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Case: 1:10-cv-02710-LW Doc #: 1 Filed: 12/01/10 1 of 8.

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IN THE UNITED STATES DISTRICT COURT


FOR THE NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

PENTAIR WATER TREATMENT (OH) CASE NO.


COMPANY (FORMERLY KNOWN AS
ESSEF CORPORATION) JUDGE
220 Park Drive
Chardon, Ohio 44024

and
COMPLAINT
PENTAIR WATER POOL & SPA, INC. (Trial by Jury Demanded)
(FORMERLY KNOWN AS PAC-FAB,
INC.),
13950 Mountain Avenue
Chino, California 91710

and

PENTAIR MANUFACTURING BELGIUM


BVBA (DOING BUSINESS IN OHIO AS
PENTAIR MANUFACTURING
BELGUIM, LLC) (FORMERLY KNOWN
AS STRUCTURAL EUROPE N.V.
FORMERLY KNOWN AS SFC),
Toekomstlaan 30
2200 Herentals

Plaintiffs,

vs.

WESTCHESTER FIRE INSURANCE


COMPANY,
1325 Avenue of the Americas
New York, New York 10019

Defendant.

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Plaintiffs Pentair Water Treatment (OH) Company (f/k/a Essef Corporation)("Essef"),

Pentair Water Pool & Spa, Inc. (f/k/a Pac-Fab, Inc.) ("Pac-Fab") and Pentair Manufacturing

Belgium BVBA (d/b/a, in Ohio, Pentair Manufacturing Belgium, LLC f/k/a Structural Europe

N.V. f/k/a SFC) ("SFC") (collectively "Plaintiffs") for their Complaint against Defendant

Westchester Fire Insurance Company (hereinafter "Westchester"), state and allege as

follows:

PARTIES

1. Essef, currently known as Pentair Water Treatment (OH) Company, is

incorporated in Ohio with its principal place of business in Chardon, Ohio.

2. Pac-Fab, currently known as Pentair Water Pool & Spa, Inc., was until

December 31, 2004 a wholly-owned subsidiary of Essef incorporated in Delaware (and

thus is an insured under the policy) and has its principal place of business in Sanford,

North Carolina. On December 31, 2004, Essef spun off, for no consideration, its Pac-Fab

subsidiary to Pentair Water Group, Inc., of which Pac-Fab is currently a wholly–owned

subsidiary.

3. SFC, formerly known as Structural Europe N.V. and Pentair Manufacturing

Belgium BVBA, was until December 29, 2004 a wholly-owned subsidiary of Essef (and

thus is an insured under the policy) with its principal place of business in Herentals,

Belgium. On December 29, 2004, all of the shares of SFC were transferred by Essef to

Pentair Global Sarl, a Luxemburg limited liability company, which in turn transferred on

December 15, 2005, all but 0.01% of the shares to its wholly-owned subsidiary, Pentair

Holdings Sarl, a Luxemburg limited liability company. On December 26, 2006, in

connection with a reorganization of Pentair's business operations in Europe, SFC was

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consolidated with another wholly–owned subsidiary of Pentair Global and Pentair

Holdings in Pentair Water Belgium BVBA. On April 18, 2007, all of the design,

procurement and manufacturing assets and related liabilities of the merged entity,

including those of SFC, were transferred to Pentair Manufacturing Belgium BVBA.

4. Westchester is a New York corporation licensed to do business within the

State of Ohio. Upon information and belief, Westchester's principal place of business is in

Philadelphia, Pennsylvania.

JURISDICTION AND VENUE

5. Jurisdiction is proper under 28 USC §1332(a)(1) as there is diversity of

citizenship and the amount in controversy exceeds $75,000 exclusive of interests and

costs.

6. Venue is proper in the Northern District of Ohio pursuant to 28 USC

§1391(a)(1) as a substantial part of the issues giving rise to the claims for relief occurred in

this District.

THE POLICY OF INSURANCE

7. Westchester issued to Plaintiffs a Commercial Umbrella Policy, bearing

policy No. CUA-100297-0, with effective dates of June 1, 1994 through June 1, 1995 (the

"Policy").

8. The Policy includes Umbrella limits of coverage in the amount of Fifteen

Million Dollars ($15,000,000) per occurrence and in the aggregate.

9. Above and beyond the policy limits of coverage, Westchester owed

additional obligations to Plaintiffs under the Policy. The Insuring Agreements provides in

pertinent part:

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II. DEFENSE SETTLEMENT

***

(3) We also have the following obligations, but only to the extent
that they are not included in "Underlying Insurance" or other insurance:

***

(c) We will pay all costs taxed against the "Insured" in any
"Claim" or "Suit we defend.

(d) We will pay all pre-judgment interest against the "Insured"


attributable to that part of any judgment which we become obligated to pay,
but our duty to pay such interest ends when we have offered to pay or
deposited in court, the part of the judgment which we become obligated to
pay and which is within the applicable "Limits of Insurance."

(e) We will pay all post-judgment interest against the "Insured"


attributable to that part of any judgment which we become obligated to pay,
but our duty to pay such interest ends when we have paid, or offered to pay
or deposited in court, the part of the judgment which we become obligated
to pay and which is within the applicable "Limits of Insurance." [Emphasis
added.]

