Skip to Navigation
The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

ACE AMERICAN INSURANCE COMPANY et al v. RAYONIER PERFORMANCE FIBERS LLC et al Complaint

ATTENTION: It is possible that this information may no longer be current and therefore may be inaccurate. The index contains both open and closed cases and is not a complete list of cases in which an ACE Insurance Group company is involved. This information is provided to give interested persons an idea of the issues disputed in the indexed cases. For a full understanding of a case, one should read the rest of the court file, including the response. For the most up-to-date and complete information on a case, visit www.pacer.gov or contact the clerk of the relevant court.

Embedded Scribd iPaper - Requires Javascript and Flash Player
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1
Page 1 of 13
IN THE UNITED STATES DISTRICT COURT DISTRICT OF SOUTH CAROLINA CHARLESTON DIVISION CIVIL ACTION NO.: 2:13-cv-1741-CWH ACE American Insurance Company and ACE Property and Casualty Insurance Company, Plaintiffs, v. Rayonier Performance Fibers, LLC, and MeadWestvaco Corporation, Defendants ACE American Insurance Company (“ACE American”) and ACE Property and Casualty Insurance Company (“ACE Property”), pursuant to Rule 57, Fed. Rules of Civ. Procedure, and 28 U.S.C. †2201, submit the following Complaint for Declaratory Judgment and allege as follows: PARTIES 1. ACE American is an insurance company organized under the laws of the COMPLAINT FOR DECLARATORY JUDGMENT
Commonwealth of Pennsylvania with its principal place of business in Philadelphia, Pennsylvania. All times relevant hereto, ACE American was in the business of writing liability insurance and was lawfully doing business in the State of South Carolina. 2. ACE Property is an insurance company organized under the laws of the
Commonwealth of Pennsylvania with its principal place of business in Philadelphia, Pennsylvania. At all times relevant hereto, ACE Property was in the business of writing
umbrella liability insurance and was lawfully doing business in the State of South Carolina.
LEGAL\16811786\1
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1
Page 2 of 13
3.
Rayonier Performance Fibers, LLC (“Rayonier”) is a limited liability company
organized and existing under the laws of the State of Delaware with its principal place of business in Jessup, Georgia. ACE is informed and believes that Rayonier is a wholly-owned subsidiary of Rayonier, Inc., a North Carolina corporation with its principal place of business in Jacksonville, Florida. 4. ACE American and ACE Property are informed and believe that MeadWestvaco
Corporation (“MWV”) is a corporation organized and existing under the laws of the State of Delaware with its principal place of business in Richmond, Virginia. MWV, at all relevant times, conducted business at its facility in North Charleston, South Carolina. JURISDICTION AND VENUE 5. The Court has jurisdiction of the subject matter of this action pursuant to 28
U.S.C. †1332 in that the amount in controversy exceeds $75,000, exclusive of interest and costs, and is between citizens of different states. 6. Venue is proper in the United States District Court, District of South Carolina in
that the events giving rise to this action arose in Charleston County, South Carolina. 7. An actual case in controversy of a justiciable nature exists between the parties
involving the rights and liabilities concerning certain liability insurance policies and umbrella liability insurance policies, in which litigation is imminent and inevitable, and which controversy may be determined by a judgment of this, without other, action.
Page 2 of 13
LEGAL\16811786\1
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1
Page 3 of 13
NATURE OF THE ACTION 8. This is an action for declaratory judgment pursuant to Rule 57, Fed. Rules of Civ.
