AXA Global v . Roberts, et a l . CV-99-133-M 03/03/00 UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
AXA Global Risks (U.S.) Insurance Company, Plaintiff
v. Civil N o . 99-133-M Opinion N o . 2000 DNH 056 Wallace Roberts; Merike Petrich; and Twin Pines Housing Trust, Inc., Defendants
O R D E R
Plaintiff, AXA Global Risks (U.S.) Insurance Company (“AXA”)
moves to stay, or dismiss its declaratory judgment action,
without prejudice, on grounds that the suit underlying this
coverage dispute has been settled upon terms that include
extension of coverage and dismissal of this case and all claims
by both plaintiff and defendants. Pro se defendant Merike
Petrich nevertheless objects, but not on pertinent grounds.
It is plain from the exhibits filed by defendant Petrich
that should a Vermont court determine that she settled the
underlying case upon the terms asserted by plaintiff (as her own counsel in the Vermont action apparently believes she did) then
this case is resolved in substantial part (save perhaps for
Petrich’s third-party claims). Petrich apparently takes the
position in the Vermont litigation that she did not authorize her
counsel to settle upon the terms alleged, and that a settlement
on those terms should not be enforced. Whether the Vermont
settlement is enforceable is an issue pending before Vermont’s
courts and will be resolved in due course. That issue is not
before this court, but its resolution could well resolve this
case. Accordingly, this case ought to be stayed pending
resolution of the settlement issue in Vermont.
However, it is neither necessary nor appropriate to stay the
case with regard to the third-party complaints brought by Petrich
against third-party defendants Rubin and Wallace. Both have
filed motions to dismiss on preliminary grounds – failure to
effect service of process, failure to comply with the Local Rules
of this court, and lack of personal jurisdiction.
Petrich’s third-party complaints attempt to allege some form
of misrepresentation related to Petrich’s settlement of a case
2 she brought against Wallace in Vermont (defendant Wallace was
represented by third-party defendant Rubin). Apparently Petrich
settled the case in exchange for Wallace’s agreement to the entry
of judgment against him in the amount of $150,000, and an
assignment of Wallace’s indemnity or coverage rights under an AXA
policy. Petrich says, essentially, that she believed AXA would
pay the judgment pursuant to the policy, but that Attorney Rubin
and Wallace did not “believe” that AXA would pay the judgment
when they agreed to the settlement and assigned Wallace’s rights
under the AXA policy. Nothing is pled suggesting that any
affirmative representations were made to her on that score and
the third-party complaint may not state a cognizable claim. But,
whether it does or does not, Petrich’s third-party claim does not
seem to arise from the same nucleus of operative facts giving
rise to this declaratory judgment action, at least not as pled.
In any event, putting aside service of process issues, and
failure by Petrich to obtain leave to file the third-party
complaint(s), it is apparent that she has also failed to
establish this court’s personal jurisdiction over third-party
3 defendant Rubin. See Sawtelle v . Farrell, 70 F.3d 1381 (1st Cir.
1995). Attorney Rubin is not alleged to have sufficient minimum
contacts with New Hampshire to warrant the exercise of personal
jurisdiction over him, and all of the acts complained of by
Petrich occurred in Vermont, where both Rubin and Wallace reside.
The settlement agreement related to the Vermont litigation; it
was negotiated and executed in Vermont; if any actionable
representations were made to Petrich, they were made in Vermont,
where she resides; Petrich relied on those representations in
Vermont if anywhere; and, finally, to the extent Petrich suffered
any injury as a result of the alleged misrepresentations, it was
felt in Vermont. See generally, International Shoe C o . v .
Washington, 326 U.S. 310 (1945); World-Wide Volkswagen Corp. v .
Woodson, 444 U.S. 286 (1980); Quinones v . Pennsylvania General
Ins. Co., 804 F.2d 1167 (10th Cir. 1986).
Attorney Rubin was not served in New Hampshire, is not
domiciled here, has insufficient minimum contacts here to support
the exercise of personal jurisdiction over him, and has not
consented to this court’s exercise of personal jurisdiction.
4 Accordingly, Attorney Rubin’s motions to dismiss the third-party
complaint against him for lack of personal jurisdiction
(documents n o . 30 and 34) are granted.1
Third-party defendant Wallace is in a somewhat different
position, however, because he is already before the court as a
defendant in the principal case, and, if he is subject to the
exercise of personal jurisdiction relative to plaintiff AXA’s
complaint, he is also subject to personal jurisdiction with
regard to any cross-claims filed by co-defendants in the action.
