United States District Court, S.D. Indiana, Indianapolis Division
NORTHERN INSURANCE COMPANY OF NEW YORK as subrogee of Koch Originals, Inc., Plaintiff,
TRAVELERS INSURANCE COMPANY, CNA INSURANCE COMPANY, HARTFORD INSURANCE COMPANY, TRAVELERS INDEMNITY COMPANY, CHARTER OAK FIRE INSURANCE COMPANY, TRAVELERS INDEMNITY COMPANY OF ILLINOIS n/k/a Travelers Property Casualty Company of America, and HARTFORD CASUALTY INSURANCE COMPANY, Defendants.
ORDER ON DEFENDANTS' MOTION TO DISMISS
PLAINTIFF'S SECOND AMENDED COMPLAINT
J. McKINNEY, JUDGE
cause is before the Court on Defendants The Travelers
Indemnity Company, The Charter Oak Fire Insurance Company,
and Travelers Property Casualty Company of America's
(collectively “Travelers”), combined Motion to
Dismiss (“Motion”) Plaintiff Northern Insurance
Company's (“Northern”) Second Amended
Complaint (“Amended Complaint”) pursuant to
Federal Rule of Civil Procedure 12(b)(6) (“Rule
12(b)(6)”) for failure to state a claim. Dkt. 50.
Northern alleged in its Amended Complaint that Travelers must
contribute a pro rata share of the costs and fees
for cleaning up a contamination caused by Northern's
Insured. Dkt. 1.
reasons set forth below, the Court GRANTS
Defendants' Motion to Dismiss.
alleged in its Amended Complaint that Travelers, along with
Northern, CNA Insurance Company (“CNA”), and
Hartford Insurance Company (“Hartford”), at all
relevant times,  insured the property located at 1401 N.
Park Street, Evansville, Indiana (“Real Estate”).
Dkt. 1 ¶ 5. Northern stated that Traveler's insured
George Koch Sons, Inc. and/or George Koch and Sons, Inc.
(collectively “George Koch Sons”), on the Real
Estate. Id. ¶ 6. Northern claims that for
several years, Koch Originals, Inc., owned the Real Estate
and for several years prior to that, George Koch Sons owned
the Real Estate. Id. ¶¶ 7, 8. At all times
relevant, the owners of the Real Estate engaged in metal
working and plating processes that involved chemicals
considered contaminants or pollutants upon contact with soil.
Id. ¶ 9.
October 2008, Koch Originals entered into an Agreed Order
with the Indiana Department of Environmental Management
(“IDEM”) for payment of costs to clean up
pollution on the Real Estate. Id. ¶ 10.
Northern, CNA, and Hartford have paid, and continue to pay a
portion of the cleanup costs (Northern 70.5%, CNA 19.7%, and
Hartford 9.8%) based on the various policies in effect for
the Real Estate. Id. ¶ 11. Northern does not
possess the Travelers policy issued to George Koch Sons, but
asserts that for nine years, Travelers issued sixteen
policies for Commercial General Liability Insurance on the
Real Estate. Id. ¶ 12.
claims that “[t]he three (3) Koch entities may be
responsible for the cleanup costs at 1401 N. Park Street
pursuant to I.C. 13-25-4-5 and I.C. 13-25-4-8, but in fact,
their insurers, Northern, CNA, and Hartford are making the
actual payments and Travelers should be doing the
same.” Id. ¶ 18. Northern alleges
that it is entitled to subrogate against Travelers for
Travelers' pro rata share of the cleanup costs.
Id. ¶ 19. In support, Northern cites Ind. Code
§ 13-25-5-20, which states that “this chapter does
not affect an action or a claim, including a claim for
contribution, that a person who implements or completes an
approved response action has or may have against a third
party.” Id. ¶ 20.
FAILURE TO STATE A CLAIM
12(b)(6) permits the dismissal of an action for failure to
state a claim upon which relief can be granted in the
pleadings. Under Rule 12(b)(6), the Court must accept as true
all well-pleaded factual allegations and draw all reasonable
inferences in favor of the plaintiff. See Esekiel v.
Michel, 66 F.3d 894, 897 (7th Cir. 1995). A
pleading must contain a “short and plain statement of
the claim showing that the pleader is entitled to
relief.” Federal Rule of Civil Procedure 8(a)(2).
Detailed factual allegations are not required, but a
plaintiff's complaint may not simply state “an
unadorned, the defendant-unlawfully-harmed-me
accusation.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009). The “allegations must be enough to raise a
right to relief above the speculative level[.]”
Bell Atlantic Corp. v. Twombly, 550, U.S.
544, 555 (2007). “[A] complaint must contain sufficient
factual matter … to ‘state a claim to relief
that is plausible on its face.'” Iqbal,
556 U.S. at 678 (quoting Twombly, 550 U.S. at 570).
“A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged[, ]” not when the plaintiff only
raises a “sheer possibility that the defendant has
acted unlawfully.” Id. “[T]he height of
the pleading requirement is relative to the circumstances[,
]” Cooney v. Rossiter, 583 F.3d 967, 971
(7th Cir. 2009), and “[d]etermining the
plausibility of a claim is a context-specific task that
requires [the Court] to draw on [its] judicial experience and
common sense.” Brown v. JP Morgan Chase Bank,
334 Fed.Appx. 758, 759 (7th Cir. 2009).
argues five separate grounds for dismissal of Northern's
Amended Complaint. Dkt. 51. First, Travelers argues that
Travelers and Northern do not cover the same Insured, which
is a prerequisite for a contribution claim as between
insurers. Id. at 6-7. Second, Travelers claims that
Northern has alleged no basis for which it may pursue a
direct action against an insurance company under Indiana law.
Id. at 7-9. Third, Travelers asserts that Northern
fails to allege that Travelers shared a common burden or
common liability with Koch Originals, which is required to
pursue a claim for contribution. Id. at 9-10.
Fourth, Travelers claims that Northern fails to allege any
facts that demonstrate Travelers' Insured, George Koch
Sons, was responsible for the contamination at the Real
Estate. Id. at 10-12. Finally, Travelers maintains
that Northern has failed to allege any facts for which
recoverable damages would be permissible under Indiana law.
Id. at 12-13. The Court assesses each of these
arguments in turn.
first argues that Northern cannot sue Travelers because
Travelers did not insure Koch Originals, the party that
entered into the Agreed Order with IDEM. Travelers claims,
and Northern does not dispute, that it only represented
George Koch Sons, which is a completely different entity.
Travelers contends that, under Indiana law, for an insurer to
seek contribution from another insurer for coverage, both
insurers must cover the same parties. The Court agrees.
Indiana, to seek contribution from another insurer to recover
a pro rata share of environmental cleanup costs, the
policies must cover: “(1) the same parties, (2) in the
same interest, (3) in the same property, (4) against the same
casualty.” Ind. Ins. Co. v. Granite State Ins.
Co., 689 F.Supp. 1549, 1558 (S.D. Ind. 1988). See
also State Auto. Ins. v. DMY Realty Co., LLP, 977 N.E.2d
411, 431 (Ind. Ct. Ap. 2012). Northern's Amended
Complaint concedes that Travelers and Northern do not
represent the same parties. Dkt. 1 ¶¶ 5-8. It also
states that it was Northern's client, Koch Originals,
that entered into the Agreed Order that gave rise to the
obligation to pay for the environmental contamination and for
which Northern seeks contribution from Travelers.
Id. ¶¶ 10, 11. Absent a showing that
Travelers also represented the responsible party, Northern
cannot bring a claim for contribution against Travelers under