MACTEC v . OneBeacon 06-CV-466-JD 3/21/07
UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF NEW HAMPSHIRE
MACTEC Engineering &
Consulting, Inc.
v. Civil N o . 06-cv-466-JD
Opinion N o . 2007 DNH 034
OneBeacon Insurance Company
O R D E R
MACTEC Engineering & Consulting, Inc., filed a declaratory
judgment action in state court pursuant to New Hampshire Revised
Statutes Annotated (“RSA”) § 491:22, seeking a determination that
OneBeacon Insurance Company is obligated to defend MACTEC against
claims brought by Hitchiner Manufacturing Company, Inc., and
Thomas & Betts Corporation (referred to as “Hitchiner”) in an
arbitration proceeding. OneBeacon removed the case to this court
and was then granted leave to amend its answer to assert a
counterclaim seeking a declaratory judgment that it has no duty
to defend or indemnify MACTEC as to claims made in the Hitchiner
complaint. MACTEC moved to dismiss OneBeacon’s counterclaim.
MACTEC also filed an emergency motion for a partial stay of
discovery to avoid a deposition noticed for March 2 3 , 2007, and
to limit the scope of a deposition noticed for April 2 , 2007.
MACTEC and OneBeacon both question whether Massachusetts or
New Hampshire law governs this case. “To determine which state’s
laws apply to a particular case, [federal courts] employ the
choice of law analysis of the forum state.” Reicher v . Berkshire
Life Ins. C o . of Am., 360 F.3d 1 , 5 (1st Cir. 2004). A choice of
law analysis is unnecessary, however, if no conflict exists in
the potentially applicable law. Pure Distribs., Inc. v . Baker,
285 F.3d 1 5 0 , 155 n.3 (1st Cir. 2002); A.M. Capen’s Co., Inc. v .
Am. Trading & Prod. Corp.,
202 F.3d 469, 473 n.6 (1st Cir. 2000).
In the absence of a conflict, the court applies the law of the
forum state. Patrick v . Mass. Port Auth.,
141 F. Supp. 2d 1 8 0 ,
187 n.6 (D.N.H. 2001).
In its emergency motion for a partial stay of discovery,
MACTEC cites both New Hampshire and Massachusetts law and states
in a footnote that the law of the two states with respect to an
insurer’s duty to defend is “virtually identical.” OneBeacon
states in it opposition to MACTEC’s motion to dismiss that the
law of New Hampshire and Massachusetts is the same as to the
interpretation of insurance policies and the duty to defend but
then asserts that the law of Massachusetts applies. Because
neither party has demonstrated that an actual conflict exists
between material law of New Hampshire and Massachusetts, the law
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of New Hampshire governs the substantive issues in this case.
I. Motion to Dismiss
OneBeacon seeks a declaratory judgment that it owes no duty
to defend or indemnify MACTEC in the Hitchiner action.1 MACTEC
moves to dismiss OneBeacon’s counterclaim on the duty to defend
on the ground that OneBeacon is limited to asserting an
affirmative defense and should not be permitted to bring a
separate declaratory judgment claim. MACTEC contends that the
counterclaim for a declaration that OneBeacon does not owe a duty
to indemnify is premature until a judgment is entered in the
underlying arbitration proceeding.
In considering a motion to dismiss, the court “take[s] as
true all well-pleaded allegations and draw[s] all reasonable
inferences in the plaintiff’s favor.” Ezra Charitable Trust v .
Tyco Int’l, Ltd., 466 F.3d 1 , 5-6 (1st Cir. 2006). “The court
need not accept a plaintiff’s assertion that a factual allegation
satisfies an element of a claim, however, nor must a court infer
from the assertion of a legal conclusion that factual allegations
could be made that would justify drawing such a conclusion.”
Cordero-Hernandez v . Hernandez-Ballesteros,
449 F.3d 2 4 0 , 244 n.3
1
OneBeacon does not specify whether a declaratory judgment
is sought under state or federal law.
