Home Indemnity Co. v. Hoechst Celanese Corp.

493 S.E.2d 806, 128 N.C. App. 113, 1997 N.C. App. LEXIS 1287
CourtCourt of Appeals of North Carolina
DecidedDecember 16, 1997
DocketNo. COA97-321
StatusPublished
Cited by9 cases

This text of 493 S.E.2d 806 (Home Indemnity Co. v. Hoechst Celanese Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Home Indemnity Co. v. Hoechst Celanese Corp., 493 S.E.2d 806, 128 N.C. App. 113, 1997 N.C. App. LEXIS 1287 (N.C. Ct. App. 1997).

Opinion

EAGLES, Judge.

When evaluating the propriety of a trial court’s stay order the appropriate standard of review is abuse of discretion. Home Indem. [118]*118Co. v. Hoechst-Celanese Corp., 99 N.C. App. 322, 325, 393 S.E.2d 118, 120 (1990), appeal dismissed and cert. denied, 327 N.C. 428, 396 S.E.2d 611 (1990). A trial court may be reversed for abuse of discretion only if the trial court made “a patently arbitrary decision, manifestly unsupported by reason.” Buford v. General Motors Corp., 339 N.C. 396, 406, 451 S.E.2d 293, 298 (1994). Rather, appellate review is limited to “insur[ing] that the decision could, in light of the factual context in which it was made, be the product of reason.” Little v. Penn Ventilator Co., 317 N.C. 206, 218, 345 S.E.2d 204, 212 (1986).

The plaintiffs argue that staying the trial of the non-North Carolina claims and effectively severing this comprehensive action constitutes an abuse of discretion by the trial court. The plaintiffs argue that a comprehensive action is preferable for three reasons: 1) the “weight of authority” favors a comprehensive action; 2) a comprehensive action avoids delay; and 3) a comprehensive action avoids inconsistent interpretations of insurance policy language. These reasons are not persuasive individually or collectively.

The “weight of authority” cited by the plaintiffs are cases from other jurisdictions and thereby not binding. Delay will not necessarily result in trying the cases in the states where the sites are located. After eight years of comprehensive litigation, including four years of litigation in North Carolina, the insured has obtained a substantive ruling on only one out of ninety-four sites. Additionally, the problem with inconsistent interpretation of policy language will not be avoided by keeping non-North Carolina sites in North Carolina. If the stay order is reversed, the North Carolina courts would be required to determine which state’s law to apply to each claim, to find relevant facts at each site and then to apply the language to the facts under the applicable state law. The possibility of inconsistent interpretations among the several states’ laws is no less likely in North Carolina than in the courts of the several states.

The plaintiffs also argue that the stay order effectively wastes four years of litigation already expended in this action. However, HCC has agreed to a “universal case management order” to facilitate litigation in all eight states. Further there is no indication that courts in other states will require parties to re-conduct discovery that has already taken place in this litigation.

The plaintiffs next argue that affirming the stay order would work a “substantial injustice” on the parties. We disagree. G.S. 1-75.12 provides that a trial court should stay an action only if “the judge shall [119]*119find that it would work a substantial injustice for the action to be tried in a court of this state.” Relevant facts that may be considered include: the nature of the case, the applicable law, the convenience of witnesses, the availability of process to compel the attendance of witnesses, the ease of access to sources of proof, the burden of litigating matters of local concern in local courts, and other practical considerations which would make the trial easy, expeditious and inexpensive. Motor Inn Management, Inc. v. Irvin-Fuller Dev. Co., Inc., 46 N.C. App. 707, 713, 266 S.E.2d 368, 371 (1980), appeal dismissed and cert. denied, 301 N.C. 93, 273 S.E.2d 299 (1980). Courts need not consider every factor. Lawyers Mut. Liab. Ins. Co. of North Carolina v. Nexsen Pruet Jacobs & Pollard, 112 N.C. App. 353, 357, 435 S.E.2d 571, 574 (1993).

By December 1996, this case had become essentially a non-North Carolina case. After Judge Gray entered partial summary judgment in COA97-459, COA96-1408 and COA96-1435, this litigation concerned the availability of insurance coverage for costs of clean up in environmental contamination situations in states other than North Carolina. With the North Carolina issues essentially resolved, the trial court reasonably concluded that continuing to litigate North Carolina coverage issues regarding the non-North Carolina sites was an unreasonable and unnecessary burden on the North Carolina courts.

While the issue of which states’ law will apply is not resolved as to all the claims, the applicable law will not be North Carolina law. There are two competing views — the traditional view of lexi loci and the alternate site specific view. Traditionally, lex loci or the law of the place where a contract is made determines matters bearing on the execution, interpretation, and validity of the contract. Computer Sales Int. v. Forsyth Mem. Hosp., 112 N.C. App. 633, 635, 436 S.E.2d 263, 265 (1993), cert. denied, 335 N.C. 768, 442 S.E.2d 513 (1994), see Tennessee-Carolina Transp., Inc. v. Strick Corp., 286 N.C. 235, 238, 210 S.E.2d 181, 183 (1974). The alternate approach has been the site specific approach. In these types of environmental insurance contracts where there is no choice of law provision, “the state where the toxic waste comes to rest is the state whose law will apply, provided that it was reasonably foreseeable that the waste would come to rest there.” Leksi, Inc. v. Federal Ins. Co., 736 F. Supp. 1331, 1336 (D.N.J.) (1990). No matter which approach is followed in this litigation, North Carolina law will not be applied. Both parties to this suit are headquartered in states other than North Carolina. Further, the essential acts critical to determining where the contract was entered [120]*120into and which states’ law controls were almost all done outside North Carolina. This would require a North Carolina trial court to apply the law of at least one and perhaps as many as twenty other states.

Further, the convenience of witnesses and availability of evidence factors all favor affirming Judge Gray’s stay order. The determination of coverage at each site will depend, at least in part, on the facts at each site. Those facts likely will be proven by witnesses who have worked at the site and know the history surrounding the site. Accordingly, we conclude that these factors militate in favor of affirming the stay order.

Generally it is more desirable to litigate local matters in local courts. Motor Inn Management, Inc., 46 N.C. App. at 713, 266 S.E.2d at 371. Each state’s court has an interest in issues concerning cleanup of environmental contamination in its own state. This factor also bolsters the trial court’s decision to stay the coverage litigation in North Carolina for the non-North Carolina sites.

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Home Indem. Co. v. Hoechst Celanese Corp.
493 S.E.2d 806 (Court of Appeals of North Carolina, 1997)

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Bluebook (online)
493 S.E.2d 806, 128 N.C. App. 113, 1997 N.C. App. LEXIS 1287, Counsel Stack Legal Research, https://law.counselstack.com/opinion/home-indemnity-co-v-hoechst-celanese-corp-ncctapp-1997.