GENERAL CABLE CORPORATION v. INSURANCE COMPANY OF NORTH AMERICA Et Al Motion To Dismiss

Case 2:10-cv-01958-PD Document 15-1 Filed 07/22/10 Page 1 of 34
IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA
General Cable Corporation CIVIL ACTION NO.1 0 1958
Plaintiff,
v.
Insurance Company Of North America, et aI.
Defendants.
BRIEF IN SUPPORT OF MOTION BY DEFENDANT CENTURY INDEMNITY

COMPANY TO DISMISS COMPLAINT OR, ALTERNATIVELY, TO STAY
PROCEEDINGS
Lawrence A. Serlin, Esquire (PAID #42898)

SIEGAL & PARK
533 Fellowship Road, Suite 120
Mt. Laurel, NJ 08054
Tel: (856) 380-8914
Fax: (856) 380-8915
Attorneys for Defendant Century Indemnity

Company, as successor to CCI Insurance
Company, as successor to Insurance Company
of North America, individually and as
successor to Indemnity Insurance Company of
North America
T ABLE OF CONTENTS
PRELIMINARY STATEMENT ................................................................................................. 1

,
FACTS ............................................................................................................ ........................... ~
A. General Cable's Federal Court Complaint .............................................................. 3
B. Century's Parallel New York State Court Complaint............................................. 5
c. Geueral Cable's Historical Demands For Coverage Under Century's Policies .... 7
1. General Cable's 1993 New Jersey Federal Court Suit Regarding Underlying
Asbestos Claims ....................................................................................................... 7
2. General Cable's Tender of the Occidental Action Claim........................................ 8
3. TIle Filing of the Instant Suit ................................................................................... 9
D. Formation ofCentnry's Policies .............................................................................. 10
ARGUMENT ............................................................................................................................... 11
I. LEGAL STANDARDS ...................................................................................................... 11
A. Federal Courts Have Discretion Not To Exercise Jurisdiction Over Declaratory

Judgment Claims ...................................................................................................... 11
I. The "Heart of the Matter" Approach Should Be Used in Suits Like This One
Presenting Both Declaratory and Coercive Claims ............................................... 11
2. Since No Discretion-Limiting Federal Interest Factors Apply, the Court Must

Consider Several Other Factors Set Forth By Supreme Court and Third
Circuit Precedent. ................................................................................................... 14
II. DECLARATORY JUDGMENT CLAIMS ARE THE HEART OF THIS MATTER,

OVER WHICH THIS COURT HAS DISCRETION WHETHER TO REFRAIN
FROM ASSERTING ITS JURISDICTION .................................................................... 15
III. VIRTUALLY ALL RELEVANT CONSIDERATIONS WEIGH HEAVILY IN

FAVOR OF THIS COURT REFRAINING FROM EXERCISING ITS
JURISDICTION ................................................................................................................ 17
A. The Existence Of A Parallel State Court Action In Which Essentially The Same
Issues Will Be Adjudicated By The Same Parties Compels This Court To
Exercise A General Policy Of Restraint .................................................................. 17
B. Close And Unsettled State Law Questions Are Presented That Are More
Appropriately Decided By The New York State Court......................................... 19
1. New York Law Applies to the Pmiies' Coverage Issues ....................................... 19
a. PennlJ;fvania's Choice of Law Rules Would Result in Application of

New YorkLaw .................................................................................................. 19
b. New York's Choice ofLaw Rules Would Also Result in Application of

New York Law to the Coverage Issues Here .................................................... 25
2. Certain of the Key Issues Presented Have Not Yet Been Resolved by New
York's Highest Court ............................................................................................. 26
C. All Other Criteria Likewise Weigh Against Exercising Federal Jurisdiction ..... 28
CONCLUSION ........................................................................................................................... 29
APPENDIX .................................................................................................................................. 30
11
TABLE OF AUTHORITIES
Cases Page No.
Atlantic Mut. Ins. Co. v. Greater New York Mut. Ins. Co., 241 A.D.2d 427,
660N.Y.S.2d983 (lstDept. 1997 ............................................................................................. 26
Bianci v. Florists Mut. Ins. Co., 660 F. Supp. 2d 434 (E.D.N.Y. 2009) ....................................... 27
Certain Underwriters at Lloyd's, London v. Foster Wheeler, 36 A.D.3d 17

(I st Dept. 2006), aff'd 9 N.y'3d 928 (2007) ...................................................................... 26,27
Coltec Industries Inc. v. Continental Ins. Co., 2005 WL 1126951 (E.D. Pa. 2005) ..................... 13
Consolidated Edison Co. of New York v. Allstate Ins. Co., 98 N.Y.2d 208 (2002) ...................... 26
Continental Casualty Co. v. Rapid-American Corp., 80 N.Y.2d 640 (1993) ............................... 26
Crucible Materials Corp. v. Certain Underwriters at Lloyd's London & London Market
Companies, 681 F. Supp. 2d 216 (N.D.N.Y. 2010) ........................................... 20,21,22,23,26
Generali-US. Branch v. Caribe Realty Corp., 1994 WL 903279 (N.Y. Sup. 1994) ................... 26
Griffith v. United Air Lines inc., 416 Pa. 1,203 A.2d 796 (1964) ................................................ 20
Hammersmith v. TIG Ins. Co., 480 F.3d 220 (3d Cir. 2007) .................................................. 20,23
In Re Liquidation ofMidland Ins. Co., 269 A.D.2d 50, 709 N.Y.S.2d 24