Procedure, and 28 U.S.C. †2201 to determine and resolve questions of actual controversy arising in connection with certain contracts of insurance issued by ACE American and ACE Property to Rayonier. By this action, ACE American and ACE Property seek declaratory relief to establish that ACE American and ACE Property have no obligation to defend or indemnify Rayonier for the claims set forth below. FACTS 9. as follows: Policy Number G21729656 G21733301 G23733614 G23749622 G24939509 (the “Primary Policies”). 10. follows: Policy Number XOO G23792321 XOO G23887563 XOO G24637827 XOO G24874473 (the “Umbrella Policies”). 11. ACE American and ACE Property are informed and believe that on or about July Effective Dates 01/01/2007-12/31/2007 01/01/2008-12/31/2008 01/01/2009-12/31/2009 01/01/2010-12/31/2010 ACE Property issued certain Umbrella Liability Insurance policies to Rayonier as Effective Dates 01/01/2006-01/01/2007 01/01/2007-01/01/2008 01/01/2008-01/01/2009 01/01/2009-01/01/2010 01/01/2010-01/01/2011 ACE American issued certain Commercial General Liability policies to Rayonier
1, 2006, MWV and Rayonier entered into a ten (10) year contract whereby MWV would Page 3 of 13
LEGAL\16811786\1
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1
Page 4 of 13
purchase for delivery to MWV’s North Charleston, South Carolina facility, 100% of the Black Liquor Soap Skimming (“BLS”) and Crude Tall Oil (“CTO”) produced by Rayonier at its Jessup, Georgia plant. 12. ACE American and ACE Property are informed and believe that on or about
September 30, 2010, MWV cancelled its contract with Rayonier, claiming that Rayonier breached the contract by furnishing defective product. 13. At or about the time that it cancelled the contract, MWV filed suit against
Rayonier in the Court of Common Pleas for Charleston County, South Carolina in an action captioned Meadwestvaco Corporation v. Rayonier Performance Fibers, LLC, Civil Action No.: 10-CP-10-5262 (the “MWV Action”). 14. MWV filed its Third Amended Complaint in the MWV Action on or about
December 3, 2012. A copy of the Third Amended Complaint is attached as Exhibit A. 15. Rayonier provided notice to ACE American of the MWV Action and, as required
under the above policies, began defending itself in that action. 16. On or about March 20, 2013, the Court in the MWV Action issued an Order
dismissing the negligence, quantum meruit, and breach of implied warranties causes of action as alleged in the Third Amended Complaint. In dismissing MWV’s negligence claim against Rayonier, the Court specifically found that Rayonier owed no duties to MWV outside the contract between MWV and Rayonier. A copy of the Court’s March 20 Order is attached as Exhibit B. 17. MWV Action. On or about March 21, 2013, Rayonier provided notice to ACE Property of the
Page 4 of 13
LEGAL\16811786\1
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1
Page 5 of 13
18.
On or about May 14, 2013, Rayonier notified ACE American that it had satisfied
its self-insured retention under Policy No.: G21729656 and demanded that ACE American assume the defense of Rayonier in the MWV Action. 19. On or about April 30, 2013 ACE American issued a declination to Rayonier under
the Primary Policies. 20. On or about June 26, 2013 ACE Property issued a declination to Rayonier under
the Umbrella Policies. CAUSE OF ACTION DECLARATORY RELIEF 21. ACE American and ACE Property re-allege each and every allegation of
Paragraph 1-20 above as though fully set forth herein. 22. MWV alleges a breach of contract against Rayonier and seeks damages arising
from that alleged breach of contract. 23. MWV also alleges that Rayonier made certain intentional misrepresentations to
MWV prior to and subsequent to the negotiation of the contract regarding the properties of the product being purchased by MWV. 24. The Primary Policies provide, in pertinent part, as follows:
COMMERCIAL GENERAL LIABILITY COVERAGE FORM SECTION I – COVERAGES COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY 1. Insuring Agreement a. We will pay those sums that the insured becomes legally obligated to pay as damages because of …”property damage” to which this insurance applies. We will have the right and duty to defend the insured against to defend the insured against any “suit” seeking damages for … “property damage” to which this insurance does not apply … . b. This insurance applies to … “property damage” only if:
Page 5 of 13
LEGAL\16811786\1
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1
Page 6 of 13
(1) The … “property damage” is caused by “occurrence” …; (2) The … “property damage” occurs during the policy period … . … 2. Exclusions This insurance does not apply to: … b. Contractual Liability …”[P]roperty damage” for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages: (1) That the insured would have in the absence of the contract or agreement …. …
k.
