GOLDBERG, District Judge.
The dispute between the parties in this case involves an alleged breach of a reinsurance contract Before the Court is Defendant's motion to dismiss Plaintiffs complaint for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2) or, in the alternative, under the doctrine of forum non conveniens. For the reasons set forth below. I will grant Defendant's motion,
Plaintiff, Pacific Employers Insurance Company (PEIC), is a Pennsylvania company whose current principal place of business is in Philadelphia, Pennsylvania. As will be detailed below, PEIC's previous place of business was Los Angeles, California, (Pl.'s Mem. 1.)
The terms of the Quota Share Agreement were never formalized into a written reinsurance agreement. Consequently, the parties never agreed to terms regarding exclusive jurisdiction in the event of a legal dispute nor did they agree on service of suit, choice of law, forum selection or arbitration. (Def.'s Mem. 7.)
AXA Belgium terminated its participation under the Quota Share Agreement effective January 31, 1985. However, PEIC has alleged that AXA Belgium's rights and obligations did not end at that time, and that AXA remains liable to reimburse PEIC for a portion of PEIC's loss and loss expense payments with respect to the Reinsured Policies written by M & C during the life of the Quota Share Agreement. Indeed, PEIC claims that AXA Belgium's obligations to reimburse PEIC continue to this day and will continue into the future. (Pl.'s Mem. 2.)
The facts offered by PEIC in support of jurisdiction in this district are wide ranging and extend over a lengthy time period. PEIC acknowledges that prior to 1992/1993, reinsurance reporting, billing and collection under the Quota Share Agreement was handled on their behalf by personnel in California through CIGNA, who had acquired PEIC.
In addition to contacts with Pennsylvania which occurred pursuant to the Quota Share Agreement. PEIC details other business transactions entered into by AXA Belgium which allegedly establish jurisdiction. For instance, PEIC points to AXA Belgium's general agency agreement through M & C whereby AXA Belgium authorized M & C to write insurance and reinsurance (excess and surplus line insurance) in the United States on AXA Belgium's behalf (MGA Agreement). (Pl.'s Mem. 4.)
All tolled, PEIC claims that in connection with the above referenced insurance and reinsurance contracts. AXA Belgium had "pervasive" contacts, including emails, letters, telephone calls, audits and in person meetings with the representatives of Pennsylvania companies in connection with the MG A Agreement and the reinsurance contracts. (Pl.'s Mem. 4-5.) PEIC further points out that because the reinsurance contracts cover casualty risk. AXA Belgium's obligations under these contracts are long term. (Pl.'s Mem. 11.)
PEIC also stresses that as a result of the obligations stemming from these insurance and reinsurance agreements, AXA Belgium made 74 separate insurance and reinsurance payments in Pennsylvania between January 8, 2001 and September 22, 2010. These payments total $7,182,749.05 (reinsurance claims) and 1,703.88 (direct insurance claims). (Pl.'s Supp. Mem. 2.)
Finally, according to PEIC, the Annual Statements of AXA Belgium's Pennsylvania reinsureds for the year ending December 1, 2008, reflect "reinsurance recoverable" from AXA Belgium totaling nearly $10 million. The reinsurance recoverables, which are the amount of an insurer's incurred losses that will be paid by reinsurers,
PEIC tiled its complaint in this district on November 9, 2009, alleging breach of contract and seeking declaratory relief. The lawsuit generally involves AXA Belgium's alleged refusal to pay claims under the Quota Share Agreement. On January 13, 2010. AXA Belgium filed the motion at issue, seeking dismissal of the complaint based upon a lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2) or, in the alternative, based on the doctrine of forum non conveniens. On March 5, 2010, PEIC filed a motion for expedited discovery, which was granted on September 30, 2010. On November 30, 2010, PEIC filed a supplemental memorandum of law in opposition to Defendant's motion to dismiss addressing the additional evidence produced in discovery. On December 28, 2010. AXA Belgium responded with a supplemental memorandum of law. AXA Belgium's motion is now ripe for decision.
