Hanover Insurance Company v. Alfa Laval Inc et al

MOTION to Dismiss for Lack of Jurisdiction

W.D. Okla.July 8, 2016

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA HANOVER INSURANCE COMPANY, as subrogee of Lakewood Transportation d/b/a BS&W Solutions, LLC Case No. CIV-16-00387-HE Plaintiff(s), v. ALFA LAVAL, INC., DOLPHIN MARINE SERVICES, INC. d/b/a DOLPHIN MARINE AND INDUSTRIAL CENTRIFUGES and GTECH Defendant(s) Cross Claim DOLPHIN MARINE SERVICES, INC. v. ALFA LAVAL, INC. Third Party Complaint DOLPHIN MARINE SERVICES, INC., v. ALFA LAVAL CORPORATE AB AND ALFA LAVAL LIMITED ________________________________________________________________________ DEFENDANT DOLPHIN MARINE SERVICES INC.’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND OPENING BRIEF IN SUPPORT NOW COMES Defendant Dolphin Marine Services Inc., by and through its counsel, and hereby files its Motion to Dismiss for Lack of Personal Jurisdiction and Opening Brief in Support pursuant to Fed. R. Civ. P. 12(b)(2). ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) JURY TRIAL DEMANDED (Fed.R.Civ.P.38[b]) Case 5:16-cv-00387-HE Document 37 Filed 07/08/16 Page 1 of 14 2 Introduction I. Plaintiff seeks recovery of damages it claims resulted from a fire at its facility due to an alleged defect and/or service and maintenance of a decanter utilized in the process of refining crude oil. Plaintiff seeks to hold Defendant Dolphin liable under a strict products liability action in Oklahoma. However, Plaintiff cannot meet its burden to prove that Dolphin is subject to personal jurisdiction in Oklahoma. Dolphin is at home in Michigan, not Oklahoma and did not direct its activities towards Oklahoma. Statement of Facts II. Plaintiff Hanover Insurance Company, as subrogee of Lakewood Transportation d/b/a BS&W Solutions, LLC, filed its Complaint on April 19, 2016 seeking damages from Defendants Dolphin Marine Services Inc. (“Dolphin”) and Alfa Laval, Inc. under a product liability claim, and Defendant GTECH USA relative to service and maintenance. See Ex. 1, Complaint. Dolphin is a Michigan corporation with its principal place of business, and indeed its only place of business, located in Warren, Michigan. Ex. 2, Decl. of Prabhu at ¶ 1. Dolphin does not have any office(s) or personnel in Oklahoma. Id. In 2006, when the subject transaction took place, Dolphin had only one employee, Sanjay Prabhu, who was the owner working part-time out of his home in Michigan. Id. Mr. Prabhu is a native of India who was working full-time as an engineer in the automotive industry. In 2006, BS&W Solutions, LLC (“BS&W), which was subsequently acquired by Lakewood Transportation (“Lakewood”), expressed an interest to Mr. Prabhu to place an order for a decanter to be manufactured by Alfa Laval in India. Id. at ¶ 3. Dolphin Case 5:16-cv-00387-HE Document 37 Filed 07/08/16 Page 2 of 14 3 contacted Essdeeco, an Indian distributor in the decanter industry, with a request for Essdeeco to order the decanter from Alfa Laval in India for BS&W, which they did. Id. at ¶ 4. In July 2006, the subject decanter was shipped from Alfa Laval in India by Essdeeco directly to the BS&W facility in Oklahoma. Id. at ¶ 5. It did not go through Dolphin. Dolphin never had possession, custody, control or title to the subject decanter, nor did Dolphin ever inspect, market, ship or touch the subject decanter. Id. Immediately prior to shipment, BS&W sent a wire transfer to Dolphin and Dolphin in turn sent a wire transfer to Essdeeco, which in turn paid Alpha Laval pursuant to Alfa Laval’s requirement for payment to be made before it would transfer the decanter to Essdeeco for shipment to BS&W. Id. However, there was no transfer of ownership, possession, title or control to Dolphin. There was no invoice, purchase order or contract as between BS&W and Dolphin. Id. On April 23, 2014, Lakewood experienced a fire that Hanover claims was caused by a defect in the subject decanter, which allegedly caused damage to Lakewood equipment insured by Hanover. It is Dolphin’s position that there was no defect in the decanter which caused the fire in the first place. Hanover claims $2,921,413 in damages from Dolphin. As will be shown below, there was no activity by Dolphin in Oklahoma which would provide the requisite minimum contacts for Dolphin to be hauled into court, or expect to be hauled into court in the state of Oklahoma. Indeed, Dolphin did not have liability insurance applicable to the subject transaction. Case 5:16-cv-00387-HE Document 37 Filed 07/08/16 Page 3 of 14 4 Standard of Review III. Pursuant to well established case law, the plaintiff bears the burden of proof to establish that jurisdiction over a party is proper under a motion to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). Orange Leaf Holdings, LLC v. Patel, No. CIV-15-8-C, 2015 WL 1529032, at *1 (W.D. Okla. April 3, 2015) (quoting McClelland v. Watling Ladder Co., 729 F.Supp. 1316, 1317–18 (W. D. Okla. 1990)). “In ruling on motions under Rule 12(b)(2), the Court considers the averments of the complaint, and the affidavits and other evidentiary materials submitted by the parties.” Id. Plaintiffs averments in the complaint “must