199 (9th Cir. 1989) ...............................................................................................8 St. Paul Fire & Marine Ins. Co. v. United States Lines Co., 258 F.2d 374 (2d Cir. 1958) ..............................................................................................12 SST Global Tech., LLC v. Chapman, 270 F.Supp.2d 444, 455 (S.D.N.Y.2003) ..........................................................................15 Case 1:16-cv-01308-LDW-AYS Document 32-9 Filed 05/19/17 Page 4 of 24 PageID #: 417 iv Taylor Inv., Ltd. v. Upper Darby Tp., 983 F.2d 1285 (3d Cir. 1993)...............................................................................................8 Texas v. United States, 523 U.S. 296 (1998) .........................................................................................................8, 9 Thomas v. City of New York, 143 F.3d 31 (2d Cir. 1998)...................................................................................................6 Trikona Investors, Ltd. v. Kai-Lin Chuang, 2013 WL 1182960 (E.D.N.Y. 2013) ...........................................................................15, 16 Tyco International Holdings S.a.r.l. v. Atkore International Group Inc., No. 14 Civ. 7968(PAC), 2015 WL 5472941 (S.D.N.Y. Sept. 17, 2015) ..........................14 United N.Y. Sandy Hook Pilots Ass’n v. Rodermond Indus., Inc., 394 F.2d 65 (3d Cir. 1968)...................................................................................................7 Wallace v. Nat’l R.R. Passenger Corp., 5 F. Supp.3d 452 (S.D.N.Y. 2014) ....................................................................................12 Winkelmann v. Excelsior Ins. Co., 85 N.Y.2d 577 (1995) .......................................................................................................13 Yves Saint Laurent Parfums, S.A. v. Costco Wholesaler Corp., 2010 WL 2593671 *9 (S.D.N.Y. June 24, 2010) ...................................................................12, 13 Rules, Statutes & Treatises 28 U.S.C. § 2201 ............................................................................................................................10 Fed. R. Civ. P. 12 ................................................................................................................... passim Fed. R. Civ. P. 57 .....................................................................................................................10, 11 Charles Alan Wright et al., Federal Practice and Procedure (3d ed. 2016) .....................................................................8 Steven Baicker-McKee et al., Federal Civil Rules Handbook 2015 (Thompson Reuters/West 2014) ...............................6 Case 1:16-cv-01308-LDW-AYS Document 32-9 Filed 05/19/17 Page 5 of 24 PageID #: 418 1 BETANCOURT VAN HEMMEN GRECO & KENYON LLC Attorneys for Defendant Randive, Inc. 151 Bodman Place, Red Bank NJ 07701 (732) 530-4646 Jeanne-Marie D. Van Hemmen (JV6414) UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ------------------------------------------------------ ATLANTIC SPECIALTY INSURANCE COMPANY, Plaintiff, v. RANDIVE INC. OF NEW JERSEY Defendants. ------------------------------------------------------- X : : : : : : : : : : X CASE NO.: 1:16-cv-1308(LDW)(AYS) MEMORANDUM OF LAW IN SUPPORT OF DEFENDANT’S MOTION TO DISMISS PURSUANT TO FED. R. CIV. P. 12(b)(1) and 12(b)(6) OR ALTERNATIVE MOTION TO STAY Defendant, Randive, Inc. (“Randive”), by its attorneys Betancourt, Van Hemmen, Greco & Kenyon LLC, respectfully submits this memorandum of law in support of its motion to dismiss Plaintiff’s complaint, pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6). Further, Randive alternatively moves to stay the present action pending the resolution of the matter, Atlantic Specialty Insurance Co. v. Coastal Environmental Group, 14-cv-7403(LDW)(AYS) (“Related Federal Court Action). Randive will also rely on the submitted Attorney Declaration of Jeanne- Marie D. Van Hemmen dated January 24, 2017 (Van Hemmen Dec.) and exhibits attached thereto. Case 1:16-cv-01308-LDW-AYS Document 32-9 Filed 05/19/17 Page 6 of 24 PageID #: 419 2 PRELIMINARY STATEMENT Prior to filing its lawsuit against Randive, Atlantic Specialty Insurance Company (“Atlantic”) filed the Related Federal Court Action against its insured, Coastal Environmental Group (“Coastal”), contesting its liability to Coastal for damages related to the sinking of the Mike B near the Coney Island Steeplechase Pier. In this case, Atlantic seeks an advisory opinion from this Court ordering Randive to indemnify Atlantic in the event Atlantic is ultimately adjudicated liable to Coastal in the Related Federal Court Action. Moreover, while Coastal alleged a counter-claim against Atlantic in the Related Federal Court Action to recover the cost of the debris removal, Coastal’s counter-claim is contingent