See Policy, "Insuring Agreements," pp. 3-4.

THE CELEBRITY CRUISES LITIGATION

10. On February 29, 2008, the United States District Court for the Southern

District of New York entered a judgment against Plaintiffs in the amount of Thirty Million

Four Hundred Thirty-Five Thousand Two Hundred and Twenty-Six Dollars ($30,

435,226.00) in the matter of Celebrity Cruises, Inc. et al. v. Essef Corp., et al., Case No. 96-

CV-3135. Specifically, the judgment consists of the following items of damages:

a. lost profits of $10,608,900 plus prejudgment interest through


February 29, 2008 of $7,478,082 on that amount for a total of
$18,086,982; and

b. out-of-pocket expenses of $7,304,959 plus prejudgment interest


through February 29, 2008 of $5,043,285 on that amount for a total
of $12,348,244.

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(A true and accurate copy of the February 29, 2008 judgment (the "Judgment") is attached

hereto as Exhibit A.)

11. The February 29, 2008 Judgment also awarded post-judgment interest

pursuant to Title 28 U.S.C. §1961 on the full amount of the Judgment and awarded taxable

costs.

12. Under the terms and conditions of the Policy, Westchester participated in the

defense and indemnification of Plaintiffs in the Celebrity litigation on behalf of Plaintiffs.

13. On July 8, 2008, a Settlement and Release Agreement was entered into

between the plaintiffs in the Celebrity Cruise litigation and the Plaintiffs in this litigation.

The Plaintiffs in this action paid $35,000,000. In connection with the settlement, the

Judgment was paid and a Satisfaction of Judgment was filed in full and final satisfaction of

the Judgment including pre-judgment interest in the amount of $12,521,367; post-

judgment interest in the approximate amount of $65,255; and taxable costs of

approximately $250,000. (A true and accurate copy of the Satisfaction of Judgment is

attached as Exhibit B.)

14. Plaintiffs have demanded that Westchester, under the terms and conditions

of the Policy, pay for the amounts of pre-judgment interest, post-judgment interest and

taxable costs awarded in the Judgment.

15. Plaintiffs have complied with all conditions precedent under the Policy.

16. Westchester has breached its contractual obligations under the Policy by

failing and refusing to pay Plaintiffs for the amounts of pre-judgment interest, post-

judgment interest and taxable costs awarded in the Judgment.

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COUNT ONE

17. Plaintiffs reallege and incorporate by reference all of the allegations

contained in paragraphs 1 through 16 as if fully rewritten herein.

18. Under the terms and conditions of the Policy, Westchester is obligated to pay

the amount of pre-judgment interest awarded against Plaintiffs.

19. Westchester has breached its contractual obligations under the Policy by

failing and refusing to pay Plaintiffs for the amount of pre-judgment interest awarded in the

Judgment.

20. As a result of Westchester's breach of its contractual obligations under the

Policy, Plaintiffs have suffered damages in the approximate amount of $12,521,367.

COUNT TWO

21. Plaintiffs reallege and incorporate by reference all of the allegations

contained in paragraphs 1 through 20 as if fully rewritten herein.

22. Under the terms and conditions of the Policy, Westchester is obligated to pay

the post-judgment interest awarded against Plaintiffs.

23. Westchester has breached its contractual obligations under the Policy by

failing and refusing to pay to Plaintiffs the amount of post-judgment interest awarded in the

Judgment.

24. As a result of Westchester's breach of its contractual obligations under the

Policy, Plaintiffs have suffered damages in the approximate amount of $65,255.00.

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COUNT THREE

25. Plaintiffs reallege and incorporate by reference all of the allegations

contained in paragraphs 1 through 24 as if fully rewritten herein.

26. Under the terms and conditions of the Policy, Westchester is obligated to pay

all taxable costs awarded against Plaintiffs.

27. Westchester has breached its contractual obligations under the Policy by

failing and refusing to reimburse Plaintiffs for the amount of taxable costs awarded in the

Judgment.

28. As a result of Westchester's breach of its contractual obligations under the

Policy, Plaintiffs have suffered damages in the approximate amount of $250,000.00 costs

awarded in the Judgment.

WHEREFORE, Plaintiffs demand that this Court enter judgment in their favor and

against Westchester as follows:

A. On Count One, the amount of $12,521,367 for pre-judgment


interest awarded in the Judgment;

B. On Count Two, the approximate amount of $65,255 for post-


judgment interest awarded in the Judgment;

C. On Count Three, the approximate amount of $250,000 for


taxable costs awarded in the Judgment;

D. For reasonable attorneys' fees, interest and costs

E. For such other relief as this Court may deem appropriate.

JURY DEMAND

Plaintiffs hereby demand a trial by jury.

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Respectfully submitted,

/s/ Richard S. Mitchell


Richard S. Mitchell (0007036)
rmitchell@ralaw.com
Roetzel & Andress, LPA
1375 East Ninth Street
One Cleveland Center
Ninth Floor
Cleveland, OH 44114
Tel: 216.623.0150
Fax: 216.623.0134

Ronald B. Lee (0004957)


rlee@ralaw.com
Roetzel & Andress, LPA
222 South Main Street
Akron, OH 44308
Telephone: 330.376.2700
Facsimile: 330.376.4577

Attorneys for Plaintiffs

1656076/067920/3091