be taken as true to the extent they are uncontroverted by the defendant's affidavits.” Intercon, Inc. v. Bell Atl. Internet Sols., Inc., 205 F.3d 1244, 1247 (10th Cir. 2000) (quoting Wenz v. Memery Crystal, 55 F.3d 1503, 1505 (10th Cir.1995)). Further, “only the well pled facts of plaintiff's complaint, as distinguished from mere conclusory allegations, must be accepted as true.” Id. Argument IV. Plaintiff fails to meet its burden in proving Dolphin is subject to personal jurisdiction in Oklahoma. “The analysis of the personal jurisdiction question in diversity cases generally involves a 2–step inquiry: courts must determine whether the exercise of jurisdiction is consistent with (1) the long-arm statute of the forum state, and (2) the due process clause of the fourteenth amendment.” Harris v. Am. Int'l Grp., Inc., 923 F. Supp. 2d 1299, 1303 (W.D. Okla. 2013) (quoting McClelland, 729 F.Supp. at 1318) (internal quotations omitted). In Oklahoma, “the state long arm statute supports personal Case 5:16-cv-00387-HE Document 37 Filed 07/08/16 Page 4 of 14 5 jurisdiction to the full extent constitutionally permitted,” and thus “due process principles govern the inquiry.” Shrader v. Biddinger, 633 F.3d 1235, 1239 (10th Cir. 2011). In order for Plaintiff to comply with due process, Plaintiff must show that an out of state defendant has “‘minimum contacts’ with the forum state, such that having to defend a lawsuit there would not ‘offend traditional notions of fair play and substantial justice.’” Id. (quoting Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1070 (10th Cir.2008)). An out of state defendant’s minimum contacts may give rise to either (1) general personal jurisdiction, or (2) specific personal jurisdiction. Id. However, Hanover does not satisfy its burden under either general or specific personal jurisdiction in this case. Oklahoma cannot exercise personal jurisdiction over Dolphin consistent with the due process clause as interpreted and applied by the United States Supreme Court . Dolphin Is Not Subject To General Personal Jurisdiction In Oklahoma A. Because Dolphin Is Not At Home In Oklahoma Plaintiff fails to show that Dolphin is subject to general personal jurisdiction in Oklahoma. Dolphin has NO presence in Oklahoma. “[A] court may assert general jurisdiction over foreign (sister-state or foreign-country) corporations to hear any and all claims against them when their affiliations with the State are so ‘continuous and systematic’ as to render them essentially at home in the forum State.” Daimler AG v. Bauman, 134 S. Ct. 746, 754; 187 L. Ed. 2d 624 (2014) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919; 131 S. Ct. 2846, 2851; 180 L. Ed. 2d 796 (U.S. 2011)). The Supreme Court of the United States has made clear that a corporation subject to general jurisdiction and “at home” (1) in its state of incorporation, (2) the state Case 5:16-cv-00387-HE Document 37 Filed 07/08/16 Page 5 of 14 6 where the principal place of business is located, or (3) in an “exceptional case” where a corporation’s operations in a forum are “so substantial and of such a nature as to render the corporation at home in that State.” Id. at 760-61, n.19. Numerous courts in the wake of Daimler have declined to find general personal jurisdiction even under circumstances where the defendant does have some contact with the forum not present here. See, e.g., Brown v. Lockheed Martin Corp., No. 14-4083, 2016 WL 641392, at *1 (2d Cir. Feb. 18, 2016) (no general jurisdiction over Lockheed Martin in Connecticut even though company leased space in four in-state locations, employed between approximately 30 and 70 workers in the state, and derived about $160 million in revenue there during the relevant time period); Karoon v. Credit Suisse Grp. AG, No. 15-CV-4643 (JPO), 2016 WL 815278, at *3 (S.D.N.Y. Feb. 29, 2016) (finding no personal jurisdiction over a Credit Suisse defendant, even though it maintained a branch bank in New York and employed approximately 100 employees there; acknowledging that the “substantial, continuous, and systematic course of business” the plaintiff had alleged were “insufficient to establish general jurisdiction after Daimler”); Patera v. Bartlett, No. 15 C 50190, 2016 WL 773225 (N.D. Ill. Feb. 29, 2016) (finding no general personal jurisdiction over defendants CitiBank and CitiMortgage in Illinois, even though their regional hub was located in Chicago, they maintained offices and employees in the state, and they solicited Illinois residents in the course of their business); Corcoran v. CVS Health Corp., No. 15-CV-3504 YGR, 2016 WL 948880, at *5 (N.D. Cal. Mar. 14, 2016) (finding no general personal jurisdiction over CVS despite plaintiff’s allegations that CVS Health had two distribution centers, a “substantial” Case 5:16-cv-00387-HE Document 37 Filed 07/08/16 Page 6 of 14 7 number of pharmacies, and employees located in California; noting that the plaintiff’s argument relied on pre-Daimler cases applying the “less stringent ‘substantial, continuous, and systematic course of business’ standard”); see also, e.g., uBID, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421, 426 (7th Cir. 2010) (no