Hartford Steam Boiler Inspection and Insurance Co. v. Quantum Chemical Corp.
United States District Court for the Northern District of Illinois
1994 WL 494776 (1994)
A heat exchanger failed at the Quantum Chemical Corporation (Quantum) (defendant) plant, resulting in property damage. Three insurance policies potentially covered the damage: the policy of Hartford Steam Boiler Inspection and Insurance Co. (Hartford) (plaintiff) covered damage from an “accident” to an “object” but did not cover explosions; the policies of Industrial Risk Insurers and DR Insurance Company (the Property Insurers) covered damage from explosions but not from an “accident” to an “object.” Hartford filed a declaratory action against Quantum in federal court, pursuant to its diversity jurisdiction, seeking to establish nonliability for coverage. Quantum filed an independent suit in state court against Hartford and the Property Insurers, but the state court dismissed that suit because of the pending federal court action. Quantum then counterclaimed against Hartford in the federal court action and joined the Property Insurers as additional third-party defendants in its counterclaim. Quantum argued, nevertheless, that the federal court lacked subject matter jurisdiction over the third-party claims because of a lack of diversity between Quantum and the Property Insurers.
Rule of Law
Holding and Reasoning (Grady, J.)
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