(1st Dept 2000) .......................................................................................................................... 21
ITT industries, Inc. v. Pacific Employers Ins. Co., 427 F. Supp. 2d 552
(E.D. Pa. 2006) ...................................................................................... 11, l3, 16, 17, 18, 19,28
J.H France Refractories Co. v. Allstate Ins. Co., 534 Pa. 29, 626 A.2d 502 (1993) ................... 21
Leonard v. State Farm Mut. Automobile Ins. Co., 2009 WL 3088425 (W,D. Pa. 2009) .............. 13
Liberty Mut. Ins. Co. v. Treesdale, Inc., 419 F.3d 216 (3d Cir. 2005) .......................................... 28
NL Industries, Inc. v. Commercial Union Ins. Co., 926 F. Supp. 465 (D.N.J. 1994) ................... 26
NLlndustries, Inc. v. Commercial Union Ins. Co., 935 F. Supp. 513 (D.N.J. 1996) ................... 27
Perelman v. Perelman, 688 F. Supp. 2d 367 (E.D. Pa. 2010) ....................................................... 13
111
Cases Page No.
Pronational Ins. Co. v. Shah, 2007 WL 2713243 (E.D.Pa. 2007) ........................ 15, 19,27,28,29
Scottsdale Ins. Co. v. Broaddus, 2009 WL 349697 (E.D. Pa.) ......................................... 14, 17, 18
Serio v. Public Service Mut. Ins. Co., 304 A.D.2d 167, 759 N.Y.S.2d 110 (2d Dept 2003) ........ 26
State Auto Ins. Cos. v. Summy, 234 F .3d 131 (3d Cir.2000) ................................................... 28, 29
The Scully Co. v. OneBeacon Ins. Co., 2004 WL 1166594 (E.D. Pa. 2004) ................................ 13
Vale Chemical Co. v. Hartford Ace. and Indem. Co., 512 Pa. 290, 516 A.2d 684 (Pa. 1986) ..... 28
Zurich Ins. Co. v Shearson Lehman Hutton, 84 N.Y.2d 309 (1994) ............................................ 25
Rules and Statutes
Fed. R.Civ. P. 12(b)(I) .................................................................................................................... I
IV
PRELIMINARY STATEMENT
Defendant Century Indemnity Company, as successor to CCI Insurance Company, as
successor to Insurance Company of North America, as successor to Indemnity Insurance
Company of North America (hereafter "Century") (incOlTectly sued as "Insurance Company of
North America"), I by its attorneys, submits this brief in support of its motion under Rule
12(b)(1) of the Federal Rules of Civil Procedure2 and pursuant to this court's broad discretionary
authority to dismiss the Complaint filed by plaintiff General Cable Company ("General Cable"),
or, alternatively, to stay the proceedings.
This is an insurance coverage dispute in which the policyholder, General Cable, has filed
a Complaint asserting five claims. Three of the claims seek declaratory relief while the other
two are related and dependent claims for breach of contract. Because General Cable's demands
for declaratory relief are at the heart of this action, in that those claims must be resolved in
General Cable's favor in order to even reach its claims for breach of contmct, this Court has
discretion to decline jurisdiction under the pennissive but not mandatory jurisdiction provided by
the Federal Declaratory Judgment Act.
The circumstances here constitute a particularly compelling case for exercising discretion
and dismissing the Complaint, or alternatively staying the proceedings, because the
considerations most pertinent to the Court's assessment weigh heavily in favor of doing so.
Those circumstances include that: (a) no federal issues or other discretion-limiting factors are
presented by General Cable's Complaint; (b) there is a parallel state court proceeding filed by
1 Century asserts that it is the ultimate successor in intcrest with respect to coverage obligations) if any, under
insurance policies at issue in this case issued by Indemnity Insurance Company of North America ("IINA") and
Insurance Company of North America ("INA"). Century submits, therefore, that INA is incorrectly named as a
defendant in this matter. Century expects that plaintiff may dispute Century's status as the correct successor in
interest. That potential issue, however, has no bearing on the matters addressed by this motion,
2 Rule 12(b)(I) provides for the filing of a preliminary motion to dismiss an action due to "lack of jurisdiction over
the subject matter." Fed.R.Civ.P. I2(b)(I).
1
Century in New York, involving all of the parties in this case (and more) and essentially the
identical issues, where the parties can ohtain complete relief; (c) the issues can better be resolved
by the New Yark state court because they are purely matters of state law, and certain key issues
are unresolved or are close questions under New York law (which should apply to General
Cable's claims under a proper choice of law analysis); and (d) the dispute concems issues of
insurance coverage, as to which this Court should be particularly restrained in exercising its
jurisdiction and mindful ofthe need for avoiding duplicative litigation.
Additionally, no consideration that General Cable may point to 111 rebuttal favors
retention of jurisdiction by this Court. For example, although this federal court action was filed
two months plior to the New York state court Complaint, such first-filed status is ilTelevant to
whether, in the exercise of sound discretion, this Court should decline jurisdiction under the
Federal Declaratory Judgment Act, particularly where, as here, neither case has progressed
beyond the preliminary pleading stage. Also, General Cable's choice offorum is entitled to little
or no weight since it is not a resident of Pennsylvania, there is no federal issue presented, the
case involves only state law questions of insurance coverage, and there is no basis for applying
Pennsylvania law to General Cable's claims. Further, the facts here demonstrate that New York
is no less convenient a forum far General Cable to litigate in than would be Pennsylvania.
Moreover, all indications are that General Cable filed tltis action in rather preemptory
fashion in the vain hope of getting more favorable Pennsylvania insurance allocation law to
apply, and that it filed in federal court in Pennsylvania simply because filing in Pennsylvania
state court would have required the impractical joining of thousands of underlying asbestos
claimants. General Cable's attempt at tactical fencing is further reason to dismiss or stay its
Complaint in favor of the parallel New York state court action.
2
Finally, there is no reason that all of the issues presented here cannot be fully adjudicated
by these same parties in the parallel state court case. Consequently, the Complaint should be
dismissed (without prejudice), or at the very least these proceedings should be stayed, in which
case the parties will be able to proceed unabated and without duplication of effCnis in the New
Yark state action.
FACTS
A. General Cable's Federal Court Complaint
On or about April 30, 2010, General Cable filed a Complaint in this Court (the "Federal
Complaint") based on diversity jurisdiction against two insurers, Century (incorrectly named as
"Insurance Company of North America") and Travelers Casualty and Surety Company
("Travelers"). See copy of Federal Complaint, attached as Exhibit A to the accompanying
Declaration of Lawrence A. Serlin, Esq. ("Serlin Dec."). The unnumbered introductory
paragraph to the Federal Complaint notes that General Cable is a "Delaware corporation" with "a
principal place of business in Highland Heights, Kentucky." Id. at I. General Cable is described
as, at all times pertinent, being engaged in the "manufacture, supply and distribution of cable and
wire products."
Of the five counts complising the Federal Complaint, two seek declaratory relief from
Century (INA) only, one seeks declaratory relief from both Century and Travelers, one asserts a
breach of contract claim against Century only and the remaining count is for an alleged breach of
contract by Travelers only.
Count I of the Federal Complaint, entitled "Declaratory Judgment for the Asbestos Suits
Against INA," asserts a claim for a declaratory judgment against Century (INA) regarding
coverage far underlying asbestos suits that have been and in the future may be brought against
3
General Cable alleging bodily injury and personal injury (the "Asbestos Suits"). Jd. at 5-6, 9-11.
By way of relief, Count I seeks a declaration that Century's predecessor is obligated to "defend
and indemnifY Plaintiff, and to pay all costs and expenses in full" with respect to the Asbestos
Suits under the tenns of two specified policies -- alleged primary policy RPL 595 (12/31159-
12131/60) and excess policy XBC 1049 (711/60-7/1163). ld. at 11. General Cable also seeks
declarations providing that it may select the policy or policies for payment of defense andlor
indemnity costs arising from the Asbestos Suits; that a "continuous injnry" trigger applies to the
Asbestos Suits; that there is an unlimited duty to pay defense costs that is invoked whenever
there is "any evidence of coverage," even if the policy instruments are "incomplete, lost or
missing;" and that the Asbestos Suits all arise out of an "occulTence," as defined by the policies.
Id.
Count II of the Federal Complaint, entitled "Declaratory Judgment for the Occidental
Action Against INA," asserts a claim for a declaratory judgment against Century (INA)
regarding coverage for an underlying contribution claim against General Cable pending in New
Jersey state court (the "Occidental Action"). The Occidental Action is described as involving
enviromnental property damage in cOlmection with the investigation and remediation of the
Diamond Alkali Superfund Site in New Jersey. !d. at 6, 11-13. The contribution claim against
General Cable allegedly arises from its fonner operation of a wire and cable facility in that
locale. Jd. at 6. By way of relief, General Cable seeks essentially the same declarations as for
Count 1, except with respect to coverage for the Occidental Action. Id. at 12-13. 3
Count IV of the Federal Complaint, entitled "Declaratory Judgment for the KIK Action
Against Travelers and INA Under the Carol Cable Policies," asserts a claim for a declaratory
3Count II adds a request, however, for a declaration that costs ineun-ed for remedial investigation/feasibility studies,
as well as other investigation costs, be deemed covered defense costs rather than indemnity costs.
4
judgment against Century (INA) and Travelers regarding coverage for an underlying
contribution claim against General Cable, as alleged successor to Carol Cable, under policies
allegedly issued by Century (INA) and Travelers to Carol Cable. Id. at 6-7, 14-15. The
underlying contribution claim (the "KIK Action") is asserted to be pending in federal court in
Rhode Island. The KIK Action is alleged to seek declaratory relief and money damages from
Carol Cable due to contamination at a Rhode Island landfill, which is part of the
Peterson/Puritan, Inc. Superfund Site in Rhode Island. Id. at 6-7. General Cable seeks identical
forms of declaratory relief in Count IV as in Count II, only with respect to the KIK Action. fd. at
15.
Counts III and V of the Federal Complaint assert dependent claims for breach of contract.
Count III asserts a claim against Century (INA) for breach of contract with respect to the
Occidental Action in allegedly failing and refusing to fully investigate or defend General Cable.
Id. at 13. In identical fashion, Count V of the Federal Complaint asserts a claim against only
Travelers for breach of contract as to the KIK Action. Id. at 16. Both counts seek money
damages in an unspecified amount "to be proven at trial." Id. at 14, 16.
B. Century's Parallel New York State Court Complaint
On June 30, 2010, Centnry filed a declaratory judgment action in New York state court
naming as defendants both General Cable and Travelers, along with numerous other insurers (the
"New York Complain!"). See copy of New York Complaint and Sunnnons, attached as Exhibit
B to Serlin Dec. The New York Complaint seeks declaratory relief with respect to the same
three underlying claims addressed by General Cable's Federal Complaint - the Asbestos Suits,
the Occidental Action and the KIK Action, which are referenced collectively in the New York
Complaint as the "Underlying Claims." Id. at 3-4.
5
The First Cause of Action III Century's New York Complaint asserts that among the
issues requiring resolution are:
(a) whether General Cable can prove the existence and material terms and
conditions of a missing or lost 1959-60 primary policy allegedly issued by IlNA
to the old General Cable Corporation; (b) whether General Cable, a Delaware
Corporation with its principal place of business in Kentucky, can prove that it is
the legal successor or assign to rights under IINA's policies issued or allegedly
issued to the old General Cable Corporation, a New Jersey corporation that, on
information and belief, had its principal place of business at the time in New
York, New York; (c) what trigger of coverage and allocation methodology among
the parties applies to defense and indemnity costs for the Underlying Claims; and
(d) whether as to excess policies issued or allegedly issned by Century to General
Cable and/or General Cable's alleged predecessor-in-interest, Carol Cable,
underlying coverage has been properly exhausted and all other prerequisites to
coverage can be established, including for purposes of defense costs that injury
within coverage is alleged in Underlying Claims to have taken place during
Century's policy period, and for purposes of indemnity costs that injury within
coverage and not subject to a policy exclusion in fact took place during Century's
policy period. ld. at 10-11.
Accordingly, the First Cause of Action seeks declaratory relief in Century's favor on these and
related insurance coverage issues. 4
4 The specific relief sought in the First Cause of Action of the New York Complaint is ajudgment:
(a) Declaring that Century is not obligated to defend. indemnify or otherwise provide
coverage to General Cable for the Asbestos Suits or the Occidental Action under alleged primary liability
policy RPL 595 for reasons including General Cable's inability to prove the material tenns and conditions
of that policy;
(b) Declaring that Century is not obligated to defend, indemnify or otherwise provide
coverage to General Cable under any policies that may have been issued to "General Cable Corporation"
prior to its merger into a subsidiary of The PeIlll Central Corporation in or around March 1982 for reasons
including General Cable's inability to prove that it is the named insured, that it is the legal successor of the
named insured, or that it is the assignee of the rights of the named insured under any such policy;
(c) Declaring that Century is not obligated to defend, indemnify or otherwise provide
coverage to General Cable under any policy as to tilose claims that fail to allege for defense cost purposes,
or for which General Cable cannot prove for indemnity cost purposes, that injury took place during the
period covered by policies issued by Century's predecessors-in-interest;
(d) Declaring that Century is not obligated to defend, indemnify or otherwise provide
coverage to General Cable under any excess policies for reasons including General Cable's inability to
prove that underlying coverage has been properly exhausted;
(e) Declaring that Century is not obligated to defend, indemnify or otherwise provide
coverage to General Cable due to such additional tenus, conditions and exclusions of coverage as the
proofs may demonstrate preclude coverage;
(f) Declaring that the "injury in fact" trigger of coverage applies to the Underlying Claims
for purposes of detennining whether there is any coverage owed under the Century policies at issue;
6
The Second Cause of Action in Century's New York Complaint seeks a declaratory
judgment, in the alternative, for contribution against General Cable and numerous other insurers,
but only if Century is detennined to have a duty to defend andlor indemnify General Cable under
any policy at issue, and if an allocation methodology were to be adopted by the New York state
court that would require Century to initially pay more than its equitable fair share of costs in
connection with the Underlying Claims. Id. at 12-14.
C. General Cable's Historical Demands For Coverage Under Century's

