Motion for Forum Non Conveniens in R&Q Reinsurance Company v. Allianz Insurance Company| Trellis.Law

On December 05, 2014 a Motion,Ex Parte was filed involving a dispute between R&Q Reinsurance Company, and Allianz Insurance Company, for Commercial Division in the District Court of New York County.

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FILED: NEW YORK COUNTY CLERK 11/16/2016 04:08 PM INDEX NO. 653744/2014
NYSCEF DOC. NO. 65 RECEIVED NYSCEF: 11/16/2016

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
--------------------------------------------------------------------X
R&Q REINSURANCE COMPANY, Index No.: 653744/2014
Plaintiff, Justice Saliann Scarpulla

-against-

ALLIANZ INSURANCE COMPANY,

Defendant.

---------------------------------------------------------------------X

ALLIANZ INSURANCE COMP ANY'S MOTION TO DISMISS ON
GROUNDS OF FORUM NON CONVENIENS

Biedermann Hoenig Semprevivo,
A Professional Corporation
Attorneys for Defendant
Allianz Global Risks US Insurance
Company, as successor-in-interest to
Allianz Insurance Company s/h/a
Allianz Insurance Company
One Grand Central Place
60 East 42 nd Street, Suite 660
New York, New York 10165
Tel.: (646) 218-7560
Fax: (646) 218-7510

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TABLE OF CONTENTS

PAGE

TABLE OF AUTHORITIES ............................................................... ............ ............................ i, ii

PRELIMINARY STATEMENT ............................... ...................................................................... 1

STATEMENT OF FACTS ..............................................................................................................
1

ARGUMENT ...................................................................................................................................
2

THIS ACTION SHOULD BE DISMISSED ON FORUM NON
CONVENIENS GROUNDS ....................................................................
.............................2

A. Legal Standard ............................................................................
.............................2

B. All Relevant Factors Weigh Heavily in Favor of Forum Non
Conveniens Dismissal ........................................................................
......................2

I. Both Parties Are Foreign Corporate Entities and Most
Witnesses and Documents Are Located Outside of
New York State .......................... ................................... ............................... 2

II. Forcing Allianz to Litigate this Dispute in New York
State will Cause Significant Hardship for Allianz and
Most Potential Witnesses .............................................. ...............................5

III. The Acts Out of Which R&Q' s Causes of Action Arose
Took Place in California .................................................... .......................... 5

IV. California Law, not New York Law, Governs R&Q's Claims ....................7

V. The Adjudication of This Action in a New York Court
Will Impose Unnecessary Burdens on this Court ............... ......................... 8

VI. California Is an Adequate Available Forum ................... ............................. 9

CONCLUSION .................................................................................................... .......................... 10

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TABLE OF AUTHORITIES

CASES PAGE

Avery v. Pfizer, Inc.,
68 A.D.3d 633 (1st Dep't 2009) .....................................
............................... .............................
8

Auten v. Auten,
308 N.Y. 155 (1954) ...................................
....................... .................... ......................... ............ 7

Bellefonte Reinsurance Co. v. Aetna Casualty & Surety Co.,
903 F.2d 910 (2d Cir. 1990)................................................................................
........................ 9

Bewers v. American Home Prods. Corp.,
99 A.D.2d 949 (1984), affd 64 N.Y.2d 630 (1st Dep't 1984) ................ ....................................
3

Economos v. Zizikas,
18 A.D.3d 392, 394, 796 N.Y.S.2d 338, 340 (1st Dep't 2005) ..................................................
2

Employers' Liability Assur. Corp. v. Aresty,
11 A.D.2d 331, 205 N.Y.S.2d 711 (1st Dep't 1960) ..................................................................
7

Excess Insurance Co. Ltd. v. Factory Mutual Insurance,
3 N.Y.3d 577 (2006) ...................................................................................................................
9

Fish v. Delaware, L. & WR. Co.,
211 N.Y. 374 (1914) ................ ...................................................................................................
7

Genicom Corp. v. Ekco Group,
160 A.D.2d 551, 552, 554 N.Y.S.2d 202 (1st Dep't 1990) ................. ............ ...........................
5