on a court’s ruling in a third litigation, Coastal Environmental Group v. Triton Structural Concrete, Inc. (“Triton”), Index. No. 505766/2014 (N.Y. Sup. Ct. Kings County 2014) (“Related State Court Action”). In the Related State Court Action, Coastal asserts that Triton owes it the cost of the debris removal. Accordingly, for Atlantic’s indemnity claim to ripen into a valid indemnity cause of action and a justiciable controversy, Triton must prevail in the Related State Court Action against Coastal, and Coastal must then prevail in the Related Federal Court Action against Atlantic. However, those dual contingencies establish that Atlantic has failed to plead a valid cause of action for indemnity as a matter of law subjecting its complaint to dismissal under Fed. R. Civ. P. 12(b)(6). Atlantic’s complaint further fails to allege a justiciable controversy under Article III of the U.S. Constitution, and the complaint is therefore subject to dismissal under Fed. R. Civ. P. 12(b)(1). In the event the Court is not inclined to grant Randive’s Motion to Dismiss, Randive alternatively seeks a stay of the current action, pending the full and final resolution of the Related Case 1:16-cv-01308-LDW-AYS Document 32-9 Filed 05/19/17 Page 7 of 24 PageID #: 420 3 Federal Court Action. Due to the doubly-contingent nature of Atlantic’s claim against Randive which may never materialize into a justiciable controversy, the issuance of a stay would prevent the unnecessary waste of judicial resources and would allow Randive to avoid incurring significant litigation costs required to defend this action. Further, unless and until Atlantic’s claim ripens, Counsel is unable to advise Randive regarding strategy and potential resolution of Atlantic’s claim, because neither Atlantic nor Coastal have produced any evidence regarding the value of their claims. Therefore, until the Related Federal Court Action is adjudicated, there is little chance that the instant litigation will be resolved. As such, a stay is appropriate. STATEMENT OF FACTS 1. The Parties. Randive is a commercial diving company. Complaint in Admiralty, Doc. 1, (“Complaint”) ¶¶5, 14. Atlantic is a marine insurer. Complaint, ¶8. Coastal is a marine construction contractor that operated the Barge Mike B (“Mike B”). Van Hemmen Dec., ¶2, Exhibit A, p. 2. Atlantic issued a P & I and hull policy covering the Mike B. Complaint, ¶8. Coastal was a subcontractor to Triton (“Triton Subcontract”) in connection with Triton’s contract with New York City for reconstruction of the Coney Island Steeplechase Pier (“Pier”). Van Hemmen Dec., ¶3, Exhibit B, ¶¶4, 8. 2. The Salvage of the Mike B. In connection with its work on the Triton Subcontract, Coastal deployed the Mike B near the Pier. Van Hemmen Dec., Exhibit A, p.2. On or about April 13, 2013, the Mike B sank near the Pier. Complaint, ¶10. Coastal hired Donjon Marine Co. Inc. (“Donjon”) to raise the Mike B. Complaint, ¶12. Atlantic paid Donjon to perform the salvage, in accordance with its obligations as underwriter, subject to a reservation as to questions of coverage with respect to the sinking. Van Hemmen Dec., ¶4, Exhibit C, ¶29. Case 1:16-cv-01308-LDW-AYS Document 32-9 Filed 05/19/17 Page 8 of 24 PageID #: 421 4 Atlantic hired Randive to inspect the sea bed of the area where the Mike B sank in order to ascertain whether there was additional debris from the Mike B visible above the mud line. Van Hemmen Dec., ¶5, Exhibit D. Randive performed the dive sweep and located several targets which were marked and subsequently removed by Donjon. Van Hemmen Dec., ¶5, Exhibit D. Randive performed a second dive sweep and reported that there were no other items above the mud line at that time. Van Hemmen Dec., ¶5, Exhibit D. Following, Randive submitted a dive report to Atlantic consistent with its findings. Van Hemmen Dec., ¶5, Exhibit D. Roughly six months later, Coastal incurred additional costs to remove debris near the Pier. Van Hemmen Dec., ¶5. Coastal billed Triton for the cost of removing the debris on the basis that the task was performed in furtherance of Coastal’s obligations under the Triton Subcontract. Van Hemmen Dec., ¶7, Exhibit E, Ex. 2, pp. 55-56, 70. 3. The Related Federal Court Action. Atlantic filed the Related Federal Court Action against Coastal seeking a judicial declaration that it has no further obligation under the Hull policy to reimburse Coastal for the value of the Mike B. Further, Atlantic has claimed that it is entitled to recovery from Coastal of the costs associated with the salvage of the Mike B. Van Hemmen Dec., ¶4, Exhibit C, ¶¶82, 88. Coastal counter-claimed against Atlantic seeking recovery of the cost of debris removal that occurred some months after the salvage of the Mike B, in the event Triton does not reimburse Coastal for those costs in the Related State Court Action. Van Hemmen Dec., ¶8, Exhibit F, p.11. 