Federal Rule of Civil Procedure 12(b)(2) allows for dismissal of a matter where the court lacks personal jurisdiction. Where a defendant raises a jurisdictional defense, the plaintiff bears the burden of establishing with reasonable particularity sufficient contacts between the defendant and the forum state to support jurisdiction. Asanov v. Gholson, Hicks & Nichols, PA., 209 Fed.Appx. 139, 141 (3d Cir.2006) (citing Provident Nat'l Bank v. Cal. Fed. Sav. & Loan Ass'n, 819 F.2d 434. 437 (3d Cir. 1987)). However, unless there is an evidentiary hearing, a plaintiff need only establish a prima facie case of personal jurisdiction. Further, a plaintiff is entitled to have his allegations taken as true and all factual disputes drawn in his favor. O'Connor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 316 (3d Cir.2007) (quoting
"A federal district court may assert personal jurisdiction over a nonresident of the state in which the court sits to the extent authorized by the law of that state." Provident Nat'l, 819 F.2d at 436 (citing Fed.R.Civ.P. 4(e)). Pennsylvania's long arm statute authorizes Pennsylvania courts to exercise personal jurisdiction over nonresidents to the "fullest extent allowed under the Constitution of the United States." 42 Pa.C.S. § 5322(b). The due process clause of the United Slates Constitution permits personal jurisdiction so long as the nonresident defendant has certain minimum contacts with the forum such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945).
A plaintiff can meet this burden by establishing either general or specific jurisdiction over the defendant. Remick v. Manfredy, 238 F.3d 248, 255 (3d Cir.2001). General jurisdiction is proper where a defendant's contacts with t he 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. Id. Specific-jurisdiction arises from a defendant's activities in the forum state that relate to the particular cause of action being litigated. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-73, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). Here, PEIC alleges that jurisdiction exists under both standards which I will consider in turn.
General jurisdiction may be asserted "regardless of whether the subject matter of the cause of action has any connection to the forum." Pennzoil Products Co. v. Colelli & Assoc., Inc., 149 F.3d 197, 199 (3d Cir.1998) (quotations omitted). "To obtain general jurisdiction over a corporation in Pennsylvania, the corporation must either: (1) be incorporated in Pennsylvania or licensed as a foreign corporation in the Commonwealth, (2) consent to jurisdiction, or (3) carry on a `continuous and systematic part of its general business' within the Commonwealth." Endless Pools, Inc. v. Wave Tec Pools, Inc., 362 F.Supp.2d 578, 581 (E.D.Pa.2005) (citing 42 Pa.C.S. § 5301(a)(2)).
PEIC alleges that AXA Belgium consented to jurisdiction because it was a foreign corporation qualified to do business in Pennsylvania. PEIC's argument regarding this alleged consent is a bit circuitous.
PEIC first notes that AXA issued insurance policies to insureds in Pennsylvania through a licensed surplus lines agent. M & C, According to PEIC. under Pennsylvania law, AXA Belgium could only have issued policies in Pennsylvania if it was a licensed insurer or an eligible surplus lines
AXA Belgium acknowledges that it was an eligible surplus lines insurer from September 18, 1979 through August 29, 1991. (Def.'s Reply Mem. 1-2.) However, AXA notes that while surplus line agents must be licensed and are regulated by the Pennsylvania Insurance Commissioner. 40 P.S. § 1006.8. eligible service line insurers are not authorized, licensed or regulated by the Pennsylvania Insurance Commission, but rather, are "declared eligible" upon request. 40 P.S. § 1006.7.
I conclude that, unlike the defendant in Bane, AXA Belgium did not obtain, nor was it required to obtain authority to do business in the Commonwealth, AXA Belgium was "declared eligible" as a surplus line insurer, a process which, under 40 P.S. § 1006.7 does not rise to the level of authorization. AXA Belgium was not a foreign corporation authorized to do business in Pennsylvania and thus did not consent to jurisdiction in the Commonwealth.
PEIC also posits that general jurisdiction is established through AXA Belgium's continuous and systematic contacts in Pennsylvania. In order to find "continuous
Courts look to numerous factors to determine if there has been sufficient contact to confer general jurisdiction, including: (1) whether the defendant conducts daily business with Pennsylvania companies: (2) what percentage of defendant's total business was generated in Pennsylvania: (3) whether defendant maintained offices or paid taxes in Pennsylvania: (4) whether defendant availed itself of Pennsylvania resources in an extensive manner as a way of furthering its business: and (5) whether defendant made significant direct sales in Pennsylvania, solicited business regularly in Pennsylvania, and advertised in a manner specifically targeted to reach the Pennsylvania market. Henning v. Suarez Corp., 713 F.Supp.2d 459, 465 (E.D.Pa.2010) (citations omitted).
