Case: 2:15-cv-00623-GLF-NMK Doc #: 1 Filed: 02/13/15 Page: 1 of 22 PAGEID #: 1

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
Hexion Inc. (f/k/a Momentive Specialty
Chemicals Inc.),
180 E. Broad Street
Columbus, OH 43215,
Plaintiff,
v.
Zurich Insurance plc (UK Branch),
c/o Messrs. Mendes & Mount, 750 Seventh
Avenue, New York, NY 10019-6829,
AIG Europe Limited,
c/o Messrs. Mendes & Mount, 750 Seventh
Avenue, New York, NY 10019-6829,
Assicurazioni Generali Spa (UK Branch),
c/o Messrs. Mendes & Mount, 750 Seventh
Avenue, New York, NY 10019-6829,
HDI-Gerling Industrie Versicherung AG,
c/o Messrs. Mendes & Mount, 750 Seventh
Avenue, New York, NY 10019-6829,
International Insurance Company of
Hannover PLC,
c/o Messrs. Mendes & Mount, 750 Seventh
Avenue, New York, NY 10019-6829,
Scor UK Company Ltd,
c/o Messrs. Mendes & Mount, 750 Seventh
Avenue, New York, NY 10019-6829,
Swiss Reinsurance Company UK Ltd.,
c/o Messrs. Mendes & Mount, 750 Seventh
Avenue, New York, NY 10019-6829,

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CASE NO. 2:15-cv-00623

JUDGE:
JURY DEMAND ENDORSED HEREON

Case: 2:15-cv-00623-GLF-NMK Doc #: 1 Filed: 02/13/15 Page: 2 of 22 PAGEID #: 2

Allianz Global Risks US Insurance

Company,
c/o Messrs. Mendes & Mount, 750 Seventh
Avenue, New York, NY 10019-6829,
Aspen Insurance UK Ltd.,
c/o Messrs. Mendes & Mount, 750 Seventh
Avenue, New York, NY 10019-6829,
QBE Insurance Corporation,
c/o Messrs. Mendes & Mount, 750 Seventh
Avenue, New York, NY 10019-6829,
ACE American Insurance Company on
behalf of Starr Technical Risks Agency,
Inc.,
c/o Messrs. Mendes & Mount, 750 Seventh
Avenue, New York, NY 10019-6829,
Talbot Syndicate #1183 on behalf of Talbot
Underwriting Ltd.,
c/o Messrs. Mendes & Mount, 750 Seventh
Avenue, New York, NY 10019-6829,
XL Insurance America, Inc.,
c/o Messrs. Mendes & Mount, 750 Seventh
Avenue, New York, NY 10019-6829,
Defendants.

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COMPLAINT
Hexion Inc. (Hexion), formerly known as Momentive Specialty Chemicals Inc., files
this Complaint against Zurich Insurance plc (UK Branch) (Zurich), AIG Europe Limited
(AIG), Assicurazioni Generali Spa (UK Branch) (Assicurazioni), HDI-Gerling Industrie
Versicherung AG (HDI), International Insurance Company of Hannover PLC
(International), Scor UK Company Ltd (Scor), Swiss Reinsurance Company UK Ltd.
(Swiss), Allianz Global Risks US Insurance Company (Allianz), Aspen Insurance UK Ltd.

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(Aspen), QBE Insurance Corporation (QBE), ACE American Insurance Company on behalf
of Starr Technical Risks Agency, Inc. (ACE), Talbot Syndicate #1183 on behalf of Talbot
Underwriting Services (US) Ltd. (Talbot), and XL Insurance America, Inc. (XL)
(collectively, the Carriers) alleging as follows:
NATURE OF THIS ACTION
1.

This Complaint requests declaratory relief and asserts breach of contract arising

out of the Carriers failure to acknowledge and to honor their contractual duty under an
international all-risk first-party property insurance program to fully reimburse Hexion for its
incurred and ongoing losses arising from the interruption of Hexions VeoVaTM manufacturing
activities at a Netherlands facility (the VeoVa Plant) due to property damage that took place to
equipment at that location that was used and contracted for use by Hexion.
2.

Hexions covered losses include lost business income, increased expenses, and

mitigation costs.
3.

Hexions losses will exceed $10 million.

4.