IFS Intern. Inc. v. SLM Software Inc.,
224 A.D.2d 810,638 N.Y.S.2d 186 (3d Dep't 1996) .................................................................
8

Islamic Republic of Iran v. Pahlavi,
62 N.Y.2d 474, 479 (1984) ...................................................................
..............................
2, 5, 8

Koop v. Guskind,
116 A.D.3d 672, 674, 984 N.Y.S.2d 68, 70 (2d Dep't 2014) ..........................................
........... 3

Manhattan Life Ins. Co. v. Johnson,
188 N.Y. 108 (1907) ............................ ......................................................
............... .................. 7

Piper Aircraft Co. v. Reyno,
454 U.S. 235, 254 n. 22 (1981) ...................................................................................................
9

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Shin-Etsu Chemical Co., Ltd. v. 3033 ICICI Bank Ltd.,
9 A.D.3d 171, 777 N.Y.S.2d 69 (1st Dep't 2004) .......................... ....................................
3, 7, 9

Tilleke & Gibbins Int'! Ltd v. Baker & McKenzie,
302 A.D.2d 328, 756 N.Y.S.2d 179 (1st Dep't 2003) ..................... ...........................................
3

Turay v. Bean Bros. Trucking, Inc.,
61 A.D.3d 964, 966 (2009) ...................... ........................................ ...........................................
2

Unigard Security Insurance Co. v. North River Insurance Co.,
4 F.3d 1049 (2d Cir. 1993) ................................................................
..........................................
9

Utica Mutual Insurance Co. v. Munich Reinsurance America,
976 F. Supp. 2d 254 (2013) ........................................................................................................
9

Wilson v. International Ocean Transport Corp.,
78 A.D.2d 623, 432 N.Y.S.2d 703, 704 (1st Dep't 1980) ..................................................
3, 4, 8

Zelouf v. Republic Nat. Bank of New York,
225 A.D.2d 419, 640 N.Y.S.2d 15 (1st Dep't 1996) ..................................................................
5

Statutes and Other Authorities

Cal. Civil Code § 1646 ......................................................
....................... .......................................
7

N.Y. C.P.L.R. § 327 Practice Commentary
(McKinney 2001) (C327:2 Forum Non Conveniens Factors) ............................
........................
5

N.Y. CPLR § 327(a) ...................................................................................................................
1, 2

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Defendant Allianz Global Risks US Insurance Company, as successor-in-interest to

Allianz Insurance Company s/h/a Allianz Insurance Company (hereinafter "Allianz"),

respectfully submits this Memorandum of Law, together with the Affirmation of Philip C.

Semprevivo, the exhibits annexed thereto, and the Affidavit of Ryan Russell, in support of its

Motion to Dismiss pursuant to CPLR 327(a).

PRELIMINARY STATEMENT

The instant action belongs in a California court, not expending the limited judicial

resources of New York to which the matter has a limited nexus. California law controls this

dispute. California courts are available to adjudicate the dispute. Neither Allianz nor Plaintiff

R&Q Reinsurance Company ("Plaintiff' or "R&Q") is a New York resident nor has its principal

place of business in New York. Most of the evidence related to this dispute is located in

California. Allianz entered into the two reinsurance certificates at issue in this matter in

California and paid its premiums in California. Almost all of the witnesses to the action are

located outside of New York - primarily on the West Coast. Allianz' witnesses are in its

California offices and the intermediary's witnesses are in Seattle. Plaintiffs witnesses are most

likely in Philadelphia. While the alleged overpayments Plaintiff seeks to recoup were made on

reinsurance certificates related to asbestos claims against a New York company, the facts of

those claims have minimal bearing on the current dispute. Moreover, that company is not a party

to the dispute nor will ithave much relevant evidence. Accordingly, this court should dismiss

this action in favor of the California courts.

STATEMENT OF FACTS

The relevant facts for purposes of determining this motion are set forth in

affirmation of Philip C. Semprevivo ("Semprevivo Aff."), dated November 4, 2016, and the

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Affidavit of Ryan Russell ("Russell Affidavit''), dated October 27, 2016, and will be

reiterated herein, only to the extent necessary for explanation or amplification.