4. The Related State Court Action. Coastal sued Triton, et al., in August 2014 to recover approximately $3 million in costs and fees which Coastal claims is due under the Triton contract. Van Hemmen Dec., ¶3, Exhibit B, ¶11. Discovery in the Related State Court Action established Case 1:16-cv-01308-LDW-AYS Document 32-9 Filed 05/19/17 Page 9 of 24 PageID #: 422 5 that a component of Triton’s alleged failure to pay Coastal is related to Triton’s belief that additional costs related to debris removal were incurred because the Mike B had not been fully removed from the sea bed floor. Van Hemmen Dec., ¶7, Exhibit E, Ex. 2, pp. 53-60. In the Related State Court Action, Coastal claims that the debris was unrelated to the MIKE B and the cost of removing it was properly charged to Triton. Van Hemmen Dec., ¶7, Exhibit E, Ex. 2, p. 132. 5. Atlantic’s Complaint herein. Atlantic sues herein to recover from Randive on the basis that Randive’s dive sweep amounted to a “certification” that all debris from the Mike B had been removed. Complaint, ¶16. Atlantic contends that if the debris subsequently removed was from the Mike B, the alleged “certification” was in error, and Atlantic is entitled to indemnification from Randive for the cost of that removal. However, Atlantic’s claim is contingent upon Atlantic being ultimately adjudicated as liable to Coastal in the Related Federal Court Action. Complaint, ¶28. The Complaint herein clearly sets forth that Atlantic denies its liability to Coastal and that its liability has not yet been established. Complaint., ¶¶21, 25, 28. The Complaint does not allege that Atlantic has suffered any damages. Further, it does not allege that Atlantic is a subrogated insurer, and it does not allege that Atlantic currently has an indemnification obligation. 6. Procedural Posture of Current Litigation. Randive was directed by the Court to participate in Court-ordered mediation in December 2016. On the eve of mediation, this Court denied Randive’s original Motion to Dismiss, subject to potential renewal should mediation fail. The December 2016 mediation proved fruitless. Van Hemmen Dec., ¶9. In the meantime, the Related Federal Court Action, which was set for trial in August 2017, has recently been adjourned with the request that the parties submit alternative trial dates in September and October 2017. Case 1:16-cv-01308-LDW-AYS Document 32-9 Filed 05/19/17 Page 10 of 24 PageID #: 423 6 Based upon the case’s current posture, it is presumed that trial in the Related Federal Court Action will go forward in either September or October 2017. Van Hemmen Dec., ¶11. ARGUMENT Point I The Complaint Fails to State a Claim for which Relief can be Granted 1. Legal Standard for a 12(b)(6) Motion The core concept of a motion to dismiss is to test the legal sufficiency of a party’s claim for relief. The rule allows the trial court to terminate lawsuits “that are fatally flawed in their legal premises and destined to fail, and thus to spare litigants the burdens of unnecessary pretrial and trial activity.” Steven Baicker-McKee et al., Federal Civil Rules Handbook 2015 472 (Thompson Reuters/West 2014), quoting Advanced Cardiovascular Systems, Inc., v. Scimed Life Systems, Inc., 988 F.2d 1157, 1160 (Fed. Cir. 1993). In deciding a motion to dismiss, the court must “accept [ ] all factual allegations in the complaint as true and draw [ ] all reasonable inferences in the plaintiff’s favor.“ MBIA Inc. v. Certain Underwriters at Lloyd’s, London, 33 F. Supp.3d 344, 352 (S.D.N.Y. 2014). The complaint should be dismissed if it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Thomas v. City of New York, 143 F.3d 31, 36-37 (2d Cir. 1998) quoting Cohen v. Koenig, 25 F.3d 1168, 1172 (2d Cir. 1994). In considering a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), a district court may consider “only the complaint, . . . any documents attached thereto or incorporated by reference and documents upon which the complaint relies heavily.” MBIA, Inc., 33 F. Supp.3d at 353 quoting Building Indus. Elec. Contractors Ass’n v. City of New York, 678 F.3d 184, 187 (2d Cir. 2012). Case 1:16-cv-01308-LDW-AYS Document 32-9 Filed 05/19/17 Page 11 of 24 PageID #: 424 7 A review of the factual allegations plead in Atlantic’s complaint establish that they do not give rise to an entitlement for relief as a matter of law. 2. Applicable Law Federal admiralty law and New York state law have different standards to determine whether an indemnity claim has accrued. Regardless of which standard is applied, Atlantic’s indemnity claim has not ripened. Under maritime law, an indemnity claim accrues as soon as liability is imposed. C.T. Shipping, Ltd. v. DMI (U.S.A.) Ltd., 774 F. Supp. 146, 150 (S.D.N.Y. 1991). Under New York State Law, an indemnity claim only accrues once payment has been made on the underlying claim or judgment. Id.; State of New York v. Syracuse