Arch Chemicals, Inc. v. Radiator Specialty Company, No. 3:2007cv01339 - Document 386 (D. Or. 2010)
Court Description: OPINION AND ORDER: Defendant's Motion Regarding Lexington's Participation at Trial 279 is granted. Plaintiffs' Motion in Limine Precluding Any Reference to Lexington Insurance Company or of Arch's Insurance at Trial 281 is denied. Signed on 12/10/10 by Magistrate Judge Dennis J. Hubel. (see formal opinion) (kb)
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Arch Chemicals, Inc. v. Radiator Specialty Company Doc. 386 1 2 3 4 5 6 7 8 IN THE UNITED STATES DISTRICT COURT 9 FOR THE DISTRICT OF OREGON 10 PORTLAND DIVISION 11 12 ARCH CHEMICALS, INC., a Virginia corporation, and LEXINGTON INSURANCE CO., No. 07-1339-HU 13 Plaintiffs v. 14 15 16 OPINION AND ORDER RADIATOR SPECIALTY COMPANY, a North Carolina corporation, Defendant. 17 18 19 20 21 22 23 24 25 26 27 M. Robert Smith Joseph Rohner IV Dennis N. Freed Ryan J. McClellan Smith Freed & Eberhard 111 S.W. Third Avenue, Suite 4300 Portland, Oregon 97204 Thomas D. Allen Amber E. Tuggle Shawn D. Scott Earl W. Gunn Mark R. Johnson Laura Voght Weinberg, Wheeler, Hudgins, Gunn & Dial 50 East Paces Ferry Road, Suite 3000 Atlanta, Georgia 30326 Attorneys for plaintiffs 28 William G. Earle Paul R. Xochihua Dockets.Justia.com 1 2 Jonathan Henderson Davis Rothwell Earle & Xochihua 1300 S.W. Fifth Avenue, Suite 1900 Portland, Oregon 97201 3 4 5 6 Daniel F. Mullin John A. McHugh Mullin Law Group 101 Yesler Way, Suite 400 Seattle, Washington 98104 Attorneys for defendant 7 HUBEL, Magistrate Judge: 8 This is an action by Arch Chemicals, Inc. (Arch)and Lexington 9 Insurance Company (Lexington) against Radiator Specialty Company 10 (RSC), asserting a claim for contribution and Lexington also 11 alleges an unjust enrichment claim. Arch and Lexington seek 12 recovery of funds paid in settlement of a lawsuit against Arch 13 brought by members of the Davidson family. Before the court are 14 RSC's Motion Regarding Lexington's Participation at Trial [doc. # 15 279] and Arch/Lexington's Motion in Limine Precluding Any Reference 16 to Lexington Insurance Company or of Arch's Insurance at Trial 17 [doc. # 281]. 18 FACTS 19 This case arises out of the wrongful death and bodily injury 20 claims brought by the Davidson family against Arch Chemicals. The 21 events leading up the injuries are summarized in other opinions and 22 will not be repeated here. 23 On April 20, 2004, the Davidson family brought a lawsuit 24 against Arch in Oregon Circuit Court alleging civil claims related 25 to the fire. The litigation was resolved by a confidential 26 settlement on December 7, 2006, which was jointly funded by Arch 27 and Lexington. 28 2 - OPINION AND ORDER 1 On September 7, 2007, Arch brought the instant lawsuit against 2 RSC, seeking contribution for RSC's role in causing the fire. 3 June 30, 2009, on RSC's motion for joinder, the court granted 4 joinder of Arch's insurer, Lexington, as a real party in interest. 5 On May 6, 2010, the parties filed the motions presently before the 6 court, essentially asking the court to determine whether and how 7 Lexington will participate in the trial. 8 9 On DISCUSSION RSC asks that Lexington be treated at trial just as any other 10 plaintiff would be treated in any trial. 11 the other hand, ask that RSC be precluded from ever mentioning the 12 existence 13 involvement from the jury. of Lexington at trial, thus Arch and Lexington, on concealing Lexington's 14 I begin by noting that in their briefing and at oral argument, 15 neither party was able to cite a case where an insurance company 16 who was a party to a case remained anonymous at trial. 17 court aware of such a case. 18 and Lexington cite in support of their bid for anonymity generally 19 pertain to the question of whether insurers are real parties in 20 interest that should be joined, or to general comments about the 21 concerns regarding jury prejudice toward insurers. 22 Nor is this On the contrary, the cases that Arch In my Opinion and Order, [doc. # 166], dated June 30, 2009, I 23 ordered that Lexington be joined as a party in this case. 24 question then, is whether an insurance company who is a real party 25 in interest should remain anonymous at trial. The 26 The leading case relating to this topic in the Ninth Circuit 27 is Wyller v. Fairchild Hiller Corp., 503 F.2d 506, 511 (9th Cir. 28 1974). The litigation in Wyller arose from a helicopter crash. 3 - OPINION AND ORDER 1 Id. at 507. 