Policies
l. General Cable's 1993 New Jersey Federal Court Suit Regarding

Underlying Asbestos Claims
The background facts relating to General Cable's filing of the Federal Complaint in this
Court go back to the early 1990s. In May 1993, General Cable filed a declaratory judgment
action against Century (IINA) and several other insurers in federal district court in New Jersey
seeking coverage for defense and indemnity costs associated with underlying asbestos bodily
injury and personal injury claims asserted against General Cable (the "New Jersey Complaint").
See copy of New Jersey Complaint, attached as Exhibit C to Serlin Dec. Then, as now, General
Cable alleged that coverage should be provided by Century's predecessor under alleged TINA
primary policy RPL 595 (12/31/59-60) and IINA excess policy XBC 1049 (7/1160-63). Id. at 9
& Appendices A & B. Ultimately, however, the claims against Century in the New Jersey
Complaint were voluntarily dismissed, without prejudice. See copy of 1112/94 Order of
Dismissal, attached as Exhibit D to Serlin Dec.
(g) Declaring that defense and/or indemnity costs for the Underlying Claims are to be
allocated pro rata by years for all purposes, including for detennining exhaustion of underlying coverage
and for determining Century's liability, if any, to General Cable; and
(g) Awarding Century such other and further relief as the Court deems necessary and proper.
Id. at 10-14.
7
2. General Cable's Tender of the Occidental Action Claim.
After a substantial hiatus, in August 2007, General Cable again demanded coverage
nnder the same two Century (IINA) policies, but this time with respect to a notice of potential
liability from the United States Environmental Protection Agency (which eventually led to the
filing of a contribution claim against General Cable in the Occidental Action). See 8116/07 letter
from Rademacher to Zajac, attached as Exhibit E to Serlin Dec. General Cable merely requested
at that point that Century review its policies to detennine coverage eligibility. Id.
In October 2007, Century responded that it did not have a copy of alleged policy RPL
595 and, therefore, was not in a position to either accept or deny coverage under it. See 10/9/07
letter from Zajac to Rademacher, attached as Exhibit F to Serlin Dec. Century further advised
that as for policy XBC 1049, if General Cable wished to pursue coverage under that policy, it
must provide proof that all applicable primary and/or underlying limits have been completely
and properly exhausted. Id. Century also noted that in allocating the costs associated with the
claim, and assuming those costs are "damages" under the policy, it did not appear that the
amount was sufficient to implicate Century's excess coverage. Id.
In December 2009, after receiving a letter from General Cable advising that it had been
named as a third-party defendant in the Occidental Action, Century responded that it had not
been able to locate a copy of alleged Century policy RPL 595, but would perfonn another search
for that policy. See 12/24/09 letter from Zajac to Rademacher, attached as Exhibit G to Serlin
Dec. Century also reiterated its position as to the lack of documentation demonstrating that its
excess policy would be incepted by the Occidental Action claim. Id.
In February 2010, General Cable's New York-based counsel responded by letter
demanding that Century (IINA) acknowledge its insuring obligations under the policies with
8
respect to the "Newark Bay Study Area" (i.e., the Occidental Action). See 211811 0 letter from
Campisi to Zajac, attached as Exhibit H to Serlin Dec. The letter additionally objected to the
purported h'ansfer of insuring obligations from IINA to Century and asserted that secondary
evidence of primary policy RPL 595, in the fonn of a schedule of underlying insurance contained
in umbrella policy XBC 1049, was sufficient evidence to establish the alleged missing policy
under a "preponderance of the evidence standard." ld. General Cable's counsel requested that
another search for the missing policy be conducted, and that a copy of the policy be provided.
ld.
Less than one month later, Century's claim handler, Ms. Zajac, sent a letter by way of
response advising that a search for the alleged missing policy was continuing but that a copy had
yet to be located. See 3115/10 letter from Zajac to Campisi, attached as Exhibit I to Serlin Dec.
Ms. Zajac requested that General Cable provide "any infonnation or documentation that would
help to identify the tenus and conditions of alleged policy RPL 595." ld. Ms. Zajac also raised
a question as to whether the "General Cable Company" asserting a claim under the Century
policies was the same company as the one that had been issued the policies in question, in that
the current company had a different state of incorporation and different principal place of
business than the one to which Century's predecessor's excess policy had been issued. ld. Ms.
Zajac requested documentation "adequate to establish that the General Cable named in the
[Occidental Action] would qualify as the insured" under the alleged policy. ld.
3. The Filing of the Instant Suit
Instead of providing the information and documentation requested in Ms. Zajac's March
15, 2010 letter, General Cable, without waming, filed the instant suit about 45 days later. As
already noted, moreover, the Federal Complaint is not limited to the Occidental Action, which
9
had been the only claim discussed in correspondence between the parties stretching back almost
three years. Rather, the Federal Complaint adds claims for declaratory relief seeking coverage of
the Asbestos Suits and, for the first time, also asserts coverage claims with respect to the KIK
Action under certain excess policies allegedly issued to Carol Cable by Century's predecessor,
INA.
D. Formation of Century's Policies
Of the two policies alleged by General Cable to have been issued by Century's
predecessor to it, and under which coverage claims are asserted, to date only a copy of excess
policy XBC 1049 (7/1/60-63) has been located by Century. See Serlin Dec. at,; II and copy of
policy XBC 1049, attached as Exhibit J thereto. As that policy indicates, it was issued to
General Cable Corporation at "730 Third Avenue, New York, New York." See accompanying
Declaration of William F. Manning ("Manning Dec.") at,; 6 and Exhibit B thereto.
The !INA excess policy references its origin in the upper right hand comer of the first
page as being INA's "New York" office (IINA being one of the insurers within the INA family
of companies at the time), which was designated by the code number "505." ld. at ~~ 4 & 6, and
Exhibit B thereto. It also references the broker, Marsh & McLennan, Inc. ld. A request to bind
coverage issued by Marsh & McLennan indicates its address at that time as 70 Pine Street, New
York, New York. See id. at ~ 7 and Exhibit C thereto.
Additional underwriting documents further confirm that excess policy XBC 1049 was
negotiated, produced, submitted, bound, written, sent, and delivered, and the premiums were
booked and collected, all in New York. See id. at ~~. 8-12 and Exhibits D-G thereto. Moreover,
if primary IINA policy RPL 595 was issued, as alleged, it would be expected that all of the same
contacts took place in New York with respect to it as well. ld. at ~ 13.
10
ARGUMENT
I. LEGAL STANDARDS
A. Federal Courts Have Discretiou Not To Exercise Jurisdiction Over