While the amount of business conducted in the forum is a significant consideration, it is the "quality and nature" of the defendant's contacts that serves as the touchstone of general jurisdiction. Manning v. Flannery, 2010 WL 55295, at *6 (E.D.Pa. Jan. 6, 2010) (citing Pennzoil, 149 F.3d at 203). As such, the court "should look to the party's purposeful and extensive availment of the forum" and "consider the degree to which a corporation's contacts with a given forum are `central to the conduct of its business.'" Henning, 713 F.Supp.2d at 465 (Provident Nat'l, 819 F.2d at 437-38).
By way of example, in Provident Nat'l, 819 F.2d at 437-38, the Third Circuit Court of Appeals agreed with the district court's extension of jurisdiction over a California bank that had only .066% of its depositors in Pennsylvania, received .071% of its deposits from Pennsylvanias, and extended only .083% of its outstanding loans to Pennsylvania residents. Despite the small percentage of business being conducted in the forum, the court found the defendant's contacts with the forum — the deposits and loans at issue — were the "bread and butter of [the defendant's] daily business" and therefore, due to the nature of the contact, defendant had a greater expectation of being haled into court. Id.
In finding jurisdiction, the Provident Nat'l court also focused on the defendant's zero-balance account with a Pennsylvania Bank, noting that the defendant conducted business regarding that account every business day. The court stressed that "this daily contact was a continuous and central part of [the defendant's] business" and "constituted a substantial, ongoing, and systematic activity in Pennsylvania." Id. at 438.
AXA Belgium contends that it has not had "continuous and systematic" contacts with Pennsylvania because it: 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 (nor has it ever applied for such a license): does not advertise, sell, solicit business, or contract to supply any goods or services in Pennsylvania: does not have any employees or agents in Pennsylvania; and does not maintain a bank account or own other property in Pennsylvania. (Def.'s Mem. 10.) I find these factors weigh against
For the most part, PEIC does not directly dispute these factors but instead argues that general jurisdiction exists because AXA Belgium's contacts with Pennsylvania make up, the "bread and butter" of its daily business. (Pl.'s Supp. Mem. 5.) Although AXA Belgium stopped writing insurance in the United States in 1991, PEIC argues that prior to 1991, AXA Belgium issued insurance policies to Pennsylvania insureds and entered into numerous reinsurance contracts with Pennsylvania insurance companies, PEIC explains that because these insurance policies and reinsurance contracts cover casualty risks, AXA Belgium's obligations are long term, ongoing and establish a substantial, continuing "core business" in the United Stales, and in turn, Pennsylvania. (Pl.'s Mem. 11.) Thus, according to PEIC, the "bread and butter" of AXA Belgium's business in the United States now consists "exclusively of activities arising out of the run off of its business, including the handling of inward claims under insurance policies and reinsurance contracts and the collection of outward reinsurance recoveries." (Pl.'s Mem. 12.)
AXA Belgium responds to this argument in several ways. First, AXA Belgium reiterates that it was never licensed as an insurer in Pennsylvania. AXA Belgium acknowledges that it was an eligible surplus line insurer from September 18, 1979 through August 29, 1991. However, it stresses that during that period, only a small portion of the policies were received by Pennsylvania insureds, and in any event, under Pennsylvania law, underwriting surplus lines policies is not "doing an insurance business." (Def.'s Resp. 4 (citing 40 P.S. § 46(e)(1); Depuis Supp. Aff. ¶ 3)). Similarly, underwriting reinsurance contracts does not constitute "doing business" in Pennsylvania. (Def.'s Resp. 4 (citing 40 P.S. § 46(e)(3).)).
While AXA acknowledges that it may have continuing obligations under the surplus lines and reinsurance contracts (run off obligations). AXA Belgium also asserts that any transaction in Pennsylvania arising out of those contracts "do not constitute doing an insurance business in Pennsylvania, and are thus irrelevant for jurisdictional purposes." (Def.'s Resp. 4-5) (citing 40 P.S. 46(e)(1), (3), (6)).
