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True North Marine Inc. v. Liberty Mutual Insurance Co.

United States District Court, D. Maine

February 19, 2019




         Plaintiffs, True North Maine Inc. and Cooke Aquaculture, Inc. (collectively “True North” or “Plaintiffs”), bring this diversity action asserting claims against Defendant, Liberty Mutual Insurance Company for breach of contract and violation of Maine's Unfair Claims Settlement Practices Act as well as seeking both a declaratory judgment and injunctive relief following Liberty's refusal to provide a defense and indemnification against a suit initiated against Plaintiffs by Plaintiffs' employee, Brian Taylor. Amended Complaint (ECF No. 11). Defendant has requested dismissal of the action and has not otherwise answered the original or amended complaint. For the reasons explained herein, Defendant's motion to dismiss the original complaint is denied as moot and Defendant's motion to dismiss Plaintiffs' amended complaint is granted in part and denied in part.


         I accept as true the Plaintiffs' well-pleaded allegations and will draw all reasonable inferences in the Plaintiffs' favor. Fed.R.Civ.P. 12(b)(6); Schatz v. Republican State Leadership Comm., 669 F.3d 50, 55 (1st Cir. 2012); Sanchez v. Pereira-Castillo, 590 F.3d 31, 41 (1st Cir. 2009).

         Plaintiff, True North Maine, Inc., is a Maine corporation with a place of business in Machiasport, Maine. Amended Complaint (“Am. Compl.”) ¶ 1 (ECF No. 11). True North is a subsidiary of True North Salmon U.S., Inc., which is a wholly owned subsidiary of Cooke Aquaculture, Inc., a Canadian corporation. Id. ¶¶ 2, 3.

         Both True North and Cooke were insured persons under three separate insurance policies issued by the Defendant, Liberty Mutual Insurance Company: (1) Canadian Commercial General Liability Policy No. 1000043008-04, effective June 14, 2016, through June 14, 2017 (“Canadian CGL Policy”); (2) United States Commercial General Liability Policy No. TB1-B71-170961-026, effective June 14, 2016, through June 14, 2017 (“U.S. CGL Policy”); and (3) Umbrella Liability Policy No. 1000050660-04, effective June 14, 2016, through June 14, 2017 (“Umbrella Policy”). Am. Compl. ¶ 5.

         On August 11, 2017, Brian Taylor filed suit against True North and Cooke in Washington County Superior Court (the “Taylor Suit”).[1] Id. ¶ 7. Taylor, a resident of Baileyville, Maine, alleges that while working at True North's Machiasport location on November 25, 2016, he purchased from a co-worker and then ingested heroin and/or cocaine.[2] Id. ¶¶ 1, 17, 18-19. After ingesting the drugs, Taylor fell as he attempted to put on a pair of rubber boots needed for work, struck his head on the floor, and lost consciousness. Id. ¶ 20. Shortly thereafter, Taylor's coworkers discovered him in his unconscious state and claim to have called a True North supervisor and informed the supervisor about the injury. Id. ¶ 21. These same coworkers then moved Taylor into a shower stall, turned on the water, and left him in a state of unconsciousness for nearly four and a half hours. Id. ¶¶ 24-25. Eventually, a True North manager called 911. Id. ¶¶ 27, 28. After administering care for a heroin overdose and hypothermia at the scene, an ambulance crew transported Taylor to the hospital. Id. ¶¶ 30-33. Taylor was treated as an inpatient at various medical facilities over the next five months and alleges serious and permanent injuries “as a direct and proximate result of his co-workers' failure to furnish appropriate medical and related assistance.” Id. ¶¶ 34-37.

         As part of his suit, Taylor asserts two primary claims. First, Taylor asserts a claim for negligent failure to render competent aid arising from the actions of his co-workers, who he asserts acted as agents of True North when they failed to give him “competent medical and related assistance after he became helpless.” Id. ¶¶ 44-46. Second, Taylor asserts a claim for premises liability and a negligent failure to furnish a reasonably safe workplace, arising from True North's failure to enforce its Alcohol and Drug Policy which prohibits “the possession, use and or sale of alcohol [or] illicit drugs.” Id. ¶¶ 4, 48-51.