Declaratory Judgment Claims.
This Court is undoubtedly well acquainted with many of the legal standards applicable to
this motion, having recently faced similar issues in Scottsdale Ins, Co, v, Broaddus, 2009 WL
349697 (E,D, Pa,) (Diamond, J,) (copy attached as Ex, A to Appendix), As the Court noted at
the outset in Broaddus, "as a procedural remedy, the federal rules respecting declaratory
judgment apply in diversity cases," Id. at *L Moreover, the Court's authority to exercise
jurisdiction in a declaratory judgment action is governed by the federal Declaratory Judgment
Act, under which district courts have discretion not to hear declaratory judgment actions, Id.
L The "Heart of the Matter" Approach Should Be Used in Suits Like

This One Presenting Both Declaratory and Coercive Claims,
A wrinkle presented by this case as compared to Broaddus is that it contains a mixture of
both declaratory and coercive claims, The tension between competing principles of Supreme
Court jurisdictional jurisprudence presented by this combination of declaratory and coercive
claims is well delineated in ITT Industries, Inc, v, Pacific Employers Ins, Co" 427 p, Supp, 2d
552,556 (E,D, Pa, 2006):
In the usual turn of events, a district couli has a "virtually unflagging obligation"
to exercise its jurisdiction, and may only decline to exercise or postpone this
jurisdiction "in the exceptional circumstances where the order to the parties to
repair to the state court would clearly serve an important countervailing interest."
Colorado River Water Conservation Dist, v, United States, 424 U,S, 800, 8l3, 96
S,C!. 1236,47 LEd.2d 483 (1976),
However, in declaratory judgment cases, the Supreme Court has explained that
"[d]istinct features of the Declaratory Judgment Act, we believe, justify a
standard vesting district courts with greater discretion in declaratory judgment
actions than that permitted under the 'exceptional circumstances' test of Colorado
River and Moses II. Cone," Wilton v, Seven Falls Company, 515 US, 277, 286,
11
115 S.Ct. 2137, 132 L.Ed.2d 214 (1995). See also Brillhart v. Excess Insurance
Company ofAmerica, 316 U.S. 491, 62 S.Ct. 1173,86 L.Ed. 1620 (1942).
Although the Supreme Court and the Third Circuit Court of Appeals have yet to opine on
how to square the competing Colorado River and Wilton/Brillhart principles in this mixed claim
context, several courts in this Circuit have addressed the question. The overwhelming majority
of those courts have adopted what is termed a "heart of the matter" approach. Under that
approach, the court must assess whether the coercive claims depend upon the outcome of the
declaratory claims, or vice versa, in determining the oveniding essence of the dispute.
For example, in ITT, supra, Judge Robreno employed the "heart of the matter" standard
in an insurance coverage dispute much like this one. Before doing so, however, he noted that
two Circuit Courts had adopted other approaches, neither of which he deemed appropriate to
follow. The Fifth Circuit had fashioned a stlict standard requiling application of the Colorado
River approach to abstention when there is any coercive claim for relief. Id. The Ninth Circuit,
on the other hand, had directed courts to "determine whether there are claims in the case that
exist independent of any request for purely declaratory relief, that is, claims that would continue
to exist if the request for a declaration simply dropped from the case." Id. (quoting United
National Ins. Co. v. R&D Latex COIp., 242 F.3d 1102, 1112 (9th Cir.2001» If so, the Ninth
Circuit held, the Colorado River standard would apply. Id.
In rejecting both the Fifth and Ninth Circuit methodologies in favor of the "heart of the
matter" approach, Judge Robreno rightly reasoned that "the considerations underlying the
decisions in Colorado River and Wilton regarding a district court's obligation to exercise
jurisdiction over an action are better served by the fact-driven 'heart of the matter' approach than
the application of a bright-line rule." Id. at 557. Judge Robreno further observed:
12
The Wilton Court explained that "the breadth of leeway we have always
understood [the Declaratory Judgment Act1to suggest, distinguish the declaratory
judgment context from other areas of the law in which concepts of discretion
surface." 515 U.S. at 286, 115 S.C!. 2137. To apply the Colorado River standard
to actions containing both declaratory judgment and coercive claims without an
analysis of the facts at hand would be to ignore the Supreme Court's specific
recognition that declaratory judgment actions necessitate a different treatment
than other types of cases. Id.
Judge Robreno noted that Judge Dalzell before him had likewise looked to the "heart of
the action" in Coltec Industries Inc. v. Continental Ins. Co., 2005 WL 1126951 (E.D. Pa. 2005)
(copy attached as Ex. B to Appendix). See ITT, supra at 557. Coltec was another situation
where an insured had sued its insurer regarding the insurer's obligation to indemnify for
underlying asbestos claims. As in this case, the insurer moved to dismiss or stay the proceedings
in favor of a parallel state court action. Judge Dalzell found that the outcomes of plaintiffs'
claims for breach of contract and bad faith were dependent on how the insurance policies were
interpreted for purposes of the declaratory judgment claim. Therefore, the action was, at heart, a
declaratory judgment action, and the discretionary standard of Wilton applied. Coltec. supra. at
*3. Other courts in this Circuit have consistently applied the same "heart of the matter" approach
in the context of insurance coverage disputes. 5
Century submits that, for the reasons expressed by Judge Robreno in the ITT case and
echoed by other courts in this Circuit, the "heart of the matter" approach best accommodates the
competing principles expressed in Colorado River and Wilton. Therefore, that test should be
5See Leonard v. State Farm Mut. Automobile Ins. Co .. 2009 WL 3088425 at *6 (W.D. Pa. 2009) (Hay, .I.) (noting
that since outcome of plaintiffs' coercive claims were largely, ifnot total1y, dependent on the scope of the insurance
policies, the action is "at heart, a declaratory judgment action, and the discretionary standard of Wilton applies")
(copy attached as Ex. C to Appendix); and The Scully Co. v. OneBeacon Ins. Co., 2004 WL 1166594 (E.D. Pa.
2004) (Padava, J.) (insurance coverage dispute termed declaratory when breach of contract and bad faith claims
were dependant on outcome of declaratory judgment claim) (copy attached as Ex. D to Appendix); but cf Perelman
v. Perelman. 688 F. Supp. 2d 367 (E.D. Pa. 20]0) (McLaughlin,.I.) (declining to adopt the "heart of the matter" test
in a dispute not involving issues of insurance coverage, and instead choosing to follow the Ninth Circuit's approach,
with which the Seventh Circuit had also recently joined).
13
employed by this Court in considering whether it has discretion to refrain from exefClsmg
jurisdiction over this insurance coverage dispute presenting both declaratory and coercive claims.
2. Since No Discretion-Limiting Federal Interest Factors Apply. the

Court Must Consider Several Other Factors Set Forth By Supreme
Court and Third Circuit Precedent.
As noted in Broaddus, supra, the Third Circuit has cautioned that a district court's
discretion to decline jurisdiction over a declaratory judgment matter is not open-ended '''when
the issues include[ ] federal statutory interpretation, the government's choice of a federal forum,
an issue of sovereign immunity, or inadequacy of the state proceeding.'" Broaddus, supra at *2
(quoting State Auto Ins. Cos. v. Summy, 234 F.3d 131, 134 (3d Cir. 2000)) (citing United States
v. Dep't of Envtl. Res., 923 F.2d 1071, 1075 (3d Cir. 1995». No such discretion-limiting
circumstance is presented by this case, however. as is apparent from the Federal Complaint.
Rather, General Cable's insurance coverage claims involve solely issues of state law, which can
be fully, and indeed more appropriately, addressed in the parallel state court proceeding filed by
Century in New York.
The Supreme Court has ruled that when discretion-limiting factors are absent. the district
court should detennine the following:
[W]hether the question in controversy between the parties to the federal suit ...
can better be settled in the proceedings pending in state court.... Naturally, this
requires some inquiry into the scope of the state court proceeding, the nature of
the defenses available there, and whether the claims of all parties of interest can
satisfactorily be adjudicated in that proceeding." Id. (quoting Summy, 234 F.3d at
133) (citing Brillhart v. lcxcess Ins. Co. of America, 316 U.S. 491, 495, 62 S.Ct.
1173,86 LEd. 1620 (1942» (quotations and citations omitted).
The Third Circuit has provided its own additional cliteria to be considered:
(I) [T]he likelihood that a federal court declaration will resolve the uncertainty of
obligation which gave rise to the controversy; (2) the convenience of the parties;
(3) the public interest in settlement of the uncertainty of the obligation; and (4) the
14
availability and relative convenience of other remedies.ld. (citing United States v.