2 helicopter manufacturer. 3 entered 4 plaintiff, Livingston, who owned the crashed helicopter. 5 511. Under the agreement, Wyller released any claims he might have 6 had against Livingston in exchange for a loan that would be used 7 for attorneys fees and costs in the action against the helicopter 8 manufacturer. 9 court, the loan was to be repaid with interest. into 10 Wyller 11 consent. 12 agreed Id. The sole survivor of the crash, Wyller, sued the an Id. at 508. agreement Id. not with his Prior to trial, Wyller former employer and co- Id. at Under the agreement, if Wyller prevailed in to settle his claims Id. In addition, without Livingston's The Ninth Circuit noted, The instant agreement bears a marked similarity to the ‘loan receipt’ device by which indemnity and liability insurers sometimes settle losses by advancing to the insured the amount of his loss in the form of a loan, repayable only in the event and to the extent that the insured obtains a recovery for the loss from a third party. Such agreements insulate the insurer from the necessity of seeking to recoup its loss in its own name and from the judicially recognized prejudice of juries against insurance companies; they also enable injured plaintiffs to avoid the acceptance of unjust settlements out of necessity. 13 14 15 16 17 18 Id. On appeal, the helicopter manufacturer argued that in reality 19 the loan money had come from Livingston's insurer. Id. It 20 assigned error to the trial court's decision not to allow the 21 manufacturer's motion to add the insurer as a plaintiff or 22 alternatively to amend the pleadings to indicate that the 23 plaintiffs were suing on behalf of Livingston's insurer, an alleged 24 real party in interest. Id. at 511-12. On this issue, the Ninth 25 Circuit expressed no opinion because there was insufficient 26 evidence in the record to show that the insurer actually supplied 27 the money and was, therefore, a real party in interest. 28 4 - OPINION AND ORDER Id. at 1 512. 2 particular insurer was in fact involved in [paying the settlement], 3 the district court would have exceeded its discretion in requiring 4 the insurer's joinder as a real party in interest." 5 mechanism of the loan receipt may have also kept that insurer 6 unnamed as a plaintiff, the lack of a record it funded the 7 settlement made that question unnecessary to reach. The court noted, "Absent some substantial showing that this While the 8 In contrast, here, there is no question that Lexington jointly 9 funded the settlement, and is, therefore, a properly joined real 10 party in interest. 11 consequences of being a plaintiff in this case, as a sophisticated 12 business it could have, at the time of settlement, utilized the 13 loan receipt mechanism discussed by the Ninth Circuit. 14 business decision would have eliminated Lexington's presence in 15 this lawsuit and the jury's knowledge of its existence. Lexington, 16 however, opted to take a different route. That route was discussed 17 in the court's June 30, 2009 opinion. To the extent Lexington seeks to avoid the Such a 18 As a real party in interest, I find no persuasive precedent 19 that Lexington's identity and role in this case should be kept from 20 the jury. 21 mechanism to achieve its goal of keeping Lexington's identity out 22 of the case, plaintiffs now want the court to rescue them from the 23 consequences of their decision to use the ratification approach. 24 For the reasons stated in my opinion of June 30, 2009, and 25 September 25, 2009, ratification was not available on the facts of 26 this case and a loan receipt was not properly utilized. 27 consequence is Lexington is in the case as a plaintiff and will be 28 treated as any other party during trial. On the contrary, having failed to utilize a valid 5 - OPINION AND ORDER The 1 If the prejudice was so great as to justify the relief 2 plaintiffs seek, there would be ample cases allowing this relief 3 over the years. 4 /// There are none. 5 6 7 CONCLUSION Defendant's Motion Regarding Lexington's Participation at Trial [doc. # 279] is granted. 8 Plaintiffs' Motion in Limine Precluding Any Reference to 9 Lexington Insurance Company or of Arch's Insurance at Trial [doc. 10 11 # 281] is denied. IT IS SO ORDERED, 12 13 Dated this 10th day of December , 2010. 14 /s/ Dennis J. Hubel 15 Dennis James Hubel United States Magistrate Judge 16 17 18 19 20 21 22 23 24 25 26 27 28 6 - OPINION AND ORDER
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