         True North timely notified Liberty of Taylor's claims and provided Liberty with a copy of the complaint. Am. Compl. ¶ 8. On August 18, 2017, Liberty sent a letter to Cooke and True North in which it denied both a defense against Mr. Taylor's claims and indemnification of True North and Cooke under all three policies. Id. ¶ 9. In its response, Liberty stated:

There is no coverage under the U.S. CGL policy as that policy specifically excludes claims for bodily injury to employees. While there is Employers Liability Coverage under the Canadian CGL policy, that coverage only applies to Canadian workers. The Umbrella Liability Policy follows the Canadian CGL and contains a similar insuring agreement, definitions and exclusions.

Am. Compl., Ex. B, 5 (ECF No. 11-2).

         On June 18, 2018, True North and Cook asserted that Liberty owed them a duty to defend in the Taylor Suit. Am. Compl. ¶ 10. Liberty did not respond further and has continued to refuse to provide a defense or indemnification to True North. Id. ¶ 11.

         Furthermore, Plaintiffs assert Liberty has “refused to properly investigate the claim or to perform a proper comparison test as required by law.” Id. ¶ 12.


         On July 24, 2018, True North filed the instant suit against Liberty in Washington County Superior Court. Compl. (ECF No. 1-3). Liberty promptly removed the suit to this Court. Notice of Removal (ECF No. 1). On September 27, 2018, Liberty moved to dismiss True North's complaint. Mot. Dismiss (“First Motion”) (ECF No. 9). On October 18, 2018, True North filed an opposition brief to the amended complaint. Opposition to Def.'s Mot. Dismiss (“First Opposition”) (ECF No. 10); Am. Compl. (ECF No. 11). In light of the amendment of the complaint, Liberty filed another motion to dismiss. Mot. Dismiss Pl.'s First Am. Compl. (“Second Motion”) (ECF No. 13). Plaintiffs then filed a second opposition brief. Opp. to Def.'s Mot. Dismiss First Am. Compl. (“Second Opposition”) (ECF No. 14). Defendant filed two reply memoranda. Def.'s Reply Memo. (“First Reply”) (ECF No. 12); Def.'s Reply Memo. (“Second Reply”) (ECF No. 15).


         Federal Rule of Civil Procedure 15 permits a party to amend its pleading once as a matter of course within 21 days following service of a motion to dismiss under Rule 12(b). Because Plaintiffs filed their First Amended Complaint 21 days after Defendant filed its motion to dismiss, the operative pleading is the First Amended Complaint, which supersedes and supplants the original complaint. Additionally, because Defendant has filed a new motion to dismiss the amended complaint, I dismiss as moot the original Motion to Dismiss (ECF No. 9) and review the Motion to Dismiss the Amended Complaint (ECF No. 13). As the second motion incorporates arguments made in the first motion papers, I will at times discuss and cite arguments pressed in the original motion papers.

         Plaintiffs assert claims against Liberty for breach of contract and violation of Maine's Unfair Claims Settlement Practices Act, 24-A M.R.S. § 2436-A. In addition, Plaintiffs seek both a declaratory judgment and injunctive relief arising from Liberty's refusal to provide a defense and indemnification in the Taylor Suit. I will consider each cause of action in turn, mindful that a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure is not a crucible in which to resolve the merits, but rather a means to tests whether Plaintiffs have alleged “sufficient facts to show that he has a plausible entitlement to relief.” Sanchez, 590 F.3d at 41. To avoid dismissal, Plaintiffs' amended complaint must provide “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). “If the factual allegations in the complaint are too meager, vague, or conclusory to remove the possibility of relief from the realm of mere conjecture, the complaint is open to dismissal.” SEC v. Tambone, 597 F.3d 436, 442 (1st Cir. 2010) (en banc).

         I. Breach of Contract

          In Count I of their First Amended Complaint, Plaintiffs allege that by refusing to provide a defense, the Defendant breached all three insurance contracts.[3] Am. Compl. ¶¶ 14-17. Thus, the core question presented is whether True North and Cooke have alleged sufficient facts to make out a plausible argument that Liberty owed them a duty to defend and indemnify against Taylor's claims.

         Because the “duty to indemnify is merely a subset of the larger sphere of actions for which there is a duty to defend, ” I will limit my consideration to the question of a duty to defend. Anderson v. Virginia Sur. Co., 985 F.Supp. 182, 187 (D. Me. 1998). If I find that Plaintiffs have alleged facts that state a plausible basis for finding a duty to defend under one or more ...

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