general jurisdiction over GoDaddy in Illinois despite the company’s intense national advertising campaign, “extensive and deliberate contacts” with Illinois and hundreds of thousands of Illinois customers delivering “many millions of dollars in revenue”). The same result should follow in this case, where Plaintiff cannot demonstrate that Dolphin Marine had ANY Oklahoma contacts. Consistent with the Supreme Court’s ruling and for purposes of general jurisdiction, Dolphin is “at home” in Michigan. As Plaintiff alleges in its Complaint, Dolphin is a Michigan corporation and has its principal place of business in Michigan. Ex. 1, Complaint at ¶ 5; Ex. 2, Decl. of Prabhu. Further, Dolphin has no office(s), personnel, or presence in Oklahoma to satisfy the high burden of operating at a rate “so substantial and of such a nature as to render the corporation at home” in Oklahoma. See Daimler, 134 S. Ct. at 761, n. 19. Indeed, Dolphin has no office(s), employees, or any “systematic and continuous” operations in Oklahoma; they are “at home” in Michigan. Id. at 754. Therefore, Dolphin is not subject to general personal jurisdiction in Oklahoma. Dolphin Is Not Subject to Specific Personal Jurisdiction In Oklahoma B. Because Dolphin Was Merely A Broker And Did Not Possess, Own, Control, Or Ship The Decanter Plaintiff fails to prove that Dolphin is subject to specific personal jurisdiction in Oklahoma. Dolphin simply facilitated the sale, only acted as a broker in the transaction Case 5:16-cv-00387-HE Document 37 Filed 07/08/16 Page 7 of 14 8 from Michigan, and had NO relationship with the State of Oklahoma. See Ex. 2, Decl. of Prabhu. Per the Supreme Court of the United States, a specific personal jurisdiction analysis “focuses on the relationship among the defendant, the forum, and the litigation,” and not the plaintiff’s relationship with the defendant or the state. Walden v. Fiore, 134 S. Ct. 1115, 1121-22; 188 L. Ed. 2d 12 (2014) (quoting Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 775; 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984)) (internal quotations omitted). The plaintiff must show that the defendant “purposefully avail[ed] itself of the privilege of conducting activities within the forum State” in order to satisfy the minimum contacts requirement. Pro Axess, Inc. v. Orlux Distribution, Inc., 428 F.3d 1270, 1277 (10th Cir. 2005) (quoting Hanson v. Denckla, 357 U.S. 235, 253; 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958)) (internal quotations omitted) (emphasis added). A defendant purposely avails itself if “the defendant purposefully directed its activities at residents of the forum, and ... the plaintiff's claim arises out of or results from actions by the defendant himself that create a substantial connection with the forum state.” Id. (quoting OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1091 (10th Cir. 1998)) (internal quotations omitted) (emphasis added). Purposeful availment cannot be the product of “random, fortuitous, or attenuated contacts.” Bell Helicopter Textron, Inc. v. Heliqwest Int'l, Ltd., 385 F.3d 1291, 1296 (10th Cir. 2004) (quoting Burger King v. Rudzewicz, 471 U.S. 462, 472–73; 105 S.Ct. 217; 85 L.Ed.2d 528 (1985)) (internal quotations omitted). Dolphin has not purposely availed itself in Oklahoma. Dolphin was contacted in Michigan by BS&W to facilitate its purchase of the decanter. See Pro-Fab, Inc. v. Marton Precision Mfg., Inc., No. CIV-07-1147-M, 2008 WL 2705459, at *3 (W.D. Okla. Case 5:16-cv-00387-HE Document 37 Filed 07/08/16 Page 8 of 14 9 July 9, 2008) (quoting Rambo v. Am. S. Ins. Co., 839 F.2d 1415, 1417 (10th Cir.1988)) (“Purposeful availment generally requires ‘affirmative conduct by the defendant which allows or promotes the transaction of business within the forum state’”) (emphasis added); see also Trierweiler v. Croxton & Trench Holding Corp., 90 F.3d 1523, 1534 (10th Cir. 1996) (quoting Far West Capital, Inc. v. Towne, 46 F.3d 1071, 1075 (10th Cir.1995)) (“The ‘purposeful availment’ requirement ensures that a defendant will not be haled into a jurisdiction as the result of another party's unilateral acts”). Dolphin contacted Essdeeco, an Indian distributor, to purchase and ship the decanter to BS&W. Essdeeco purchased the decanter from Alfa Laval India, and shipped the decanter directly to BS&W from the manufacturer. At no time did Dolphin possess, control, or have title/ownership of the decanter. Simply put, Dolphin facilitated the sale and only acted as a broker. Plaintiff falsely alleges in its Complaint that Dolphin inspected, marketed, and placed the decanter in the stream of commerce to Lakewood in Oklahoma, and that the decanter was in Dolphin’s control. Ex. 1, Complaint at ¶ 28-31. These allegations are incorrect. See Ex. 2, Decl. of Prabhu. Plaintiff alleges no facts proving Dolphin directed ITS activities toward Oklahoma. Plaintiff simply relies on the false assertion that Dolphin allegedly had control of the decanter and placed it into the stream of commerce to BS&W in an attempt to bootstrap Dolphin into the chain of distribution. However, Dolphin committed none of these acts and did not place the decanter into the stream