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TURNER & NEWALL, PLC v. CANADIAN UNIVERSAL INS. CO

January 30, 1987

TURNER & NEWALL, PLC, Plaintiff,
v.
CANADIAN UNIVERSAL INSURANCE COMPANY, et al., Defendants



The opinion of the court was delivered by: GREENE

 Plaintiff Turner & Newall, PLC, seeks to require four of its insurers, *fn1" pursuant to contractual agreements, to defend it in some seventy lawsuits now pending throughout the United States, and to indemnify it for costs already incurred in its own defense. In those lawsuits, various claimants allege that property damage resulted from the use of asbestos and related products that were manufactured, distributed, or sold by Turner & Newall or its subsidiaries. *fn2" Pending before the Court are various motions, *fn3" including a motion by defendants to transfer this action to the Southern District of New York. For the reasons stated below, the Court grants the motion to transfer and leaves the resolution of any remaining motions to the transferee court.

 Defendants ask the Court to transfer this case pursuant to 28 U.S.C. § 1404(a), for the convenience of the parties and witnesses and in the interest of justice. According to defendants, this lawsuit has no connection with the District of Columbia but has a substantial connection with the Southern District of New York. Moreover, defendants argue that Turner & Newall have chosen this forum simply to take advantage of an unusually helpful precedent, Keene Corp. v. Insurance Company of North America, 215 U.S. App. D.C. 156, 667 F.2d 1034 (D.C. Cir. 1981).

 I

 Defendants first contend that Turner & Newall, a British company, has no connection with the District of Columbia, and they further contend that the only connection between this suit and this District is that one of the seventy-odd underlying lawsuits was brought here. Rather than to answer these contentions by showing any factual link at all between their claim and the District, plaintiff Turner & Newall makes general arguments that are not particularly persuasive.

 For example, Turner & Newall places great weight on its right, as a plaintiff, to choose a forum, and the general presumption against disturbing such a choice. But as defendants correctly point out, this presumption loses much of its force when the action has little relationship to the forum chosen. See Franklin v. Southern Railway Co., 523 F. Supp. 521, 524 (D.D.C. 1981). In fact, the presumption may switch to defendants' favor in the District of Columbia when neither party resides in the chosen forum and the cause of action arises elsewhere. See Mills v. Aetna Fire Underwriters Insurance Co., 511 A.2d 8, 11 (D.C. 1986). Legal presumptions thus will not go very far in helping plaintiffs keep this lawsuit in this forum, if the relevant factors under section 1404(a) point to a different forum.

 Rather than to point out some factual connection between this lawsuit and the District of Columbia, plaintiff further relies on its "contractual right to select the forum." *fn5" All the insurance contracts here involved apparently contain the following standard clause:

 
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 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 . . . . *fn6"

 The existence of such a clause, however, will not in itself persuade the Court to keep jurisdiction of this case, for two reasons.

 First, a recent decision from the Court of Appeals for this Circuit strongly implies that a clause such as the one referred to above may not come into effect at all. In Eli Lilly Co. v. The Home Insurance Co., 254 U.S. App. D.C. 1, 794 F.2d 710 (D.C. Cir. 1986), the court stated that, in order for the "failure of the Company to pay" clause to operate, an insurer must "repudiate liability" -- and the mere fact that an insurer disputes liability is not a repudiation. Id. at 719 n.22. Since it is no more clear in the instant case than in Lilly that defendants have "repudiated" liability -- whatever that phrase means -- it is not at all clear that the so-called "service of suit" provision has any bearing on this motion.

 Second, the above provision would not necessarily control the Court's decision even if it were in effect. As the leading commentors have noted:

 
A contractual provision specifying the forum for any litigation arising out of the contract . . . cannot be decisive on a motion to transfer. "Congress set down in § 1404(a) the factors it thought should be decisive on a motion for transfer. Only one of these -- the convenience of the parties -- is properly within the power of the parties themselves to affect by a forum-selection clause. The other factors -- the convenience of witnesses and the interest of justice -- are third party or public interests that must be weighed by the district court; they cannot be automatically outweighed by the existence of a purely private agreement between the parties."

 C. Wright & A. Miller, Federal Practice and Procedure § 3847 (quoting Plum Tree, Inc. v. Stockment, 488 F.2d 754, 757-48 (3d Cir. 1973)). Since plaintiffs have failed to articulate either a factual connection with the District of Columbia or a solid legal reason for a presumption against transfer, the next question is whether ...


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