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Tokio Marine America Insurance Co. v. Oil Recovery Company, Inc.

United States District Court, S.D. Alabama, Southern Division

May 11, 2015



WILLIAM H. STEELE, Chief District Judge.

This matter is before the Court on the defendant's motion to dismiss. (Doc. 11). The parties have filed briefs in support of their respective positions, (Docs. 12, 17, 18), and the motion is ripe for resolution. After careful consideration, the Court concludes the motion is due to be denied.


According to the complaint, (Doc. 1), a fire and explosions on the Mobile waterfront damaged adjacent property insured by the plaintiff. The plaintiff paid its insured over $500, 000 on its ensuing claim. In this action the plaintiff, as subrogee, alleges that the fire and explosions, and the resulting loss to its insured, resulted from the defendant's acts and/or omissions on its adjacent property. The complaint asserts claims of negligence, wantonness/gross negligence/recklessness, and strict liability.

In the wake of this incident, three limitation actions were filed, which the Court later consolidated. Both the plaintiff and the defendant filed claims against each of the limitation plaintiffs. Neither the plaintiff nor the defendant filed a cross-claim against the other.


The defendant's motion seeks dismissal: (1) because the plaintiff failed to file a cross-claim against the defendant in the limitation proceedings by the deadline established in that case; and (2) because the plaintiff is prohibited from pursuing duplicative litigation in this case. (Doc. 11 at 1).[1]

I. Failure to File a Timely Cross-Claim.

The Rule 16(b) scheduling order in the limitation proceedings provided that motions to amend the pleadings, "including to assert any cross-claims and/or counterclaims, " had to be filed by September 30, 2014. (Doc. 12 at 4). The defendant argues that this order compelled the plaintiff to file any cross-claim against it in the limitation proceedings and that the plaintiff is improperly attempting to "circumvent" the September 2014 deadline for doing so by filing this action. (Id. at 4-5).

As the plaintiff notes, "[u]nder Fed.R.Civ.P. 13(g), cross claims are permissive rather than compulsory and a party to an action has the option to pursue it in an independent action." Dunn v. Sears, Roebuck & Co., 645 F.2d 511, 512 n.1 (5th Cir. 1981) (former Fifth Circuit case); accord Charles A. Wright, Arthur R. Miller & Mary K. Kane, Federal Practice and Procedure ยง 1431 at 275 (2010) ("Rule 13(g), unlike Rule 13(a), always is permissive."). The scheduling order could not render a permissive cross-claim compulsory, and it did not purport to do so. Rather, the scheduling order merely set a deadline for seeking leave to file any cross-claim that a party might desire to file. The defendant cites no authority supporting its contrary position.[2] Neither the scheduling order in the limitation proceedings nor the plaintiff's failure to file a cross-claim therein presents any impediment to the plaintiff pursuing this action.

II. Duplicative Litigation.

The defendant's motion asserts that this action constitutes duplicative litigation, but its brief argues instead that "[t]he principles underlying the prohibition against duplicative litigation apply equally" here. (Doc. 12 at 7; accord id. at 5, 8).

"It is well established that as between federal district courts, the general principle is to avoid duplicative litigation." I.A. Durbin, Inc. v. Jefferson National Bank, 793 F.2d 1541, 1551 (11th Cir. 1986) (internal quotes omitted). "Although no precise test has been articulated for making this determination, [citation omitted], the general rule is that a suit is duplicative of another suit if the parties, issues and available relief do not significantly differ between the two actions." Id. The Eleventh Circuit drew this rule from Complaint of Bankers Trust Co. v. Chatterjee, 636 F.2d 37 (3rd Cir. 1980), which stated that, "[w]hen the claims, parties, or requested relief differ, deference may not be appropriate." Id. at 40.

As measured by these benchmarks, this action is not duplicative of the limitation proceedings. First, while there are over 20 parties to the limitation proceedings, here there are only two. Second, the plaintiff has not made a claim against the defendant of any sort in the limitation proceedings, much less a claim that resembles the claims asserted here.[3] Third, the plaintiff maintains - without dispute by the defendant - that only this action protects its right to a jury trial of its claim against the defendant.[4] The Court assumes it was for these or similar reasons that the defendant abandoned its argument that this action is duplicative ...

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