Pilkington North America, Inc. v. Mitsui Sumitomo Insurance Company of America

Background

Pilkington North America alleged that it suffered approximately $60 million to $100 million in losses when a tornado struck its glass manufacturing factory in Ottawa, Illinois, on or around February 28, 2017. Pilkington sought additional insurance coverage from Mitsui Sumitomo Insurance Company of America (MSI) under a U.S. local policy. MSI had paid Pilkington $15 million, relying on a $15 million windstorm sublimit. Pilkington claimed that MSI and its broker, Aon Risk Services Central, Inc., had mishandled or misrepresented changes to the policy.

MSI filed a third-party complaint against Aon UK Limited, Nippon Sheet Glass Co., Ltd. (NSG), and Mitsui Sumitomo Insurance Co. Ltd. (MSI-J). MSI sought a declaration that the $15 million windstorm sublimit in the global insurance program applied to the losses. MSI also sought damages from NSG and Aon UK for negligent misrepresentation if MSI were found liable to Pilkington, and contribution from Aon UK for a share of any liability.

Motions and jurisdiction

NSG and Aon UK moved under Federal Rule of Civil Procedure 12(b)(2) to dismiss for lack of personal jurisdiction and under Rule 12(b)(6) to dismiss for failure to state a claim. The court first addressed jurisdiction. It held that MSI made the required preliminary showing of specific personal jurisdiction over NSG and Aon UK under New York’s long-arm statute.

The court treated the allegations as showing that NSG and Aon UK arranged or supervised the global insurance program and delegated responsibility to Aon-US, which obtained the relevant policy from MSI’s New York-based underwriter. The policy also contained a New York forum-selection clause. The court concluded that Aon-US’s New York contacts could be attributed to NSG and Aon UK under an agency theory. It therefore held that jurisdiction was reasonable and consistent with constitutional due-process requirements.

Failure to state a claim

The court nevertheless held that MSI’s claims failed under Rule 12(b)(6). As to the declaratory-judgment claim against NSG, the court found that MSI’s request was redundant because Pilkington’s existing claim already gave the court a vehicle to determine the parties’ rights under the insurance policy. The court also declined to exercise jurisdiction over a declaration concerning the Master Policy because that agreement provided that English courts had exclusive jurisdiction, except for arbitration. For the same reasons, the court dismissed MSI’s declaratory claim against MSI-J and dismissed MSI-J as a third-party defendant.

The court dismissed MSI’s negligent-misrepresentation claims against NSG and Aon UK. It found that MSI had not plausibly alleged that either defendant made a false statement or should have known that a statement was false. The allegations instead indicated that NSG arranged the $15 million sublimit, Aon UK transmitted the relevant terms, and the local policy reflected the global program’s terms. The court also found no adequately alleged special relationship or direct contact between MSI and either NSG or Aon UK, as required for this type of claim under New York law.

The court also dismissed MSI’s contribution claim against Aon UK. Even assuming New York law applied, the court held that MSI had not plausibly alleged that Aon UK owed a duty to MSI or Pilkington or breached such a duty. The court did not decide whether Illinois or another state’s law governed the contribution claim because the claim failed even under New York law.

Disposition

Judge John F. Keenan denied NSG’s and Aon UK’s Rule 12(b)(2) motions. He granted their Rule 12(b)(6) motions. The order therefore dismissed the third-party claims against NSG and Aon UK and dismissed MSI’s third-party claim against MSI-J, resulting in MSI-J’s dismissal from the action. The court gave MSI 14 days to file a proposed amended third-party complaint and a memorandum explaining how amendment would cure the pleading problems. The opinion does not state that the dismissals were with or without prejudice.