ARGUMENT

THIS ACTION SHOULD BE DISMISSED ON FORUM NON CONVENIENS GROUNDS

A. Legal Standard

New York's Civil Practice Law and Rules, Rule 327(a) provides that "when the court

finds that in the interest of substantial justice the action should be heard in another forum, the

court ... may stay or dismiss the action in whole or in part in any conditions that may be just."

CPLR 327(a).

In determining aforum non conveniens claim, New York courts consider the balance of

the following factors: (1) the burden on the New York courts; (2) the potential hardship to the

defendant; (3) the availability of an alternative forum; (4) whether both parties to the action are

non-New York residents; and (5) whether the transaction complained of occurred primarily in a

foreign jurisdiction. Islamic Republic of Iran v. Pahlavi 62 N.Y.2d 474, 479 (1984). Additional

factors are the residency of the parties, the potential hardship to witnesses, the situs of the

underlying actionable events, and the location of the evidence. Turay v. Bean Bros. Trucking,

Inc. 61 A.D.3d 964, 966 (2009).

B. All Relevant Factors Weigh Heavily in Favor of Forum Non Conveniens Dismissal

I. Both Parties Are Foreign Corporate Entities and Most Witnesses and
Documents Are Located Outside of New York State.

Both parties to this dispute are nonresident entities which do not have their principal

places of business in New Yark, which is a compelling factor supporting dismissal. See e.g.,

Economos v. Zizikas, 18 A.D.3d 392, 394, 796 N.Y.S.2d 338, 340 (1st Dep't 2005) (dismissing

on grounds of forum non conveniens where all parties lived in New Jersey and other factors

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favored New Jersey as the more appropriate forum); Koop v. Guskind, 116 A.D.3d 672, 674, 984

N.Y.S.2d 68, 70 (2d Dep't 2014) (dismissing on grounds of forum non conveniens where

plaintiff was resident of Canada and events complained of occurred in Canada even though

Defendant was New York resident); Wilson v. International Ocean Transport Corp., 78 A.D.2d

623, 432 N.Y.S.2d 703, 704 (1st Dep't 1980) (reversing denial of forum non conveniens motion

where plaintiff was a resident of Texas, place the events occurred was Texas, and defendant's

only connection to New York was that they had an office there and were licensed to do business

in New York.)

Plaintiff is a Pennsylvania corporation with its principal place of business in Philadelphia.

See Ex. A, ,r 1. Allianz was, at the time of contracting, a California corporation with its principal

place of business in Los Angeles. See Russell Affidavit, ,r4. Currently, Allianz' principal place

of business is in Chicago, and it is incorporated under the laws of Illinois. See id

A related consideration that militates in favor of dismissal is the location of witnesses and

documents. New York courts often dismiss actions where, as in the instant matter, the majority

of fact witnesses are non-residents. In Shin-Etsu Chemical Co., Ltd v. 3033 ICICI Bank Ltd .,9

A.D.3d 171, 777 N.Y.S.2d 69 (1st Dep't 2004), where witnesses with personal knowledge were

located overseas, the Appellate Division, First Department, reversed the denial of a forum non

conveniens motion, holding that "the location of the witnesses and any relevant documents [was]

an important factor." Similarly, In Bewers v. American Home Prods. Corp., 99 A.D.2d 949

(1984), affd 64 N.Y.2d 630 (1st Dep't 1984), the First Department reversed the denial of aforum

non conveniens motion, inasmuch as "[t]he vast majority of witnesses and documentation

regarding [the actions underlying the tort claims] are in England." In Tilleke & Gibbins Int'! Ltd

v. Baker & McKenzie, 302 A.D.2d 328, 756 N.Y.S.2d 179 (1st Dep't 2003), the First Department

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affirmed the forum non conveniens dismissal where "most of the material witnesses" were

located in Thailand, which had "very substantial nexus" to the facts of the case. Also, in Wilson,

the First Department, reversed the denial of forum non conveniens motion, noting that "[n]one of

the proposed key witnesses for either party is a resident of forum state." 78 A.D.2d at 623, 432

N.Y.S.2d at 704.