Damage To Your Product
“Property damage” to “your product” arising out of it or any part of it. m. Damage To Impaired Property Or Property Not Physically Injured “Property damage” to “impaired property” or property that has not been physically injured, arising out of: (1) A defect, deficiency, inadequacy or dangerous condition in “your product” …. Section V – Definitions 8. “Impaired property” means tangible property, other than “your product” …, that cannot be used or is less useful because: a. It incorporates “your product” … that is known or thought to be defective, deficient, inadequate or dangerous; or b. You have failed to fulfill the terms of a contract or agreement; if such property can be restored to use by: a. The repair, replacement, adjustment or removal of “your product” …; or
Page 6 of 13
LEGAL\16811786\1
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1
Page 7 of 13
b. Your fulfilling the terms of the contract or agreement. 13. “Occurrence” means an accident, including continuous or repeated exposure to substantially the same general harmful conditions.
… 17. “Property damage” means: a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the “occurrence” that caused it. 21. “Your product”: a. Means: (1) Any goods or products, other than real property, manufactured, sold, handled, distributed or disposed of by: (a) You…. Includes (1) Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of “your product”….
b.
The Primary Policies are amended by endorsement to provide as follows: EXTENDED PROPERTY DAMAGE This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE FORM Exclusion 2.a. of Section I, Coverage A, “Bodily Injury and Property Damage” is replaced by the following: a. …”[P]roperty damage” expected or intended from the standpoint of the insured. …. …
DEDUCTIBLE ENDORSEMENT (ALAE INCLUDED IN DEDUCTIBLE) THIS ENDORSEMENT MODIFIES INSURANCE PROVIDED UNDER THE FOLLOWING: Page 7 of 13
LEGAL\16811786\1
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1
Page 8 of 13
COMMERCIAL GENERAL LIABILITY COVERAGE FORM Schedule Deductible Per Occurrence $1,000,000 Claim Service Organization ESIS, Inc. 1. Our obligation to pay damages and “allocated loss adjustment expense” under this policy applies only to the amount of damages and “allocated loss adjustment expense” in excess of the Deductible amount stated in the Schedule above. The Limits of Insurance will be reduced by the amount of damages … included in the Deductible. The Deductible Per Occurrence shall apply separately to: a. The sum of all damages and “allocated loss adjustment expense” under Coverage A … arising out of any one “occurrence” þ 
2. You and we mutually agree that the Claim Service Organization shown in the Schedule will provide investigation, administration, adjustment, and settlement services, and will provide for the defense of all claims or “suits” arising under this policy. Accordingly, you agree with us that we shall not have any duty to defend any such “suit”, nor to pay any “allocated loss adjustment expense” within the Deductible amounts with respect to any claim or “suit”. 3. You will pay all sums the insured becomes legally obligated to pay within the Deducible Per Occurrence. 4. We will have the right at our sole discretion: a. to pay any damages under this policy within the Deductible Per Occurrence should you fail to pay any final judgment against or settlement entered into by an insured. b. to pay any amounts within the Deductible Per Occurrence to settle any claim or “suit”. c. to assume the defense and control of any claim or “suit” seeking payment of damages under this policy that we believe will exceed the Deducible Per Occurrence; and d. to pay any “allocated loss adjustment expense” incurred by us associated with a. b or c. above. You shall promptly reimburse us for any sums we may have to pay under item 4. 5. All terms, conditions and limitations of this policy not inconsistent with this endorsement shall continue to apply. DEFINITIONS Page 8 of 13
LEGAL\16811786\1
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1
Page 9 of 13
