Thomson, Inc. n/k/a Technicolor USA, Inc., Technicolor Inc., and Technicolor Limited v. Continental Casualty Co., Travelers Casualty & Surety Co.

FILED
Oct 09 2012, 8:58 am
FOR PUBLICATION CLERK
of the supreme court,
court of appeals and
tax court
ATTORNEYS FOR APPELLANTS: ATTORNEYS FOR APPELLEE XL
INSURANCE f/k/a WINTERTHUR
GEORGE M. PLEWS INTERNATIONAL AMERICA
KAREN B. SCHEIDLER INSURANCE COMPANY:
SEAN M. HIRSCHTEN
Plews Shadley Racher & Braun LLP STEPHEN J. PETERS
Indianapolis, Indiana DAVID I. RUBIN
Harrison & Moberly, LLP
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
THOMSON, INC. n/k/a TECHNICOLOR )
USA, INC., TECHNICOLOR INC., and )
TECHNICOLOR LIMITED, )
)
Appellants/Plaintiffs, )
)
vs. ) No. 49A02-1202-PL-80
)
CONTINENTAL CASUALTY CO.; )
TRAVELERS CASUALTY & SURETY CO. & )
TRAVELERS PROPERTY CASUALTY )
CO. OF AM.; ACE AM. INS. CO. & )
CENTURY INDEMNITY CO., INDEMNITY )
INS. CO. OF N. AM., INS. CO. OF N. AM., )
& CIGNA INS. CO.; XL INS. AM., INC.; )
and NORTHERN ASSURANCE CO. OF AM.; )
)
Appellees/Defendants. )
APPEAL FROM THE MARION SUPERIOR COURT
The Honorable Michael D. Keele, Judge
Cause No. 49D07-0807-CT-30746
October 9, 2012
OPINION – FOR PUBLICATION
BRADFORD, Judge
CASE SUMMARY[1]
Appellants/Plaintiffs Thomson Inc. n/k/a Technicolor USA, Inc., Technicolor,
Inc., and Technicolor, Ltd. (collectively, “Thomson”) appeal from the trial court’s
judgment in favor or Appellee/Defendant XL Insurance of America, Inc. As restated,
Thomson contends that (I) full faith and credit does not require that Indiana courts respect
a California trial court’s decision that California law applies to certain insurance policies
XL sold to Thomson (“the California decision”), (II) comity does not favor deference to
the California decision, and (III) Indiana’s choice-of-law rules require the application of
Indiana law to the policies at issue. Concluding that the trial court did not abuse its
discretion in applying the principles of comity, we affirm on that basis, and do not reach
Thomson’s other arguments.
FACTS AND PROCEDURAL HISTORY
XL sold a total of twelve insurance policies (“the Policies”) to Thomson that are of
interest in this case, policies which were in effect from January 1, 2000, to January 1,
2006. On July 11, 2008, Thomson sued several of its past and present insurers in this
action, including XL, for coverage of an environmental cleanup in Taiwan. Eventually,
by amendment of pleadings, additional sites in Fort Wayne, Indiana; Mocksville, North
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We heard oral argument in this case on September 25, 2012, at the Indiana Court of Appeals
courtroom in Indianapolis. We wish to commend counsel for the high quality of their oral advocacy.
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Carolina; Circleville, Ohio; and two sites in Marion, Indiana, were added to the action.
In April of 2009, Thomson mailed a request for coverage to certain insurers for
environmental cleanups of sites in Hollywood and North Hollywood, California, and
West Drayton, United Kingdom, (“the Technicolor Sites”) sites that were acquired when
Thomson acquired Technicolor, Inc., and Technicolor, Ltd.
On May 14, 2009, American Motorists Insurance Company (“AMICO”), one of
the insurers from whom Thomson had requested coverage for the Technicolor Sites, sued
Thomson and twenty “John Doe” insurers in California court, seeking a declaration that
its policies do not cover the Technicolor Sites. On June 12, 2009, AMICO named XL as
one of the John Doe insurers, adding it to the California action. On August 18, 2009,
Thomson added the Technicolor Sites to the Indiana action.
On May 24, 2010, the California trial court issued a summary judgment
concluding that California law applied to the interpretation of XL’s policies as to the
Technicolor Sites. Thomson appealed the California decision, which was affirmed by the
Court of Appeal of the State of California on August 29, 2011. Thomson’s petition for
review by the California Supreme Court was denied on December 22, 2011. Pursuant to
United States Supreme Court Rule 13, Thomson had until March 21, 2012, or ninety days
following the California Supreme Court’s denial of review, to petition for a writ of
certiorari, but did not do so.
Meanwhile, on March 30, 2011, Thomson filed for partial summary judgment as
to choice of law in the Indiana action, seeking to have Indiana law applied to the
interpretation of insurance policies sold to it by XL and the other defendants. On October
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6, 2011, the trial court granted Thomson’s motion for partial summary in part but
concluded that full faith and credit and principles of comity required it to refrain from
departing from the May 24, 2010, California ruling regarding XL’s policies and the
Technicolor Sites. On October 31, 2011, Thomson filed a motion to correct error. On
January 13, 2012, the trial court denied Thomson’s motion to correct error in an order
that provided, in part, as follows:
4. The California trial court’s May 24, 2010 Judgment in favor
of XL and against Thomson and the affirmance of that judgment by the
California Court of Appeals on August 29, 2011, are entitled to res judicata
effect under the full faith and credit and comity principles.