3
(1st Cir. 2006). “A complaint should not be dismissed unless it
is apparent beyond doubt that the plaintiff can prove no set of
facts in support of his claim that would entitle him to relief.”
Conley v . Gibson, 355 U.S. 4 1 , 45-46 (1957) (quotation marks
omitted); accord Stanton v . Metro Corp.,
438 F.3d 119, 123-24
(1st Cir. 2006).
MACTEC is mistaken that OneBeacon is limited to asserting
affirmative defenses against MACTEC’s declaratory judgment
action. MACTEC seeks a declaratory judgment that it is entitled
to a defense provided by OneBeacon.2 If MACTEC is successful,
that declaration would issue. If OneBeacon asserted a successful
affirmative defense, MACTEC’s claim would be denied, but no
declaration would issue in OneBeacon’s favor. On the other hand,
however, if OneBeacon were successful on its counterclaim seeking
a declaratory judgment in its favor, that it does not owe a duty
to defend or to indemnify MACTEC, an order would issue
establishing that OneBeacon did not owe that duty. Therefore, a
2
“It is well-settled law in New Hampshire that an insurer’s
obligation to defend its insured is determined by whether the
cause of action against the insured alleges sufficient facts in
the pleadings to bring it within the express terms of the
policy.” Broom v . Cont’l Cas. Co., 152 N.H. 749, 753 (2005).
“In determining whether a duty to defend exists based upon the
sufficiency of the pleadings, we consider the reasonable
expectations of the insured as to its rights under the policy.”
Id. The insurer’s duty to defend is broader than the duty to
indemnify. Ross v . Home Ins. Co.,
146 N.H. 4 6 8 , 473 (2001).
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claim for a declaratory judgment is not the same thing as
asserting an affirmative defense to the plaintiff’s claim for the
opposite relief.
MACTEC also argues that OneBeacon’s claim for a declaratory
judgment, that it is not obligated to provide indemnification,
cannot be adjudicated unless and until the arbitration action is
concluded. The duty to indemnify arises from the terms of the
policy. See Keating v . United Instruments, Inc., 144 N.H. 393,
400 (1999); Concord Hosp. v . N.H. Med. Malpractice Joint
Underwriting Ass’n,
142 N.H. 5 9 , 61 (1997). Although the
obligation to pay and the amount owed are not determined until
judgment enters in the underlying action, a declaratory judgment
action can and often does determine whether a duty exists under
the policy to provide indemnification before the underlying
liability is reduced to judgment. See, e.g., Merchants Mut. Ins.
C o . v . Laighton Homes, LLC,
153 N.H. 485, 486 (2006); Broom v .
Cont’l Cas. Co.,
152 N.H. 749, 752 (2005). If the underlying
action determines that the insured is not liable, however, the
declaratory judgment action becomes moot. See Tothill v . Estate
of Warren Center,
152 N.H. 389, 390 (2005).
MACTEC provides no basis to dismiss OneBeacon’s counterclaim
for a declaratory judgment that it owes no duty to defend or to
indemnify MACTEC in the underlying arbitration proceeding.
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II. Emergency Motion for Partial Stay of Discovery and to Quash
Deposition
MACTEC moves for an immediate partial stay of discovery to
avoid its deposition to be taken on March 23 and to limit the
scope of a subsequent deposition. The premise of MACTEC’s motion
is that OneBeacon’s counterclaim would be dismissed, making
discovery pertaining to the counterclaim unnecessary. MACTEC’s
motion to dismiss, however, is denied. Therefore, the emergency
motion is also denied.
Conclusion
For the foregoing reasons, the plaintiff’s motion to dismiss
(document n o . 19) and the plaintiff’s emergency motion for a
partial stay (document n o . 22) are denied.
SO ORDERED.
_________________________
^—) Joseph
Joseph A. DiClerico, Jr.
United States District Judge
March 2 1 , 2007
cc: Jeffrey T . Edwards, Esquire
Peter G. Hermes, Esquire
Daniel P. Luker, Esquire
Joshua E . Menard, Esquire
Erica E . Sullivan, Esquire
Roy T . Pierce, Esquire
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