Lastly, AXA Belgium posits that its claim and reserve activity that may be connected to Pennsylvania over the past 10 years has been de minimus as compared to its overall claim and reserve activity and thus weighs in favor of dismissal. Examining its claim activity going back three years, AXA notes that there were only thirteen claims ($640,849): in the past five years there were only twenty-three claims ($1,670,804): and in the past seven years, only fifty-six claims ($5,043,244). (Def.'s Resp. to Pl.'s Supp. Mem. 8.)
In analyzing the panics' respective positions, I must first determine what the relevant time period is in deciding whether AXA Belgium has had continuous and systematic contacts with the forum. A "court must examine the contacts over a reasonable period of time to determine whether general jurisdiction existed when the action arose." Simplicity, 2006 WL 924993, at *2 (citing Modern Mailers, Inc. v. Johnson & Quin, Inc., 844 F.Supp. 1048, 1052 (E.D.Pa.1994)). The Second Circuit Court of Appeals has observed that "[f]ew cases discuss explicitly the appropriate time period for assessing whether a defendant's contacts with the forum state are sufficiently `continuous and systematic' for the purposes of general jurisdiction." Metropolitan Life Insurance Co. v. Robertson-Ceco Corp., 84 F.3d 560, 569 (2d Cir.1996). The court noted that defendant's contacts
Metropolitan Life, 84 F.3d at 569.
PEIC has relied upon evidence of AXA Belgium's contacts with Pennsylvania as far back as 1977, including evidence that AXA Belgium entered into a number of reinsurance, insurance and retrocessional contracts between 1977 and 1991/1992. However, the alleged breach of contract at issue occurred much later, in 2007, while the complaint was filed in November 2009. Given the precedent cited above. I conclude that examining all of AXA Belgium's contacts with Pennsylvania between 1977 and November 2009 is an unreasonable time period. See Birnberg v. Milk St., Residential Associates Ltd. Partnership, 2002 WL 1162848. at *4 (N.D.Ill.2002) ("the fact that the defendant may have had more significant contacts ten to fifteen years ago does not mean that the defendant is subject to the personal jurisdiction of the forum's courts") (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 563, 62 L.Ed.2d 490 (1980)). Keeping in mind that PEIC relocated to Pennsylvania in 1996, the more reasonable time period to examine AXA Belgium's contacts is between 2000 and November 2009.
Using this time frame, and after careful consideration of all of the factors highlighted by PEIC, I conclude that PEIC has not presented sufficient evidence of AXA Belgium's continuous and systematic contacts in Pennsylvania to establish a prima facie case of general jurisdiction. It is undisputed that AXA Belgium 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 (nor has it ever applied for such a license): 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,
Moreover, the 74 claim payments made over ten years, valued at approximately $7.5 million, comprised only .026% of AXA
Even if I were to accept that AXA LM Inc. acted as AXA Belgium's agent, and that its activities are attributable to AXA Belgium, allegations of five audits, an unspecified number of in person meetings and "numerous" contacts over ten years are too vague to support a finding that contact was "continuous and substantial." See Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61, 66 (3d Cir.1984) (holding that a plaintiff establishing personal jurisdiction must present more than "mere affidavits which parrot and do no more than restate plaintiffs allegations without identification of particular defendants and without factual content"); see also Assonov, 209 Fed.Appx. at 141.
A plaintiff must show significantly more than mere minimum contacts to establish general jurisdiction. Provident Nat'l, 819 F.2d at 437. The facts required to show general jurisdiction must be "extensive and persuasive." Reliance Steel Products Co. v. Watson, Ess, Marshall & Enggas, 675 F.2d 587, 588-89 (3d Cir.1982), I find PEIC has failed to provide such persuasive facts and that the nature and extent of AXA Belgium's contacts with Pennsylvania are insufficient for this Court to assert general jurisdiction,
Specific jurisdiction exists where the plaintiffs cause of action arises out of the defendant's contact with the forum state such that the defendant "should reasonably anticipate being haled into court" in that forum. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). In order for specific jurisdiction to be properly exercised under the Due Process Clause, the plaintiff must satisfy a two-part test.