of commerce into Oklahoma. Case 5:16-cv-00387-HE Document 37 Filed 07/08/16 Page 9 of 14 10 Dolphin did not take title, ownership, possession, or control of the decanter in the first place in order to ship it to BS&W in Oklahoma. Thus, Dolphin did not have the requisite contacts with Oklahoma. Dolphin had no contact or relationship with Oklahoma in this transaction. Walden, 134 S. Ct. at 1121-22 (Specific personal jurisdiction focuses on the defendants contact with the forum state, not with the plaintiff). Simply directing BS&W’s order to Essdeeco is not a sufficient contact with Oklahoma or a “substantial connection” with Oklahoma in order to render specific personal jurisdiction upon Dolphin. See J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873, 884; 131 S. Ct. 2780, 2789; 180 L. Ed. 2d 765 (2011) (“The [specific jurisdiction] question is whether a defendant has followed a course of conduct directed at the society or economy existing within the jurisdiction of a given sovereign, so that the sovereign has the power to subject the defendant to judgment concerning that conduct”); Id. at 888-89 (citing Asahi Metal Industry Co. v. Superior Court of Cal., Solano Cty., 480 U.S. 102, 111, 112; 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987)) (“a single sale of a product in a State does not constitute an adequate basis for asserting jurisdiction over an out-of-state defendant, even if that defendant places his goods in the stream of commerce, fully aware (and hoping) that such a sale will take place”). Dolphin did not even place the goods into the stream of commerce in the subject transaction. Further, Plaintiff’s products liability claim does not “arise out of or result from” its contacts with Dolphin. As mentioned before, Dolphin did not manufacture, inspect, own, service, warrant, posses/control, or ship the decanter. Thus, there is no “substantial connection” between Plaintiff’s products liability claim and Dolphin. Case 5:16-cv-00387-HE Document 37 Filed 07/08/16 Page 10 of 14 11 Forcing Dolphin To Defend A Lawsuit In Oklahoma Offends The C. Traditional Notions Of Fair Play And Substantial Justice If Dolphin is forced to defend this lawsuit in Oklahoma, traditional notions of fair play and substantial justice will be offended. In determining whether personal jurisdiction over a defendant offends traditional notions of fair play and substantial justice, courts evoke a sliding scale and consider “the strength of a defendant's minimum contacts . . . [T]he weaker the plaintiff's showing on minimum contacts, the less a defendant need show in terms of unreasonableness to defeat jurisdiction.” Pro-Fab, Inc., 2008 WL 2705459, at *3 (quoting OMI Holdings, Inc., 149 F.3d at 1092). As illustrated above, Dolphin’s contact in this case was simply acting as a broker in Michigan without having ANY contact with Oklahoma. Dolphin did not ever inspect, own, control, ship, or even touch the decanter and did not place it in the stream of commerce into Oklahoma. This tenuous connection and Dolphin’s extremely limited role make clear that exercising personal jurisdiction over Dolphin in Oklahoma would be unreasonable. There was no act by Dolphin in Oklahoma which would provide the requisite minimum contacts for Dolphin to be hauled into court , or expect to be hauled into Court, in the State of Oklahoma. Therefore, personal jurisdiction in Oklahoma should be defeated with respect to Dolphin. Conclusion V. Plaintiff fails to meet its burden proving Dolphin is subject to general or specific personal jurisdiction in Oklahoma. Therefore, this Court should grant Dolphin’s motion to dismiss for lack of personal jurisdiction with respect Plaintiff’s claim against Dolphin. Case 5:16-cv-00387-HE Document 37 Filed 07/08/16 Page 11 of 14 12 WHEREFORE, Defendant respectfully request that the Court grants its Motion and grants such other relief as it deems appropriate. Respectfully submitted: /s/ Richard L. Braun THE MILLER LAW FIRM, P.C. Richard L. Braun II (P26408) Brian E. Etzel (P54905) 950 W. University Dr., Ste. 300 Rochester, MI 48307 (248) 841-2200 rlb@millerlawpc.com bee@millerlawpc.com John R. Woodard, III Coffey, Senger + McDaniel 4725 East 91st Street, Suite 100 Tulsa, OK 74137 (918) 292-8787 john@csmlawgroup.com Dated: July 8, 2016 Case 5:16-cv-00387-HE Document 37 Filed 07/08/16 Page 12 of 14 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA HANOVER INSURANCE COMPANY, as subrogee of Lakewood Transportation d/b/a BS&W Solutions, LLC Case No. CIV-16-00387-HE Plaintiff(s), v. ALFA LAVAL, INC., DOLPHIN MARINE SERVICES, INC. d/b/a DOLPHIN MARINE AND INDUSTRIAL CENTRIFUGES and GTECH Defendant(s) Cross Claim DOLPHIN MARINE SERVICES INC. v. ALFA LAVAL INC. Third Party Complaint DOLPHIN MARINE SERVICES INC., v. ALFA LAVAL; CORPORATE AB AND ALFA LAVAL LIMITED ________________________________________________________________________ PROOF OF SERVICE Alexis C. Haan certifies that on July 8, 2016, she served Defendant Dolphin Marine Services Inc.’s Motion to Dismiss for Lack of Personal Jurisdiction and Opening Brief I n Support and this Proof of Service via Electronic Case Filing System ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) JURY TRIAL DEMANDED (Fed.R.Civ.P.38[b]) Case 5:16-cv-00387-HE Document 37 Filed 07/08/16 Page 13 of 14 2 I declare under the penalty of perjury that the statements made above are true to the best of my knowledge, information, and belief. /s/ Alexis C. Haan Alexis C. Haan Case 5:16-cv-00387-HE Document 37 Filed 07/08/16 Page 14 of 14 EXHIBIT 1 Case 5:16-cv-00387-HE Document 37-1 Filed 07/08/16 Page 1 of 10 1 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA HANOVER INSURANCE COMPANY, ) as subrogee of Lakewood Transportation ) d/b/a BS&W Solutions, LLC, ) ) Case No.: Plaintiff, ) ) v. ) ) ALFA LAVAL, INC., DOLPHIN MARINE ) JURY TRIAL DEMANDED SERVICES, INC. d/b/a DOLPHIN MARINE ) (Fed.R.Civ.P. 38[b]) AND INDUSTRIAL CENTRIFUGES ) and GTECH USA, ) ) Defendants. ) COMPLAINT COMES NOW the Plaintiff, HANOVER INSURANCE COMPANY (hereafter “Hanover”), as subrogee of Lakewood Transportation d/b/a BS&W Solutions, LLC, by and through its attorneys, Fenton, Fenton, Smith, Reneau & Moon and Grotefeld Hoffmann, LLP, and for its Complaint against Defendants ALFA LAVAL, INC. (hereinafter “Alfa Laval”), DOLPHIN MARINE SERVICES, INC. d/b/a DOLPHIN MARINE AND INDUSTRIAL CENTRIFUGES (hereinafter, “Dolphin”) and GTECH USA (hereinafter “GTech), alleges the following: PARTIES 1. At all relevant times, Hanover was a corporation with its principal place of business located at 440 Lincoln Street, Worcester, MA 01653, and was duly authorized to conduct business and issue policies of insurance in the State of Oklahoma. 2. At all relevant times, Lakewood Transportation d/b/a BS&W Solutions, LLC (hereinafter “Lakewood”), was a corporation with its principal place of business located at 4902 CIV-16-0387-HE Case 5:16-cv-00387-HE Document 1 Filed 04/19/16 Page 1 of 8Case 5:16-cv-00387-HE Document 37-1 Filed 07/08/16 Page 2 of 10 2 Oklahoma Avenue, Woodward, Oklahoma 73802 and the owner of certain property and equipment located at 183 Northeast Highway Street, Woodward, Oklahoma 73801 (hereinafter “subject property”). 3. At all relevant times, Hanover issued a policy of insurance to Lakewood that provided coverage for, among other things, fire related damage to the subject property and equipment kept therein. 4. Upon information and belief, Alfa Laval is a New Jersey corporation and is a manufacturer of equipment, systems, and services for liquid/solid separation, heat transfer and treatment, and fluid handling, with its principal place of business located at 5400 International Trade Drive, Richmond, Virginia, 23231. 5. Upon information and belief, Dolphin is a Michigan corporation and is a distributor of equipment and systems for among other things, refining crude oil, and is located at 24344 Gibson Drive, Warren, Michigan, 48089. 6. Upon information and belief, GTech is a Texas limited liability company which, among other things, repairs and maintains equipment for refining crude oil, and is located at 2511 N. Frazier Street, Conroe, Texas 77305. JURISDICTION AND VENUE 7. Jurisdiction is proper in this Court pursuant to 28 U.S.C. §1332(a)(1) as this action involves a controversy between citizens of different states. Moreover, the amount in controversy is in excess of $75,000 which exceeds the jurisdictional threshold of this Court. 8. Venue is proper in this district based on 28 U.S.C. §1391(b)(2) in that the events giving rise to this claim occurred within the district. Case 5:16-cv-00387-HE Document 1 Filed 04/19/16 Page 2 of 8Case 5:16-cv-00387-HE Document 37-1 Filed 07/08/16 Page 3 of 10 3 FACTUAL ALLEGATIONS COMMON TO ALL COUNTS 9. At all relevant times, the subject property was a crude oil processing facility operated by Lakewood, which contained an assortment of Lakewood’s equipment related to the process of refining crude oil. 10. Prior to April 23, 2014, Lakewood purchased an Alfa Laval NX 418B-31G (hereinafter the “subject decanter”). 11. Upon information and belief, Alfa Laval designed, manufactured and distributed the subject decanter. 12. Upon information and belief, Dolphin, prior to April 23, 2014, sold the subject decanter to Lakewood. 13. Upon information and belief, GTech, prior to April 23, 2014, performed repairs and/or maintenance work on the subject decanter. 14. On and before April 23, 2014, Lakewood had and continued to complete the necessary and recommended maintenance and upkeep to the subject decanter. 15. On or about April 23, 2014, the subject decanter was among Lakewood’s crude oil refining equipment at the subject property. 16. Upon information and belief, on or about April 23, 2014, the subject decanter malfunctioned and failed. Specifically, the subject decanter catastrophically exploded, causing damage to the subject property and business of Lakewood. 17. On or about April 23, 2014, when the subject decanter failed and catastrophically exploded, it communicated fire from the subject decanter to Lakewood’s surrounding equipment and the subject property causing substantial damage to Lakewood’s surrounding equipment, the subject property and Lakewood’s business. Case 5:16-cv-00387-HE Document 1 Filed 04/19/16 Page 3 of 8Case 5:16-cv-00387-HE Document 37-1 Filed 07/08/16 Page 4 of 10 4 18. Subsequent investigation revealed that the catastrophic failure of the subject decanter resulted from improper manufacture and/or modifications performed by entities other than Lakewood. 