ACE AMERICAN INS. CO. v. KEYSTONE CONSTRUCTION & MAINTENANCE SERVICES, INC.
United States District Court, D. Connecticut.
September 27, 2012.
Bluewater argues that the recklessness claim against it should be dismissed, because the plaintiffs' factual allegations are insufficient to state a cause of action. Plaintiffs allege that Bluewater: (1) designed and implemented a gas blow process in which natural gas was released at high pressure into a small area with numerous sources of ignition; (2) selected and/or recommended gas blows to clean fuel gas piping despite knowing it was inherently dangerous;
(3) failed to follow its own gas blow commissioning procedures; (4) designed and implemented a gas blow process when it knew it didn't have the necessary expertise; (5) permitted a Keystone employee with no experience to design and implement the temporary piping for the gas blow; (6) refused to modify the temporary gas piping configuration after it was warned that that configuration would result in a dangerous amount of natural gas being blown into a small space with numerous ignition sources; and (7) discharged an employee because he attempted to develop safer procedures. These allegations are sufficient to satisfy a claim for recklessness. Thus, Bluewater's motion to dismiss the recklessness claim on this ground is denied.
2. Keystone's Motion to Dismiss the Recklessness Claim (Count One)
Keystone also argues that the plaintiffs have failed to state a claim for recklessness against it. The plaintiffs allege that Keystone: (1) assumed responsibility for designing and implementing the gas blow, when it knew it did not have the necessary expertise; (2) implemented a gas blow that expelled gas into a confined area with numerous sources of ignition; (3) falsely represented that it possessed the experience necessary to design and implement the gas blow process; (4) ordered an employee with no experience to design the temporary gas piping; (5) failed to follow its gas blow commissioning procedures; (6) failed to conduct a safety meeting; (7) failed to de-energize sources of ignition, and ordered workers to continue welding where flammable natural gas was to accumulate; (8) recommended natural gas to clean gas piping because it was faster; and (9) proceeded with the February 7 gas blow without obtaining permission from Bluewater.
Keystone's motion to dismiss the recklessness claim relies principally on its assertion that plaintiffs fail to allege knowledge on Keystone's part sufficient to sustain a recklessness claim. Although fewer than all of the allegations against Keystone may constitute recklessness as opposed to negligence or gross negligence, the claim nonetheless survives. Plaintiffs allege, for example, that Keystone permitted the gas blow to proceed "when it was obvious" that the design "would permit excessive amounts of natural gas to collect in a confined area where there were numerous sources of ignition." 3d Am. Compl. at ¶ 35(g). Drawing all reasonable inferences in favor of plaintiffs, these allegations sufficiently allege recklessness. Accordingly, Keystone's motion to dismiss the recklessness claim on this ground is denied.
3. Siemens' Motion to Dismiss the Recklessness Claim (Count Twelve)
Siemens also moves to dismiss the recklessness claim against it. The plaintiffs have alleged that Siemens acted recklessly by: (1) permitting the gas pipes at the Kleen Plant to be cleaned with natural gas, despite knowing that such a process was inherently dangerous; (2) using language in the "system requirements" that "suggested" natural gas was acceptable and safe to clean pipes, even though it knew it was not; (3) failing to ensure the cleaning contractors prepared a detailed procedure addressing system preparation, cleaning, and restoration for the gas blow process; (4) mandating that Kleen clean its gas piping, but failing to take any steps to ensure the gas blow process was performed by parties with appropriate experience and expertise; (5) failing to specify upper limits on gas pressure of gas blows in the "system requirements;" and (6) failing to take a lead role in pre-gas blow meetings.
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.