To satisfy the first prong of the test, the defendant must have "purposefully directed" its activities at the forum. O'Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 317 (3d Cir.2007). Parties who "reach out beyond [their] state and create continuing relationships and obligations with citizens of another state" are subject to the regulations of their activity in that undertaking. Burger King, 471 U.S. at 473, 105 S.Ct. 2174. The "unilateral activity of those who claim some relationship with a nonresident defendant" is insufficient. Hanson, 357 U.S. at 253, 78 S.Ct. 1228.
In analyzing specific jurisdiction arising out of a breach of contract claim, the court should consider "the totality of the circumstances, including the location and character of the contract negotiations, the terms of the contract, and the parties' actual course of dealing." Remick, 238 F.3d at 256. Courts should inquire whether the defendant's contacts with the forum "were instrumental in either the formation of the contract or its breach." Gen. Elec. Co. v. Deutz AG, 270 F.3d 144, 150 (3d Cir.2001) (citing Phillips Exeter Acad. v. Howard Phillips Fund, Inc., 196 F.3d 284, 289 (1st Cir.1999)).
A contract case in which one party has moved to a new jurisdiction, such as the case before the Court, can pose somewhat unique issues. In Boehringer, Inc. v. Murawski Corp., 699 F.Supp. 59, 60 (E.D.Pa. 1988), the plaintiff, a New York corporation, and the defendant, an Illinois corporation, entered into a contract on August 24, 1984, wherein the defendant agreed to act as a dealer for the plaintiff's products. The contract had a one year term and both parties reserved the right to "review, modify and/or terminate the relationship at the end of the initial term." Id. At the time of execution, the plaintiff's principal place of business was in New York, however, at some point after the contract was executed, the plaintiff moved to Pennsylvania. Thereafter, the defendant purchased $1,254,676.52 worth of goods through the plaintiff's Pennsylvania office.
The plaintiff filed suit in the Eastern District of Pennsylvania alleging that the defendant had failed to pay $191,593.47 owed under the contract. Id. In ruling upon defendant's motion to dismiss for lack of personal jurisdiction, the court found that while there was no evidence relating to the location of the contract negotiations, it was clear that none of those negotiations took place in Pennsylvania. Additionally, the contract did not mention Pennsylvania, nor was there a choice of law provision. Id. at 62.
The court found jurisdiction to be lacking mainly because defendant, who the court analogized as being a "passive buyer" was bound to deal with plaintiff, "who had unilaterally decided to move to Pennsylvania." Even after the defendant could have terminated the contract, but decided to continue to do business with plaintiff in Pennsylvania, the court declined to exercise jurisdiction due to a lack of evidence regarding the extent of the contacts with plaintiff in Pennsylvania. Id. Thus, although at least a portion of the business dealings occurred in Pennsylvania, as did the alleged breach, because all contacts stemmed from a contract negotiated and entered into outside of Pennsylvania, the
Unisys Corp. v. Electronic Recovery, Inc., 1994 WL 236541 (E.D.Pa. June 2, 1994) is also similar to the situation before the Court. In Unisys, the plaintiff and defendant had entered into a contract outside of Pennsylvania. Although Plaintiff's "contact person" then moved to Pennsylvania, the court found that no personal jurisdiction existed based on the defendant's contact with Pennsylvania as the contacts were a result of the plaintiff's unilateral move. Because the defendant could not avoid Pennsylvania without breaching its contract with the plaintiff, the court concluded that its dealings with Pennsylvania relating to the contract did not constitute "purposeful availment." Even after the defendant negotiated with the plaintiff to amend the contract, whereby defendant "took on features of a more active purchaser," the court found defendant did not have sufficient contacts to establish personal jurisdiction. Id. at **4-5.
Here, AXA Belgium argues that similar to Boehringer, there is no specific jurisdiction as the contract was not formed or consummated in Pennsylvania. AXA Belgium also points out that both PEIC and M & C, who registered on AXA Belgium's behalf, were located in California at all times during the negotiation of the Quota Share Agreement and while the contract remained in force. Therefore, AXA Belgium contends there was no reason to anticipate that Pennsylvania would be in any way connected to the Quota Share Agreement. (Def.'s Mem. 16.)
