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James River Insurance Co. v. All Resort Coach, Inc.

United States District Court, E.D. Virginia, Richmond Division

January 27, 2017

JAMES RIVER INSURANCE COMPANY, Plaintiff,
v.
ALL RESORT COACH, INC. d/b/a LEWIS STAGES, Defendant.

          MEMORANDUM OPINION (GRANTING DEFENDANT'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION)

          Henry E. Hudson United States District Judge.

         This matter involves an alleged breach of contract by Defendant All Resort Coach, Inc. d/b/a Lewis Stages ("Defendant"), a Utah corporation. The dispute arose from a commercial general liability insurance policy Defendant purchased from Plaintiff James River Insurance Company ("Plaintiff). Presently before the Court is Defendant's Motion to Dismiss for Lack of Personal Jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), or alternatively for a Transfer of Venue to the United States District Court for the District of Utah pursuant to 28 U.S.C. § 1404. (ECF No. 16.) The parties have briefed the issues and submitted exhibits addressing the pertinent underlying facts, and the matter is now ripe for decision. Because Defendant lacks the necessary contacts with Virginia, the Court will grant Defendant's Motion to Dismiss for Lack of Personal Jurisdiction.

         I. BACKGROUND

         "In considering a defendant's challenge to personal jurisdiction, a court must construe all relevant allegations in the light most favorable to the plaintiff and draw the most favorable inferences for the existence of jurisdiction." Am. Online, Inc. v. Huang, 106 F.Supp.2d 848, 853 (E.D. Va. 2000). See also Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 60 (4th Cir. 1993). Viewed through this lens, the facts are as follows.

         Plaintiff is an Ohio corporation with its principal place of business in Richmond, Virginia (Compl. ¶ 1.) Defendant is a Utah corporation with its principal place of business in Salt Lake City, Utah. (Id. at ¶ 2.) On November 14, 2014, Defendant submitted an application for general commercial liability coverage through its insurance broker, Sam Lambert, of Lambert Insurance Services/Insurance Solutions Group of Utah, Inc. ("Retail Broker"). (Id. at ¶ 5; Def.'s Reply Br. Supp. Mot. Dismiss Ex. B, at 4, ECF No. 27-2.) In turn, the Retail Broker requested quotes from its wholesale broker, Burns & Wilcox of Utah ("Wholesale Broker"). (Am. Answer 2, ECF No. 28.)

         In response, Plaintiff sent the Wholesale Broker an insurance quote requiring an advance premium of $89, 955, subject to the payment of additional premium of $119.94 per each $1, 000 of Defendant's gross receipts in excess of $750, 000 as determined by semi-annual audits. (Compl. ¶ 8; Budisin Decl. 6, ECF No. 27-1.) The Wholesale Broker then submitted the quote to the Retail Broker, who conveyed it to Defendant for acceptance. (Budisin Decl. 4-5.) On December 12, 2014, Defendant accepted the offer and Plaintiff issued a commercial general liability policy numbered 00064994-0 ("Policy"). (Compl. at ¶ 9-11.)

         In July, 2015, Plaintiff conducted an audit of Defendant's gross receipts as required by the Policy. (Id. at ¶ 16.) The Retail Broker served as intermediary during the audit, requesting information from Defendant and transmitting it to Plaintiff. (Budisin Decl. 31.) Thereafter, on September 9, 2015, the parties agreed to amend the Policy, requiring Defendant to pay an additional premium in the amount of $427, 706.00 and reducing the $119.94 composite rate in the original Policy to $99.55 per each $1, 000 of Defendant's gross receipts in excess of $5, 200, 000. (Pl.'s Br. Opp'n Summ. J. 3, ECF No. 22.) On September 11, 2015, Defendant received confirmation of the Policy modifications and an invoice from the Retail Broker. (Budisin Decl. 34-38.)

         In 2016, Plaintiff sent two letters to Defendant stating Plaintiff had "not received payment from [Defendant's] broker" These letters, dated February 5 and June 2, requested payments for $342, 164.80 and $80, 929.00, respectively. (Compl. Ex. B, at 1, ECF No. 1-5; Compl. Ex. C, at 1, ECF No. 1-6.)

         Plaintiff filed this breach of contract action on November 3, 2016, alleging that Defendant owes it $ 423, 093.80 in unpaid premiums. (Compl. ¶ 38.)

         II. STANDARD OF REVIEW

         A motion made pursuant to Federal Rule of Civil Procedure 12(b)(2) challenges the court's exercise of personal jurisdiction over a defendant. "When a court's personal jurisdiction is properly challenged ... the jurisdictional question thereby raised is one for the judge, with the burden on the plaintiff ultimately to prove grounds for jurisdiction by a preponderance of the evidence." Mylan Labs., 2 F.3d at 59-60; see also Grayson v. Anderson, 816 F.3d 262, 267 (4th Cir. 2016). When, as here, "the court addresses the personal jurisdiction question by reviewing only the parties' motion papers, affidavits attached to the motion, supporting legal memoranda, and the allegations in the complaint, a plaintiff need only make a prima facie showing of personal jurisdiction to survive the jurisdictional challenge." Grayson, 816 F.3rd at 268.

         "When determining whether a plaintiff has made the requisite prima facie showing, the court must take the allegations and available evidence relating to personal jurisdiction in the light most favorable to the plaintiff." Id. "Ultimately, however, a plaintiff must establish facts supporting jurisdiction over the defendant by a preponderance of the evidence." Id.; see also People Express Airlines, Inc. v. 200 Kelsey Assocs., LLC, 922 F.Supp.2d 536, 541 (E.D. Va. 2013).

         Federal courts may exercise personal jurisdiction over a defendant who is "subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located." Fed.R.Civ.P. 4(k)(1)(A). Virginia extends the grant of personal jurisdiction as far as the Due Process Clause allows. Tire Eng'g & Distrib., LLC v. Shandong Linglong Rubber Co., 682 F.3d 292, 301 (4th Cir. 2012). Therefore, the statutory and constitutional inquiries merge, and the reviewing court "has jurisdiction over a nonresident defendant if the exercise of such jurisdiction is consonant with the strictures of due process." Id.; DeCusati v. Reiss Eng'g, Inc., No. 3:15-CV-204, 2015 WL 4622494, at *1 (E.D. Va. 2015). Accordingly, the Court will employ the well-established Due Process analysis.[1]

         III. ...


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