19. Pursuant to the terms and conditions of the Hanover insurance policy, Hanover was obligated to pay, and did in fact pay, Two Million, Nine Hundred Twenty-one Thousand, Four Hundred and Thirteen Dollars and Fifty-six Cents ($2,921,413.56) to or on behalf of Lakewood for fire related damage to Lakewood’s subject property and equipment, repair to Lakewood’s subject property and equipment and pollution cleanup of the subject property. 20. Pursuant to the terms and conditions of the Hanover Insurance Policy, and by virtue of its payments to or on behalf of Lakewood, Hanover is subrogated to all rights, claims and causes of action Lakewood may have or had against Alfa Laval, Dolphin and/or GTech. COUNT I STRICT PRODUCT LIABILITY ALFA LAVAL 21. Hanover repeats and re-alleges the allegations contained in Paragraphs 1 through 20 of this Complaint, as if fully set forth herein. 22. Upon information and belief, Alfa Laval designed, manufactured, inspected, marketed, sold and distributed the subject decanter. 23. Upon information and belief, Alfa Laval released the subject decanter into the stream of commerce. 24. Upon information and belief, the subject decanter was in substantially the same condition when received by Lakewood, as when released into the stream of commerce by Alfa Laval. Case 5:16-cv-00387-HE Document 1 Filed 04/19/16 Page 4 of 8Case 5:16-cv-00387-HE Document 37-1 Filed 07/08/16 Page 5 of 10 5 25. When the subject decanter left Alfa Laval’s control and entered the stream of commerce, it was unreasonably dangerous for its intended use as determined by a reasonably prudent manufacturer’s standards at the time the subject decanter was made. 26. As a direct and proximate result of one or more defective conditions of the subject decanter, the subject decanter malfunctioned and catastrophically exploded, igniting a fire that communicated throughout the subject property and to personal property kept therein. WHEREFORE, Plaintiff, Hanover Insurance Company, as subrogee of Lakewood Transportation d/b/a BS&W Solutions, LLC, requests that judgment be entered in its favor and against ALFA LAVAL, INC., in an amount in excess of Two Million, Nine Hundred Twenty- one Thousand, Four Hundred and Thirteen Dollars and Fifty-six Cents ($2,921,413.56) plus costs, and for such other or further relief as this Court deems equitable and just. COUNT II STRICT PRODUCT LIABILITY DOLPHIN 27. Hanover repeats and re-alleges the allegations contained in Paragraphs 1 through 20 of this Complaint, as if fully set forth herein. 28. Upon information and belief, Dolphin inspected, marketed, sold and distributed the subject decanter. 29. Upon information and belief, Dolphin released the subject decanter into the stream of commerce; specifically Dolphin sold the subject decanter to Lakewood. 30. Upon information and belief, the subject decanter was in substantially the same condition when received by Lakewood, as when sold and distributed by Dolphin. Case 5:16-cv-00387-HE Document 1 Filed 04/19/16 Page 5 of 8Case 5:16-cv-00387-HE Document 37-1 Filed 07/08/16 Page 6 of 10 6 31. When the subject decanter left Dolphin’s control and entered the stream of commerce, it was not reasonably safe for its intended use as determined by a reasonably prudent distributor’s standards. 32. As a direct and proximate result of one or more defective conditions of the subject decanter, the subject decanter malfunctioned and catastrophically exploded, igniting a fire that communicated throughout the subject property and to personal property kept therein. WHEREFORE, Plaintiff, Hanover Insurance Company, as subrogee of Lakewood Transportation d/b/a BS&W Solutions, LLC, requests that judgment be entered in its favor and against DOLPHIN MARINE SERVICES, INC. d/b/a DOLPHIN MARINE AND INDUSTRIAL CENTRIFUGES in an amount in excess of Two Million, Nine Hundred Twenty-one Thousand, Four Hundred and Thirteen Dollars and Fifty-six Cents ($2,921,413.56) plus costs, and for such other or further relief as this Court deems equitable and just. COUNT III NEGLIGENCE GTECH 33. Hanover repeats and re-alleges the allegations contained in Paragraphs 1 through 20 of this Complaint, as if fully set forth herein. 34. At all relevant times, GTech had a duty to exercise reasonable care in the repair and maintenance work it performed in regards to the subject decanter. 35. At all relevant times, GTech knew or should have known the subject decanter had a propensity to catastrophically fail when it was not properly maintained. 36. At all relevant times, GTech breached its duty of care by committing one or more of the following negligent acts or omissions: a. Failing to repair, maintain, inspect and/or test the subject decanter; Case 5:16-cv-00387-HE Document 1 Filed 04/19/16 Page 6 of 8Case 5:16-cv-00387-HE Document 37-1 Filed 07/08/16 Page 7 of 10 7 b. Performing repairs or maintenance which affected the operation of the subject decanter; c. Failing to properly repair the subject decanter in a manner and method which would protect against its catastrophic failure; d. Failing to maintain the subject decanter in a manner and method which would protect against its catastrophic failure; e. Failing to inspect the subject decanter in a manner and method which would protect against its catastrophic failure; and f. Was otherwise negligent. 