QST v . OHM CV-98-572-M 09/27/00
UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
QST Environmental, Inc., f/k/a
Environmental Science & Engineering, Inc.,
Plaintiff
v. Civil N o . 98-572-M
Opinion N o .
OHM Remediation Services Corp.;
National Union Fire Insurance Company
of Pittsburgh, PA; and
United National Insurance Company,
Defendants
O R D E R
Plaintiff (“ESE”) moves to dismiss a counterclaim filed
against it by Defendant United National Insurance Company (United
National) (document n o . 4 6 ) . The pertinent facts have already
been described in an Order dated July 2 2 , 1999, and one issued
contemporaneously with this Order, so will not be repeated.
Basically, Defendant United National asserts a claim against
ESE based upon an alleged breach of the covenant of good faith
and fair dealing implied in every New Hampshire contract.
National Union says it extended coverage to ESE, as an
“additional insured,” under a policy issued to OHM Corporation
(“OHM”) and, under that policy ESE had a “duty to cooperate” in
resolving the underlying Shoemaker plaintiffs’ claims against
ESE, OHM, and OHM’s subsidiary OHMRS (which company had
contractually agreed to indemnify ESE with respect to any claims
brought against ESE arising from OHMRS’ negligence).
United National’s claim rests, apparently, on the notion
that ESE breached the good faith covenant of the insurance
contract (though there is no allegation that ESE ever contracted
with National Union for insurance coverage) because ESE failed to
participate in settlement discussions with the Shoemaker
plaintiffs, even though ESE faced independent liability (that i s ,
for claims not covered by OHMRS’ indemnity agreement and thus not
covered by the policy). But, even assuming ESE owed a duty to
cooperate with National Union in the defense of covered claims,
ESE owed no common law or contractual duty to participate in
settlement discussions as to claims not covered by the
indemnity/insurance contract – ESE was well within its rights to
offer nothing to settle those claims and litigate them to final
resolution. And, obviously, National Union had complete
authority and ability to settle claims against ESE that its
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policy did cover (which it apparently d i d ) . Moreover, National
Union was not entitled to any monetary contribution by ESE toward
the settlement of the covered claims. ESE was not duty bound to
contribute monetarily to the settlement of claims covered by
insurance and an indemnity agreement.
National Union’s counterclaim is based, it says, on ESE’s
“failing to acknowledge that independent claims of liability
could exist from those covered by United National’s policy [which
failure to acknowledge caused] United National to incur
additional costs in settling the [Shoemaker] claims.”
Defendant’s Motion [sic] in Objection to Plaintiff’s Motion to
Dismiss (document n o . 4 8 ) , at 1 2 . ESE owed no duty, either at
common law or otherwise, to “acknowledge” claims by the Shoemaker
plaintiffs against it that were not covered by National Union’s
policy. Again, as to such claims ESE was free to resolve them as
it saw fit, just as National Union was free to resolve covered
claims as it saw fit.
The counterclaim, as pled, is completely without merit. If
National Union is attempting to assert some “failure to
cooperate” by ESE beyond or different from ESE’s having failed to
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“acknowledge” “independent” claims against i t , or its failure to
settle those independent claims as part of a global settlement,
or its failure to contribute monetarily to the settlement of
claims covered by National Union’s policy, then National Union
has failed to adequately plead such theories and supporting
facts. If National Union intended to plead the theories and
facts it appears to have asserted, then National Union has
plainly failed to state a cause of action based upon an alleged
breach of the implied covenant of good faith and fair dealing,
for the same reasons discussed in the prior and companion Orders
issued in this case.
Conclusion
Plaintiff ESE’s Motion to Dismiss Counterclaim of United
National Insurance Company (document n o . 46) is hereby GRANTED.
SO ORDERED.
Steven J. McAuliffe
United States District Judge
September 2 7 , 2000
cc: James C . Wheat, Esq.
Gordon A . Rehnborg, Jr., Esq.
Margaret H . Nelson, Esq.
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