Petrich filed her claim against Wallace as a “third-party
complaint,” but it is not. See Fed.R.Civ.P. 14(a). Her claim
against Wallace must be asserted, if it can be asserted at all,
as a cross-claim against a co-party under Fed.R.Civ.P. 13(g).
But, Rule 13(g) limits assertable cross-claims to those claims
“arising out of the transaction or occurrence that is the subject
matter . . . of the original action.” Here, it is clear that
even treating Petrich’s third-party complaint against Wallace as
1 Subject matter jurisdiction over Petrich’s claims against Attorney Rubin (and Wallace) is also questionable since the parties appear not to be diverse.
5 a cross-claim, it cannot be asserted because it does not arise
out of the transaction or occurrence that is the subject matter
of the original action. The original action is a rather
straight-forward insurance coverage dispute, while the cross-
claim attempts to assert a tort claim in the nature of
intentional misrepresentation or fraud.
What constitutes the “same transaction or occurrence” is
generally determined by the same standards applicable in
determining whether couterclaims are compulsory or permissive,
that i s :
1. Whether the issues of fact and law are generally the same (here, they are not – whether coverage exists under the AXA policy is entirely unrelated to whether some guarantee or misrepresentation of coverage was made by Wallace to induce a settlement of his case);
2. Whether res judicata or collateral estoppel would bar a subsequent suit on defendant’s cross-claim (it would n o t ) ;
3.
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AXA Global v . Roberts, et a l . CV-99-133-M 03/03/00 UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
AXA Global Risks (U.S.) Insurance Company, Plaintiff
v. Civil N o . 99-133-M Opinion N o . 2000 DNH 056 Wallace Roberts; Merike Petrich; and Twin Pines Housing Trust, Inc., Defendants
O R D E R
Plaintiff, AXA Global Risks (U.S.) Insurance Company (“AXA”)
moves to stay, or dismiss its declaratory judgment action,
without prejudice, on grounds that the suit underlying this
coverage dispute has been settled upon terms that include
extension of coverage and dismissal of this case and all claims
by both plaintiff and defendants. Pro se defendant Merike
Petrich nevertheless objects, but not on pertinent grounds.
It is plain from the exhibits filed by defendant Petrich
that should a Vermont court determine that she settled the
underlying case upon the terms asserted by plaintiff (as her own counsel in the Vermont action apparently believes she did) then
this case is resolved in substantial part (save perhaps for
Petrich’s third-party claims). Petrich apparently takes the
position in the Vermont litigation that she did not authorize her
counsel to settle upon the terms alleged, and that a settlement
on those terms should not be enforced. Whether the Vermont
settlement is enforceable is an issue pending before Vermont’s
courts and will be resolved in due course. That issue is not
before this court, but its resolution could well resolve this
case. Accordingly, this case ought to be stayed pending
resolution of the settlement issue in Vermont.
However, it is neither necessary nor appropriate to stay the
case with regard to the third-party complaints brought by Petrich
against third-party defendants Rubin and Wallace. Both have
filed motions to dismiss on preliminary grounds – failure to
effect service of process, failure to comply with the Local Rules
of this court, and lack of personal jurisdiction.
Petrich’s third-party complaints attempt to allege some form
of misrepresentation related to Petrich’s settlement of a case
2 she brought against Wallace in Vermont (defendant Wallace was
represented by third-party defendant Rubin). Apparently Petrich
settled the case in exchange for Wallace’s agreement to the entry
of judgment against him in the amount of $150,000, and an
assignment of Wallace’s indemnity or coverage rights under an AXA
policy. Petrich says, essentially, that she believed AXA would
pay the judgment pursuant to the policy, but that Attorney Rubin
and Wallace did not “believe” that AXA would pay the judgment
when they agreed to the settlement and assigned Wallace’s rights
under the AXA policy. Nothing is pled suggesting that any
affirmative representations were made to her on that score and
the third-party complaint may not state a cognizable claim. But,
whether it does or does not, Petrich’s third-party claim does not
seem to arise from the same nucleus of operative facts giving
rise to this declaratory judgment action, at least not as pled.
In any event, putting aside service of process issues, and
failure by Petrich to obtain leave to file the third-party
complaint(s), it is apparent that she has also failed to
establish this court’s personal jurisdiction over third-party
3 defendant Rubin. See Sawtelle v . Farrell, 70 F.3d 1381 (1st Cir.
1995). Attorney Rubin is not alleged to have sufficient minimum
contacts with New Hampshire to warrant the exercise of personal
jurisdiction over him, and all of the acts complained of by
Petrich occurred in Vermont, where both Rubin and Wallace reside.