Hexions incurred and future losses are Time Element Losses, and associated

increased costs and expenses, that are covered under an interlocking international insurance
program that includes a Master Policy and a Local Policy. Attached hereto as Exhibits A and B
are true and correct copies of Policy No. WB1400879 (the Master Policy) and Policy No.
22588 (the Local Policy) (collectively the Policies).
5.

The Policies by their terms are interlocking, but to the extent terms and/or

coverage is broader, the terms and coverage of the Master Policy control.

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6.

Hexions incurred and future losses are subject to a $500 million policy limit and

a $1 million deductible.
7.

In the alternative, Hexions losses are Contingent Time Element Losses in respect

of named suppliers and are subject to a $100 million Master Policy sublimit and a $1 million
deductible.
8.

The Carriers have expressed an intent to limit and/or deny coverage by issuing a

reservation of rights letter asserting that: (1) a corrosion exclusion in the Master Policy may
bar coverage for Hexions losses; and (2) to the extent that the Master Policy provides any
coverage for Hexions losses, that coverage is subject to a $10 million sublimit for Contingent
Time Element Losses in respect of unnamed suppliers.
9.

Hexion seeks a declaration regarding the parties rights and obligations under the

insurance program, as well as damages resulting from the Carriers breach and/or anticipatory
breach of their coverage obligations.
THE PARTIES
10.

Hexion is a global specialty chemical manufacturer incorporated in New Jersey

with its principal place of business in Columbus, Ohio.

11.

Upon information and belief, Defendant Zurich is incorporated in Ireland, and its

UK Branch is registered in England and Wales with its principal place of business located at
3000 Parkway, Whiteley, Fareham, Hampshire in the United Kingdom.
12.

Upon information and belief, Defendant AIG is incorporated in the United

Kingdom with its principal place of business located at 58 Fenchurch St., EC3M 4AB, London in
the United Kingdom

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13.

Upon information and belief, Defendant Assicurazioni is incorporated in the

United Kingdom with its principal place of business located at 100 Leman St., E1 8AJ, London
in the United Kingdom.
14.

Upon information and belief, Defendant HDI is incorporated in Germany with its

principal place of business located at 10 Fenchurch St., EC3M 3BE, London in the United
Kingdom.
15.

Upon information and belief, Defendant International is incorporated in the

United Kingdom with its principal place of business located at 10 Fenchurch St., EC3M 3BE,
London in the United Kingdom.
16.

Upon information and belief, Defendant Scor is incorporated in the United

Kingdom with its principal place of business located at 10 Lime St., EC3M 3BE, London in the
United Kingdom.
17.

Upon information and belief, Defendant Swiss is incorporated in the United

Kingdom with its principal place of business located at 30 St. Mary Axe, EC3A 8EP, London in
the United Kingdom.
18.

Upon information and belief, Defendant Allianz is incorporated in California with

its principal place of business located in Burbank, California.

19.

Upon information and belief, Defendant Aspen is incorporated in the United

Kingdom with its principal place of business located at 30 Fenchurch St., EC3M 3BD, London in
the United Kingdom.

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20.

Upon information and belief, Defendant QBE is incorporated in Pennsylvania

with its principal place of business located at 88 Pine St. Wall St. Plaza., 4th Floor, New York,
NY 10005.
21.

Upon information and belief, Defendant ACE is incorporated in Pennsylvania

with its principal place of business located at 436 Walnut St., Philadelphia, PA 19106.
22.

Upon information and belief, Defendant Talbot is incorporated in New York with

its principal place of business located at 48 Wall St., Floor 17, New York, NY 10005.
23.

Upon information and belief, Defendant XL is incorporated in Delaware with its

principal place of business located at Seaview House, 70 Seaview Ave., Stamford, CT 06902.
24.

As described below, the Carriers issued a first-party property insurance policy to

Hexion.
JURISDICTION AND VENUE
25.

This Court has jurisdiction pursuant to 28 U.S.C. 1332 because there is

complete diversity of citizenship between Hexion and the Carriers, which are citizens of different
countries or states, and the amount in controversy exceeds $75,000, exclusive of interest and
costs.
26.

The Carriers are subject to personal jurisdiction because they regularly transact

business in Ohio and delivered the Policies at issue to Hexion in Ohio.

27.

Additionally, the Master Policy has a Jurisdiction clause stating that

jurisdiction shall be determined by a court of competent jurisdiction as stated in the Service of

Suit Clause, as defined in endorsement No. 5 attached hereto. Master Policy at 54.

