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Homax Prods., Inc. v. Old Magic Corp.

United States District Court, D. Delaware

July 28, 2014

HOMAX PRODUCTS, INC., Plaintiff,
v.
OLD MAGIC CORPORATION f/k/a Magic American Corporation f/k/a Magic American Chemical Corporation, and ALSCOTT, LLC f/k/a Scottal, LLC, and ACME PATENT CORP. f/k/a Pentagonal Holdings, Inc., and ALAN F. ZEILINGER and SCOTT E. ZEILINGER, Defendants

Page 414

For Homax Products Inc., successor by merger to Magic American Products Inc., Plaintiff: Michael Jason Barrie, LEAD ATTORNEY, Stephen M. Ferguson, Benesch Friedlander Coplan & Aronoff, Wilmington, DE; Eric L. Zalud, PRO HAC VICE; J. Allen Jones, III, PRO HAC VICE.

For Old Magic Corporation, formerly known as Magic American Corporation, formerly known as Magic American Chemical Corporation, Defendant: Nancy Shane Rappaport, LEAD ATTORNEY, DLA Piper LLP, Wilmington, DE; Aleine Michelle Porterfield, New Castle County Law Dept., New Castle Corporate Commons, New Castle, DE; Heidi Levine, PRO HAC VICE.

For Alscott LLC, formerly known as Scottal LLC, Acme Patent Corp., formerly known as Pentagonal Holdings Inc., Defendants: Nancy Shane Rappaport, LEAD ATTORNEY, DLA Piper LLP, Wilmington, DE; Aleine Michelle Porterfield, New Castle County Law Dept., New Castle Corporate Commons, New Castle, DE.

For Alan F. Zeilinger, Defendant: Todd C. Schiltz, LEAD ATTORNEY, Drinker Biddle & Reath LLP, Wilmington, DE.

For Scott E. Zeilinger, Defendant: Nancy Shane Rappaport, LEAD ATTORNEY, DLA Piper LLP, Wilmington, DE; Aleine Michelle Porterfield, New Castle County Law Dept., New Castle Corporate Commons, New Castle, DE; Harold Schwarz, PRO HAC VICE; John P. Susany, PRO HAC VICE.

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MEMORANDUM

SUE L. ROBINSON, United States District Judge.

At Wilmington this 28th day of July, 2014, having reviewed the papers submitted in connection with defendants' motion to dismiss, I will grant the motion based on the following analysis:

1. Introduction.

Plaintiff Homax Products, Inc. (" Homax" ) is a successor by merger to Magic American Products, Inc. (" MAP" ). Homax is a Delaware corporation with its principal place of business at 1835 Barkley Boulevard, Suite 101, Bellingham, Washington. (D.I. 1 at ¶ 1) Homax is a leading supplier of do-it-yourself and professional home improvement products. ( Id. ) Defendant Old Magic Corporation (" Old Magic" ) (f/k/a Magic American Corporation (" MAC" ), f/k/a Magic American Chemical Corporation (" MACC" ),[1] was an Ohio corporation with its principal office located in Pepper Pike, Ohio. ( Id. at ¶ 2) Old Magic filed a Certificate of Dissolution by Shareholders, Directors, or Incorporators in the Office of the Ohio Secretary of State on or about June 24, 2004. ( Id. ) Defendant Alscott, LLC (" Alscott" ) (f/k/a Scottal, LLC (" Scottal" )) was an Ohio limited liability company that filed a Certificate of Dissolution of Limited Liability Company (the " Alscott Certificate" ) in the Office of the Ohio Secretary of State on or about March 2, 2005. According to the Alscott Certificate, the company may be reached for purposes of process, notice, or demand at 27950 Belgrave Road, Pepper Pike, Ohio. ( Id. at ¶ 3) Defendant Acme Patent Corp. (" Acme" ) (f/k/a Pentagonal Holdings, Inc. (" Pentagonal" )) was an Ohio corporation with its principal office located in Pepper Pike, Ohio. Acme filed a Certificate of Dissolution by Shareholders, Directors, or Incorporators in the Office of the Ohio Secretary of State on or about March 21, 2005. ( Id. at ¶ 4) Defendant

Page 416

Alan F. Zeilinger is an individual residing in Chagrin Falls, Ohio. ( Id. at ¶ 5) Defendant Scott E. Zeilinger is an individual also residing in Pepper Pike, Ohio.[2]( Id. at ¶ 6) This court has jurisdiction over the subject matter of the litigation pursuant to 28 U.S.C. § 1332.

2. Background.

On August 9, 2002, MAP entered into an asset purchase agreement (" APA" ) with MAC, Scottal, and Pentagonal, together with Alan and Scott Zeilinger as stockholders. ( Id. at ¶ 17) Homax is successor in interest to MAP, while Old Magic is successor in interest to MAC.[3]

3. On October 17, 2012, Ernest C. Reed (" Reed" ) filed a complaint in the Superior Court of the State of Rhode Island and Providence Plantations, Providence County, Reed v. A.I.I. Acquisitions, LLC, et al., Civ. No.12-5404 (the " Reed Action" ), alleging asbestos-related injuries against more than one hundred defendants, including MACC. ( Id. at ¶ ¶ 11, 12; ex. 2) In his complaint, Reed alleges that he contracted asbestos-related mesothelioma and other asbestos-related pathologies as a result of exposure to, and inhalation of, asbestos. Reed further alleges that MACC and other defendants, inter alia, " engaged in the business of contracting for, mining, milling, processing, distributing, delivering, marking, and/or selling asbestos and asbestos products." ( Id. at ¶ 13) It is further alleged in the Reed Action that MACC and other defendants sold asbestos-containing products " to the employer(s) of the Plaintiff, or to others working at the various job sites where the Plaintiff was employed, or to third persons who, in turn, delivered and sold such products and materials to employers or to others working at such job sites for use by employees, including the Plaintiff, or others through which the Plaintiff was exposed." ( Id. at ¶ 14) Reed claims that the asbestos products were defective, resulting in Reed contracting severe, painful, and fatal injuries, and causing " great pain, suffering, mental anxiety, distress of mind, humiliation, emotional trauma and mental anguish." ( Id. at ¶ 15) In his complaint, Reed seeks at least $1,000,000 in compensatory damages, $1,000,000 in punitive damages, and exemplary damages, including attorney fees, interest, and costs, with respect to claims for: (i) failure to warn; (ii) negligence; (iii) strict product liability; (iv) breach of warranty; and (v) conspiracy. ( Id. at ¶ 16)

4. Although the summons in the Reed Action was directed to " Magic American Chemical Corporation," it was addressed to " The Homax Group, Inc., P.O. Box 5643, Bellingham, WA 98227." ( Id. at ¶ 12; ex. 2 at 2) The summons gave 20 days after service to answer the complaint. ( Id. ) On or about November 13, 2012, Homax sent correspondence to " S. Zeilinger" by messenger. ( Id., ex. 3) In the correspondence, Homax alleged that " MAP" (as opposed to MACC) was named as a defendant in the Reed Action and sought indemnification and defense from defendants pursuant to Section 11.1(a)(v) of the APA. ( Id., ex. 3) Homax also requested that defendants respond to the correspondence within the ten-day period set forth by Section 11.1(c) of the APA. ( Id. ) There was no timely response to the November 13, 2012 ...


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