37. As a direct and proximate result of one or more of the foregoing acts or omissions to act by GTech, the subject decanter malfunctioned and catastrophically exploded, igniting a fire that communicated throughout the subject property and to personal property kept therein. JURY TRIAL DEMAND 38. In accordance with Rule 38(b) of the Federal Rules of Civil Procedure, demand is made for trial by jury on all issues in this action. WHEREFORE, Plaintiff, Hanover Insurance Company, as subrogee of Lakewood Transportation d/b/a BS&W Solutions, LLC, requests that judgment be entered in its favor and against GTECH USA, in an amount in excess of Two Million, Nine Hundred Twenty-one Thousand, Four Hundred and Thirteen Dollars and Fifty-six Cents ($2,921,413.56) plus costs, and for such other or further relief as this Court deems equitable and just. Case 5:16-cv-00387-HE Document 1 Filed 04/19/16 Page 7 of 8Case 5:16-cv-00387-HE Document 37-1 Filed 07/08/16 Page 8 of 10 8 /s/ Albert L. Tait, Jr. ALBERT L. TAIT, JR., OBA NO. 8824 Fenton Fenton Smith Reneau & Moon 211 N. Robinson, Ste. 800N Oklahoma City, OK 73102 Phone: 405.235.4671/ Fax: 405.235.5247 E-Mail: altait@fentonlaw.com ATTORNEYS FOR PLAINTIFF HANOVER INSURANCE COMPANY, as subrogee of Lakewood Transportation d/b/a BS&W Solutions, LLC -and- John R. Schleiter Lindsay E. Dansdill GROTEFELD, HOFFMANN, LLP 311 S. Wacker, Suite 1500 Chicago, IL 60606 Telephone: (312) 551-0200 Facsimile: (312) 601-2402 Email: ldansdill@ghlaw-llp.com Case 5:16-cv-00387-HE Document 1 Filed 04/19/16 Page 8 of 8Case 5:16-cv-00387-HE Document 37-1 Filed 07/08/16 Page 9 of 10 1s 44 ~e~. ~ ~~~s> CIVIL COVER SHEET The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. (SEE INSTRUCTIONS ON NEXT PAGE OF THIS FORM.) I. (a) PLAINTIFFS Hanover Insurance Company, as subrogee of Lakewood Transportation d/b/a BS&W Solutions, LLC {bj County of Residence of First Listed Plaintiff (EXCEPT IN U.S. PLAINTIFF CASES) ~C~ Attorneys (Firm Name, Address, and Telephone Number) Albert L. Tait, Jr., Fenton Fenton Smith Reneau &Moon, 211 N. Robinson, Ste. 800N, Oklahoma City, OK 73102 405.235.4671 II. BASIS OF JURISDICTION(Ptacean X°in oneB~xonly) O 1 U.S. Government O 3 Federal Question Plaintiff (U.S. Government Nnt a Party) O 2 U.S. Government ~ 4 Diversity Defendant (Indicate Citizenship nfParties in Item III) __ IV. NATURE OF SUIT (Place an ' X" in One Box Only) DEFENDANTS Alfa Laval, Inc., Dolphin Marine Services, Inc., d/b/a Dolphin Marine and Industrial Centrifuges and GTech USA County of Residence of First Listed Defendant (IN U.S. PLAINTIFF CASES ONLY) NOTE: INLAND CONDEMNATION CASES, USE THE LOCATION OF THE TRACT OF LAND INVOLVED. Attorneys (If Known) III. CITIZENSHIP OF PRINCIPAL PARTIES (r~tace an 'X" in OneBnxforPZainti~ (For Diversity Cases Only) and One Box for Defendant) PTF DEF PTF DEF Citizen of This State O 1 O 1 Incorporated or Principal Place t~ 4 O 4 of Business In This State Citizen of Another State Q 2 O 2 Incorporated and Principal Place O 5 f~ 5 of Business In Another State Citizen or Subject of a O 3 O 3 Foreign Nation O 6 O 6 Foreign Country COV"fItAC.I t~ON"f J' P~OItll ! I t ill Pf ~ VI 1 T BA~~KIit Yl (\ f)'THER S~i~;~Tl-~1'f:S O 110 Insurance PERSONAL INNRY PERSONAL INJURY O 625 Drug Related Seizure O 422 Appea128 USC 158 O 375 False Claims Act O 120 Mazine O 310 Airplane O 365 Personal Injury - of Property 21 USC 881 O 423 Withdrawal O 376 Qui Tam (31 USC O 130 Miller Act O 315 Airplane Product Product Liability O 690 Other 28 USC 157 3729(a)) O 140 Negotiable Instrument Liability O 367 Health Care/ O 400 State Reapportionment PROPERTY K1GH7'SO 150 Recovery of Overpayment O 320 Assault, Libel & Pharmaceutical O 410 Mtitrust O 820 Copyrights& Enforcement of Judgment Slander Personal Injury O 430 Banks and Banking O I51 Medicaze Act D 330 Federal Employers' Product Liability O 830 Patent tl 450 Commerce O L 52 Recovery of Defaulted Liability O 368 Asbestos Personal O 840 Trademark O 460 Deportation Student Loans O 340 Marine Injury Product O 470 Racketeer Influenced and (Excludes Veterans} O 34S MazineProduct Liability LABUR S(>~1~L Sl.CL1:1T~ Corrupt Organizations O 710 Fair Labor Standazds O 861 HIA (1395f~O 153 Recovery of Overpayment Liability PERSONAL PROPERT'1 O 480 Consumer Credit of Veteran's Benefits O 350 Motor Vehicle O 370 Other Fraud Act O 862 Black Lung (423) O 49Q Cable/Sat TV Q 160 Stockholders' Suits O 355 Motor Vehicle O 371 Truth in Lending Q 720 Labor/Management O 863 DIWC/DIWW (405(g)) O 850 5ecuritiestCommodiues/ O 190 Other Contract Product Liability O 380 Other Personal Relations O 864 SSID Title XVI Exchange O 195 Contract Product Liability O 196 Franchise O 360 Other Personal Property Damage Injury 'L~ 385 Property Damage O 740 Railway Labor Act O 751 Family and Medical O 865 RSI (405(8)) D 890 