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28.

Additionally, the Master Policy contains a Service of Suit Clause, Endorsement 5,

which provides that the Carriers agree at the request of the Insured to submit to the
jurisdiction of a Court of competent jurisdiction within the United States. Master Policy,
Endorsement 5 at 70.
29.

Further, the Declarations supplied by and agreed to by the Carriers states: Choice

of jurisdiction to be determined in court of competent jurisdiction as stated in Service of Suit

Clause in Part II Supplemental Clauses. Master Policy, Declarations at 8 (referencing
Endorsement 5).
30.

Further, the Master Policy states that It is further agreed that service of process

in such suit may be made upon Messers Mendes & Mount, 750 Seventh Avenue, New York, NY
10019-6829, United States of America, and that in any suit instituted against any one of [the
Carriers] will abide by the final decision of such Court or of any Appellate Court in the event of
an appeal. Master Policy, Endorsement 5 at 70.
31.

Venue is proper in this Court pursuant to 28 U.S.C. 1391 because Hexions

headquarters and principal place of business is in Columbus, Ohio, the sale and delivery of the
Master Policy took place in Columbus, Ohio, and Hexions risk management office responsible
for the purchase of the Master Policy and relations with the Carriers regarding the Master Policy
is in Columbus, Ohio.
HEXIONS 2014-2015 ALL-RISK PROPERTY INSURANCE PROGRAM
32.

In exchange for substantial premiums, the Carriers sold Hexion all-risk first-party

property insurance coverage for the period of July 1, 2014 to July 1, 2015.

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33.

This coverage is in the form of an international insurance program that consists of

the Master Policy, which covers all of its insured locations, and interlocks with, and provides
broad difference in conditions coverage vis-a-vis, one or more local policies (Insurance
Program).
THE MASTER POLICY
34.

The Master Policy applies worldwide to cover All Real and Personal Property

to which Hexion or its subsidiaries has an insurable interest. Master Policy at 1, 16.
35.

Momentive Specialty Chemicals Holdings LLC, now known as Hexion LLC, and

any of its subsidiaries, among other entities, are Named Insureds under the Master Policy.
Master Policy at 1.
36.

Hexion is and was a wholly owned subsidiary of Hexion LLC.

37.

Hexion B.V., the entity that owns the VeoVa Plant, is a subsidiary of Hexion.

38.

The Master Policy insures Real Property that is located at an Insured Location

or within 1,000 feet thereof, to the extent of the interest of the Insured in such property. Master
Policy at 16.
39.

The Master Policy defines Real Property to include new buildings (or

structures), alterations, repairs and additions under construction at an Insured Location, in which
the Insured has an insurable interest. Master Policy at 16.
40.

The Master Policy defines an Insured Location as a location: 1) listed on a

Schedule of Locations attached to this Policy. 2) [sic]covered as a Miscellaneous Unnamed

Location. [or] 3) [sic]covered under the terms and conditions of the Automatic Coverage or
Errors and Omissions provisions. Master Policy at 14.

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41.

The Master Policy defines Location to mean (1) As specified in the schedule

of locations, except for Miscellaneous Unnamed Locations; or (2) If not so specified or if a

Miscellaneous Unnamed Location, a building . . . bounded on all sides by public streets, clear
land space, or open waterways, each not less than 50 feet wide. Master Policy at 14.
42.

The Master Policy provides up to $500 million in coverage per occurrence,

subject to a $1 million deductible. Master Policy at 1, 45.

43.

The Master Policy also includes certain sublimits to coverage.

44.

The Master Policy defines occurrence as [a]n event of a continuous exposure

to conditions which cause or result from direct physical loss or damage. All damages resulting
from a common cause, or from exposure to substantially the same conditions, shall be deemed to
result from one occurrence. Master Policy at 3.
45.

The Master Policy provides coverage for Time Element loss directly resulting

from physical loss or damage of the type insured by the property damage sections of the Policy
to property (i) described elsewhere in this Policy and not otherwise excluded by this Policy,
(ii) used by the Insured, or for which the Insured has contracted use, or (iii) located at an
Insured Location, during the Policy periods of liability. Master Policy at 36.
46.

The Master Policy does not include a sublimit for Time Element losses.

47.