Here, similar to the cases cited above, most of the key potential witnesses, including

Plaintiffs witnesses, Allianz' witnesses, and the intermediary's, Guy Carpenter, employees,

reside outside of New York State. See Russell Affidavit, 1 13. Peter Dowling and Rose

Amador, two Allianz witnesses, are located in Allianz' Burbank California office. See id. R&Q's

witnesses Anna Wszalek, John Mensch, and Chris Mattis are located in Pennsylvania. See id.

The intermediary's witnesses are likely in its Seattle office. See id. All of the significant fact

witnesses to the contract formation, payment of premiums, and handling of the claims file are

thus located outside of New York.

Also the documentary evidence, except the limited information the now-defunct Kentile

Floors may have in storage, is located outside of New York. Allianz's main claims file,

including the billing and payment documents, essential to the action, is located in Burbank,

California. See Russell Affidavit, 1 12. Plaintiffs file is likely located in Pennsylvania.

Whatever information Guy Carpenter may have, is located in Seattle. See id. at 1 6.

Unfortunately, Guy Carpenter lost most or all of its New York file related to this matter in the

terrorist attacks of September 11, 2001. See id.

In sum, this is an action between two non-New York residents involving evidence located

outside of New York with fact witnesses who are not residents of New York, which strongly

supports the dismissal of this action.

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II. Forcing Allianz to Litigate this Dispute in New York Will Cause Significant
Hardship for Allianz and Most Potential Witnesses.

A related consideration which strongly favors dismissal is the hardships involved in

bringing out-of-state witnesses into New York. See e.g., Genicom Corp. v. Ekco Group, 160

A.D.2d 551, 552, 554 N.Y.S.2d 202 (1st Dep't 1990) (court weighed potential hardship to

defendants' witnesses in granting motion to dismiss on the ground of forum non conveniens).

As most of the witnesses and evidence are located outside of New York, the potential

hardship to Allianz is significant. See Russell Affidavit, ,r13. Allianz would have to transport its
evidence and witnesses from California to New York. Similarly, Allianz' witnesses would suffer

hardship as they would be required to leave their jobs and personal lives to appear at court

proceedings in New York. The same would be true of Guy Carpenter's witnesses. Most of the

witnesses would be forced to travel across the country in order to attend court proceedings.

Accordingly, this motion should be granted in the interest of a California action which will

significantly decrease the time and expense burden on defendant and most witnesses in this case.

III. The Acts Out of Which R&Q's Causes of Action Arose Took Place in
California.

In ruling on a forum non conveniens motion, New York courts consider whether "the

transaction out of which the cause of action arose occurred primarily in a foreign jurisdiction."

Pahlavi, 62 N.Y.2d at 479. The action should be heard in the jurisdiction where the conduct

occurred. See e.g., Zeloufv. Republic Nat. Bank of New York, 225 A.D.2d 419,640 N.Y.S.2d 15

(1st Dep't 1996) (forum non conveniens applied where subject matter of action had "substantial

nexus" to London); see also N.Y. C.P.L.R. § 327 Practice Commentary (McKinney 2001)

(C327:2 Forum Non Conveniens Factors) ("The fact that the most significant events out of which

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the cause of action arose occurred in another state or nation obviously is an important factor

weighing in favor of dismissal.").

The reinsurance certificates at issue in this case were negotiated by the intermediary in

New York, issued in Pennsylvania and delivered to California. See Russell Affidavit, 116-9.
The contract was to be performed in California and ultimately made in California, the place of

acceptance of the certificates. See id The action relates to Allianz' conduct and the transactions

between Allianz and plaintiff, both of which primarily occurred in California. See id Premiums

were paid in California and the file was maintained in California. See id at 1110-11. At the time

the parties entered into the certificates Defendant was a California corporation with California

employees who administered the certificates. See id at 4. All information Allianz had regarding

the underlying insured was located in California.

