United States District Court, District of Columbia
N. MCFADDEN, U.S.D.J.
Commodities Financial Services I, LLC won a multi-million
dollar arbitration award against Assured Risk Transfer PCC,
LLC, or ART. Now Vantage wants the money. Although the
arbitration award represents the proceeds of a credit
insurance policy that ART sold to Vantage, ART says it cannot
pay by itself because it counted on help from reinsurance
companies. And the companies that reinsured ART's
liability under the insurance policy have refused to help. So
Vantage has sued ART and the reinsurance companies. It has
also sued Willis Limited, Willis Re Inc., and Willis Towers
Watson Management (Vermont), Ltd.-related companies that
Vantage says offered ART their services in captive insurance
management and as reinsurance brokers and intermediaries. The
reinsurance companies and the Willis companies have filed
Motions to Dismiss. Because Vantage failed to establish the
Court's personal jurisdiction over the reinsurance
companies, their Motions to Dismiss will be granted. And
because Vantage did not state a contract claim but has stated
several negligence claims against the Willis Defendants,
their Motion to Dismiss will be granted in part and denied in
case began with a series of related financial transactions.
First, Vantage extended $44 million in credit to an energy
company. Compl. ¶ 93. Second, ART insured Vantage
against the risk that the energy company would default, up to
$22 million. Id. ¶ 17. Third, the Willis
companies helped ART reinsure 90% of its liability by
brokering reinsurance contracts with several other companies,
including the seven reinsurance companies that are defendants
here. Then the energy company defaulted and went
bankrupt. Id. ¶¶ 82, 89.
submitted proof of loss to ART to collect on its insurance
policy, but ART denied the claim based on Vantage's
purported failure to comply with a collateralization
requirement in that policy. Id. ¶¶ 19, 94.
So Vantage presented its claim to an arbitration panel, which
determined that Vantage had met its collateralization
obligations and that ART owed Vantage $22 million in damages,
plus several million in interest and costs. Id.
¶¶ 20-21, 136. The Supreme Court of New York
confirmed the award in the amount of $26, 288, 351.80 plus
post-judgment interest that continues to accrue. Id.
has not received the funds. Id. ¶ 24. ART told
Vantage that the only assets it has to pay the judgment are a
$2.2 million letter of credit and its reinsurance policies.
Id. ¶ 134. And the Reinsurer Defendants have
refused to pay ART, claiming that ART and the Willis
companies violated the terms of the reinsurance agreements by
failing to provide them prompt notice of Vantage's loss.
Id. ¶¶ 139-142. The Reinsurer Defendants
have also rebuffed Vantage's efforts to collect, claiming
that Vantage has no contractual right to demand payment
directly from them. Id. ¶ 150.
has now turned to federal court, filing a Complaint that
names ART, the seven Reinsurer Defendants, and the three
Willis companies as defendants. Vantage asserts breach of
contract claims against the Reinsurer Defendants and asks the
Court for declaratory judgment establishing their contractual
obligations. Id. ¶¶ 152-54, 162. It also
asserts breach of contract and negligence claims against the
Willis Defendants. Id. ¶¶
163-187. The Reinsurer Defendants have filed two
Motions to Dismiss, and the Willis Defendants have filed one.
The Court Cannot Exercise Personal Jurisdiction Over the
a claim against a defendant, a court must have personal
jurisdiction over that defendant. There are three
requirements for a court to exercise personal jurisdiction.
First, the state's long-arm statute must reach the
defendant. GTE New Media Servs. Inc. v. BellSouth
Corp., 199 F.3d 1343, 1347 (D.C. Cir. 2000). Second, the
exercise of jurisdiction must comport with the constitutional
requirements of due process. Id. Third, service of
summons must take place to assert the court's
jurisdiction. Omni Capital Int'l, Ltd. v. Rudolf
Wolff & Co., Ltd., 484 U.S. 97, 104 (1987). The
plaintiff bears the burden of establishing a basis for
personal jurisdiction. Crane v. New York Zoological
Soc., 894 F.2d 454, 456 (D.C. Cir. 1990).