AXA Belgium further stresses that there are no formal written terms of the Quota Share Agreement, and therefore, it did not contain any exclusive jurisdiction, service of suit, choice of law or forum selection clause.
Lastly, AXA Belgium contends that it had no "actual presence" in Pennsylvania with respect to performance of the Quota Share Agreement and reiterates that PEIC and M & C were located in California at all times while the contract remained in force. (Def.'s Mem. 16.) While AXA Belgium acknowledges that it sent limited payments to, and audited PEIC's records in Pennsylvania, it contends that any contact with Pennsylvania was the result of "PEIC'S unilateral action decision to relocate." (Def.'s Mem. 11.)
While acknowledging that the Quota Share Agreement was not formed in Pennsylvania, PEIC responds that AXA Belgium's termination of the Quota Share Agreement meant only that AXA Belgium would not reinsure risk written by PEIC after January 31, 1985, but that AXA Belgium's obligations to pay claims continue until this day. Thus, PEIC contends that it was not their unilateral move which created jurisdiction, but rather AXA Belgium's affirmative conduct in continuing to
In marshaling these arguments, PEIC relies upon Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958) and asserts that even where there is "unilateral activity" by a plaintiff, a court still must look to the defendant's activity in the plaintiff's new forum state to determine jurisdiction. The Hanson Court held that "[t]he unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State." Id. However, PEIC points out that the court continued, "the application of that rule will vary with the quality and nature of the defendant's activity, but it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Id. Based on this section of the Hanson opinion. PEIC concludes that if a defendant's contacts with a forum state were never considered after a plaintiff had relocated to that state, the Supreme Court "would not have even asked whether the defendant [] had engaged in activities in [the new forum] after [the plaintiff] moved there." (Pl.'s Mem. 19.)
I disagree with PEIC, and find a lack of specific jurisdiction for the following reasons. First, it is undisputed that contract negotiations and the consummation of the agreement did not take place in Pennsylvania. These factors weigh heavily against subjecting AXA Belgium to this state's jurisdiction. Second, there is no evidence that AXA Belgium would have had any expectation that in entering into the Quota Share Agreement with a California company it could later be haled into court in Pennsylvania. Nothing in the record reflects that in contracting with PEIC, AXA Belgium intended to "purposefully direct" its business activities to Pennsylvania. Rather, AXA Belgium's actions are similar to the "passive buyer" in Boehringer, who was bound to deal with a plaintiff who had unilaterally moved to another jurisdiction. Third, there are no grounds for jurisdiction based on the terms of the Quota Share Agreement as there was no written agreement and therefore no exclusive jurisdiction, service of suit or choice of law or forum clause. PEIC could have insisted on a jurisdictional provision in the Quota Share Agreement, but apparently chose not to. See Pioneer Commercial Funding Corp. v. Norick, 2006 WL 3354141 at * 2 (E.D.Pa. Nov. 17, 2006) ("it is an elementary matter of contract interpretation that, where parties did not include a forum selection clause within their express written contract, they did not intend to bind themselves to litigating their disputes in any particular forum"). In sum, the location and character of the contract negotiations and the terms of the contract do not support this Court exercising jurisdiction.
Moreover, the parties' business interactions do not support PEIC's position. The first part of the parties' business dealings
The second phase of the parties' interactions began in 1992/1993, when responsibility for the handling of direct claims under the Reinsured Policies and the reinsurance reporting, billing and collection under the Quota Share Agreement was transferred to CIGNA personnel in Philadelphia. From that point through 2007, all of PEIC's billings to AXA Belgium were sent from Philadelphia and all payments were made to Philadelphia. The record before us does not include information on the total number of billings sent from Pennsylvania under obligations stemming from the Quota Share Agreement. However, according to AXA Belgium, it made a total of thirty-one claim payments to PEIC in Pennsylvania between 1992 and 2007. (Declaration of Beverly McClure.) PEIC does not dispute these numbers.
PEIC also alleges that from 1996, when it re-domesticated, through 2007, AXA Belgium and/or its representatives engaged in "numerous" communications with PEIC's representatives in Pennsylvania. PEIC notes that AXA Belgium also directed that two audits be conducted in Philadelphia, one in 2004 and one in 2008, and that at least one meeting was held between a representative of AXA Belgium and a representative of PEIC in Philadelphia.