While Kentile Floors was a New York Corporation, Plaintiff's primary allegations

against Allianz stem from conduct that necessarily would have occurred in Allianz's Burbank

office. R&Q alleges that Allianz knew of the dangers of asbestos exposure and knew claims had

been made against Kentile but chose not to disclose the information to R&Q. See Ex. A, 1130-

31. Allianz absolutely denies that Allianz employees concealed relevant information from R&Q.

However, to the extent that such a decision would have or could have been made, the decision

and all communications related to it necessarily occurred in California where Allianz

administered the file. Likewise, any underwriting decision Allianz made regarding asbestos use

in Kentile' s products would have been made in California.

Plaintiffs additional assertion that the reinsurance certificates failed because Allianz

ceded 100% of its liability to Allianz Underwriters also arises from conduct in California.

Allianz Underwriters was, at the time, a California corporation. See Russell Affidavit, 1 4. Any

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transaction to cede liability from Allianz to Allianz Underwriters would have occurred in

California between California employees. Likewise, Plaintiffs final contention - that Allianz

did not pay premiums on the certificates - relates to conduct that occurred in California, the

place of payment of the certificate premiums. See id. at ,r10.

Accordingly, since none of the complained of conduct occurred within New York's

borders, this case should be dismissed to be pursued in California.

IV. California Law, not New York Law, Governs R&Q's Claims.

Under New York law, a contract which is made in one jurisdiction to be performed in

another is governed by the law of the place of performance. Fish v. Delaware, L. & W.R. Co.,

211 N.Y. 374 (1914); Manhattan Life Ins. Co. v. Johnson, 188 N.Y. 108 (1907); Employers'

Liability Assur. Corp. v. Aresty, 11 A.D.2d 331, 205 N.Y.S.2d 711 (1st Dep't 1960); Auten v.

Auten 308 N.Y. 155 (1954). Similarly, in California "a contract is to be interpreted according to

the law and usage of the place where it is to be performed; or, if it does not indicate a place of

performance, according to the law and usage of the place where it is made." Cal. Civil Code

§ 1646.

Under either New York or California choice of law rules, California law applies.

Although the certificates involved the intermediary and an underlying insured both located in

New York, they were ultimately made in California (place of acceptance) to be performed in

California (place of payment issuance). See Russell Affidavit, ,r,r7-12. Therefore, California law

applies, warranting dismissal or stay because of an inconvenient forum. See e.g., Shin-Etsu

Chemical Co., Ltd. v. 3033 !CIC! Bank Ltd., 9 A.D.3d 171, 172, 777 N.Y.S.2d 69, 71 (1st Dep't

2004) (applicability of foreign law militates in favor of dismissal on forum non conveniens

grounds). The New York court would be unnecessarily burdened if it was required to apply the

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law of another forum to this dispute. See e.g., IFS Intern. Inc. v. SLM Software Inc., 224 A.D.2d

810, 638 N.Y.S.2d 186 (3d Dep't 1996) (the fact that Canadian law governed action favored

forum non conveniens dismissal).

If this matter remains in New York, the New York Court will be compelled to find,

interpret and apply California law to the dispute. This is not warranted especially when the

California court is available to adjudicate this dispute. It would be much more efficient for a

California Court to apply laws it is familiar with to the parties in this action, warranting

dismissal.

V. The Adjudication of This Action in New York Court Will Impose
Unnecessary Burdens on this Court.

In addition to the unnecessary intellectual burden on the New York court to apply the

laws of a foreign jurisdiction, this action would impose an unwarranted financial burden on both

this Court and the State of New York, strongly favoring dismissal. "[T]he taxpayers of this State

should not be compelled to assume the heavy financial burden attributable to the cost of

administering the litigation contemplated when their interest in the suit and the connection of its

subject matter to the State of New York is so ephemeral" (citation omitted). Pahlavi, 62 N.Y.2d

at 483.

Wilson v. Pfizer, Inc., No. 107932/06, 2008 WL 2468538, at *3 (Sup. Ct. N.Y. Cty. Jun.