Rigging Co., 249 A.D.2d 758, 759 (3d Dep’t 1998) (holding “[a]s a general rule, a claim for indemnification does not accrue until payment has been made by the party seeking indemnification.”) Both standards require that liability of the indemnitee be established for an indemnification claim to accrue. See In Re M/V DG HARMONY, No. 98 Civ. 8394(DC), 2009 WL 3241238, at *7 (S.D.N.Y. Sept. 30, 2009) citing Atlantic Richfield Co. v. Interstate Oil Transp. Co., 784 F.2d 106, 112 (2d Cir. 1986); United N.Y. Sandy Hook Pilots Ass’n v. Rodermond Indus., Inc., 394 F.2d 65, 74 (3d Cir. 1968). Atlantic seeks a declaration that it is entitled to indemnity from Randive based on Randive’s alleged breach of contract to provide dive sweep services, arguably a maritime contract. Atlantic’s Complaint alleges that 1) it denies its underlying liability, and that 2) its underlying liability is currently the object of litigation in the Related Federal Court Action. Atlantic does not allege that it has a legal obligation to pay Coastal or that it has suffered any damages. Accordingly, Case 1:16-cv-01308-LDW-AYS Document 32-9 Filed 05/19/17 Page 12 of 24 PageID #: 425 8 Atlantic has not alleged a legally viable indemnity claim under either maritime or New York state law. Consequently, the claim should be dismissed. Point II Atlantic’s Claim Fails to Allege an Actual Controversy and Accordingly Must Be Dismissed for Lack of Subject Matter Jurisdiction 1. Legal Standard for 12(b)(1) Motion to Dismiss for Lack of Subject Matter Jurisdiction based on Failure to Allege an Actual Case or Controversy Because ripeness affects justiciability, unripe claims should be disposed of on a motion to dismiss. Charles Alan Wright et al., Federal Practice and Procedure § 3532.7 (3d ed. 2016) citing Taylor Inv., Ltd. v. Upper Darby Tp., 983 F.2d 1285, 1290 & n.7 (3d Cir. 1993). It is proper to consider affidavits in granting motions raising ripeness issues. The party invoking the court’s jurisdiction has the burden of showing that jurisdiction exists. Factual disputes can be resolved by the court. Id., citing St. Clair v. City of Chico, 880 F.2d 199, 201-202 (9th.Cir. 1989). 2. Applicable Law To be justiciable, a cause of action must be ripe - it must present a real, substantial controversy, not a mere hypothetical question. Ripeness is peculiarly a question of timing. A claim is not ripe for adjudication if it depends upon contingent future events that may not occur as anticipated, or indeed may not occur at all. The doctrine’s major purpose is to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements. SC Note Acquisitions, LLC v. Wells Fargo Bank, N.A., 548 F. App’x 741 (S.D.N.Y. 2014) quoting Nat’l Org. for Marriage, Inc. v. Walsh, 714 F.3d 682, 687 (2d Cir. 2013); see also Oldcastle Precast, Inc. v. U.S. Fid. & Guar. Co., 458 F. Supp.2d 131, 145 (S.D.N.Y. 2006) quoting Texas v. United States, 523 U.S. 296, 300 (1998); Charter Oak Fire Ins. Co. v. Bolding, No. 08-CV- 02632(KAM), 2009 WL 3246116, at *3 (E.D.N.Y. Oct. 1, 2009) (“A court’s judgment must resolve a real and substantial controversy admitting of specific relief through a decree of a Case 1:16-cv-01308-LDW-AYS Document 32-9 Filed 05/19/17 Page 13 of 24 PageID #: 426 9 conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts” (internal quotations omitted.)) In determining whether a matter is ripe for judicial review, courts evaluate both the fitness of the issues for judicial determination and the hardship to the parties of withholding court consideration. See Oldcastle, 458 F. Supp.2d at 145, quoting Texas, 523 U.S. at 301. In Charter Oak Fire Insurance Co. v. Bolding, 2009 WL 3246116 (E.D.N.Y.Oct. 1, 2009), the plaintiff insurance company (“Charter Oak”) filed a declaratory judgment action against its insured, Richard Bolding, and the parents of a young girl who drowned in Bolding’s swimming pool, the Karims. Charter Oak’s lawsuit sought a declaration that it owed no obligation to indemnify Bolding for any liability to the Karims, on the basis of late notice. The Karims’ daughter had drowned over two years before. Although Bolding had given the insurer notice of the event, neither Bolding nor the Karims had demanded any further action from the underwriter. The court raised, sua sponte, the threshold question of whether it had subject matter jurisdiction over the proceeding, holding that “[t]he possibility of a future controversy between parties in certain contingencies is insufficient to establish a controversy [in satisfaction of the subject matter jurisdictional requirement for such]”. Id., at *3. Atlantic’s indemnity claim is not fit for judicial determination. There is no real, substantial controversy over whether Atlantic is entitled to indemnification from Randive for the costs of removing the debris from near the Pier. It is purely hypothetical. Coastal incurred the costs to remove the