The Master Policy defines the Period of Liability for Time Element loss to

buildings and equipment as the period: a) starting from the time of direct physical loss or
damage of the type insured against; and b) ending when with due diligence and dispatch the
building and equipment could be (i) repaired or replaced; and (ii) made ready for operations,

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under the same or equivalent physical and operating conditions that existed prior to the damage,
c) not to be limited by the expiration of this Policy. Master Policy at 45.
48.

The Master Policy extends the Period of Liability to apply for such additional

length of time as would be required with the exercise of due diligence and dispatch to restore the
Insureds business to the condition that would have existed had no loss occurred, commencing
with the date on which the liability of the Company for loss resulting from interruption of
business would terminate if this Extension had not been included herein. Master Policy at 42.
49.

The Period of Liability in the Master Policy extends for up to twenty-four (24)

months.
50.

The Master Policy also covers expenses reasonably and necessarily incurred by

the Insured to reduce the loss otherwise payable under this section of this Policy. The amount of
such recoverable expenses will not exceed the amount by which the loss has been reduced.
Master Policy at 36.
51.

The Master Policy also covers the reasonable and necessary extra costs incurred

by the Insured of the following during the PERIOD OF LIABILITY: a) Extra expenses to
temporarily continue as nearly normal as practicable the conduct of the Insureds business; and
b) Extra costs of temporarily using property or facilities of the Insured or others, less any value
remaining at the end of the PERIOD OF LIABILITY for property obtained in connection with
the above. Master Policy at 39.
52.

The Master Policy also covers Professional Fees, including the actual costs

incurred by [Hexion] of reasonable fees payable to professionals assisting in producing such

other proofs, information or evidence in support of Hexions claim. Master Policy at 2728.

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53.

In addition to Time Element coverage, the Master Policy provides, as a Time

Element Coverage Extension, CONTINGENT TIME ELEMENT coverage, which is defined as

the Actual Loss sustained and EXTRA EXPENSE incurred by the Insured during the PERIOD
OF LIABILITY: 1) directly resulting from physical loss or damage of the type insured; and 2) to
property of the type insured, at any locations of direct suppliers or customers located within the
TERRITORY of this Policy. Master Policy at 42.
54.

The Master Policy contains a $100 million sublimit for Contingent Time Element

Coverage in respect of named customers and/or suppliers and a $10 million sublimit for
Contingent Time Element Coverage in respect of unnamed customers and/or suppliers. Master
Policy at 45.
55.

The terms named and unnamed are not defined in the Master Policy.

56.

The Master Policy excludes from coverage deterioration, depletion, rust,

corrosion or erosion, wear and tear, inherent vice, latent defect or quality in the property that
causes it to damage or destroy itself, decay or other spoilage, when not sudden and/or
accidental. Master Policy at 34.
57.

The Policy further states that if direct physical damage not excluded by this

Policy results, then only that resulting damage is insured. Master Policy at 34.
58.

The Master Policy has a Jurisdiction clause stating that jurisdiction shall be

determined by a court of competent jurisdiction as stated in the Service of Suit Clause, as defined
in endorsement No. 5 attached hereto. Master Policy at 54.

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59.

The Master Policy contains a Service of Suit Clause, Endorsement 5, which

provides that the Carriers agree at the request of the Insured to submit to the jurisdiction of a
Court of competent jurisdiction within the United States. Master Policy, Endorsement 5.
60.

The Declarations supplied by and agreed to by the Carriers states: Choice of

jurisdiction to be determined in court of competent jurisdiction as stated in Service of Suit

Clause in Part II Supplemental Clauses. Master Policy, Declarations at 8 (referencing
Endorsement 5).
61.

The Master Policy states that it shall only apply to the extent that: a) the Insured

Perils and/or definitions and/or conditions under this Policy are broader in meaning or scope than
those of any Specific Local Primary Policy and/or b) limits of liability set forth herein are
broader in meaning or scope than those of any Specific Local Primary Policy and this Policy
shall only apply to provide excess insurance over any amount collectible from such policies.
Master Policy, Endorsement 8 at 73.
62.

The Master Policy further states:

International Insurance Program Structure
This policy is part of an international insurance program. This program
arrangement is a compilation of different policies, which all have one
common goal: to cover you as agreed in this policy.

Master Policy, Endorsement 9 at 79.

THE LOCAL POLICY
63.