Dep't. ofEnvtl. Res., 923 F.2d 1071, 1075 (3d Cir.199l)).
In cases like this one involving insurance coverage, moreover, the Third Circuit offers
three further considerations:
(I) A general policy of restraint when the same issues are pending in state court;
(2) An inherent conflict of interest between an insurer's duty to defend in state
court and its attempt to characterize that suit in federal court as falling within the
scope of a policy exclusion; (3) Avoidance of duplicative litigation. ld. (citing
Summy, 234 F.3d at 134) (citing Dep't. ofEnvtl. Res., 923 F.2d at 1075».
Finally, as this Court observed in Pronationallns. Co. v. Shah, 2007 WL 2713243 at *2
(E.D.Pa. 2007) (Diamond, J.) (copy attached as Ex. E to Appendix):
[TJhe Summy Court counseled against "exercising jurisdiction over declaratory

judgment actions where the state law involved is close or unsettled." 234 F.3d at
135. Rather, "district courts should give serious consideration to the fact that they
do not establish state law, but are limited to predicting it. This is especially
impOliant in insurance coverage cases .... "
n. DECLARATORY JUDGMENT CLAIMS ARE THE HEART OF THIS

MATTER, OVER WHICH THIS COURT HAS DISCRETION WHETHER
TO REFRAIN FROM ASSERTING ITS JURISDICTION.
Assuming that the "heart of the matter" approach is applied in this case, as Century
submits it should be, it is readily apparent that General Cable's declaratory judgment claims
constitute the overriding essence of this suit. General Cable's only coercive claim against
Century is Count III, which seeks relief for an alleged breach of contract regarding the
Occidental Action. Before that claim can or need be reached, however, the Court would have to
address the declaratory claim in Count II asserting that General Cable is entitled to declarations
with respect to the Occidental Action, including that Century "is obligated pursuant to the terms
of the General Cable Policies to defend and indemnify Plaintiff' and that "Plaintiff may select
the policy or policies, and the policy year or years, for payment of defense and/or indemnity
15
costs" arising from that claim. The breach of contract claim depends upon the outcome of the
declaratory claim, but not the other way around.
Similarly, in ITT, the insured asserted coercive claims for both breach of contract and bad
faith, in addition to those for declaratory judgment. The Court found that, "cutting through the
rhetorical fog of the pleadings, ... the essence of the dispute concerns the scope of the insurance
coverage for the [underlying claims]." ITT, 427 F. Supp. 2d at 557. The ITT Court reasoned:
ITT asks for the Court's declaration that [insurer1 PErC "is obligated to payor
reimburse the costs and expenses ... of the Silica Suits." Am. Comp!. ~ 26.
Accordingly, the Court must rule on this question before reaching the issue of
whether PEIC has "failed or refused to meet these contractual demands and failed
or refused to acknowledge, accept or undertake, its contractual obligation." Am.
Comp!. ~ 22. To do so, the Court will have to interpret the relevant insurance
policies, and make a judgment on their scope and reach before ruling on the
breach of contract or bad faith claims. In other words, the outcome of the bad
faith and breach of contract claims depends on the resolution of the declaratory
judgment claims. At its heart, this dispute is a declaratory judgment action. ld.
Likewise here, the Court would have to assess, among other things, whether there is
adequate proof of the existence and the material tenns and conditions of alleged Century primary
policy No. RPL 595, and if so, whether the claim in question is within the scope of coverage of
that policy as well as Century's excess policy No. XBC 1049 for purposes of the declaratory
claims, which require a ruling with or without an assertion of a breach of contract, before turning
to the breach of contract claim - if it is not mooted by the prior analysis. Since the breach of
contract claim is dependent upon the outcome of the d.eclaratory judgment claim, but not the
other way around, it is apparent that the declaratory claims against Century are the heart of this
6 This conclusion is further bolstered by the fact that General Cable'S other two claims against Century are purely
for declaratory relief, with respect to the Asbestos Suits (Count I) and the KIK Action (Count IV). Thus, three out of
the four counts asserted against Century in the Federal Complaint seek only declaratory relief.
16
General Cable has also asserted two claims against defendant Travelers, one seeking
declaratory relief (Count IV) and the other for breach of contract (Count V). Both claims are
only with respect to the underlying KiK Action. As with the coverage claims asserted against
Century, the outcome of the declaratory judgment claim against Travelers will detennine
whether the Court needs to consider the breach of contract claim. Since the breach of contract
claim against Travelers, like that against Century, is dependent on the outcome of General
Cable's declaratory judgment claim, but not the other way around, the claims against Travelers
are consistent with the conclusion that the declaratory relief claims are the heart of this matter.
Consequently, as in Broaddus, supra, this Court has discretion whether to stay or dismiss this
action pursuant to an analysis of the various considerations in applying Wilton set forth by the
Supreme Court and the Third Circuit.
m. VIRTUALLY ALL RELEVANT CONSIDERATIONS WEIGH HEAVILY

IN FAVOR OF THIS COURT REFRAINING FROM EXERCISING ITS
JURISDICTION.
A. The Existence Of A Parallel State Court Action In Which Essentially

The Same Issues Will Be Adjudicated By The Same Parties Compels
This Court To Exercise A Genel'al Policy Of Restraint.
As this Court has observed, the absence of a parallel state court proceeding does not
preclude exercising discretion to refi'ain from asserting jUlisdiction under the Third Circuit's
guidance in Summy. See Broaddus, supra at *3. Yet, the existence of a parallel state court
action undeniably is a significant factor favoring restraint. Thus, in ITT, supra, the court began
its detailed analysis by detennining whether proceedings pending in New York state court were,
in fact, "parallel." ITT, supra at 557-60.
17
Under the same type of analysis conducted in ITT, the pending New York state court
declaratory judgment action at issue here clearly constitutes a parallel judicial proceeding. In
ITT, the court observed:
For judicial proceedings to be parallel, there must be identities of parties, claims,

and time. As we noted in Yang v. Tsui. "[PJarallel cases involve the same parties
and 'substantially identical' claims, raising 'nearly identical allegations and
issues.' " IFC Interconsult. AG v. Safeguard International Partners, LLC, 438
F.3d 298, 306 (3d Cir.2006) (citing Yang v. Tsui, 416 F.3d 199, 205 (3d
Cir.2005». Id. at 558.
The Court then noted that the parties in the federal action were also before the New York state
court, as is the case here. Moreover, "[tJhe presence of additional parties in the New York action
does not bear on whether abstention here is proper. The Third Circuit has stated that it has 'never
required complete identity of the parties for abstention.'" Id. (quoting IFC, 438 F.3d at 306).
Thus, there is an identity of parties in this case, notwithstanding there being additional insurers
named as defendants, on a contingent contribution claim basis, in the New York state court
· 7
proceedmg.
Likewise, the issues presented by the New York proceeding are essentially identical to
those in the instant suit, which is all that is necessary to find that the cases are parallel. See id.
(noting that "[tJhe crucial question here is not whether the claims are exactly the same in the
federal and the state action, but whether the issues the courts will need to analyze are
substantially identical" (emphasis added». As a review of the comparative counts in both cases
shows, the same insurance coverage issues presented by General Cable's Complaint here will
need to be analyzed in the New York state suit. s
7 Moreover, if this matter were not dismissed or stayed, Century would seek to add the same additional insurers as
third-party defendants for purposes of a contingent contribution claim in this action as well.
S Compare this suit's Counts J, II and IV with the New York state court suit's Firs! Cause of Action, in which
declarations are sought in both cases as to issues of coverage, "trigger," lost or missing policies, and allocation
18
Moreover, although General Cable's breach of contract claims in this case are not
explicitly included in the New York state court suit, those claims are effectively covered by the
New York action's declaratory judgment claims. The New York state court action's declaratory
claims concern coverage issues that overlap with and would need to be decided before ever
reaching breach of contract claims, in much the same way that the ITT Court found was the case
under comparable circumstances. See id. at 559. There is also no reason why General Cable
could not assert its breach of contract claims in the New York suit as a counterclaim and cross-
claim pursuant to Section 3019 of the New York Civil Practice Law and Rules, just as the ITT
Court noted could be done with respect to the coercive claims in that case. Id. Accordingly, the
likelihood of there being determinations of overlapping insurance coverage issues between this
case and the state court proceeding compels this Court to exercise "'[a] general policy of
restraint.'" Shah. supra at *5 (quoting Summy, 234 F.3d at 134).
B. Close And Unsettled State Law Questions Are Presented That Are
More Appropriately Decided By The New York State Court.
1. New York Law Applies to the Parties' Coverage Issues.
Whether analyzed from this Court's perspective, applying Pennsylvania conflicts law, or
that of the New York court in the parallel state court action, the relevant choice oflaw principles
dictate application of New York law to the coverage issues presented, given that the Century
policies in question contain no choice oflaw provision otherwise.
a. Pennsylvania's Choice of Law Rules Would Result in Application