….
8. The California appellate process is concluded and the
judgment in favor of XL and against Thomson affirmed; therefore, the Full
Faith and Credit principles set forth in the United States Constitution,
Article IV, § 1 and Ind. Code § 34-1-18-7 apply and must be given
preclusive effect. Therefore, Thomson’s Motion to Correct Errors is denied
as to XL.
Appellant’s App. pp. 82, 84.
DISCUSSION AND DECISION
Whether Comity Favors Deference to the California Court’s Decision
Thomson argues that the trial court abused its discretion in relying upon the
principles of comity to defer to the California decision.
“Under principles of comity, Indiana courts may respect final decisions of
sister courts as well as proceedings pending in those courts.” Am. Econ.
Ins. Co. v. Felts, 759 N.E.2d 649, 660 (Ind. Ct. App. 2001) (citing George
S. May Int’l Co. v. King, 629 N.E.2d 257, 260 (Ind. Ct. App. 1994), trans.
denied). Comity is not a constitutional requirement, but a rule of
convenience and courtesy. Id. (citing County of Ventura v. Neice, 434
N.E.2d 907, 910 (Ind. Ct. App. 1982)). Moreover, comity has been
described as representing “‘a willingness to grant a privilege, not as a
matter of right, but out of deference and good will. Its primary value is to
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promote uniformity of decision by discouraging repeated litigation of the
same question.’” Id. (citations omitted).
In re Arbitration Between Am. Gen. Fin. Services, Inc. & Miller, 820 N.E.2d 722, 725
(Ind. Ct. App. 2005). “It is within the trial court’s discretion to dismiss an action out of
comity.” Brightpoint, Inc. v. Pedersen, 930 N.E.2d 34, 39 (Ind. Ct. App. 2010), trans.
denied. “Again, an abuse of discretion occurs only when the trial court’s judgment is
against the logic and effects of the facts and circumstances before it, and we will not
reweigh the evidence most favorable to that judgment.” Id.Courts in other jurisdictions likewise have concluded that where an
action concerning the same parties and the same subject matter has been
commenced in another jurisdiction capable of granting prompt and
complete justice, comity ordinarily should require staying or dismissal of a
subsequent action filed in a different jurisdiction, in the absence of special
circumstances. See McWane Cast Iron Pipe Corp. v. McDowell-Wellman
Eng’g Co., 263 A.2d 281, 283 (Del. 1970); American Home Products Corp.
v. Adriatic Ins. Co., 286 N.J. Super. 24, 668 A.2d 67, 72 (N.J. Super. Ct.
App. Div. 1995).
Factors this court has considered in addressing comity questions
include whether the first filed suit has been proceeding normally, without
delay, and whether there is a danger the parties may be subjected to
multiple or inconsistent judgments. See Hexter v. Hexter, 179 Ind. App.
638, 640, 386 N.E.2d 1006, 1008 (1979). We also believe it appropriate to
look for guidance from cases interpreting Indiana Trial Rule 12(B)(8),
which expressly permits dismissal of a lawsuit where another action already
is pending in another Indiana state court. Under that rule, a second action
“should be dismissed where the parties, subject matter, and remedies are
precisely or even substantially the same in both suits.” Vannatta v.
Chandler, 810 N.E.2d 1108, 1110-11 (Ind. Ct. App. 2004).
Id. at 39-40 (quoting Jallali v. Nat’l Bd. of Osteopathic Med. Examiners, Inc., 902 N.E.2d
902, 904 (2009), vacated on other grounds on reh’g, 908 N.E.2d 1168 (Ind. Ct. App.
2009), trans. denied).
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We conclude that the trial court did not abuse its discretion. First and foremost,
the specific issue here, which state’s law governed XL’s policies with regard to the
Technicolor Sites, was litigated first in California. Although the Indiana suit was filed on
July 11, 2008, the Technicolor Sites were not made a part of it until August 19, 2009.
The California suit, which was concerned solely with the Technicolor Sites, two of the
three of which are located in California, was filed on May 19, 2009, and XL was added
on June 12, 2009. Additionally, Thomson did not file for summary judgment on the
choice-of-law question in the Indiana action until approximately ten months after the
California trial court had already ruled against it on the same question, and there is no
indication that the California suit was not proceeding normally in the California court
system. Although both the California and Indiana suits involve many more parties and
issues, the issue, parties, and remedies in this appeal were precisely the same in both
actions and the only things affected by the trial court’s invocation of comity. We believe
it is also worth noting that the effect of giving deference to the California decision has the
effect of applying California law to those sites contaminated by Technicolor, apparently a
California-based company before Thomson’s acquisition, and applying Indiana law to
those sites contaminated by Thomson, an Indiana-based company, including three sites in
Indiana. In short, there do not seem to be any special circumstances in this case that
would warrant departure from the general rule that comity favors deference to the
California courts. The trial court did not abuse its discretion in deferring to the California
decision.
The judgment of the trial court is affirmed.
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VAIDIK, J., and CRONE, J., concur.
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