13, 2008) ajfd sub nom. Avery v. Pfizer, Inc., 68 A.D.3d 633 (1st Dep't 2009), an action between

residents of Georgia for a claim which arose in Georgia and where the witnesses were located in

Georgia, was dismissed on the basis of forum non conveniens although the suit involved issues

frequently litigated in New York. The Court noted, "Plaintiffs position that this court would not

be substantially burdened by retaining this case since it deals with comparable actions frequently,

ignores New York's interest in managing its docket and focusing its resources on New York

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centered litigation." For the same reasons, this action should be dismissed and the parties'

claimed be adjudicated in California.

In fact, given the minimal contact this action has with New York, it appears that Plaintiff

engaged in "forum shopping," by filing this action in New York. It may be that Plaintiff filed in

New York to take advantage of the so-called Bellefonte line of cases which find a presumption

under New York law that facultative certificates limits of liability are unambiguously expense-

inclusive. Indeed, this action was filed shortly after the decision in Utica Mutual Insurance

Co. v. Munich Reinsurance America, 976 F. Supp. 2d 254 (2013), which was based upon

Bellefonte Reinsurance Co. v. Aetna Casualty & Surety Co., 903 F.2d 910 (2d Cir. 1990),

Unigard Security Insurance Co. v. North River Insurance Co., 4 F.3d 1049 (2d Cir. 1993),

and Excess Insurance Co. Ltd. v. Factory Mutual Insurance, 3 N.Y.3d 577 (2006).

VI. California Is an Adequate Available Forum.

"Ordinarily, [the] requirement [of an adequate alternative forum] will be satisfied when

the defendant is 'amenable to process' in the other jurisdiction ...." Shin-Etsu Chemical Co., Lrd.

V 3033 ICICI Bank Ltd., 9 A.D.3d 171, 178, 777 N.Y.S.2d 69, 75 (1st Dep't 2004) (quoting

Piper Aircraft Co. v. Reyno, 454 U.S. 235, 254 n. 22 (1981)).

Allianz is amenable to process in California. In fact, a substantially similar action

between the same parties (Allianz Global Corporate and Specialty Co. v. R&Q Reinsurance

Company (Case No. BC596070)) is pending in Los Angeles County Superior Court. See Russell

Affidavit, ,r 14, The California court issued a stay in that action on March 30, 2016, pending

resolution of the New York jurisdictional issues. See id.

In sum, this matter is particularly ill-suited for adjudication in a New York court as

neither entity is a New York Corporation and the connection of the litigation to New York is

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"ephemeral" at best. Where, as here, there is an attractive and adequate alternate forum

which would free-up New York's resources, the interests of the court and the state are

satisfied by the granting Allianz' motion to dismiss.

CONCLUSION

Based upon the foregoing, Defendant respectfully requests that the court grant its motion

to dismiss, together with such other and further relief as the court deems just and proper.

Dated: New York, New York
November 16, 2016
Respectfully submitted,

BIEDERMANN HOENIG ~ SMPREV 'N6,
A Professional Corporation
~,,,,.,.,...

B~ ~ previvo

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Case Info

Judge

Saliann Scarpulla Track Judge’s New Case

Case No.

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Document Filed Date

November 16, 2016

Case Filing Date

December 05, 2014

County

Parties

ALLIANZ INSURANCE COMPANY Defendant
BASWELL, KAREN C Attorney for the Defendants
BOWEN, ALLISON B Attorney for the Defendants
FRIEDMAN, BRUCE MICHAEL Attorney for the Plaintiff
MOISE CASSETTA, MADELEINE E Attorney for the Defendants
R&Q REINSURANCE COMPANY Plaintiff
SCHNUR, KAREN Attorney for the Defendants
SCHWARTZ, STEVEN C Attorney for the Defendants
SEMPREVIVO, PHILIP CARMINE Attorney for the Defendants
BRUCE MEISEL Attorneys for Plaintiffs
JASON ESON Attorneys for Plaintiffs

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Motion,Ex Parte: R&Q Reinsurance Company v. Allianz Insurance Company

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