Nov 15, 2013

Ford Marrin Obtains Dismissal in Tortious Interference Suit

Resolute Management Inc. et al. v. Transatlantic Reinsurance Co. et al., Case No. SUCV2013-01597 (Superior Court of Suffolk County).

Law360, Nov. 15, 2013: TransRe Defeats Berkshire’s Asbestos Liability Suit

In a major case closely watched by the reinsurance industry, FMEW successfully obtained a complete dismissal on the pleadings of an action brought in Massachusetts state court by Berkshire Hathaway’s National Indemnity Company (NICO) and Resolute Management (Resolute) against Transatlantic Reinsurance Company (TransRe) and its corporate parent, Alleghany Corporation (Alleghany). The lawsuit alleged that TransRe, at Alleghany’s direction, tortiously interfered with contractual relations and engaged in unfair claims practices by refusing to pay asbestos liabilities on claims transferred to NICO pursuant to certain loss portfolio transfer (LPT) transactions entered into with AIG, OneBeacon and Utica Mutual. The court adopted each of the firm’s arguments in favor of dismissal of the entire action.

Specifically, we were able to establish that Resolute was not a party to the various LPTs under which asbestos liabilities were transferred to NICO and therefore Resolute had no standing to sue for tortious interference with such contracts. As for NICO, the court agreed with our argument that NICO could not bootstrap Resolute’s Boston residence in order to apply Massachusetts substantive law to the tortious interference claims. Rather, either New York law (where the acts occurred) or Nebraska (where NICO resides) applied. Under New York or Nebraska law, an “actual breach” is an element of a tortious interference claim and since it was not alleged that either NICO or its contracting partners (AIG, OneBeacon and Utica Mutual) had breached the LPTs, NICO failed to state tortious interference claims based on those LPTs.

The court also dismissed the Massachusetts statutory (G.L. c. 93A) unfair practices claims, noting that it is “the rare case” in which a 93A claim is dismissed at the pleading stage but that “this appears to be that case.” In so holding, the Court noted that all of the actions and transactions occurred outside of Massachusetts and that Resolute’s residence in Massachusetts was insufficient to make Massachusetts the “center of gravity.” As to NICO, the court cogently held that the “center of gravity” lies “somewhere west of the Massachusetts-New York border.”

Partner Joseph D’Ambrosio represented TransRe and Alleghany in this matter.

By, Joseph D’Ambrosio