ACE AMERICAN INS. CO. v. KEYSTONE CONSTRUCTION & MAINTENANCE SERVICES, INC.
United States District Court, D. Connecticut.
September 27, 2012.
Siemens' alleged conduct does not rise to the level of recklessness. For the most part, the plaintiffs only allege passive conduct: for example, failure to take a lead role and failure to ensure cleaning contractors establish a procedure. The only affirmative conduct the plaintiffs allege is that Siemens told Kleen the gas pipes had to be cleaned, and that Siemens "suggested" natural gas was a safe way to do so, even though it knew it was not. Examination of the "system requirements" referred to in the complaint shows that the document contains a "safety" section that directs cessation of welding, grinding and operation of electrical equipment if a gas blow is to be performed. The Siemens document also directs selection of "location and orientation of the outlet to best allow dissipation of gas." At most, Siemens' conduct may have been negligent, it does not rise to the level of recklessness. Accordingly, Siemens' motion to dismiss the recklessness claim is granted.
4. Siemens' Motion to Dismiss the Strict Liability Claim (Count Thirteen)
Siemens has also filed a motion to dismiss the strict liability claim. Siemens did not partake in the ultrahazardous activity. All Siemens did was require Kleen to clean the gas pipes. Siemens did not require they be cleaned through gas blows, or involve itself in the Kleen Plant gas blows. Therefore, I grant Siemens' motion to dismiss the strict liability claim against it.
5. WorleyParsons' Motion to Dismiss the Recklessness Claim (Count Five)
Next, WorleyParsons moves to dismiss the recklessness claim against it. The plaintiffs have alleged that WorleyParsons acted recklessly by: (1) reviewing and accepting Siemens' "system requirements" that suggested natural gas was safe to clean pipes, even though it knew it would influence other parties to use that process; (2) accepting the gas blow process when it knew the process had been outlawed in other parts of the world where it conducts business; (3) reviewing and accepting Siemens' suggestion that gas blows were safe when it knew that a large turbine manufacturer in the United States recommended other methods for cleaning gas piping; (4) reviewing and accepting Siemens' "system requirements" regarding system cleaning when it knew that the gas blow process was flawed; (5) allowing or failing to object to flawed designs and implementation at pre-gas blow meetings; (6) failing to include in its design an accommodation for temporary gas piping; and (7) failing to identify the gas blow procedure as a "Key Issue" in its proposal summary.
WorleyParsons' conduct does not rise to the level of recklessness. For the most part, the plaintiffs only allege passive conduct: for example, acceptance of Siemens' "system requirements" and attendance at pre-gas blow meetings. Although that conduct may have been negligent, it was not reckless. Accordingly, WorleyParsons' motion to dismiss the recklessness claim is granted.
6. WorleyParsons' Motion to Dismiss the Strict Liability Claim (Count Six)
1. Unless otherwise noted, all background information is taken from the Third Amended Complaint.
2. Although the plaintiffs made similar allegations with regard to Algonquin, at the motion hearing the plaintiffs admitted that they had no reason to believe Algonquin was involved in developing gas blow protocols.
3. In response to the motion to dismiss, the plaintiffs provided the court with an affidavit describing Spectra's involvement in the gas blows. I am unable to consider that additional material at the motion to dismiss stage.
4. Plaintiffs' various builder's risk insurance policies follow the form of a single lead policy issued by Ace American Insurance Company. Unless otherwise noted, the term "insurance policy" refers to Kleen's insurance agreements with the plaintiffs.
5. In support of their argument, the plaintiffs cite Stop & Shop Supermarket Co. v. Abco Refrigeration Supply Corp., 48 Conn.Sup. 301 (2003). Stop & Shop was also a subrogation action, in which the defendant claimed to be an additional insured. The contract in that case stated that "Unless otherwise provided, the Owner shall purchase and maintain . . . property insurance upon the entire Work at the site to the full insurable value thereof. This insurance shall be on an all-risk policy form and shall include interests of the Owner, the Contractor, Subcontractors, and Sub-subcontractors in the Work and shall insure against the perils of fire." Id. at 305. The Court concluded that the defendant was not an "additional insured" under that agreement because "[w]hen Stop & Shop wanted to designate others as additional insureds, it did so." Id. at 311. I believe there is more evidence in this case that the subcontractors were actual insureds under the contract, including the fact that the Contractor was considered a fiduciary for the "insureds," including the subcontractors.
6. Perhaps the least convincing of Bluewater's arguments is that the contract should be read in the subcontractors' favor because the contract is ambiguous. "`As with contracts generally, a provision in an insurance policy is ambiguous when it is reasonably susceptible to more than one reading. . . . Under those circumstances, any ambiguity in the terms of an insurance policy must be construed in favor of the insured because the insurance company drafted the policy.'" Johnson v. Conn. Ins. Guar. Ass'n, 302 Conn. 639, 640 (2011) (quoting Conn. Med. Ins. Co. v. Kulikowski, 286 Conn. 1, 5-6 (2008)). The ambiguity here stems not from the insurance agreement, however, but the contract between Kleen and O&G. There is no indication that Kleen alone drafted the contract, and thus the usual rule regarding ambiguity in insurance agreements does not apply here.