ofNew York Law.
The Third Circuit has recently provided extensive guidance on the choice of law process
111 an insurance case brought in federal court in Peillisylvania on the basis of diversity
methodology with respect to the same policies and for the same underlying claims -- the Asbestos Suits, the
Occidental Action and the KlK Action. See Facts. §§ A & B, pgs. 4-7. supra.
19
jurisdiction, like this one. See Hammersmith v. TIG Ins. Co., 480 F.3d 220 (3d Cir. 2007). In
Hammersmith, the Court noted initially that "[b ]ecause this is a diversity case, we apply the
choice-of law-rules of the forum state, Pennsylvania." (citing Klaxon v. Stentor Electric Mig.
Co., 313 U.S. 487, 61 S.C!. 1020, 85 L.Ed. 1477 (1941». Next, after acknowledging past
confusion and disagreements on the matter, including among prior panels of the Third Circuit,
the Court expressly reaffinned its prediction that Pennsylvania's Supreme Court will no longer
follow the traditional "lex loci contractus" (place of contracting) rule in cases involving contract
disputes, but rather will apply the approach adopted by the Pennsylvania Supreme Court in a tort
context in Griffith v. United Air Lines Inc., 416 Pa. 1,203 A.2d 796 (1964). Id. at 227-29. The
Griffith approach provides "a more flexible rule which pennits analysis of the policies and
interests underlying the particular issue before the COUlt." Id. at 227.
In applying a Griffith analysis in the contract context, the Third Circuit observed that the
first step is to determine if there is an "actual or real conflict between the potentially applicable
laws." Id. at 230 (emphasis in original). In a case in point, a federal district court in New York,
applying Pennsylvania conflict rules (because the case had originally been filed in a
Pennsylvania federal court before being transferred), detennined that an actual conflict exists
between the laws of Pennsylvania and New York with respect to allocation of an insured's loss.
See Crucible Materials Corp. v. Certain Underwriters at Lloyd's London & London Afarket
Companies, 681 F. Supp. 2d 216 (N.D.N.Y. 2010). As the Crucible Court noted, whereas New
York allocates loss evenly across the number of years for which insurance was obtained,
Pennsylvania rejects that approach and would be expected to opt for joint and several liability
among carriers for the full amount of the loss. Id. at 226. Allocation is likewise among the
20
Issues presented with respect to General Cable's claims against Century for defense and
indemnity costs in this case 9
Because there is an "actual" conflict, the Court secondly must detelmine whether that
conflict is appropriately classified as "true," "false" or an "unprovided-for" situation. ld. at 225
(citing Hammersmith, 480 F.3d at 230). 'There is a true conflict between two states' laws 'if
both jurisdictions' interests would be impaired by the application of the other's laws. '" ld.
(quoting Hammersmith, 480 F.3d at 230 (emphasis in original». Based on an analysis of the
competing interests reflected by the different approaches to allocation taken by Pennsylvania and
New York, the Crucible Court concluded that a !me conflict exists. See id. at 227 (noting that
"New York applies the time on the risk method of allocation for the very same reason
Pennsylvania declines to do so .... "). That same analysis mandates the finding of a "true"
conflict in this case with regard to the allocation laws of the two states. 10
The third step, employed if there is a true conflict, asks which state has "'the greater
interest in the application of its law.'" ld. (quoting Hammersmith, 480 F.3d at 231). "When
making this detennination, a state's contacts must be weighed 'on a qualitative scale according to
their relation to the policies and interests underlying the [particular] issue.'" ld. (quoting
Hammersmith, 480 F.3d at 231 (alteration in original». As noted in Crucible,
9 Another issue presented by this case on which Pennsylvania and New York have an "actual" conflict is the
appropriate trigger of coverage, paliicularly with respect to underlying asbestos bodily iI1jury claims. Compare J.H.
France Reli'aetories Co. v. Allstate Ins. Co., 534 Pa. 29, 626 A.2d 502 (1993) (adopting multiple-trigger approach,
commencing with exposure, continuing with progression and ending with manifestation of injury) with In Re
Liquidation of Midland Ins. Co., 269 A.D.2d 50,61,62,709 N.Y.S.2d 24, 32, 33 (1" Dept. 2000) (concluding that
"New Yark does not follow the multiple-u'igger theory" and holding that "coverage is triggered by exposure,
whether first or continued, but not by exposure in residence").
JO There also appears to be a "true" conflict between Pennsylvania and New York concerning trigger of coverage
since application of Pennsylvania's multiple-trigger approach benefits the insured by maximizing the amount of
available coverage at the expense of the insurer's interests, whereas New York's approach limiting the policies
triggered to those in effect when actual exposure takes place could result in a significantly shorter trigger period, and
consequently far less coverage being made available.
21
Where, as is the case here, the insured risk is located throughout a number of
different states, the following contacts must be evaluated: "(1) the place of
contracting; (2) the place of negotiation of the contract; (3) the place of
performance; (4) the location of the subj ect matter of the contract; and (5) the
domicile, residence, nationality, place of incorporation and place of business of
the parties." Id. at 225-26 (quoting Hammersmith, 480 F.3d at 233) (citing
RESTATEMENT (SECOND) OF CONFLICTS OF LAWS § 188 (1971)).
Applying the relevant qualitative contacts factors specified by Section 188 of the Second
Restatement of Conflicts to this case inexorably leads to the conclusion that New York has the
b'l'eater interest in the issues presented and, therefore, that its law should be applied. As to the
first factor, an insurance policy is considered to be made "in the state where it is delivered." Id.
at 227 (quoting Hammersmith, 480 F.3d at 233). Here, like in Crucible, the place of contracting
was New York in that the Century policies issued or allegedly issued to General Cable were
produced, sent from the insurer and delivered to the insured all in New York. II See Manning
Dec., 'I~[ 6-9. Thus, this factor weighs in favor of applying New York law.
-n1e seeond factor, the place where the contract was negotiated, also favors application of
New York law. The pertinent policy and underwriting documents located to date reveal that
General Cable's broker for purposes of the Century excess policy was Marsh & McLennan,
which was located in New York, and that underwriting was performed out of the New York
oftices of Century's predecessor, INA (notwithstanding that IINA's home office was in
Pennsylvania). Id. at ~~ 6 & 7. Moreover, General Cable's principal place of business at the
time also appears to have been in New York. Id. at ~ 11. Thus, it is reasonable to conclude that
II Three of General Cable'S five counts concem alleged Century primary policy RPL 595 and Century excess policy
XBC 1049, and two of the three underlying claims coneem only those Century policies. Thus, regardless of the
location of General Cable's alleged predecessor in interest, Carol Cable, when policies purportedly were issued to it
by defendant Travelers and Century's predecessor in interest, the determination of governing law in this case is
appropriately governed by the quality of the contacts with the Century (UNA) policies issued (or allegedly issued) to
General Cable in or around 1960.
22
the negotiations and discussions leading to the creation of the policies in question would have
taken place mostly, ifnot entirely, in New York.
Regarding the third factor, the place of perfonnance, Pelllisylvania law generally holds
that an insurance policy is perfonned where the premiums are paid. Crucible, supra at 228.
Here, given the circumstances of the policies being brokered and llilderwritten in New York, the
practice was for the New York insured, General Cable, to pay gross premillins to its broker's
New York office, which would then send payment (minus commission) to INA's New York
office. See Manning Dec., 'If 10. Thus, this factor would also seem to favor application of New
York law.
The fourth factor is the location of the subject matter of the contract. For insurance
policy purposes, this refers to the location of the insured risk. Hammersmith, supra at 234.
Where the insured risk is spread throughout numerous states, however, as appears to be the case
here, Pennsylvania law holds that there is no single location of the risk. Id. 12 Moreover, while at
least some of the lli1derlying claimants with respect to the Asbestos Suits are residents of New
York, there are some others who admittedly are residents of Pennsylvania. See Serlin Dec. at 'If
13 and Exhibit L. Further, neither of the two envirOlllilcntal sites at issue here are located in
New York ar in Pennsylvania. Rather, one site is in New Jersey, where the initial "General
Cable" was incorporated and operated a manufacturing plant. See Serlin Dec., Exhibit C at 4, 'If'l
3 & 4. The other site is in Rhode Island, and concems coverage claims under policies issued to
General Cable's alleged predecessor in interest, Carol Cable. Thus, this factor appears to favor
neither Pennsylvania nor New Yark particularly.
12 With respect to the multi-jurisdictional nature of General Cable's risks, see. e.g .. Manning Dec. at f 8 and Exhibit
D thereto; and Serlin Dec. at ~ 13 and Exhibit L thereto.
23
As to the fifth factor, the domicile, residence, place of incorporation and place of
business of the parties, it is notable that General Cable is not a Pennsylvania company nor does it
have its principal place of business in Pellisylvania. Rather, it is a Delaware company that
presently has its principal place of business in Kentucky. General Cable's website indicates that
it maintains a business facility in New York, as well as one in Pennsylvania. See Exhibit L to
Serlin Dec. Moreover, when General Cable previously sued insurers over the same type of
underlying asbestos liabilities, it chose to do so in New Jersey. Further, although Century is a
Pennsylvania corporation with its principal place of business in Pemlsylvania, it was the New
York office of Century's predecessor that was involved in placing the coverage at issue. Thus,
the fifth factor doesn't militate in favor of either jurisdiction.
Finally, each contact must be weighed on a qualitative scale to determine which state has
a greater govermnental interest in the application of its law. As noted, none of the relevant
factors favor application of Pennsylvania law. Thus, Pennsylvania would appear to have no real
governmental interest in this dispute. On the other hand, the place of contracting, place of
negotiating and place of performance all favor application of New York law and testify to New
York's much stronger connection to this dispute. New York clearly has an interest in seeing that
the expectations of parties whose contracts are fonned within its borders are met, even if neither
of those parties cUlTcntly resides there. Moreover, New York unquestionably has an interest in
the manner in which disputes over insurance coverage formed, brokered and performed in its
state are resolved. Consequently, under Pennsylvania conflict principles, New York law should
be applied.
24
b. New York's Choice of Law Rules Would Also Result in Application

