Case 4:12-cv Document 1 Filed in TXSD on 11/15/12 Page 1 of 7

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1 Case 4:12-cv Document 1 Filed in TXSD on 11/15/12 Page 1 of 7 ^.ffifted States Courts. vfftnern District of TBOB* FILED ^* IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION CONTINENTAL INSURANCE COMPANY, RLI INSURANCE COMPANY, ZURICH INSURANCE COMPANY, and INDEMNITY INSURANCE COMPANY OF NORTH AMERICA as Subrogees of McDERMOTT, INC., and McDERMOTT, INC. Plaintiffs, V. C.ANO.: deugro (USA), INC. Defendant. PLAINTIFFS, ORIGINAL COMPLAINT TO THE HONORABLE JUDGE OF SAID COURT: >' N0V Plaintiffs Continental Insurance Company, RLI Insurance Company, Zurich Insurance Company, and Indemnity Insurance Company of North America as Subrogees of McDermott, Inc., and McDermott, Inc., file its Original Complaint against Defendant deugro (USA), Inc. and respectfully states as follows: I. PARTIES 1. Plaintiff, Continental Insurance Company ("Continental"), is a corporation duly organized and existing under the laws of the State of New Hampshire with a principal place of business located at CNA Center, 333 S. Wabash, Chicago, Illinois 60604, and at all relevant times, was engaged in the insurance business and licensed to do business in the State of Texas. 2. Plaintiff, RLI Insurance Company ("RLI"), is a corporation duly organized and existing under the laws of the State of Illinois with a principal place of business located at 9025

2 Case4:12-cv Document 1 Filed in TXSD on 11/15/12 Page 2 of 7 N. Lindbergh Drive, Peoria, Illinois , and at all relevant times, was engaged in the insurance business and licensed to do business in the State of Texas. 3. Plaintiff, Zurich Insurance Company ("Zurich"), has a principal place of business located at 1400 American Lane, Schaumberg, Illinois , and at all relevant times, was engaged in the insurance business and licensed to do business in the State of Texas. 4. Plaintiff, Indemnity Insurance Company of North America ("Indemnity"), is a corporation duly organized and existing under the laws of the State of Pennsylvania with a principal place of business located at 436 Walnut Street, Philadelphia, PA 10105, and all relevant times, was engaged in the insurance business and licensed to do business in the State of Texas. 5. Plaintiff, McDermott, Inc. ("McDermott") is a Delaware corporation with a place of business located at 757 North Eldridge Parkway, Houston, Texas Defendant, deugro (USA), Inc. ("deugro") is a corporation duly organized and existing under the laws of the State of Texas with a principal place of business located at Central Green Blvd., Suite 200, Houston, Texas Defendant may be served with citation in this action by serving its registered agent for service of process at the following address: CT Corporation System, 350 N. St. Paul Street, Suite 2900, Dallas, Texas II. JURISDICTION 7. This Court has jurisdiction over this lawsuit under 28 USC 1332(a)(1). III. VENUE 8. Venue is proper in this judicial district under 28 USC 1391(a)(1). In addition, McDermott and deugro agreed in its Freight Forwarding Services Agreement ("the Agreement") to submit to personal jurisdiction and venue in the Federal District Court for the Southern

3 Case4:12-cv Document 1 Filed in TXSD on 11/15/12 Page 3 of 7 District of Texas in Harris County, Houston, Texas for litigation arising out of the Agreement or the performance of services under the Agreement. IV. FACTS 9. Defendant deugro acted as freight forwarder on McDermott's behalf for transportation of its loaded "APV Skid Assembly No. 1" with a final delivery address of J.R. McDermott, Master of DB 50, c/o Sembawang Shipyard PTE Ltd, SG Singapore. 10. On or about November 16, 2011, a trucking subcontractor retained by deugro was utilizing a tractor trailer to transport McDermott's APV Skid Assembly No. 1. While in transit outside of Aalborg, Denmark, the right side of the trailer caught on fire. The tractor unit was ultimately disconnected from the burning trailer but McDermott's cargo was rendered a complete and total loss. Damage to the loaded cargo of APV Skid Assembly No. 1 included the battery and six control valves, solenoid valves, cabling and the unit's platform. 11. At all relevant times, McDermott was insured by Plaintiffs Continental, RLI, Zurich and Indemnity under a "quota share" policy as follows: 35% Continental Insurance Company, Policy No. OC ; 30% RLI Insurance Company, Policy No. CAR ; 25% Zurich Insurance Company, Policy No. OC ; and 10% Indemnity Insurance Company of North America, Policy No. N A 12. After the loss, McDermott tendered a first-party claim to its insurers. Pursuant to its policy of insurance, the Insurer Plaintiffs issued payment in the amount of $367, to McDermott for damage to the APV Skid Assembly No. 1 and related costs. McDermott sustained additional uninsured losses in excess of $500,

