Dun et al v. Transamerica Premier Insurance Company et al
ORDER denying 62 Motion to Dismiss for Lack of Jurisdiction. IT IS FURTHER ORDERED that Plaintiffs' motion to transfer this matter to the Federal District Court of the District of Columbia (Doc. 58 ) is GRANTED. Signed by Judge Brian Morris on 1/2/2019. (NOS)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
WILLIAM DUN, Individually and as
the PERSONAL REPRESENTATIVE
OF THE ESTATE OF IRMADEL
DUN, IRENE DUN, SHERYL DUN,
PAT RUGGIERI, and DORA
MENGEL, and all others similarly
TRANSAMERICA PREMIER LIFE
INSURANCE COMPANY, F/K/A
MONUMENTAL LIFE INSURANCE
COMPANY, F/K/A PEOPLES
BENEFIT LIFE INSURANCE
PLANNING SERVICES, INC.,
BUENA SOMBRA INSURANCE
AGENCY, INC., AMPAC
INSURANCE AGENCY, INC.,
AEGON DIRECT MARKETING
SERVICES, INC., and DOES V – XI,
The Court addresses two motions. Plaintiffs William Dun (“Dun”),
individually and as personal representative for Irmadel Dun, Irene Dun, Sheryl
Dun, Pat Ruggieri, Dora Mengel, and all others similarly situated, move the Court
to transfer this case to the U.S. District Court for the District of Columbia. (Doc.
58). Defendants Financial Planning Services, Inc. (“FPS”) and Aegon Direct
Marketing Services, Inc. (“ADMS”) ask the Court to dismiss FPS and ADMS as
parties based upon the Court’s alleged lack of personal jurisdiction. (Doc. 62).
This matter began as a denial of insurance benefit claim when Dun filed an
action against Transamerica Premier Insurance Inc. (“Transamerica”) in the
Eighteenth Judicial District Court, Gallatin County, Montana. (Doc. 1 at 2).
Irmadel Dun had purchased a life insurance policy in response to a solicitation that
she had received in the mail at her home in Montana. Id. Transamerica properly
removed the case to the Montana District Court’s Butte Division by means of
diversity jurisdiction, pursuant to 28 U.S.C. § 1332. Id.
Initial discovery unearthed new information regarding the insurance policy
purchased by Irmadel Dun. (Doc. 21 at 2). Dun discovered that the insurance
policy purchased by Irmadel Dun had been placed in a Trust with its situs in
Washington D.C. (Doc. 59 at 4-5). Dun amended his Complaint twice to reflect
the new information.
Dun added two potentially liable parties involved in the dissemination of the
insurance policy attached to the Trust – ADMS and FPS. (Docs. 21, 28).
Transamerica currently serves as Trustor of the Trust, ADMS serves as the
Administrator of the Trust, FPS serves as the Trustee, and the insureds serve as the
beneficiaries of the Trust. (Doc. 59 at 3-6). Dun lacked knowledge of the
existence of the Trust and the roles played by ADMS, and FPS before he filed his
original complaint. Id. at 2.
“For the convenience of the parties and witnesses, in the interests of justice,
a district court may transfer any civil action to any other district court or division
where it might have been brought or to any district or division to which all parties
have consented.” 28 U.S.C. § 1404(a). The trial court typically determines the
question of personal jurisdiction in advance of venue. Leroy v. Great W. United
Corp., 443 U.S. 173, 180 (1979). Personal jurisdiction reflects the court’s power
to exercise control over the parties. Id. A court may reverse the normal order of
considering personal jurisdiction and venue when there exists a “sound prudential
justification for doing so . . ..” Id.
The party seeking transfer bears the burden of demonstrating that the
transferee district provides a more appropriate forum. See Jones v. GNC
Franchising, Inc., 211 F.3d 495, 499 (9th Cir. 2000). Courts possess broad
discretion to transfer cases. Id. at 498. A court must consider, however, the
factors of convenience and fairness to the parties in choosing whether to exercise
this discretion. Id.
A district court’s consideration of a transfer pursuant to § 1404(a) typically
involves two steps. A district court first must decide whether the action originally
could have been brought in the proposed transferee districts. Hatch v. Reliance
Ins. Co., 758 F.2d 409, 414 (9th Cir. 1985). If the answer is yes, then the district
court must make an individualized, case-specific, analysis of convenience and
fairness to the parties and witnesses, and an assessment of the interests of justice.
See Jones, 211 F.3d at 498-99. This assessment incorporates multiple factors.
These factors include the following items: (1) the location where the parties
negotiated and executed the relevant agreements; (2) the forum most familiar with
the governing law; (3) the plaintiffs’ choice of forum; (4) contacts of the different
parties with the forum; (5) local interest in the controversy; (6) the ease of access
to sources of proof and evidence; and (7) relative congestion in each forum. Id.
A. Personal Jurisdiction
Federal courts follow state law in determining the bounds of jurisdiction
over a party. Fed. R. Civ. P. 4(k)(1)(A). Montana’s long-arm statute provides that
“[a]ny person is subject to the jurisdiction of the courts of this state as to any claim
for relief arising from the doing personally, through an employee, or through an
agent, of . . . the transaction of any type of business within this state . . . contracting
to insure any person, property or risk located within this state at the time of
contracting.” Mont. R. Civ. P. 4(b)(1)(A), (D). The Court must comport with the
limits imposed by federal due process when determining personal jurisdiction.
