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New Hampshire Insurance Co. v. Green Dragon Trading Co.

June 17, 2008

NEW HAMPSHIRE INSURANCE COMPANY, PLAINTIFF,
v.
GREEN DRAGON TRADING COMPANY, DEFENDANTS.



The opinion of the court was delivered by: Samuel Der-yeghiayan, District Judge

MEMORANDUM OPINION

This matter is before the court on Defendant Green Dragon Trading Co.'s ("Green Dragon") motion to dismiss for lack of personal jurisdiction and for improper venue or, in the alternative, to transfer. For the reasons stated below, we deny Green Dragon's motion to dismiss and grant Green Dragon's motion to transfer.

BACKGROUND

In October 2007, Plaintiff New Hampshire Insurance Co. ("New Hampshire") alleges that it issued Green Dragon an Executive Yacht Insurance Policy ("Policy"), effective October 24, 2007 to October 24, 2008. According to New Hampshire, the Policy coverage related to M/Y LE VIPER, Green Dragon's 85-foot motor yacht ("Yacht"). On November 18, 2007, the Yacht was allegedly traveling north from Key West, Florida towards Ft. Lauderdale, Florida and began taking on water in the engine room. New Hampshire alleges that the United States Coast Guard and a private towboat responded to the Yacht's distress call, and the private towboat towed the Yacht to port. New Hampshire claims that it was notified of the incident on November 19, 2007 ("Claim"). On December 7, 2007, New Hampshire alleges that it issued a Reservation of Rights letter informing Green Dragon that coverage might be denied pursuant to provisions of the Policy. On March 3, 2008, New Hampshire denied coverage for the damage to the Yacht ("Damage").

New Hampshire brought the instant action, pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201 et seq., seeking a declaration of its rights and responsibilities for the Damage under the Policy. Specifically, New Hampshire requests that this court declare that it does not have an obligation or duty to provide coverage for the Claim because (1) losses arising out of "wear and tear" are not covered under Paragraph 10(B)(2) of the Policy (Count I), (2) losses arising out of "improper maintenance" are not covered under Paragraph 10(B)(1) of the Policy (Count II), and (3) Green Dragon breached the implied warranty of seaworthiness (Count III). (Compl. Par. 21-23). Green Dragon filed the instant motion to dismiss for lack of personal jurisdiction and venue or, in the alternative, to transfer.

LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(2) provides that an action should be dismissed against a party over whom the court lacks personal jurisdiction. Fed. R. Civ. P. 12(b)(2). The plaintiff bears the burden of providing sufficient evidence to establish that personal jurisdiction exists. RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1276 (7th Cir. 1997). For on a motion to dismiss for lack of personal jurisdiction, "all well-pleaded jurisdictional allegations in the complaint are accepted as true unless controverted by affidavit." Travelers Cas. & Sur. Co. v. Interclaim (Bermuda) Ltd., 304 F.Supp.2d 1018, 1021 (N.D. Ill. 2004); Zurich Capital Markets, Inc. v. Coglianese, 2004 WL 2191596, at *3 (N.D. Ill. 2004).

Federal Rule of Civil Procedure 12(b)(3) ("Rule 12(b)(3)") provides that a party may move to dismiss an action when the action is not filed in a proper venue. Fed. R. Civ. P. 12(b)(3). If a court determines that it is not a proper venue for the action, the court is required to dismiss the action or "if it be in the interests of justice, transfer such case to any district or division in which it could have been brought."

28 U.S.C. § 1406(a).

Pursuant to 28 U.S.C. § 1404(a), a district court may transfer a civil action to another district if such a transfer is appropriate and if it is done "[f]or the convenience of parties and witnesses, [and] in the interest of justice. . . ." 28 U.S.C. § 1404(a). In order to transfer a case pursuant to 28 U.S.C. § 1404(a), the transferor court must first find that: (1) venue is proper in the transferor district, and (2) venue is proper in the transferee district. See Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219 (7th Cir. 1986); 28 U.S.C. § 1404(a)(stating that transfer can only be made to a district in which the action "might have been brought"). The moving party has the burden of "establishing . . . that the transferee forum is clearly more convenient." Coffey, 796 F.2d at 219.

DISCUSSION

As an initial matter, this court notes that New Hampshire has brought this action as an admiralty and maritime claim under Federal Rule of Civil Procedure 9(h) ("Rule 9(h)"). (Compl. Par. 5). Rule 9(h) states that "[i]f a claim for relief is within the admiralty or maritime jurisdiction and also within the court's subject matter jurisdiction on some other ground, the pleading may designate the claim as an admiralty claim or maritime claim for purposes of Rules 14(c), 38(e), and 82. . . ." Fed. R. Civ. P. 9(h)(1). New Hampshire's complaint states "this claim is an admiralty and maritime claim within the meaning of Rule 9(h)." (Compl. Par. 5). This statement satisfies the requirements necessary to designate this action as an admiralty case. Fed. R. Civ. P. 9(h)(1); see also Wingerter v. Chester Quarry Co., 185 F.3d 657, 666 (7th Cir. 1998)(stating that "the preferred method to designate the action as being one in admiralty is by an express reference to Fed. R. Civ. P. 9(h)"). Thus, Green Dragon's motion to dismiss or to transfer venue must be considered in light of the specific rules applicable to an admiralty and maritime claim. See Wingerter, 185 F.3d at 664 (stating that "numerous and important consequences flow from whether a district court treats a case as falling under admiralty or [some other form of subject matter] jurisdiction").

I. Rule 12(b)(2) Motion to Dismiss for Lack of Personal Jurisdiction

Green Dragon argues that this court must dismiss the instant action due to the fact that it lacks personal jurisdiction over Green Dragon. Personal jurisdiction may only be created by "statute or federal rule with force of statute" and the Seventh Circuit has declined to create a uniform national rule for personal jurisdiction in admiralty cases. United Rope Distributors, Inc. v. Seatriumph Marine Corp., 930 F.2d 532, 534-35 (7th Cir. 1991). Therefore, the proper inquiry with respect to personal jurisdiction is whether (1) there is a federal or state statutory basis for personal jurisdiction, and (2) whether the exercise of personal jurisdiction would be consistent with the applicable state constitution and the United States Constitution. Central States, Southeast and Southwest Areas Pension Fund v. Reimer Express World Corporation, 230 F.3d 934, 939 (7th Cir. 2000). Illinois authorizes personal jurisdiction over out-of-state defendants under its long arm statute which states, in part, that "a court may also exercise jurisdiction on any other basis now or hereafter permitted by the Illinois Constitution and the Constitution of the United States." 735 ILCS 5/2-209(c). Thus, in addition to the specific authorized instances of personal jurisdiction, Illinois law allows the exercise of personal jurisdiction over non-resident defendants if ...


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