MACTEC v. OneBeacon

2007 DNH 034

• Court: District Court, D. New Hampshire
• Decided: March 21, 2007
• Docket: 06-CV-466-JD
• Status: Published

Opinion

MACTEC v . OneBeacon 06-CV-466-JD 3/21/07 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

MACTEC Engineering & Consulting, Inc. v. Civil N o . 06-cv-466-JD Opinion N o . 2007 DNH 034 OneBeacon Insurance Company

O R D E R

MACTEC Engineering & Consulting, Inc., filed a declaratory

judgment action in state court pursuant to New Hampshire Revised

Statutes Annotated (“RSA”) § 491:22, seeking a determination that

OneBeacon Insurance Company is obligated to defend MACTEC against

claims brought by Hitchiner Manufacturing Company, Inc., and

Thomas & Betts Corporation (referred to as “Hitchiner”) in an

arbitration proceeding. OneBeacon removed the case to this court

and was then granted leave to amend its answer to assert a

counterclaim seeking a declaratory judgment that it has no duty

to defend or indemnify MACTEC as to claims made in the Hitchiner

complaint. MACTEC moved to dismiss OneBeacon’s counterclaim.

MACTEC also filed an emergency motion for a partial stay of

discovery to avoid a deposition noticed for March 2 3 , 2007, and

to limit the scope of a deposition noticed for April 2 , 2007. MACTEC and OneBeacon both question whether Massachusetts or

New Hampshire law governs this case. “To determine which state’s

laws apply to a particular case, [federal courts] employ the

choice of law analysis of the forum state.” Reicher v . Berkshire

Life Ins. C o . of Am., 360 F.3d 1 , 5 (1st Cir. 2004). A choice of law analysis is unnecessary, however, if no conflict exists in

the potentially applicable law. Pure Distribs., Inc. v . Baker,

285 F.3d 1 5 0 , 155 n.3 (1st Cir. 2002); A.M. Capen’s Co., Inc. v .

Am. Trading & Prod. Corp., 202 F.3d 469, 473 n.6 (1st Cir. 2000).

In the absence of a conflict, the court applies the law of the

forum state. Patrick v . Mass. Port Auth., 141 F. Supp. 2d 1 8 0 ,

187 n.6 (D.N.H. 2001).

In its emergency motion for a partial stay of discovery,

MACTEC cites both New Hampshire and Massachusetts law and states in a footnote that the law of the two states with respect to an

insurer’s duty to defend is “virtually identical.” OneBeacon

states in it opposition to MACTEC’s motion to dismiss that the

law of New Hampshire and Massachusetts is the same as to the

interpretation of insurance policies and the duty to defend but

then asserts that the law of Massachusetts applies. Because

neither party has demonstrated that an actual conflict exists

between material law of New Hampshire and Massachusetts, the law

2 of New Hampshire governs the substantive issues in this case.

I. Motion to Dismiss

OneBeacon seeks a declaratory judgment that it owes no duty

to defend or indemnify MACTEC in the Hitchiner action.1 MACTEC

moves to dismiss OneBeacon’s counterclaim on the duty to defend

on the ground that OneBeacon is limited to asserting an

affirmative defense and should not be permitted to bring a

separate declaratory judgment claim. MACTEC contends that the

counterclaim for a declaration that OneBeacon does not owe a duty

to indemnify is premature until a judgment is entered in the

underlying arbitration proceeding.

In considering a motion to dismiss, the court “take[s] as

true all well-pleaded allegations and draw[s] all reasonable

inferences in the plaintiff’s favor.” Ezra Charitable Trust v .

Tyco Int’l, Ltd., 466 F.3d 1 , 5-6 (1st Cir. 2006). “The court

need not accept a plaintiff’s assertion that a factual allegation

satisfies an element of a claim, however, nor must a court infer

from the assertion of a legal conclusion that factual allegations

could be made that would justify drawing such a conclusion.”