4 Case4:12-cv Document 1 Filed in TXSD on 11/15/12 Page 4 of 7 V. COUNT 1 - BREACH OF CONTRACT 13. At all relevant times, McDermott and deugro's relationship was governed by the Agreement whereby deugro would provide McDermott cost effective and expeditious custom house brokerage services, coordination, forwarding and transportation of similar services to designations selected by McDermott. Provisions of the Agreement were to prevail over any conflicting provisions in any purchase order, shipment documents, bill of lading, power of attorney or other document. As part of its agreement, deugro agreed to be responsible for all loss or damage to McDermott's cargo caused by the acts, omissions and/or negligence of deugro and/or its subcontractors. Specifically, deugro agreed to the following: 8.4 LIABILITY FOR COMPANY'S PROPERTY Contractor shall be responsible for and defend, indemnify and hold Company Group harmless from and against, all loss or damage to the Materials or other cargo caused by the acts, omissions and/or negligence of Contractor and/or its subcontractors, including material packers. 14. After the loss, McDermott presented a written claim for damage to the APV Skid Assembly No. 1 to deugro. To date, deugro has not been responsible for or otherwise indemnified McDermott for damages to the APV Skid Assembly No. 1. Accordingly, deugro is in breach of the Freight Forwarding Services Agreement for failure to fully indemnify McDermott for all damages sustained. VI. COUNT 2 - NEGLIGENCE 15. In the alternative, deugro owed McDermott a duty to exercise reasonably prudent and ordinary care in transporting and/or storing McDermott's cargo. Defendant breached this duty by negligently transporting and/or storing the cargo and by failing to select adequate and

5 Case4:12-cv Document 1 Filed in TXSD on 11/15/12 Page 5 of 7 competent contractors to assist with transportation of McDermott's cargo. Defendant deugro's negligent acts and omissions include, but are not limited to: (a) (b) (c) (d) failing to act with due and reasonable care under the circumstances so as to protect the cargo from harm; failing to exercise reasonable care in performing services in connection with the transportation and/or delivery of the cargo; failing to hire competent carriers, agents and/or employees to transport the cargo; and otherwise failing to exercise due care under the circumstances. Each of the above-referenced acts and omissions, singly or in combination with others, constituted negligence, which proximately caused the damages incurred by Plaintiffs. VII. COUNT 3 - RES IPSA LOQUITUR 16. In addition to the specific acts and omissions enumerated above, Plaintiffs alleges that deugro is liable pursuant to the doctrine of res ipsa loquitur. The cargo was within the exclusive direction and control of deugro and its contractors when this loss occurred. The incident is not the kind that would ordinarily occur in absence of negligence. Plaintiffs did not commit any voluntary act which in any way contributed to the loss or damages incurred by Plaintiffs. VIII. COUNT 4 - BAILMENT 17. In the alternative, delivery to and acceptance of the cargo by deugro constituted a bailment. The bailment was created for the mutual benefit of McDermott and deugro. This bailment imposed a duty on deugro to properly and reasonably care for the cargo and to select competent contractors to transport the cargo while it was in its possession, care, custody and control. On or about November 16, 2011, deugro and/or its contractor took possession, custody

6 Case4:12-cv Document 1 Filed in TXSD on 11/15/12 Page 6 of 7 and control of the cargo in a good marketable condition. However, after taking possession of the cargo but prior to its arrival in Singapore, and while still under the possession, custody and control of deugro and its contractors, the cargo was rendered a total loss. As a result of deugro's failure to exercise the requisite care, Plaintiffs suffered the loss of its property as set forth above and incurred damages. IX. DAMAGES 18. As a direct and proximate result of deugro's conduct, McDermott suffered damage to its cargo. The damages sustained were tendered to the Insurer Plaintiffs for payment in the amount of $367,728.72, which represented the scheduled value of the APV Skid Assembly No. 1 and associated costs. Pursuant to its legal, equitable and contractual rights of subrogation, the Insurer Plaintiffs now bring this action seeking this sum from deugro. In addition, McDermott seeks damages which were not covered under its insuring policy in an amount in excess of $500, case. X. JURY DEMAND 19. Plaintiffs respectfully request that this Court empanel a lawful jury to hear this XL PRAYER 20. For these reasons, Plaintiffs ask for judgment against Defendant deugro for the following: (a) (b) (c) actual damages not to exceed to $900,000.00; prejudgment and postjudgment interest; costs of suit; and

7 Case4:12-cv Document 1 Filed in TXSD on 11/15/12 Page 7 of 7 (d) all other relief the Court deems appropriate. Respectfully submitted, COZEN O'CONNOR >. Schulze fe Bar No !1 McKinney, Suite 2900 Houston, Texas Telephone: Facsimile: ATTORNEYS FOR PLAINTIFFS