These minimal contacts and infrequent payments over a fifteen year period (1992-2007) are insufficient to confer specific jurisdiction because each contact was made as a direct result of PEIC's unilateral move to Pennsylvania.
Because I find that AXA Belgium's minimum contacts in Pennsylvania stemmed from PEIC's unilateral move, and therefore, subsequent dealings between the parties were insufficient to confer jurisdiction, I need not determine if exercising jurisdiction would comport with traditional notions of fair play and substantial justice.
Finally, PEIC has requested that, if the Court were to find jurisdiction lacking, the case be transferred pursuant to 28 U.S.C. § 1631 to the Central District of California.
The first Circuit Court of Appeals has found that § 1631's language creates a rebuttable presumption in favor of transfer stating, "Transfer, rather than dismissal, is the option of choice." D'Jamoos v. Pilatus Aircraft Ltd., 2009 WL 3152188 (E.D.Pa. 2009) (quoting Britell, 318 F.3d at 74). The Britell court, however, provided three scenarios in which the presumptive preference for transfer could be rebutted. First, transfer is not warranted if it would unfairly
In seeking transfer, PEIC stresses that: AXA Belgium entered into the Quota Share Agreement with PEIC while PEIC was a California company located in California; the Quota Share Agreement was negotiated through M & C in California; AXA Belgium dealt with and corresponded with M & C in California; M & C conducted the underwriting of the underlying business in California; and the parties performed the contract in California. Finally, PEIC points out that AXA Belgium made payments to PEIC and/or M & C in California until 1992 or 1993. (Pl.'s Mem. 29.)
While I agree that PEIC has presented sufficient evidence to present a prima facie case of jurisdiction in California, I do not find that transferring the case would be in the interest of justice. PEIC left California in 1996 and thus, neither party is domiciled in the state. Additionally, the record before me does not indicate that any of the witnesses or documents related to the breach of contract at issue are in California. (Def.'s Resp. 9-10 (claiming its entire original files with respect to PEIC are in its Belgium office and that its key witnesses are in Brussels); Pl's Mem. 25 (listing all of the relevant documents and witnesses as located in Pennsylvania or New York.)) Litigation in California would therefore be a burden on both parties in terms of both time and expense. Further, a California court may not consider the issue of whether a Belgium company breached a reinsurance agreement with a Pennsylvania company, a "local issue." This problem is not cured by the fact that one of the parties previously was located in California given the fact PEIC moved to Pennsylvania approximately fifteen years ago. Lastly, and importantly, "PEIC does not dispute that Belgium is an alternative forum." and AXA Belgium and PEIC are both authorized insurers in Belgium. (Def.'s Mem. 23; Pl.'s Memo. 24.) Consequently, because it would not be in the interest of justice to transfer this matter to California, PEIC's request for such transfer is denied.
Our Order follows.
AXA Belgium responded by submitting the Declaration of Beverly McClure which indicated thirty-one payments were made from AXA Belgium to PEIC in Philadelphia between 1992 and 2007.
AXA Belgium responds that this Court's September 30, 2010 Order allowing for jurisdictional discovery only required information on claim activity "occurring in Pennsylvania" and that claim payments made to a company that maintains its administrative offices outside of Pennsylvania would not qualify as activity occurring in Pennsylvania. (Def.'s Supp. Mem. 4-5.) AXA Belgium contends that its reserves are not claim activity occurring in Pennsylvania, because it sets its reserves with respect to claims at its home office in Belgium. Further, AXA Belgium notes that letters of credit do not constitute claim activity as they are standby instruments used to satisfy regulators in a jurisdiction that an insurer has sufficient collateral from an unauthorized foreign or alien reinsurer. AXA Belgium did not have an obligation to establish a letter of credit for PEIC and did not do so. Lastly, AXA Belgium asserts that any claims communications, meetings and calls concerning claim payments listed on AXA Belgium's spreadsheets occurred through brokers outside of Pennsylvania. (Def.'s Supp. Resp. 4-7.) All of this additional data has been considered by the Court.