debris. Coastal billed Triton for the cost of removal on the basis that the debris did not consist of remnants of the Mike B but instead other detritus that needed removing consistent with its contractual obligations to Triton. Triton alleged the debris was related to the Mike B and Case 1:16-cv-01308-LDW-AYS Document 32-9 Filed 05/19/17 Page 14 of 24 PageID #: 427 10 refused to pay. That dispute is currently being litigated in the Related State Court Action. It is unclear how it will be resolved. If Coastal recovers from Triton for the cost of removing the debris, Atlantic will never suffer any loss for which it needs indemnification from Randive. Even if Triton prevails and does not pay Coastal for the cost of the debris removal, Atlantic might still never incur those costs, since its primary position in the Related Federal Court Action is that it has no coverage obligation to Coastal. Accordingly, Atlantic’s claim asserted herein is doubly contingent, first on the outcome of the Related State Court Action and second on the outcome of the Related Federal Court Action. It is not fit for judicial determination, as it seeks an advisory opinion about what the court would decide if indeed Atlantic is found to have a coverage obligation to Coastal for the debris removal costs, which neither Atlantic nor Coastal assert as their primary position in any of the three currently pending related litigations. The second consideration is the harm to the litigants if the court withholds decision. Atlantic will suffer no harm because it has not yet paid out any amount in payment of the obligation for which it seeks a judicial declaration of Randive’s indemnity obligation. Randive will be harmed if it is forced to defend against this claim which might never actually become ripe. 3. The Federal Declaratory Judgment Statute Does Not Save Atlantic’s Claim from its Lack of Ripeness Atlantic’s complaint asserts that it is brought pursuant to 28 U.S.C. § 2201 et seq., the Federal Declaratory Judgment Act, and Federal Rule of Civil Procedure 57, Declaratory Judgment. While the Declaratory Judgment Act allows a party to seek such a judicial declaration even when the party has not yet suffered actual damage, it nonetheless requires the existence of an actual controversy. 28 U.S.C. § 2201(a) (“In a case of actual controversy within its jurisdiction . . . any Case 1:16-cv-01308-LDW-AYS Document 32-9 Filed 05/19/17 Page 15 of 24 PageID #: 428 11 court of the United States . . . may declare the rights . . . of an interested party . . . .” ). “The ‘controversy’ must necessarily be ‘of a justiciable nature, thus excluding an advisory decree upon a hypothetical state of facts.’” Fed. R. Civ. P. 57, advisory committee’s notes, citing Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 325 (1936). In Charter Oak, the court specifically considered and rejected the idea that the Federal Declaratory Judgment Act might provide a jurisdictional basis in which to allege a contingent controversy, holding the “Declaratory Judgment Act is ‘operative only in respect to controversies which are such in the constitutional sense.’” Charter Oak, 2009 WL 3246116, quoting Aetna Life Ins. Co. of Hartford, Conn. v. Haworth, 300 U.S. 227, 240 (1937). Atlantic’s claim seeks an advisory opinion from this Court. There is no justiciable controversy. The fact that Atlantic’s claim is raised in the context of a request for a judicial declaration does not fix the fatal flaws in Atlantic’s Complaint and accordingly it must be dismissed. 4. Case Law Previously Cited by Atlantic in Support of its Claim is Inapplicable to this Case When this Motion to Dismiss was originally filed, Atlantic cited certain case law in opposition to Randive’s position. However, the case law previously cited by Atlantic is inapplicable to this case. In Atlantic’s first opposition to Randive’s original Motion to Dismiss, Atlantic contended New York state and federal courts “repeatedly recognized that fundamental questions of fairness and judicial economy, and practical considerations compel courts to entertain contingent subrogation, indemnity and contribution claims.” Atlantic’s Memorandum of Law, p. 1. In support Case 1:16-cv-01308-LDW-AYS Document 32-9 Filed 05/19/17 Page 16 of 24 PageID #: 429 12 of that proposition, Atlantic cited to numerous state and federal court cases which are distinguishable from the issues herein. In fact, the cases cited by Atlantic almost universally involved impleader practice, wherein court rules specifically permitted the timely impleader of additional parties on the basis of contingent claims, when (1) the causes of action alleged against them bore a close factual nexus to the main claims; and (2) the third-party defendants may have been be liable to the third-party plaintiffs for the latter’s liability to plaintiff. Yves Saint Laurent Parfums, S.A. v. Costco Wholesaler Corp., No. 