Dinallo v. Dunav Insurance Co.
(S.D.N.Y. February 1, 2010)
In a motion for reconsideration in the federal district court for the Southern District of New York, a Serbian reinsurance company sought reversal of an order remanding a suit to New York State supreme court. The suit was brought by the New York Superintendant of Insurance in his capacity as Liquidator of Midland Insurance Company. Between 1978 and 1980, Midland entered into four separate reinsurance contracts with the Serbian reinsurer. Each of the reinsurance contracts contained a “service of suit” provision whereby the Serbian reinsurer agreed to “submit to the jurisdiction of any Court of competent jurisdiction within the United States” and to “comply with all requirements necessary to give such Court jurisdiction.” The court originally found that this service of suit provision effected a waiver of the Serbian reinsurer’s removal rights.
The Serbian reinsurer argued upon reconsideration that the court overlooked important facts regarding its reasons for agreeing to the service of suit provision including that (1) these reinsurance contracts were among the first entered into in the United States by the Serbian reinsurer and it lacked the sophistication and experience of insurers that wrote reinsurance in the United States on a regular basis; (2) it was “given to understand” that the service of suit provision with Midland was required by law and that no changes to the provision could be made; and (3) there was no indication upon completion of the contracts that the Serbian reinsurer was being asked to waive its removal rights. Disregarding these arguments, the court held that the service of suit clause unambiguously operates as a waiver of the Serbian reinsurer’s removal rights.
A copy of the decision can be found here
Bryan Richmond and Jeffrey Kingsley