The District of Columbia's Long-Arm Statute Reaches the
District of Columbia's long-arm statute authorizes courts
to “exercise personal jurisdiction over a person, who
acts directly or by an agent, as to a claim for relief
arising from the person's . . . transacting any business
in the District of Columbia.” D.C. Code §
13-423(a)(1). It also authorizes jurisdiction over persons
defending against claims that arise from “contracting
to insure or act as surety for or on any person, property, or
risk, contract, obligation, or agreement located, executed,
or to be performed within the District of Columbia at the
time of contracting, unless the parties otherwise provide in
writing.” D.C. Code § 13-423(a)(6). Vantage argues
that I have jurisdiction over the Reinsurer Defendants under
both these prongs of the long-arm. Pl.'s Opp. to
Reinsurer Defs.' Mots. Dismiss 12-14.
the insurance prong of the statute, Vantage correctly
observes that the Reinsurer Defendants contracted to insure
ART, a legal person located in the District of Columbia at
the time of contracting. Id. at 13. The Reinsurer
Defendants do not contest this. Instead, they claim they are
beyond the reach of the long-arm statute because Vantage
cannot assert rights under their contracts with ART and so
can make no claim arising from those contracts. Memo. ISO
Mot. Dismiss by Caisse Centrale De Réassurance,
Hannover Ruckverishcerung AG, and Partner Reinsurance Europe
PLC (First Reinsurer Defs.' Memo. ISO Mot. Dismiss) 14;
Reply ISO First Reinsurer Defs.' Mot. Dismiss
But this argument goes to the merits rather than to
jurisdiction. And in any case, the long-arm's
“arising from” requirement is satisfied
“when the claim has a discernible relationship”
to the District-related activity. I Mark Mktg. Servs.,
LLC v. Geoplast S.p.A., 753 F.Supp.2d 141, 157 (D.D.C.
2010). Here, Vantage's claim against the reinsurers has a
clear relationship to the reinsurers' contracts with ART.
It therefore arises from the Reinsurer Defendants'
contracts to insure a person in the District and falls within
the scope of the District's long-arm
this Court has jurisdiction under the “transacting any
business” prong of the statute for the reasons
explained in the due process analysis below. See Thompson
Hine, LLP v. Taieb, 734 F.3d 1187, 1189 (D.C. Cir. 2013)
(holding that the “transacting any business”
prong “provide[s] jurisdiction to the full extent
allowed by the Due Process Clause”).
The Exercise of Jurisdiction Comports with Due
Process Clause limits a court's jurisdiction to
defendants who “have certain minimum contacts with
[‘the territory of the forum,' which is to say, the
geographic area under the court's authority, ] 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
(1945). Depending on the defendant's forum contacts, a
court's personal jurisdiction over a defendant may be
general, allowing the court to hear any claim against the
defendant, or specific, allowing the court to hear claims
against the defendant only if those claims arise from the
defendant's forum contacts. Goodyear Dunlop Tires
Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011).
district court may exercise general jurisdiction over all
claims against a corporate defendant if the corporation's
“affiliations with the State are so continuous and
systematic as to render [it] essentially at home” in
the territory subject to the court's authority.
Daimler AG v. Bauman, 571 U.S. 117, 761 (2014).
Although the Supreme Court has not foreclosed the possibility
of an “exceptional case, ” courts generally
consider a corporation at home only in the place of its
incorporation and in its principal place of business. See
Id. & n.19. Vantage concedes that it does not know
of any facts that would give me general jurisdiction over the
Reinsurer Defendants. Pl.'s Opp. to Reinsurer Defs.'
Mots. Dismiss 12 n.5. And by Vantage's own account, the
Reinsurer Defendants are incorporated and have their
principal places of business in Germany, Ireland, the United
Kingdom, Switzerland, and France. Pl.'s Supp. Filing 4-7.
So I do not have general personal jurisdiction over the
district court that lacks general jurisdiction may still have
specific jurisdiction over claims related to acts by which a
defendant “purposefully avails itself of the privilege
of conducting activities within the forum State, thus
invoking the benefits and protections of its laws.”
Hanson v. Denckla, 357 U.S. 235, 253 (1958).
Purposeful availment does not require that a defendant
physically enter the forum state. Burger King, 471
U.S. at 476. It simply “ensures that a defendant
will not be haled into a jurisdiction solely as a result of
random, fortuitous, or attenuated contacts or of the
unilateral activity of another party or a third
person.” Id. at 475 (internal citations
omitted). For a commercial actor, it is enough that the
defendant purposefully directed its efforts toward residents
of the forum state or created continuing obligations to forum
residents. Id. By tying jurisdiction to actions by
the defendant that create a “substantial
connection” with the forum state, the law ensures the
foreseeability of a court's exercise of jurisdiction.
Id. at 474-75.
Reinsurer Defendants are commercial actors who purposefully
directed their activities at ART, a resident of the District
of Columbia. See Compl. Ex. 4. They did so by
entering reinsurance contracts that created continuing
obligations to ART. See Id. ¶ 52, 65-66. It
appears that ART was domiciled in the District of Columbia
when the Reinsurer Defendants contracted with it, when it
paid premiums to the Reinsurer Defendants, and when it
experienced the risk that the reinsurance plans covered.
