Insurance – Asbestos – Third-party claim

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Where insurers named as defendants in asbestos-related litigation have moved for leave to file a third-party complaint, the motion should be denied as premature.

“… All but one defendant now seek to add a third party, Tyco Receivables (Tyco) as a result of a transaction between [policyholder] Crosby [Valve] and Tyco in September 2012. The defendants argue that, as a result of that transaction, they may have a right of indemnification against Tyco in the event that Crosby is determined to be an insured entitled to coverage. This Court concludes that the motion must be denied without prejudice, for reasons articulated by the plaintiffs in open court. In particular, the Court is persuaded by the following:

“1. The plaintiffs make a serious argument that the proposed third-party complaint is so lacking in merit that the motion should be denied on the grounds of futility. This Court declines to do so, but does agree with plaintiffs that Tyco’s liability at this stage is at best theoretical. Indeed, the issues raised by the proposed third party complaint may not have to be resolved at all depending on how the litigation proceeds.

“2. If at some point in the future, there is some real (as opposed to theoretical) issue which would permit the defendants to seek indemnification against Tyco, then it can be added to the case without having to reopen discovery to any significant extent. At this point, Tyco’s interests are aligned with those of plaintiffs so that whatever discovery plaintiffs obtain will be shared with Tyco with that alignment of interest in mind. Although Tyco’s late addition to the case might necessitate some additional discovery by defendants, this is unlikely to be substantial. Defendants have already obtained certain discovery about the September 2012 transaction and can obtain third party discovery from Tyco as well. Moreover, plaintiffs (at this point reprinted by the same law firm as Tyco) have no interest in increasing the cost of the ligation by holding back on certain discovery simply because Tyco is not now a party.

“3. Counsel for Tyco was present at the hearing on this motion and expressly represented to the Court that Tyco would not oppose any motion to join it as a party at some point later in the case if that became necessary. Moreover, he would not seek to reopen discovery on issues that were already fully explored by the present parties.

“4. At the conclusion of the hearing, defense counsel intimated that the defendants may be contemplating filing a separate action against Tyco in this Court or in another court that raises the same issues. Although this Court is not in a position to prevent such an action, it would essentially defeat what this Court is trying to achieve by the denial of the instant motion — namely, to promote a more efficient use of judicial and litigation resources.”

Crosby Valve, LLC, et al. v. OneBeacon America, et al. (Lawyers Weekly No. 12-116-15) (2 pages) (Sanders, J.) (Superior Court) (Civil Action No. 2012-2705 BLS2) (Oct. 13, 2015).

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