ofNew York Law to the Coverage Issues Here.
New York generally employs what it terms the "center of gravity" or "grouping of
contacts" analytical approach to choice of law issues in contract cases. Zurich Ins. Co. v
Shearson Lehman Hutton, 84 N.Y.2d 309, 317 (1994) (citing Auten v. Auten, 308 N.Y. 155
(1954». This approach accords with Pennsylvania's in looking to the five factors specified by
Section 188 of the Second Restatement of Conflicts. See id. Thus, the outcome of a "center of
gravity" analysis under New York choice of law principles would naturally be the same as under
the Pennsylvania analysis previously discussed.
More recently, however, in Certain Underwriters at Lloyd's. London v. Foster Wheeler.
36 A.D.3d 17, 26-27 (1st Dept. 2006), aif'd 9 N.Y.3d 928 (2007), it was noted that "in cases
involving liability insurance covering multi state risks, we regard the state of tlle insured's
domicile [at the time the policy was issued] to be a proxy for the principal location of the insured
risk, which, under New York law and Restatement § 193, is the controlling factor in determining
the law applicable to a liability insurance policy, thereby obviating the need to consider all five
Restatement factors."I] Moreover, if the principal place of business is different than the state of
incorporation, it is the location of the corporation's principal place of business that constitutes its
"domicile" for this purpose, and is controlling. Id. at 24-25. Since General Cable apparently
13 The Foster Wheeler Court reasoned that:
The state of the insnred's domicile is a fact known to the parties at the time of contracting, and (in the
absence of a contractual choice-of-Iaw provision) application of the law of that state is 1110St likely to
conform to their expectations .... Moreover, the state of the insured!s domicile can be ascertained in any
subsequent litigation without a fact-intensive inquiry or unguided weighing of different contacts, and
making the insured!s domicile the primary factor in selecting applicable law minimizes the likelihood that
contemporaneous policies will be deemed governed by the laws of different states. Thus, in addition to
rendering the resolution of the choice-of-Iaw issues less difficult, adoption of a rule to apply the law of the
insured!s domicile makes it more likely that consistent and uniform results will be reached in different
cases.
Jd. at 23.
25
was domiciled in New York when the Century policies central to this dispute were issued, New
York choice oflaw principles mandate application of New York law to the coverage issues here.
2. Certain of the Key Issues Presented Have Not Yet Been