The settlement agreement related to the Vermont litigation; it
was negotiated and executed in Vermont; if any actionable
representations were made to Petrich, they were made in Vermont,
where she resides; Petrich relied on those representations in
Vermont if anywhere; and, finally, to the extent Petrich suffered
any injury as a result of the alleged misrepresentations, it was
felt in Vermont. See generally, International Shoe C o . v .
Washington, 326 U.S. 310 (1945); World-Wide Volkswagen Corp. v .
Woodson, 444 U.S. 286 (1980); Quinones v . Pennsylvania General
Ins. Co., 804 F.2d 1167 (10th Cir. 1986).
Attorney Rubin was not served in New Hampshire, is not
domiciled here, has insufficient minimum contacts here to support
the exercise of personal jurisdiction over him, and has not
consented to this court’s exercise of personal jurisdiction.
4 Accordingly, Attorney Rubin’s motions to dismiss the third-party
complaint against him for lack of personal jurisdiction
(documents n o . 30 and 34) are granted.1
Third-party defendant Wallace is in a somewhat different
position, however, because he is already before the court as a
defendant in the principal case, and, if he is subject to the
exercise of personal jurisdiction relative to plaintiff AXA’s
complaint, he is also subject to personal jurisdiction with
regard to any cross-claims filed by co-defendants in the action.
Petrich filed her claim against Wallace as a “third-party
complaint,” but it is not. See Fed.R.Civ.P. 14(a). Her claim
against Wallace must be asserted, if it can be asserted at all,
as a cross-claim against a co-party under Fed.R.Civ.P. 13(g).
But, Rule 13(g) limits assertable cross-claims to those claims
“arising out of the transaction or occurrence that is the subject
matter . . . of the original action.” Here, it is clear that
even treating Petrich’s third-party complaint against Wallace as
1 Subject matter jurisdiction over Petrich’s claims against Attorney Rubin (and Wallace) is also questionable since the parties appear not to be diverse.
5 a cross-claim, it cannot be asserted because it does not arise
out of the transaction or occurrence that is the subject matter
of the original action. The original action is a rather
straight-forward insurance coverage dispute, while the cross-
claim attempts to assert a tort claim in the nature of
intentional misrepresentation or fraud.
What constitutes the “same transaction or occurrence” is
generally determined by the same standards applicable in
determining whether couterclaims are compulsory or permissive,
that i s :
1. Whether the issues of fact and law are generally the same (here, they are not – whether coverage exists under the AXA policy is entirely unrelated to whether some guarantee or misrepresentation of coverage was made by Wallace to induce a settlement of his case);
2. Whether res judicata or collateral estoppel would bar a subsequent suit on defendant’s cross-claim (it would n o t ) ;
3. Whether the same evidence will support or refute both the original claim and the cross-claim (it will not – the original claim will require legal construction of the policy and adjudication of facts related to coverage, while the cross-claim will involve consideration of wholly independent facts related to representations made by Wallace outside the confines of
6 the policy, as well as a determination of whether tort or other principles render them actionable); and
4. Whether there is a logical relationship between the claim and cross-claim (there is not, since resolution of AXA’s claim will have no effect on the resolution of Petrich’s cross-claim against Wallace, notwithstanding the fact that Petrich would likely drop them if coverage is found).
See, generally, J. Wagstaffe, et a l . , California Practice Guide,
Federal Civil Procedure, § 8:333, at 8-73 (1999).
Petrich’s cross-claim cannot be asserted against Wallace in
this action consistently with Rule 13(g) (and probably could not
be asserted in a separate suit in this district due to the likely
absence of personal jurisdiction for the same reasons given with
regard to Attorney Rubin). Accordingly, Petrich’s
“third-party complaint” against co-defendant Wallace is
dismissed, without prejudice.
Conclusion
Plaintiff’s motion to stay (document n o . 37) is granted.
All motions pending and not ruled on in this order are denied
without prejudice and with leave to refile in the event the case
7 is not later dismissed in accordance with the terms of the
alleged Vermont settlement agreement between the parties. Third-
party defendant Rubin’s motions to dismiss (documents n o . 30 and
34) are granted, and the complaint against him is dismissed for
lack of personal jurisdiction. The “third-party complaint”
against defendant Wallace is treated as a cross-claim and
Wallace’s motion to dismiss (document n o . 35) is granted for the
reasons given herein. The cross-claim is dismissed without
prejudice.
SO ORDERED.
Steven J. McAuliffe United States District Judge
March 3 , 2000
cc: Andrew J. Palmer, Esq. Merike Petrich Wallace Roberts Michael F. Hanley, Esq. Cheryl M. Hieber, Esq.