07 Civ. 3214 (LBS)(HBP), 2010 WL 2593671 *9 (S.D.N.Y. June 24, 2010). See e.g. Andrulonis v. United States, 26 F.3d 1224 (2d Cir. 1994) (tort claim for contribution brought against third-party defendant pursuant to Fed. R. Civ. P. 14(a)); St. Paul Fire & Marine Ins. Co. v. United States Lines Co., 258 F.2d 374 (2d Cir. 1958) (contractual indemnification claim brought against a third-party defendant pursuant to Fed. R. Civ. P. 14(a)); Wallace v. Nat’l R.R. Passenger Corp., 5 F. Supp.3d 452 (S.D.N.Y. 2014) (same); Yves Saint Laurent Parfums, S.A. v. Costco Wholesaler Corp., No. 07 Civ. 3214 (LBS)(HBP), 2010 WL 2593671 (S.D.N.Y. June 24, 2010) (tort claim for contribution and indemnity pursuant to Fed. R. Civ. P. 14(a)); Krause v. American Guarantee and Liability Insurance Co., 22 N.Y.2d 147 (1968) (state court permitted a third-party subrogation action to go forward when the third-party defendant had been properly impleaded under New York C.P.L.R. § 1007); Consol. Edison Co. of N.Y., Inc. v. Royal Indem. Co., 41 A.D.2d 37 (1st Dep’t 1973) (same); O’Brien v. Key Bank, 223 A.D.2d 830 (3d Dep’t 1996) (contractual indemnification claim against third party under C.P.L.R. § 1007). Atlantic, however, did not implead Randive and likely could not do so. Atlantic’s claim against Randive is not factually related to Atlantic’s insurance obligations to Coastal, the issue in Case 1:16-cv-01308-LDW-AYS Document 32-9 Filed 05/19/17 Page 17 of 24 PageID #: 430 13 the Related Federal Court Action. Instead, Randive’s potential liability to Atlantic arises out of Atlantic’s own contract with Randive. Moreover, a trial date was already scheduled and most discovery was already completed in the Related Federal Court Action by the time Atlantic filed this suit and by the time Atlantic raised the issue of consolidation of the two lawsuits, which has since been denied. Notions of judicial economy arising out of impleader practice recognized in the impleader cases cited by Atlantic are not implicated when an unripe case is litigated in a different lawsuit or when the necessary discovery addresses different factual issues, as is the case here. Moreover, many of the cases previously cited by Atlantic involve tort litigations, wherein third-party defendants were impleaded on the basis of contingent common law contribution and indemnity claims. See e.g. Yves Saint Laurent Parfums, S.A. v. Costco Wholesaler Corp., No. 07 Civ. 3214 (LBS)(HBP), 2010 WL 2593671 (S.D.N.Y. June 24, 2010); Andrulonis v. U.S., 26 F.3d 1224 (2d Cir. 1994); Krause v. Am. Guar. & Liability Ins. Co., 22 N.Y.2d 147 (1968). Alternatively, they involved claims by defendant insurance companies against entities potentially liable to the insured plaintiff for the loss out of which the insurance claim arose. See e.g. Winkelmann v. Excelsior Ins. Co., 85 N.Y.2d 577 (1995). Or, they involved claims by insurance companies seeking recompense for sums they had already paid out, not sums that they may pay out in the future. See e.g. RLI Insurance Co. v. Turner/Santa Fe, 58 A.D.3d 413 (1st Dep’t 2009). The judicial economy arising out of the simultaneous litigation of tort liability among joint tortfeasors is obvious and is not applicable to the facts before the Court, as is the judicial economy inherent in litigating an insurer’s liability to an insured, simultaneously with the insurer’s subrogated claim against the third party responsible for the loss. Case 1:16-cv-01308-LDW-AYS Document 32-9 Filed 05/19/17 Page 18 of 24 PageID #: 431 14 This case is distinguishable. The claim Atlantic asserts herein is not a subrogated claim of its insured, Coastal. Atlantic alleges negligence and a breach of contract arising out of Randive’s performance of a contract Atlantic entered into with Randive. The facts relevant to the alleged breach and/or negligence, i.e. what Atlantic’s attorney, James Carbin, agreed to with Randive and what Randive did, is not relevant to the issues being litigated in either the suit pending in the Related State Court Action or the Related Federal Court Action. Nor are the facts being litigated in the Related State Court Action, i.e. the rights and liabilities of Coastal and Triton under the marine construction contract for the Steeplechase Pier Reconstruction, or the Related Federal Court Action, i.e. the rights and liabilities of Atlantic and Coastal under Atlantic’s hull and P & I policies, relevant to Randive. Accordingly, no judicial economy is achieved by forcing Randive to litigate Atlantic’s unripe claims, whether in this action or in the Related Federal Court Action. To date, Atlantic has been unable to provide any jurisprudential authority to support its position that a party is permitted to litigate an unripe claim against a third party, when ripening of the claim is contingent upon the outcome of two other lawsuits in which the third party has no potential liability