CERTAIN UNDERWRITERS AT LLOYDS LONDON v. AIU (2008)

Supreme Court, Appellate Division, First Department, New York.

CERTAIN UNDERWRITERS AT LLOYDS, LONDON, Plaintiffs, v. MILLENNIUM HOLDINGS LLC, et al., Defendants-Respondents, AIU Insurance Company, et al., Defendants-Appellants,
American Home Assurance Company, et al., Defendants, Certain London Market Insurance Companies, Nominal Defendants. Certain Underwriters at Lloyds, London, Plaintiffs-Appellants, v. Millenium Holdings LLC, et al., Defendants, Certain London Market Insurance Companies, Nominal Defendants, NL Industries Inc., Defendant-Respondent, Employers Mutual Casualty Company, et al., Defendants-Appellants.

Decided: June 10, 2008

TOM, J.P., MAZZARELLI, GONZALEZ, DEGRASSE, JJ.

Simpson Thacher & Bartlett LLP, New York (Bryce L. Friedman of counsel), for AIU Insurance Company, Granite State Insurance Company, Lexington Insurance Company, National Union Fire Insurance Company of Pittsburgh, PA, New Hampshire Insurance Company, Travelers Casualty & Surety Company and The Travelers Indemnity Company, appellants. Zuckerman Spaeder LLP, Washington, DC (Carl S. Kravitz of counsel), for Certain Underwriters at Lloyds, London, appellants. Rivkin Radler LLP, Uniondale (David M. Cassidy of counsel), for Government Employees Insurance Company, OneBeacon America Insurance Company, Republic Insurance Company and Riunione Adriatica DiSicurta, appellants. Kelley Drye & Warren LLP, New York (Neil Merkl, and John E. Heintz of the District of Columbia Bar, admitted pro hac vice, of counsel), for Millennium Holdings LLC, Millennium Chemicals Inc. and Millennium Inorganic Chemicals, Inc., respondents. Dickstein Shapiro LLP, Washington, DC (Leon B. Kellner of counsel), for NL Industries Inc., respondent.

Judgment, Supreme Court, New York County (Helen E. Freedman, J.), entered December 3, 2007, dismissing the cross claims of defendants Travelers and the remaining defendants-appellants (collectively, the AIG defendants) in favor of an Ohio action, based on an order, entered November 8, 2007, which also denied Travelers' motion for summary judgment, unanimously affirmed, with costs. Appeal from the underlying order unanimously dismissed, without costs, as subsumed in the appeal from the judgment. Order, same court and Justice, entered December 26, 2007, which denied the motion of plaintiffs Certain Underwriters and the cross motion of defendants OneBeacon America, Republic, Government Employees and Riunione Adriatica to enjoin NL Industries from maintaining actions in Texas, unanimously reversed, on the law and the facts, with costs, and the motion and cross motion granted.

Deference to the long-pending comprehensive Ohio action was warranted, as we ruled in this case in October 2007 (44 A.D.3d 536, 537, 844 N.Y.S.2d 226); the first-filed rule does not govern here (see ACE Fire Underwriters Ins. Co. v. ITT Indus., Inc., 44 A.D.3d 404, 405, 843 N.Y.S.2d 579 [2007] ). Travelers was not entitled to summary judgment on its defense of release; the interpretation of the settlement agreement at issue presented an issue for the Ohio court, which ruled in favor of resorting to extrinsic evidence.

In view of NL's forum-shopping in commencing parallel Texas actions just after the insurers had brought suit in New York, this Court's clear indication in our October 2007 ruling that the dispute has a greater nexus to New York, and the possibility of conflicting rulings, NL should have been enjoined from maintaining its Texas action (see Jay Franco & Sons Inc. v. G Studios, LLC, 34 A.D.3d 297, 825 N.Y.S.2d 20 [2006]; Interested Underwriters at Lloyd's v. H.D.I. III Assoc., 213 A.D.2d 246, 623 N.Y.S.2d 871 [1995] ). Under the circumstances, our deference to the Texas courts as a matter of comity is not warranted.

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