United States District Court, Northern District of Illinois, E.D
March 31, 1964
ANDREW A. EUZZINO, PLAINTIFF,
THE LONDON & EDINBURGH INSURANCE COMPANY LIMITED, DEFENDANT.
The opinion of the court was delivered by: Will, District Judge.
Plaintiff Andrew A. Euzzino, an Illinois citizen, has moved
to remand this action to the Circuit Court of Cook County. The
cause was originally brought in that court in January, 1954.
Defendant, The London & Edinburgh Insurance Company Limited, a
British corporation, which has its principal place of business
in Great Britain and which is authorized to sell insurance in
Illinois, removed the action to this Court. The amount in
controversy exceeds $10,000 exclusive of interest and costs.
In his complaint, plaintiff alleges that he is the insured
under a policy issued by defendant which policy covered, inter
alia, theft of certain property, that $39,575.00 of such
insured property was stolen in January, 1963, that he complied
with all provisions of the policy as to presenting claims and
furnishing due proof of loss, but that defendant refuses to
reimburse him for the loss.
As the basis for his motion to remand, plaintiff contends
that the policy obligates defendant to submit itself to the
jurisdiction of any court of competent jurisdiction, state or
federal, which plaintiff selects and to have the controversy
determined in accordance with the law and practice of that
court. The applicable policy provisions are as follows:
"It is agreed that in the event of the failure of the
Company to pay any amount claimed to be due
hereunder, the Company, at the request of the
Assured, will submit to the jurisdiction of any court
of competent jurisdiction within the United States
and will comply with all requirements necessary to
give such Court jurisdiction and all matters arising
hereunder shall be determined in accordance with the
law and practice of such court.
"It is further agreed that * * * in any suit
instituted against it upon this contract, the Company
will abide by the final decision of such Court or of
any Appellate Court in the event of an appeal."
Defendant concedes that the Circuit Court of Cook County is a
court of competent jurisdiction but contends that, properly
interpreted, the foregoing language does not constitute a
waiver by it of any rights of removal it might otherwise have
and, further, that if the provision is construed to be such a
waiver, it is invalid.
While the provisions of the policy are not entirely free from
doubt, giving effect to all of the language utilized, it seems
clear that the defendant-insurer agreed to litigate disputes
under the policy in any court of competent jurisdiction
selected by the plaintiff-assured. If the insurer, which
drafted the policy, had intended merely to agree to litigate
disputes under the policy in any appropriate United States
forum, the policy need simply have read, "* * * the Company
will submit to the jurisdiction of any court of competent
jurisdiction in the United States. * * *."
The insurer, however, chose to add the words "at the request
of the Assured" and references to (1) complying "with all
requirements necessary to give such Court jurisdiction", (2)
having all matters "determined in accordance with the law and
practice of such court", and (3) agreeing to "abide by the
final decision of such Court". The "such court" in each
instance is the court of competent jurisdiction selected by the
Assured. Unless all of these provisions are to be deemed mere
surplusage, the conclusion is unavoidable that the policy
accords to the assured the right to choose the court of
competent jurisdiction in which disputes are to be determined.
This conclusion was also reached in General Phoenix Corp. v.
Malyon, 88 F. Supp. 502 (S.D.N.Y. 1949), where it was held that
the defendant, by entering into a contract which contained the
identical provisions as those in the instant policy, waived his
right to remove the litigation to a federal court from the
state court selected by the plaintiff. The court stated that
the contract provision "restricts the defendant to the Court in
which suit is first begun against it, be it Federal or State."
Id. 88 F. Supp. at 503.
Defendant urges that such an interpretation is inconsistent
with the following principle enunciated in § 558 of the
Restatement of Contracts:
"A bargain to forego a privilege, that otherwise
would exist, to litigate in a Federal Court rather
than in a State Court, or in a State Court rather
than in a Federal Court, or otherwise to limit
unreasonably the tribunal to which resort may be had
for the enforcement of a possible future right of
action or the time within which a possible future
claim may be asserted, is illegal."*fn1
The better and more modern rule, however, apparently limits
the foregoing to contracts the terms of which are unreasonable
or to agreements procured under duress. See William H. Muller &
Co. v. Swedish Amer. Line Ltd., 224 F.2d 806
, 808, 56 A.L.R.2d
295 (2d Cir.), cert. denied, 350 U.S. 903
, 76 S.Ct. 182
L.Ed. 793 (1955). See also concurring opinion of L. Hand, J.,
in Krenger v. Pennsylvania R. Co., 174 F.2d 556
, 561 (2d Cir.),
cert. denied, 338 U.S. 866
, 70 S.Ct. 140
, 94 L.Ed. 531 (1949).
Defendant does not allege that it entered into the instant
contract under duress nor does it suggest any basis for the
Court to hold that the provisions thereof are unreasonable.
It is well settled that parties to a contract may agree to
resolve all disputes by arbitration and to forego any resort to
the courts. Ehrenzweig, Conflict of Laws, §§ 42-43 (1962).
There would appear to be no public policy reason, absent a
showing of duress or unreasonableness, why they could not
likewise agree to submit such disputes for determination to any
court of competent jurisdiction selected by one of them.
Defendant agreed to litigate this matter in any court of
competent jurisdiction selected by plaintiff, and the Circuit
Court of Cook County is that court. Consequently, plaintiff's
motion to remand must be granted. An order consistent with the
above will be entered.