See Id. Ex. 4 (establishing the District of Columbia
as ART's place of domicile); see also Compl.
¶ 122 (referencing premiums paid by ART to reinsurers).
This establishes a substantial connection between the
Reinsurer Defendants and the District of Columbia that does
not result from random or fortuitous occurrences and that
makes it reasonably foreseeable that a lawsuit related to the
contracts would be brought in the District. See Burger
King, 471 U.S. at 474-75; McGee v. Int'l Life
Ins. Co., 355 U.S. 220, 223 (1957).
sure, as the Reinsurer Defendants point out, “merely
entering into a contract with an out-of-state party does not
constitute the kind of purposeful availment that subjects a
defendant to the laws of the other party's home
state.” Katopothis v. Windsor-Mount Joy Mut. Ins.
Co., 211 F.Supp.3d 1, 22 (D.D.C. 2016). But “under
some circumstances the terms of a contract may well create
such a substantial connection between the non-resident and
the forum that the contract alone could supply the necessary
minimum contacts.” Thompson Hine, 734 F.3d at
1193. And a single insurance contract provides sufficient
basis for personal jurisdiction when, as here, the insurance
company purposefully enters a contract with, receives
payments from, and insures a risk experienced by a forum
resident. McGee, 355 U.S. at 223 (emphasizing the
forum state's “manifest interest in providing
effective means of redress for its residents when their
insurers refuse to pay claims”); see also Travelers
Health Assoc. v. Va. State Corp. Comm'n, 339 U.S.
643, 647 (1950) (“[A] state has a legitimate interest
in all insurance policies protecting its residents against
risks, an interest which the state can protect even though
the state action may have repercussions beyond state
lines.”); id. at 648 (noting the “great
weight” accorded to a state's interest in enforcing
its residents' insurance contracts). The reinsurance
contracts fall under this rule because reinsurance is simply
“insurance for insurance companies.” See
Validus Reinsurance, Ltd. v. United States, 19 F.Supp.3d
225, 227 (D.D.C. 2014). Thus, I have specific jurisdiction
over Vantage's claims against the Reinsurer Defendants.
Vantage Has Not Asserted the Court's Jurisdiction Through
a federal court may exercise personal jurisdiction over a
defendant, the procedural requirement of service of summons
must be satisfied.” Omni Capital Int'l, Ltd. v.
Rudolf Wolff & Co., Ltd., 484 U.S. 97, 104 (1987).
Vantage tried to serve the Reinsurer Defendants through their
law firm, Mendes & Mount, which it argues was their
authorized agent for service of process under Federal Rule of
Civil Procedure 4(h)(1)(B). Pl.'s Opp. to Reinsurer
Defs.' Mots. Dismiss 21-22. This view finds some support in
the reinsurance contracts, which authorize service on Mendes
& Mount. Compl. Ex. 7 Art. XXVI; id. Ex. 8 Art.
Reinsurer Defendants deny that Mendes & Mount is their
authorized agent for service of process. First Reinsurer
Defs.' Memo. ISO Mot. Dismiss 15-17; Second Reinsurer
Defs.' Memo. ISO Mot. Dismiss 12-13. They claim that the
service provision in the reinsurance contracts authorizes
service only if ART sues the reinsurers to compel
arbitration or to enforce an arbitral award. First Reinsurer
Defs.' Memo. ISO Mot. Dismiss 17; Second Reinsurer
Defs.' Memo. ISO Mot. Dismiss 13. And they are right that
the contracts' service provision is not a general
authorization of Mendes & Mount to receive service of
process in all cases. The clearest limitation on the
service of suit provision is that it “shall not be read
to conflict with or override the obligations of the parties
to arbitrate their disputes” under the contracts'
arbitration clause. Compl. Ex. 7 Art. XXVI; id. Ex.
8 Art. XXVI.
Vantage can only serve the Reinsurer Defendants through
Mendes & Mount if it is entitled to rely on the service
clause and can maintain its lawsuit without violating the
arbitration clause of the reinsurance
contracts. The Reinsurer Defendants argue that any
legal theory allowing Vantage to invoke the benefits of the
reinsurance contracts would also require it to submit its
claims to arbitration. First Reinsurer Defs.' Memo. ISO
Mot. Dismiss 21-24; Second Reinsurer Defs.' Memo. ISO
Mot. Dismiss 17-18. Vantage responds that it is not seeking
the benefit of the reinsurance contracts but is instead
seeking to enforce “a ...