When used in this endorsement: “Deductible Per Occurrence” shall mean the amount of damages and “allocated loss adjustment expense, under this policy which you have a duty to pay and which arises from (i) any one “occurrence” to which insurance applies under this policy þ sustained by any one person or organization. “Allocated Loss Adjustment Expense” shall mean any expenses, costs, and interest provided for under Section I – Coverages, Supplementary Payments – Coverages A and B of this policy, or any other expenses, costs, or interest incurred in connection with the investigation, administration, adjustment, settlement or defense of any claim or “suit” arising under this policy, which the Claim Service Organization shown in the Schedule under its accounting practices, directly allocates to a particular claim, whether or not a payment indemnifying the claimant(s) is made. Such expenses include, but are not limited to, subrogation, all court costs, fees and expenses; fees for service of process; fees and expenses to attorneys for legal services; the cost of services to undercover operations and detectives; fees to obtain medical cost containment services, the cost of employing experts for the purpose of preparing maps, photographs, diagrams, and chemical and physical analyses or for expert advice or opinions; the cost of obtaining copies of any public records, and the cost of obtaining depositions and court reporters for or recorded statements. “Allocated loss adjustment expense” shall not include the salaries of our employees or our overhead or adjusters fees. 25. The Umbrella Policies provide, in pertinent part, as follows: I. A. INSURING AGREEMENT We will pay on behalf of the “insured” those sums in excess of the “retained limit” that the “insured” becomes legally obligated to pay as damages because of … “property damage” … to which this insurance applies. 1. This insurance applies to … “property damage” …, but only if: a. b. The … “property damage” is caused by an “occurrence”; The … “property damage” occurs during the “policy period”….
… III. A. DEFENSE AND SUPPLEMENTARY PAYMENTS We will have the right and duty to defend the “insured” against any “suit” seeking damages for … “property damage” …, even if groundless, false or fraudulent, to which this insurance applies:
Page 9 of 13
LEGAL\16811786\1
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1
Page 10 of 13
1.
2.
3.
When damages sought would be covered by “underlying insurance” but are not covered by that insurance because of the exhaustion of the applicable limits of “underlying insurance” by the payment of “loss” covered by this policy; or When damages sought would be covered under any “other insurance” but are not covered by that insurance because of the exhaustion of the applicable limits of “other insurance” by the payment of “loss” covered under such “other insurance”; or When damages sought for … “property damage” … are not covered by “underlying insurance” or “other insurance”, or any applicable self-insured retention has been exhausted by the payment of “loss” covered by this policy.
B.
We will have no duty to defend the “insured” against any “suit” seeking damages for … “property damage” … to which this insurance does not apply.
… V. EXCLUSIONS This insurance does not apply to: C. Contractual Liability …”[P]roperty damage” for which the “insured” is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages: 1. That the “insured” would have in the absence of the contract or agreement….
D.
Damage to Impaired Property or Property Not Physically Injured “Property damage” to “impaired property” or property that has not been physically injured, arising out of: 1. 2. A defect, deficiency, inadequacy or dangerous condition in “your product” …; or A delay or failure by you or anyone acting on your behalf to perform a contract or agreement in accordance with its terms.
F.
Damage to Your Product “Property damage” to “your product” arising out of it or any part of it.
K.
Expected or Intended Injury
Page 10 of 13
LEGAL\16811786\1
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1
Page 11 of 13
… “[P]roperty damage” expected or intended from the standpoint of the “insured”. VII. H. DEFINITIONS “Impaired property” means tangible property, other than “your product” …, that cannot be used or is less useful because: 1. 2. It incorporates “your product” … that is known or thought to be defective, deficient, inadequate or dangerous; or You have failed to fulfill the terms of a contract or agreement:
if such property can be restored to use by: 1. 2. O. The repair, replacement, adjustment or removal of “your product” …; or Your fulfilling the terms of the contract or agreement.