The Carriers issued the Local Policy to Hexion, which is a local property

insurance policy applicable to Hexions insurable interests in the Netherlands.

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64.

The Local Policy states that it is part of an international insurance program,

under which an interlocking master policy and one or more local policies have been issued to the
parent company and to the local companies that belong to its group. Local Policy at
Declarations Page 1.
65.

The Local Policy provides coverage for the real interest against loss or damage

[to insured property] if and insofar as the loss or damage is the result of an occurrence. Local
Policy at 7.
66.

The Local Policy defines real interest as [t]he insureds interest in the

preservation of the risk objects on account of ownership or any other real right or his bearing the
risk for the preservation thereof. Local Policy at 7.
67.

The Local Policy defines risk objects as the buildings, machinery/equipment,

and/or goods in the buildings at the address(es) specified in the schedule. Local Policy at 5.
68.

The Local Policy further states that Carriers have knowledge of the location,

construction, lay-out and use of the risk objects, as well as of the adjacent premises, upon
inception of the contract. Local Policy at 14.
HEXIONS BUSINESS INTERRUPTION AND RESULTING AND ONGOING
ECONOMIC LOSSES
69.

Hexions VeoVa Plant is located at Chemieweg 25, Moerdijk, Netherlands 4782

70.

The VeoVa Plant is located at the same address, and is physically attached and

SJ.

directly adjacent to, a manufacturing facility (Shell Plant) owned and operated by Shell
Nederland Chemie (Shell).

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71.

The VeoVa Plant produces a family of vinyl ester monomers known as VeoVa,

which principally is used as a monomer in paint production.

72.

One of the base raw materials that the VeoVa Plant needs in order to manufacture

VeoVa is acetylene, which Shell produces at the Shell Plant, and which Shell has contracted with
Hexion to supply to the VeoVa Plant.
73.

Shell supplies acetylene that is manufactured at the Shell Plant (the VeoVa Plant

and the Shell Plant are collectively referred to as the Moerdijk Facility).
74.

The VeoVa Plant is physically connected to the Shell Plant through a series of

piping systems at the Moerdijk Facility.

75.

Steam produced by the boilers at the Moerdijk Facility is used both by the VeoVa

Plant and the Shell Plant.

76.

Equipment to produce and to distribute steam at the Moerdijk Facility is used both

by the VeoVa Plant and the Shell Plant.

77.

Hexion owns manufacturing and storage vessels, equipment, piping, electrical

substation and a process control system at the Moerdijk Facility.

78.

Shell owns pipes, boilers, and oil refining cracker equipment at the Moerdijk

Facility, which are used by Shell in the production and/or supply of acetylene to Hexion.
79.

Hexion uses and contracts for the use of the Shell Plant pursuant to a Site

Services, Utilities, Materials and Facilities Agreement (SUMF Agreement).

80.

Under the SUMF Agreement, Hexion purchases from Shell certain site services,

utilities, materials and facilities, including boilers and steam distribution equipment and piping.

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81.

Further, Hexion uses and contracts for use of the Shell Plant pursuant to an

Operation and Maintenance Services Agreement (Operation Agreement).

82.

Pursuant to the Operation Agreement, Shell provides Hexion with operation,

maintenance, and direct technical manpower services for operation and maintenance of the
VeoVa Plant.
83.

Pursuant to the Operation Agreement, the VeoVa Plant is operated pursuant to

site requirements that apply to the entire Moerdijk Facility.

84.

Pursuant to the Operation Agreement, Hexion must acquire the approval of Shell

for any improvement proposed for the VeoVa Plant.

85.

Pursuant to the Operation Agreement, Hexion utilizes and pays for the

maintenance of certain equipment at the Shell Plant.

86.

Upon information and belief, on October 2, 2014, an incident at the Shell Plant

located within the Moerdijk Facility resulted in property damage to equipment used by Shell in
the production of acetylene and steam.
87.

Property damage at the Moerdijk Facility impacted the cracker, boilers, piping,

and other equipment necessary for the production of acetylene and steam.
88.

Upon information and belief, property damage at the Moerdijk facility was caused

by an extraordinary and unforeseen incident.

89.

Property damage causing interruption of Hexions business took place to property

at the address of the VeoVa Plant submitted to the Carriers.

90.

Property damage at the Moerdijk Facility causing interruption of Hexions

business took place to property used and contracted for use by Hexion.

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91.

