Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

WEST SHORE PIPE LINE CO. v. ASSOCIATED ELEC. & GAS

May 11, 1992

WEST SHORE PIPE LINE COMPANY and AMOCO PIPE LINE COMPANY as agent for WEST SHORE PIPE LINE COMPANY, Plaintiffs,
v.
ASSOCIATED ELECTRIC AND GAS INSURANCE SERVICES LTD., a foreign corporation, Defendant.



The opinion of the court was delivered by: CHARLES R. NORGLE

 Before the court is defendant Associated Electric and Gas Insurance Services Ltd.'s ("AEGIS") motion to dismiss. For reasons that follow, the motion is granted.

 FACTS

 This declaratory judgment action involves an excess liability insurance policy that plaintiffs West Shore Pipe Line Company and Amoco Pipe Line Company (together "West Shore") obtained from AEGIS. In June 1988, an underground pipeline in Wauwatosa, Wisconsin owned by West Shore sprang a leak. AEGIS denied West Shore's claim over the leak in November 1989. West Shore filed the present lawsuit on October 16, 1991.

 Attached to West Shore's complaint was a copy of the insurance policy. Two provisions of the policy are particularly relevant at this stage of the proceedings. One is a clause titled "Arbitration/Service of Suit," which provides in part:

 
Any controversy or dispute arising out of or relating to an interpretation or breach of this POLICY shall be settled by binding arbitration in accordance with the Rules of the American Arbitration Association and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereover. The arbitration process shall be governed by and conducted in accordance with the laws of the State of New York. . . .
 
In the event of a judgment entered against [AEGIS] on an arbitration award, [AEGIS] at the request of [West Shore], shall submit to the jurisdiction of any court of competent jurisdiction within the United States of America, and shall 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.
 
Service of process in such suit or any other suit against [AEGIS] may be made upon Messrs. LeBoeuf, Lamb, Leiby & McRae, 520 Madison Avenue, New York, New York 10022 . . .

 Another "Service of Suit Clause" was attached to the policy. That clause provides in part:

 
It is agreed that in the event of the failure of the Insurer hereon to pay any amount claimed to be due hereunder, the Insurer hereon, at the request of the INSURED, will submit to the jurisdiction of any court of competent jurisdiction within the United States of America and will comply with all requirements necessary to give such Court jurisdiction [sic] and all matters arising hereunder shall be determined in accordance with the law and practice of such Court.

 AEGIS responded to the complaint by filing the instant motion to dismiss under Federal Rule of Civil Procedure 12(b)(1). It asserted that the second service of suit clause, which allegedly attempts to waive the mandatory arbitration provision in the arbitration/service of suit clause, was attached without its knowledge or consent, and is therefore not part of the insurance contract. Accordingly, AEGIS contended that the arbitration clause deprives this court of subject matter jurisdiction.

 In support of its motion, AEGIS submitted various materials, including a copy of West Shore's August 4, 1987 insurance application, on a 14-page AEGIS form, signed by a West Shore vice president. The first page of the application contains a one-paragraph policy description entirely in capital letters, including a sentence stating that "THIS POLICY WOULD PROVIDE FOR MANDATORY ARBITRATION OF ALL DISPUTES THAT MAY ARISE THEREUNDER." The last page of the form, the signature page, contains four paragraphs, the second of which states that the application does not constitute a binding offer or acceptance by either party, "BUT IT IS AGREED THAT THIS APPLICATION SHALL BE THE BASIS OF THE INSURANCE SHOULD A POLICY BE ISSUED." The third paragraph provides that "BY SIGNING THIS APPLICATION, THE APPLICANT COMPANY ACKNOWLEDGES THAT IT HAS RECEIVED THE ATTACHED SPECIMEN POLICY AND AGREES TO BE BOUND BY THE MANDATORY ARBITRATION PROVISION SHOULD A POLICY BE ISSUED."

 AEGIS also submitted a pair of affidavits in support of its motion. Gary Buchanan, an AEGIS claims attorney, averred that Mack & Parker was neither an AEGIS agent nor was it authorized to accept service of process on AEGIS's behalf at any time. Buchanan also testified, in an offer of proof before this court, that the second service of suit clause, which would allow Mack & Parker to accept service on AEGIS's behalf, was never presented to AEGIS for inclusion in West Shore's policy. He also testified that the original policy issued to West Shore was kept in AEGIS's offices in New Jersey, and that the policy contained neither the service of suit clause listing Mack & Parker nor such a clause listing any other agent for service of process residing in Illinois. Buchanan acknowledged, however, that other AEGIS policies issued in Illinois contain a service of suit clause providing for service upon AEGIS in Illinois. He submitted a copy of AEGIS's ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.