to the other litigants and into which the third party was not timely brought in order to engage simultaneously in related fact discovery.1 1 Atlantic also previously cited to two cases for the proposition that, because it has incurred costs and fees in pursuing its declaratory judgment action against Coastal, its claim against Randive is ripe. These cases are equally inapplicable to the present litigation, as one of the cases, Esposito v. Great Lakes Dredge & Dock Co., 2003 A.M.C. 2753 (E.D.N.Y. 2003), involved a plaintiff seaman’s claim against a vessel resulting in a maritime lien which created an immediate right of action against the vessel. Further, Tyco International Holdings S.a.r.l. v. Atkore International Group Inc., No. 14 Civ. 7968(PAC), 2015 WL 5472941 (S.D.N.Y. Sept. 17, 2015) involved specific contractual language that provided a right of action to the plaintiff for any “threatened claim”, giving plaintiff the contractual right to proceed based on the contract’s particular verbiage. Obviously, neither of these circumstances are involved in the present case, where Atlantic has Case 1:16-cv-01308-LDW-AYS Document 32-9 Filed 05/19/17 Page 19 of 24 PageID #: 432 15 Point III 1. The Current Suit Should be Stayed Pending the Outcome of the Related Federal Court Action In the event that the Court is disinclined to grant Randive’s Motion to Dismiss, Randive alternatively requests that the current action be stayed until the Related Federal Court Action is resolved. Such a stay would not prejudice Atlantic, because Atlantic’s claim against Randive is wholly contingent upon the outcome of the Related Federal Court Action. Further, a stay would, in fact, promote efficient use of judicial resources, while simultaneously protecting Randive from potentially expensive and unnecessary litigation. a. The Legal Standard for Determining the Appropriateness of a Stay The court maintains an inherent power to issue a stay when it is in the interest of justice. See Trikona Investors, Ltd. v. Kai-Lin Chuang, 2013 WL 1182960 (E.D.N.Y. 2013) citing Louis Vuitton Malletier S.A. v. LY USA, Inc. 676 F.3d 83, 96 (2d Cir. 2012). It is “incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.” See id; citing Landis v. N. Am. Co., 299 U.S. 248, 254, 57 S.Ct. 163, 81 L.Ed. 153 (1936). A stay may be appropriate “in light of a concurrently pending federal action (either because the claim arises from the same nucleus of facts or because the pending action would resolve a controlling point of law).” SST Global Tech., LLC v. Chapman, 270 F.Supp.2d 444, 455 (S.D.N.Y.2003.) See also Goldstein v. Time Warner N.Y. City Cable Grp., 3 F.Supp.2d 423, 437- voluntarily decided to sue Coastal for a declaration that it is relieve of its insurance obligations to Coastal. Case 1:16-cv-01308-LDW-AYS Document 32-9 Filed 05/19/17 Page 20 of 24 PageID #: 433 16 38 (S.D.N.Y.1998) (holding it is within the sound discretion of a court to enter a stay pending the outcome of independent proceedings that are likely to affect a case on its calendar.) Further, the degree to which two actions overlap is relevant to a court's determination of whether a stay is warranted; however, “parties and claims need not be identical in order for one action to be stayed or dismissed in deference to an earlier action.” Caspian Investments, Ltd. v. Vicom Holdings, Ltd., 770 F. Supp. 880, 884 (S.D.N.Y.1991); citing Landis v. North American Co., 299 U.S. 248, 254 (1936). While it is the moving party’s burden on a motion to stay to show a clear case of hardship or inequity in being required to go forward, the following factors are to be considered in determining whether a stay is appropriate: (1) The private interests of the plaintiffs in proceeding expeditiously with the litigation as balanced against the prejudice to the plaintiffs if delayed; (2) The private interests of and burden on the defendants; (3) The interests of the courts; (4) The interests of persons not parties to the litigation; and (5) The public interest. See Kappel v. Comfort, 914 F. Supp. 1056, 1058 (S.D.N.Y. 1996). For example, the Eastern District of New York, in Trikona, cited supra, issued a stay in a case which was likely to be affected by a case pending in federal court in Connecticut. The Court found that the interests of the litigants, the court, interested parties, and the public weighed in favor of a stay, as the cases involved the same plaintiffs and interrelated claims against the similar defendants. In fact, the New York action was only brought because the plaintiff was precluded from suing one of the New York defendants Case 1:16-cv-01308-LDW-AYS Document 32-9 Filed 05/19/17 Page 21 of 24 PageID #: 434 17 in Connecticut, due to personal jurisdiction limitations. The Court found that, while the Connecticut action would not settle every question of fact or law at issue in the New York suit, it would, in “all likelihood . . . settle many and simplify them all.” See Trikona at *4. Moreover, the Southern District of New York, in Readick v. Avis Budget Group, Inc., issued a stay in a New York class action suit pending the resolution of a similar class action awaiting decision in New Jersey federal court. The Southern District found that, because the ability of the New York plaintiffs to pursue class certification would be affected by the New Jersey court’s determination regarding class certification, there would be no prejudice to plaintiffs if a stay was granted. In fact, if nationwide class certification was obtained in the New Jersey case, the New York plaintiffs would essentially be subsumed within the New Jersey litigation. Conversely, the defendant would be prejudiced by incurring significant and unnecessary legal expense, in the event the New Jersey action disposed of some or all of the plaintiffs’ claims. Lastly, the Court determined that a stay would also promote the interests of the court and the public by promoting judicial efficiency and minimizing the possibility of inconsistent adjudications. See Readick v. Avis Budget Group, Inc. 2014 WL 1683799 at *3-6 (S.D.N.Y. 2014).2 b. A Stay is Warranted Under the Circumstances Herein Equally strong reasons exist in this case which support the issuance of a stay. First, a stay will not harm the interests of Atlantic, because Atlantic’s claim against Randive is wholly contingent on the adjudication of its claim in Related Federal Court Action. While the claims, parties, and issues in the Related Federal Court Action are not identical to the issues to be decided 2 The Readick Court also considered the Fourth Kappel factor, the interests of persons not parties to the litigation, and determined that it was neutral. See Readick at *6. Case 1:16-cv-01308-LDW-AYS Document 32-9 Filed 05/19/17 Page 22 of 24 PageID #: 435 18 in this case, the fate of Atlantic’s claim herein is directly tied to its being held liable to Coastal. In the event Atlantic is found to have no obligation to Coastal in the Related Federal Court Action, its entire claim in this litigation is moot. Further, considering trial in the Related Federal Court Action is to be scheduled for either September or October 2017, a stay in this case pending the resolution of the Related Federal Court Action would be of limited duration. Conversely, Randive would be prejudiced by the refusal of a stay in this case, as continuing to litigate Atlantic’s claim herein puts Randive at a significant disadvantage as far as crafting litigation strategy and forces Randive to incur significant and potentially unnecessary litigation costs. As mentioned above, neither Atlantic nor Coastal has been able to articulate the value of either contingent claim in any meaningful way. This due largely in part to the fact that, as outlined above, neither claim may be cognizable in any event. As a result, Randive has been placed at a disadvantage in evaluating these potential claims and preparing a coherent litigation strategy in response. Van Hemmen Dec., ¶10. If this suit was proceeding in a vacuum, without any consideration paid to the potential value of Atlantic’s contingent claim, Randive would take additional steps to defend itself, including filing of third party claims against multiple entities and filing a motion to recuse Atlantic’s attorney, James Carbin. However, if Atlantic’s claim proves to be relatively modest, Randive’s litigation strategy would likely to altered to avoid such costly motion and third-party practice. Moreover, should Atlantic prevail in the Related Federal Court Case, judicial time and resources in reference to this case would be wholly wasted, working against the interests of both the Court and the public. Consequently, the Court should issue a stay in this matter until the full and final resolution of the Related Federal Court Action. Case 1:16-cv-01308-LDW-AYS Document 32-9 Filed 05/19/17 Page 23 of 24 PageID #: 436 19 CONCLUSION For the foregoing reasons, Defendant Randive, Inc. respectfully requests that this Court enter an Order dismissing Plaintiff Atlantic Specialty Insurance Company’s complaint pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6). Alternatively, in the event the Court is disinclined to grant Randive’s request for dismissal, Randive requests that the instant litigation be stayed until the Related Federal Court Action is wholly and finally resolved. Dated: May 19, 2017 Red Bank, NJ 07701 BETANCOURT VAN HEMMEN GRECO & KENYON LLC Attorney for Defendant Randive, Inc. By s/ Jeanne-Marie D. Van Hemmen____________ Jeanne-Marie D. Van Hemmen (JV6414) 151 Bodman Place, Red Bank NJ 07701 (732) 530-4646 To: Duane Morris Attorneys for Plaintiffs One Riverfront Plaza 1037 Raymond Blvd. Newark, NJ 07102 (973) 424-2000 Case 1:16-cv-01308-LDW-AYS Document 32-9 Filed 05/19/17 Page 24 of 24 PageID #: 437