Resolved by New York's Highest Court.
Among the issues that will need to be addressed before General Cable could be entitled to
any relief is the method for allocating past and future defense costs. Allocation of indemnity
costs on a pro rata basis for the duration of the damage appears to be a well-settled principle
under New York law. See Consolidated Edison Co. of New York v. Allstate Ins. Co., 98 N.Y.2d
208 (2002).14 As to defense costs, however, although several New York courts have detennined
that a pro rata allocation should likewise apply,15 the Court of Appeals (New Yark's highest
court) has not yet fully addressed the issue.
In the one case in which the Court of Appeals has discussed allocation of defense costs, it
commented that pro rata allocation is a permissible approach, but failed to order that such
methodology be used at the outset of every case and deferred ruling on certain other aspects of
the issue that could arise here. In Continental Casualty Co. v. Rapid-American Corp., 80 N.Y.2d
640,655-56 (1993), the Court of Appeals stated that "[w]hen more than one policy is triggered
by a claim, pro rata sharing of defense costs may be ordered, but we perceive no error or
unfairness in declining to order such sharing, with the understanding that the insurer may later
14 See also Crucible, supra at 226 ("New York allocates an insured's losses by distributing the highest projection of
alleged damages evenly across the number of years for which insurance was obtained"); Serio v. Public Service Mu/.
Ins. Co., 304 A.D.2d 167, 759 N.Y.S.2d 110 (2d Dept 2003) (citing Consolidated Edison in adopting pro rata
apportionment in context of coverage dispute concerning lead paint bodily injury claim).
15 See, e.g., Foster Wheeler, supra at 33, n.1 (accepting parties' shared premise that Consolidated Edison adopted
time-on-the-risk as New York's allocation method, in context of action seeking coverage for defense and indemnity
costs of underlying asbestos claims); Atlantic Mut. Ins. Co. v. Greater New York Mut. Ins. Co., 241 A.D.2d 427,660
N.Y.S.2d 983 (1st Dept 1997) (applying pro rata allocation of defense costs between successive insurers in context
ofa contribution action by one insurer against another); and Generali-U.S. Branch v. Caribe Realty Corp., 1994 WL
903279 (N.Y. Sup. 1994) (copy attached as Ex. F to Appendix) (holding that defense costs would be apportioned
between an insured and its iIk-:urer when there is a clear basis for doing so); accord, NL Industries, Inc. v.
Commercial Union Ins. Co., 926 F. Supp. 446, 465 (D.N.J. 1994) (applying New York law and finding that "the
prefelTed method of sharing would be on a pro-rata basis-so that each party pays only for its fair share of the defense
costs").
26
obtain contribution from other applicable policies ... " (citations omitted). The Court further
noted that, "[t]he question whether the insured itself must contribute to defense costs--an issue
on which courts have divided ... --is appropriately deferred at least until such time as the
underlying lawsuits are shown to involve 'occurrences' during self-insured periods." Id. at 656.
Thus, the clitical issue of how defense costs are to be allocated, including with respect to periods
of "self-insurance" or gaps in coverage due to insolvencies, has not yet been fully resolved under
New York law. 16
Additionally, the standard of proof under New York law for establishing the existence
and terms of a missing policy is disputed. See Bianci v. Florists Mut. Ins. Co .. 660 F. Supp. 2d
434, 437 (E.D.N.Y. 2009) (discussing disagreement under New York law as to whether proof of
a lost or missing policy requires "clear and convincing evidence" or merely a "preponderance of
the evidence"). The resolution of that dispute may figure prominently in this case, in that
General Cable contends Century has coverage obligations under alleged IINA primary policy
RPL 595 dating fi'om around 1960, a copy of which has not been located but as to which General
Cable asselis there is sufficient secondary evidence to establish its existence and material tenns.
See, e.g., Serlin Dec., Exhibits H & 1.
In Summy, the Third Circuit stated that unresolved or close issues like those noted above,
"which might otherwise be candidates for certification to the state's highest court ... should
proceed in nonnal fashion through the state court system." 234 FJd at 135. This Court also
noted, upon identifying an unresolved state law question presented by the claims in Shah. supra,
that "[t]he Summy Court cautioned against the exercise of jurisdiction over declaratory judgment
16 Accord, NL Industries, Inc. v. Commercial Union Ins. Co., 935 F. Supp. 513, 520 (D.N..!. 1996) (noting that "the
issue of whether an insured must contribute to its own defense because it self-insured at certain times may not be
settled under New York law").
27
actions-especially those involving insurance coverage issues-when the state law involvcd is close
or unsettled. Id. at *5. As in Shah, that is exactly the case here.
C. All Other Criteria Likewise Weigh Against Exercising Federal Jurisdiction.
None of the other relevant factors support asserting discretionary federal jurisdiction over
this case either. As in Shah, the coverage issues raised here are "exclusively questions of state
law that state courts are better suited to address." Id. Also as in Shah, "[tJhere is 110 significant
public interest in a federal court resolving the coverage question Plaintiff raises." Id.
Nor is litigating in a New York state court likely to be any less convenient for the parties
than this Court. As noted, General Cable is located in Kentucky and apparently only decided to
file in Pennsylvania in a transparent effort to obtain what it perceives to be more favorable
Pennsylvania coverage law with regard to allocation, rather than in the interest of convenience.
Indeed, as noted, General Cable previously filed a similar coverage suit against Century's
predecessor and others in New Jersey when it apparently suited its interests to do so. Further,
General Cable likely selected a federal comi forum in this case only because had it filed in
Pennsylvania state court it would have had to abide by state procedural jurisprudence, thereby
necessitating the unwieldy joinder of the thousands of underlying asbestos bodily injury
claimants. 17 Consequently, General Cable's selection of this forum is entitled to little weight in
assessing convenience. See ITT, supra at 562.
Further, this action having been filed plior to the New York state court Complaint is of
no moment. See Summy, supra at 136 ("It is irrelevant that the state declaratory judgment
petition was filed after its counterpart in the District Court"). Notably, moreover, this case has
17 See Vale Chemical Co. v. Hartford Ace. and Indem. Co., 512 Pa. 290. 516 A.2d 684 (Pa. 1986) (dismissing
insurance declaratory judgment action for lack of subject matter jurisdiction due to failure by policyholder to join all
underlying claimants as "indispensible parties"); Liberty Mut. Ins. Co. v. Treesdale, Inc., 419 F.3d 216, 229 (3d Cir.
2005) (finding that "Vale is a procedural and jurisdictional ruling," which a federal district court in Pennsylvania is
not required to apply).
28
not progressed beyond the earliest pleading stage and therefore there will be no waste of the
parties' or the Court's resources in dismissing it at this point. Nor will a dismissal cause any
undue delay or hardship to General Cable. Indeed, failing to dismiss (or stay) this case would
clearly risk wasteful duplicative litigation, the avoidance of which is instructed by Summy. Id. at
134.
Finally, in Shah, it was observed that "although a decision by this Court will likely
resolve the uncertainty of obligation that gave rise to the instant action, that alone is insufficient
to convince me to exercise jurisdiction." Id. The same conclusion should be reached here. All
of the issues presented can be equally, and more appropriately. resolved in the parallel New York
state court proceeding. TIlerefore. there is no reason not to dismiss. or alternatively at least stay,
this litigation in favor of the parallel state court case.
CONCLUSION
For all of the foregoing reasons, Century requests that its motion be granted and that the
Court dismiss (or alternatively stay) this case in favor of the parallel state court action pending in
New York.
Respectfully submitted,
By: lsi Lawrence A. Serlin

LAWRENCE A. SERLIN
Dated: July 22,2010
29

GENERAL CABLE CORPORATION v. INSURANCE COMPANY OF NORTH AMERICA Et Al Motion To Dismiss

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GENERAL CABLE CORPORATION v. INSURANCE COMPANY OF NORTH AMERICA Et Al Motion To Dismiss

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Case 2:10-cv-01958-PD Document 15-1 Filed 07/22/10 Page 1 of 34

IN THE UNITED STATES DISTRICT COURT

General Cable Corporation CIVIL ACTION NO.1 0 1958

Insurance Company Of North America, et aI.

BRIEF IN SUPPORT OF MOTION BY DEFENDANT CENTURY INDEMNITY

Lawrence A. Serlin, Esquire (PAID #42898)

Attorneys for Defendant Century Indemnity

PRELIMINARY STATEMENT ................................................................................................. 1

A. General Cable's Federal Court Complaint .............................................................. 3

B. Century's Parallel New York State Court Complaint............................................. 5

2. General Cable's Tender of the Occidental Action Claim........................................ 8

3. TIle Filing of the Instant Suit ................................................................................... 9

D. Formation ofCentnry's Policies .............................................................................. 10

I. LEGAL STANDARDS ...................................................................................................... 11

A. Federal Courts Have Discretion Not To Exercise Jurisdiction Over Declaratory

2. Since No Discretion-Limiting Federal Interest Factors Apply, the Court Must

II. DECLARATORY JUDGMENT CLAIMS ARE THE HEART OF THIS MATTER,

III. VIRTUALLY ALL RELEVANT CONSIDERATIONS WEIGH HEAVILY IN

1. New York Law Applies to the Pmiies' Coverage Issues ....................................... 19

a. PennlJ;fvania's Choice of Law Rules Would Result in Application of

b. New York's Choice ofLaw Rules Would Also Result in Application of

Cases Page No.

Certain Underwriters at Lloyd's, London v. Foster Wheeler, 36 A.D.3d 17

Continental Casualty Co. v. Rapid-American Corp., 80 N.Y.2d 640 (1993) ............................... 26

In Re Liquidation ofMidland Ins. Co., 269 A.D.2d 50, 709 N.Y.S.2d 24

Perelman v. Perelman, 688 F. Supp. 2d 367 (E.D. Pa. 2010) ....................................................... 13

Cases Page No.

Rules and Statutes

Fed. R.Civ. P. 12(b)(I) .................................................................................................................... I

Defendant Century Indemnity Company, as successor to CCI Insurance Company, as

successor to Insurance Company of North America, as successor to Indemnity Insurance

Company of North America (hereafter "Century") (incOlTectly sued as "Insurance Company of

or, alternatively, to stay the proceedings.

the Federal Declaratory Judgment Act.

jurisdiction and mindful ofthe need for avoiding duplicative litigation.

Complaint in favor of the parallel New York state court action.

Yark state action.

A. General Cable's Federal Court Complaint

("Travelers"). See copy of Federal Complaint, attached as Exhibit A to the accompanying

Declaration of Lawrence A. Serlin, Esq. ("Serlin Dec."). The unnumbered introductory

contract by Travelers only.

damages in an unspecified amount "to be proven at trial." Id. at 14, 16.

B. Century's Parallel New York State Court Complaint

Complaint as the "Underlying Claims." Id. at 3-4.

issues requiring resolution are:

related insurance coverage issues. 4

connection with the Underlying Claims. Id. at 12-14.

C. General Cable's Historical Demands For Coverage Under Century's

l. General Cable's 1993 New Jersey Federal Court Suit Regarding

Dismissal, attached as Exhibit D to Serlin Dec.

2. General Cable's Tender of the Occidental Action Claim.

amount was sufficient to implicate Century's excess coverage. Id.

excess policy would be incepted by the Occidental Action claim. Id.

In February 2010, General Cable's New York-based counsel responded by letter

3. The Filing of the Instant Suit

D. Formation of Century's Policies

Declaration of William F. Manning ("Manning Dec.") at,; 6 and Exhibit B thereto.

York, New York. See id. at ~ 7 and Exhibit C thereto.

A. Federal Courts Have Discretiou Not To Exercise Jurisdiction Over

jurisdiction in a declaratory judgment action is governed by the federal Declaratory Judgment

L The "Heart of the Matter" Approach Should Be Used in Suits Like

A wrinkle presented by this case as compared to Broaddus is that it contains a mixture of