Pacific Employers Ins. Co. v. AXA Belgium S.A. (E.D. Pa. April 27, 2011)
In 1978, plaintiff and defendant entered into a reinsurance agreement. Pursuant to the agreement, defendant was obligated to reimburse plaintiff for 5% of a portion of loss and/or loss expense payments made with respect to insurance policies written on plaintiff’s behalf. At the time the agreement was negotiated and entered into, plaintiff was (and still is) a California domiciled insurance company with its principal place of business in California. Defendant was (and still is) an insurer and reinsurer organized under the laws of the Kingdom of Belgium with headquarters in Belgium.
Defendant terminated its participation under the agreement effective January 31, 1985. Plaintiff alleged that defendant’s rights and obligations did not end at that time, and alleges that defendant remains liable to reimburse it for a portion of its loss and loss expense payments with respect to the policies reinsured under the agreement. Defendant moved to dismiss plaintiff’s complaint for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2).
The court granted defendant’s motion. The court noted that a plaintiff can obtain personal jurisdiction over a defendant through either general or specific jurisdiction. General jurisdiction is proper where a defendant’s contacts with the forum state are continuous and systematic and exists whether or not the cause of action is related to a defendant’s activities in the forum state. Specific jurisdiction arises from a defendant’s activities in the forum state that relate to the particular cause of action being litigated.
The court held that general jurisdiction was not proper because defendant was a foreign corporation, not authorized to do business in Pennsylvania and did not consent to jurisdiction in Pennsylvania. Additionally, plaintiff did not present sufficient evidence of defendant’s continuous and systematic contacts in Pennsylvania to establish a prima facie case of general jurisdiction. Defendant does not own, rent, use or possess any property in Pennsylvania, does not have an office, place of business, postal address or telephone listing in Pennsylvania, is not licensed to do business in Pennsylvania, does not advertise, sell, solicit business or contract to supply any goods or services in Pennsylvania, does not have any employees in Pennsylvania and does not maintain a bank account or own other property in Pennsylvania. Because the facts required to show general jurisdiction must be extensive and persuasive, and a plaintiff must show significantly more than mere minimum contacts to establish general jurisdiction, the court found general jurisdiction lacking in this case.
The court also held that specific jurisdiction was not proper. The court held that the contract negotiations and the consummation of the agreement did not take place in Pennsylvania. Also, there is no evidence was defendant would have had any expectation that in entering into the agreement with a California company it would later be haled into court in Pennsylvania. Additionally, there were no grounds for jurisdiction in Pennsylvania by way of a forum selection clause or choice of law provision. The court held that the location and character of the contract negotiations and the terms of the contract did not support the court exercising jurisdiction in Pennsylvania. Any minimum contact defendant had with Pennsylvania stemmed from plaintiff’s unilateral move and was insufficient to confer jurisdiction.
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Toni Frain and Michael Glascott
case provided courtesy of Lexis