“Occurrence” means: 1. With respect to … “property damage”, an accident, including continuous or repeated exposure to substantially the same general harmful conditions. All such exposure to substantially the same general conditions shall be considered as arising out of the same” occurrence”, regardless of the frequency or repetition thereof, or the number of claimants. “Property damage” means: 1. Physical injury to tangible property,, including all resulting loss of use of that property. All such loss of use will be deemed to occur at the time of the physical injury that caused it; or 2. Loss of use of tangible property that is not physically injured. All such loss of use will be deemed to occur at the time of the “occurrence” that caused it. “Retained limit” means either of the following: 1. The total applicable limits of “underlying insurance” and any applicable limit of “other insurance” providing coverage to the “insured”…. “Your product”: 1. Means: a. Any goods or products, other than real property, manufactured, sold, handled, distributed or disposed of by: (1) You…. 2. Includes:
U.
V.
AA.
Page 11 of 13
LEGAL\16811786\1
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1
Page 12 of 13
a.
Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of “your product”….
26.
Damages alleged against Rayonier in the MWV action do not give rise to liability
insurance coverage under either the Primary Policies or the Umbrella Policies. 27. The damages alleged against Rayonier in the MWV litigation do not give rise to
“property damage” under either the Primary Policies or the Umbrella Policies. 28. The damages alleged against Rayonier in the MWV litigation do not give rise to
an “occurrence” under either the Primary Policies or the Umbrella Policies. 29. The damages alleged against Rayonier in the MWV litigation are expressly
excluded under both the Primary Policies and the Umbrella Policies. 30. Rayonier has not exhausted the deductible as required under the Primary Policies
nor the “retained limit” as required under the Umbrella Policies. 31. Neither ACE American nor ACE Property have an obligation to defend Rayonier
for the claims alleged in the MWV litigation. 32. Neither ACE American nor ACE Property have an obligation to indemnify
Rayonier for the damages alleged in the MWV litigation. WHEREFORE, ACE American and ACE Property seek declaratory relief that they have no obligation to defend or indemnify Rayonier from and for the allegations made against Rayonier by MWV because a) the allegations do not give rise to liability insurance coverage; b) the allegations do not give rise to “property damage” under the policies; c) the allegations do not give rise to an “occurrence” under the policies; d) the allegations are expressly excluded under the policies; e) Rayonier has not exceeded the “retained limit under the Umbrella Policies; and f) for such other reasons as may be shown at trial.
Page 12 of 13
LEGAL\16811786\1
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1
Page 13 of 13
WHEREFORE, ACE American and ACE Property pray for the relief set forth above and for such other and further relief as this Court deems just and necessary. COZEN O’CONNOR Dated: June 26, 2013 BY: /s/Tracy L. Eggleston Tracy L. Eggleston, Fed. ID No. 689 South Carolina Bar No.1856 301 South College Street, Suite 2100 Charlotte, NC 28202 Telephone No.: (704) 376-3400 Fax No.: (704) 334-3351 Email: teggleston@cozen.com Counsel for ACE American Insurance Co. and ACE Property and Casualty Insurance Company
Page 13 of 13
LEGAL\16811786\1
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 1 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 2 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 3 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 4 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 5 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 6 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 7 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 8 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 9 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 10 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 11 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 12 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 13 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 14 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 15 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 16 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 17 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 18 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 19 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 20 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 21 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 22 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 23 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 24 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-1
Page 25 of 25
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-2
Page 1 of 5
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-2
Page 2 of 5
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-2
Page 3 of 5
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-2
Page 4 of 5
2:13-cv-01741-CWH
Date Filed 06/26/13
Entry Number 1-2
Page 5 of 5

Published under a Creative Commons License By attribution, non-commercial
AttachmentSize
D.E.1 COMPLAINT against Meadwestvaco Corporation, Rayonier Performance Fibers LLC.pdf3.11 MB

Like us on facebook!