Property damage causing interruption of Hexions business took place to property

within 1,000 feet of Hexion property.

92.

Upon information and belief, the Carriers knew or should have known that Shell

was a supplier to Hexion.

93.

Hexion had an insurable interest in the damaged property that caused an

interruption to its business.

94.

As a direct result of the property damage incident, Shell was unable to produce

any acetylene or steam from its damaged Facility.

95.

On October 2, 2014, Shell declared force majeure under its contracts with Hexion.

96.

Shell has not supplied the Facility with any acetylene or steam as of October 2,

2014, and upon information and belief the damaged facilities at the Shell Plant will not be able to
resume manufacturing acetylene or steam for an extended period of time.
97.

These events have interrupted, and continue to interrupt, the VeoVa Plants

operations and have caused Hexion to suffer loss.

98.

As a direct result of the October 2, 2014 incident and resulting property damage at

the Moerdijk Facility, and based on information presently available to Hexion, Hexions covered
losses will exceed $10 million.
HEXIONS TIMELY SUBMISSION OF ITS INSURANCE CLAIM
AND THE CARRIERS RESPONSE
99.

On or around October 6, 2014, the Carriers were notified of the October 2, 2014

property damage event at the Moerdijk Facility, and of the resulting interruption of its operations
at the VeoVa Plant.

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100.

During the months following Hexions submission of notice to the Carriers,

Hexion has been corresponding with the Carriers regarding the claim and has been providing the
Carriers with documents and information that they have requested in connection with their claim
investigation and adjustment activities.
101.

On or around January 8, 2015, Zurich sent a letter to Hexion stating that the

Carriers are in the early stages of investigating the claim, and purported to reserve its rights
with respect to the following coverage defenses:
- The Zurich Netherlands policies only cover [Hexions] property and do not provide
Contingent Time Element coverage.
- Any loss caused by corrosion shall be excluded. This may be of relevance when the
cause investigation is complete.
- The Contingent Time Element coverage in [the Master Policy] for unnamed suppliers
has a USD$10,000,000 sublimit.
102.

In an email dated February 3, 2015, the Carriers further asserted that the parties

dispute is governed by English law and is subject to the jurisdiction in a court of England and
Wales.
103.

To the extent not waived or otherwise excused by the acts and conduct of Zurich,

or by operation of law, Hexion has complied with all terms and conditions precedent in the
Policies, and accordingly is entitled to all benefits of the Policies.
COUNT I
(Declaratory Judgment on the Carriers Obligations Under the Insurance Program)
104.

Hexion incorporates herein by reference the preceding paragraphs of this

Complaint as if fully set forth herein.

105.

The Carriers owe a duty to reimburse Hexion for its incurred and ongoing losses

and expenses, including but not limited to Time Element Loss, increased expenses, and

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mitigation costs, arising from the interruption of its manufacturing activities at the Facility
caused by the October 2, 2014 property damage incident at the Moerdijk Facility under the
Insurance Programs Time Element Coverage and related coverages.
106.

Alternatively, the Carriers owe a duty to reimburse Hexion for its incurred and

ongoing losses and expenses, including but not limited to Time Element Loss, and associated
costs and expenses, arising from the interruption of its manufacturing activities at the Facility
caused by the October 2, 2014 property damage incident at the Moerdijk Facility under the
Master Policys Contingent Time Element Coverage subject to the Master Policys $100 million
sublimit for named suppliers.
107.

The Carriers invocation of inapplicable language in the Master Policy that would

operate to eliminate or otherwise limit Hexions claim constitutes an express intention to

materially breach their duties and obligations under the Insurance Program.
108.

In light of the above, there exists an actual controversy between the parties

appropriate for the entry of a declaratory judgment pursuant to 28 U.S.C. 2201, in Hexions
favor.
109.

Hexion is entitled to a declaration that the Carriers owe a duty to reimburse

Hexion for its incurred and ongoing lost business income, increased expenses, mitigation costs,
and other covered loss arising from the interruption of its manufacturing activities at the Facility
caused by the October 2, 2014 property damage incident at the Moerdijk Facility under the
Insurance Programs Time Element Coverage and terms.
110.

Alternatively, Hexion is entitled to a declaration that the Carriers owe a duty to

reimburse Hexion for its incurred and ongoing lost business income, increased expenses,

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mitigation costs, and other covered loss under the Master Policys Contingent Time Element
Coverage subject to the Master Policys $100 million sublimit for named suppliers, and other
terms.
COUNT II
(Anticipatory Breach)
111.