Cordero-Hernandez v . Hernandez-Ballesteros, 449 F.3d 2 4 0 , 244 n.3

1 OneBeacon does not specify whether a declaratory judgment is sought under state or federal law.

3 (1st Cir. 2006). “A complaint should not be dismissed unless it

is apparent beyond doubt that the plaintiff can prove no set of

facts in support of his claim that would entitle him to relief.”

Conley v . Gibson, 355 U.S. 4 1 , 45-46 (1957) (quotation marks

omitted); accord Stanton v . Metro Corp., 438 F.3d 119, 123-24

(1st Cir. 2006). MACTEC is mistaken that OneBeacon is limited to asserting

affirmative defenses against MACTEC’s declaratory judgment

action. MACTEC seeks a declaratory judgment that it is entitled

to a defense provided by OneBeacon.2 If MACTEC is successful,

that declaration would issue. If OneBeacon asserted a successful

affirmative defense, MACTEC’s claim would be denied, but no

declaration would issue in OneBeacon’s favor. On the other hand,

however, if OneBeacon were successful on its counterclaim seeking

a declaratory judgment in its favor, that it does not owe a duty to defend or to indemnify MACTEC, an order would issue

establishing that OneBeacon did not owe that duty. Therefore, a

2 “It is well-settled law in New Hampshire that an insurer’s obligation to defend its insured is determined by whether the cause of action against the insured alleges sufficient facts in the pleadings to bring it within the express terms of the policy.” Broom v . Cont’l Cas. Co., 152 N.H. 749, 753 (2005). “In determining whether a duty to defend exists based upon the sufficiency of the pleadings, we consider the reasonable expectations of the insured as to its rights under the policy.” Id. The insurer’s duty to defend is broader than the duty to indemnify. Ross v . Home Ins. Co., 146 N.H. 4 6 8 , 473 (2001).

4 claim for a declaratory judgment is not the same thing as

asserting an affirmative defense to the plaintiff’s claim for the

opposite relief.

MACTEC also argues that OneBeacon’s claim for a declaratory

judgment, that it is not obligated to provide indemnification,

cannot be adjudicated unless and until the arbitration action is concluded. The duty to indemnify arises from the terms of the

policy. See Keating v . United Instruments, Inc., 144 N.H. 393,

400 (1999); Concord Hosp. v . N.H. Med. Malpractice Joint

Underwriting Ass’n, 142 N.H. 5 9 , 61 (1997). Although the

obligation to pay and the amount owed are not determined until

judgment enters in the underlying action, a declaratory judgment

action can and often does determine whether a duty exists under

the policy to provide indemnification before the underlying

liability is reduced to judgment. See, e.g., Merchants Mut. Ins. C o . v . Laighton Homes, LLC, 153 N.H. 485, 486 (2006); Broom v .

Cont’l Cas. Co., 152 N.H. 749, 752 (2005). If the underlying

action determines that the insured is not liable, however, the

declaratory judgment action becomes moot. See Tothill v . Estate

of Warren Center, 152 N.H. 389, 390 (2005).

MACTEC provides no basis to dismiss OneBeacon’s counterclaim

for a declaratory judgment that it owes no duty to defend or to

indemnify MACTEC in the underlying arbitration proceeding.

5 II. Emergency Motion for Partial Stay of Discovery and to Quash Deposition

MACTEC moves for an immediate partial stay of discovery to

avoid its deposition to be taken on March 23 and to limit the

scope of a subsequent deposition. The premise of MACTEC’s motion

is that OneBeacon’s counterclaim would be dismissed, making

discovery pertaining to the counterclaim unnecessary. MACTEC’s

motion to dismiss, however, is denied. Therefore, the emergency

motion is also denied.

Conclusion

For the foregoing reasons, the plaintiff’s motion to dismiss

(document n o . 19) and the plaintiff’s emergency motion for a

partial stay (document n o . 22) are denied.

SO ORDERED.

_________________________ ^—) Joseph Joseph A. DiClerico, Jr. United States District Judge March 2 1 , 2007

cc: Jeffrey T . Edwards, Esquire Peter G. Hermes, Esquire Daniel P. Luker, Esquire Joshua E . Menard, Esquire Erica E . Sullivan, Esquire Roy T . Pierce, Esquire