Other Statutory Actions O 891 Agricultural Acts O 362 Personal Injury - Product Liability Leave Act O 893 Environmental Matters Medical Malpractice O 790 Other Labor Litigation Income Security Act O 895 Freedom of Information Act O 896 Arbitration RE~1.nR(lPER'7l' tl~([,Rit:11l,C PI21S<»I'APESlltu~ti,._~191Emp1oyeeRetiremenf HL.UEK.11.I~\~tl~fS O 210 Land Condemnation O 440 Other Civil Rights Habeas Corpus: D 870 Taxes (U.S. Plaintiff O 220 Foreclosure O 441 Voting O 463 Alien Detainee or Defendant) O 899 Administrative Procedure O 230 Rent Lease &Ejectment O 442 Employment O 510 Motions to Vacate O 871 IR,S—Third Party AebReview or Appeal of O 240 Torts to Land ~ 443 Housing/ Sentence 26 USC 7609 Agency Decision O 245 Tog Product Liability Accommodations O 530 General O 950 Constitutionality of i ~ t ~ t I ~ : u ~ i i ~ r~O 290 All Other Real Property O 445 Amer, w/Disabilities - O 535 Death Penalty State Statutes O 462 Natura~ization Applicarion&nployment Other: O 446 Amer. w/Disabilities - O 540 Mandamus &Other O 465 Other Immigration Other O 550 Civil Rights Actions O 448 Education O 555 Prison Condition O 560 Civil Detainee Conditions of Confinement v. ORIGIN (Place an ̀ X" in One Box Only) 1 Original O 2 Removed from ~ 3 Remanded from Q 4 Reinstated or O 5 Transferred from D 6 Muitidistrict Proceeding State Court Appellate Court Reopened Another District Litigation (speei(y) - – -- Ci e t e U lull 1Statute under ich y u a e 11' D nor cite juri d'c t n atures unless diversity): 1 ~ ~.S.~. ~ection 1332(a)~1~ ant 2~ ~.~~ section 1 ~~'~~a~~~~ VI. CAUSE OF ACTION $ref escr'ptioq of cause: Pro~uct ~~abihty case VII. REQUESTED IN ~ CHECK IF THIS IS A CLASS ACTION DEMAND $ CHECK YES only if demanded in complaint: COMPLAINT' UNDER RULE 23, F.R.Cv.P. BURY DEMAND: ~ Yes O No VIII. RELATED. CASES) IF ANY (See insmrctions): JUDGE _ __ __ _,~ _DOCKET NUMBER DATE pj '~` ~,('j SIGNATURE ATTO EY O `~ RECEIPT # AMOUNT APPLYING IFP JUDGE MAG. NDGE Case 5:16-cv-00387-HE Document 1-1 Filed 04/19/16 Page 1 of 1Case 5:16-cv-00387-HE Document 37-1 Filed 07/08/16 Page 10 of 10 EXHIBIT 2 Case 5:16-cv-00387-HE Document 37-2 Filed 07/08/16 Page 1 of 4 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA HANOVER INSURANCE COMPANY, as subrogee of Lakewood Transportation d/b/a BS&W Solutions, LLC Case No. CIV-16-00387-HE Plaintiff(s), v. ALFA LAVAL, INC., DOLPHIN MARINE SERVICES, INC. d/b/a DOLPHIN MARINE AND INDUSTRIAL CENTRIFUGES and GTECH Defendant(s) Cross Claim DOLPHIN MARINE SERVICES, INC. v. ALFA LAVAL, INC. Third Party Complaint DOLPHIN MARINE SERVICES, INC., v. ALFA LAVAL; CORPORATE AB AND ALFA LAVAL LIMITED ____________________________________________________________________________ DECLARATION OF SANJAY PRABHU I, Sanjay Prabhu, hereby declare: 1. I am over the age of 18 and I am competent to make this declaration. I have personal knowledge of the facts stated in this declaration and, if sworn and a witness, could and would testify competently thereto. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) JURY TRIAL DEMANDED (Fed.R.Civ.P.38[b]) Case 5:16-cv-00387-HE Document 37-2 Filed 07/08/16 Page 2 of 4 2 2. I am the president and sole stockholder of the defendant Dolphin Marine Services Inc. (“Dolphin Marine”). Dolphin Marine is a Michigan corporation with its principle place of business and indeed its only place of business in Warren, Michigan. Dolphin Marine does not now have and never has had any offices or personnel located in the state of Oklahoma. In 2006 when the subject transaction took place I was the only employee of Dolphin Marine and I worked part-time out of my home in Michigan. Today Dolphin Marine has four employees including myself. 3. In 2006 Dolphin Marine served as a broker relative to the purchase of the subject decanter identified in Plaintiff’s Complaint, in the following manner. I was contacted by the owner of BS&W Solutions LLC (“BS&W”), Mr. Brad Barby, who indicated that he wished to place an order for this decanter to be manufactured by Alfa Laval in India for U.S. application with 60 HZ power. BS&W is the predecessor company for the Plaintiff Lakewood Transportation, which operated the plant in Oklahoma where the subject decanter was shipped. 4. I then contacted Essdeeco, a company in India which serves as a distributor for this type of equipment, with a request for Essdeeco to place BS&W’s order with the manufacturer, Alfa Laval India, which they did. 5. In July 2006 the subject decanter was shipped by Essdeeco from the manufacturer, Alfa Laval India, to the BS&W plant in Oklahoma. Dolphin Marine did not ever take possession, custody, control or title to the subject decanter, nor did Dolphin Marine ever inspect, market, ship or touch the subject decanter. BS&W sent a wire transfer to Dolphin Marine and Dolphin Marine in turn sent a wire transfer to Essdeeco which in turn paid Alfa Laval India before the subject decanter was shipped by Essdeeco from Alfa Laval India to BS&W, but there was never any transfer of ownership, title or control to Dolphin Marine. There Case 5:16-cv-00387-HE Document 37-2 Filed 07/08/16 Page 3 of 4 Case 5:16-cv-00387-HE Document 37-2 Filed 07/08/16 Page 4 of 4