Hexion incorporate herein by reference the preceding paragraphs of this

Complaint as if fully set forth herein.

112.

Hexion has complied with all applicable conditions precedent contained in the

Insurance Program.
113.

Additionally, none of the exclusions in the Insurance Program preclude coverage

for Hexions claim.

114.

The Carriers have a duty to reimburse Hexion for its incurred and ongoing lost

business income, increased expenses, mitigation costs and other covered loss arising from the
interruption of its manufacturing activities at the Facility caused by the October 2, 2014 property
damage incident at the Moerdijk Facility because the loss is encompassed by the Insurance
Programs Time Element Coverage and other terms.
115.

Alternatively, the Carriers have a duty to reimburse Hexion for its incurred and

ongoing lost business income, increased expenses, mitigation costs and other covered loss arising
from the interruption of its manufacturing activities at the Facility caused by the October 2, 2014
property damage incident at the Moerdijk Facility because the loss is encompassed by the Master
Policys Contingent Time Element Coverage and subject to the Master Policys $100 million
sublimit for named suppliers and other terms.

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Case: 2:15-cv-00623-GLF-NMK Doc #: 1 Filed: 02/13/15 Page: 20 of 22 PAGEID #: 20

116.

By invoking inapplicable language in the Master Policy that would operate to

eliminate or otherwise limit Hexions claim, the Carriers have expressed their intention to
materially breach their obligations under the Insurance Program regarding their duty to
reimburse Hexion for its incurred and ongoing lost business income, increased expenses, and
mitigation costs arising from the interruption of its manufacturing activities at the Facility caused
by the October 2, 2014 property damage incident at the Moerdijk Facility.
117.

As a direct and proximate result of the Carriers breach, the Carriers have

deprived Hexion of the benefit of the Insurance Program for which Hexion has paid a substantial
premium.
118.

Hexion has been damaged in an amount to be proven at trial, plus interest and

appropriate damages.
119.

As set forth above, this amount will exceed $10 million.

PRAYER FOR RELIEF

WHEREFORE, Hexion respectfully seeks the following:

A.

That the Court enter judgment in favor of Hexion on all causes of action;

B.

On all causes of action, an award of damages in Hexions favor in an

amount to be determined at trial;

C.

On Hexions First Cause of Action, a declaration that the Carriers are

under a duty to reimburse Hexion for its incurred and ongoing Time
Element loss and related loss and expenses, or alternatively its incurred
and ongoing Contingent Time Element loss in respect of named suppliers,
arising from the interruption of its manufacturing activities at the Facility

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Case: 2:15-cv-00623-GLF-NMK Doc #: 1 Filed: 02/13/15 Page: 21 of 22 PAGEID #: 21

caused by the October 2, 2014 property damage incident at the Moerdijk

Facility in amounts to be determined by this Court;

D.

On all claims for relief, an award of Hexions reasonable attorneys fees;

E.

On all claims for relief, an award of pre-judgment and post-judgment

interest, costs and expenses of this action;

F.

On all claims for relief, for such other, further and different relief as this
Court deems just and proper; and

G.

That this case be tried by a jury.

Respectfully submitted,
/s/ Albert J. Lucas
Albert J. Lucas
(0007676)
Trial Counsel
Jason J. Blake
(0087692)
CALFEE, HALTER & GRISWOLD LLP
1200 Huntington Center - 41 S. High Street
Columbus, OH 43215
614-621-1500
614-621-0010 (FAX)
alucas@calfee.com; jblake @ calfee.com
Barry J. Fleishman
Erica J. Dominitz
Gregory M. Jacobs
KILPATRICK TOWNSEND &
STOCKTON LLP
607 14th Street NW, Suite 900
Washington, DC 20005
(202) 508-5800
(202) 508-5858 (FAX)
bfleishman@kilpatricktownsend.com
edominitz@kilpatricktownsend.com
gjacobs@kilpatricktownsend.com
Attorneys for Plaintiff Hexion Inc.

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JURY DEMAND
Plaintiff hereby demands trial by jury on all issues so triable by the maximum number of
jurors allowed.
/s/ Albert J. Lucas
One of the Attorneys for Plaintiff
Hexion Inc.

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