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 464 (1985).
The U.S. Supreme Court in International Shoe Co. v. Washington, 326 U.S.
310, 316 (1945), determined that a state may exercise personal jurisdiction over an
out-of-state defendant if the defendant has certain minimum contacts such that the
maintenance of the suit does not offend “traditional notions of fair play.”
International Shoe’s “conception of fair play and substantial justice presaged the
development of two categories of personal jurisdiction.” Daimler AG v. Bauman,
571 U.S. 117, 126 (2014).
General jurisdiction proves proper where a foreign corporation’s operations
within a state are sufficiently substantial, continuous and systematic that it justifies
a suit against it on causes arising from those activities. International Shoe, 326
U.S. at 318. Specific jurisdiction exists from in-state activities giving rise to the
liabilities sued on and proves proper with respect to suits relating to some single or
occasional act within the state. Id.; Daimler AG, 571 U.S. at 126.
The Court employs a three-part test to determine whether the defendant’s
contacts with the forum-state suffice for specific jurisdiction. Farmers Ins. Exch.
v. Portage La Prairie Mut. Ins. Co., 907 F.2d 911, 913 (9th Cir. 1990). Specific
jurisdiction exists if: (1) the defendant does some act which purposefully avails
itself of the privilege of conducting activities in the forum; (2) the claim arises
from the defendant’s forum-related activities, and; (3) the exercise of jurisdiction is
Defendants ADMS and FPS meet all three elements required for the Court to
exercise specific personal jurisdiction. FPS and ADMS hold significant
responsibilities with the Trust that directly solicited Irmadel Dun in Montana.
Dun’s claim for relief stems directly from the insurance policy held by the Trust.
It is reasonable for the Trustee and the Administrator of the Trust to foresee being
haled into a court where the Trustor, Transamerica, directly solicited the insured to
purchase the policy.
The Ninth Circuit in Farmers Ins. Exch. evaluated whether Portage La
Prairie Mutual Insurance (“Portage”) had availed itself to the Montana forum. Id.
at 913. Farmers Insurance (“Farmers”) argued that Portage purposefully had
availed itself to the forum by having issued a policy that extended into Montana.
Id. The Ninth Circuit agreed. Portage satisfied the purposeful availment
requirement when Portage offered insurance in Montana. The act of offering
insurance in the forum state left little doubt that the insurer could foresee being
haled into court in that forum state. Id. at 914.
Transamerica, ADMS, and FPS act in concert for the Trust that produced
and solicited an insurance policy within the exterior boundaries of Montana.
(Docs. 28, 31, 40, 41 at ¶ 6). Transamerica serves as the Trustor of the Trust.
(Doc. 59 at 40). FPS has served as Trustee for the Trust since the Trust’s inception
in 1982. Id. at 20. ADMS serves as the Administrator of the Trust. (Doc. 40 at 5).
The Trustee holds the group insurance policy at issue. (Doc. 59 at 4, 23). Irmadel
Dun received direct mail solicitation in Montana for the insurance policy. (Doc. 69
at 18). Similar to Farmers Ins. Exch., by soliciting citizens within the District of
Montana little doubt exists that Transamerica as Trustor, FPS as Trustee, and
ADMS as Administrator of the policy could foresee being haled into a Montana
court related to an issue with the insurance policy that Transamerica solicited in
This Court’s ability to exercise jurisdiction over Transamerica remains
undisputed. (Doc 76 at ¶1). ADMS and FPS contend that they lack the requisite
minimum contacts with Montana to prove sufficient to support the Court’s exercise
of specific jurisdiction. (Doc 62). ADMS and FPS claim they have not engaged in
any activity in Montana. ADMS and FPS claim that they did not conduct any
business in Montana. ADMS and FPS claim that they did not commit any act in
Montana that would provide the basis for a tort claim. ADMS and FPS further
contend that they do not own or possess property in Montana, did not contract to
insure anyone in Montana, and did not act as a trustee of a corporation in Montana.
Id. Both parties further allege that they played no role in the development,
marketing, sale, or claims associated with the insurance policy issued to Irmadel
The Court agrees that ADMS may have played no direct role with the
insurance policy at issue. Transamerica issued the policy to Irmadel Dun in 2001
and ADMS did not become Administrator of the Trust until 2007. (Doc. 59 at 4).
ADMS fails to acknowledge, however, that it assumed “all liabilities [of ADMS’s
predecessors] arising directly from their service as prior Administrators of the
Trust” when Bueana Sombra, ADMS’s predecessor, merged into ADMS. (Doc. 59
at 57). ADMS accepted liability for all actions taken by its predecessors, including
the development, approval, and dissemination of the insurance policy to Irmadel
Dun in 2001.
The Agreement and Declaration of the Trust further demonstrates that the
Administrator holds significant duties that support the Court’s exercise of specific
jurisdiction over ADMS. ADMS, as the Administrator, determines the
requirements with which a person must comply in order to be eligible for benefits
provided by insurance policies in the Trust. (Doc 59 at 27). ADMS, as the
Administrator, holds a veto power that prohibits the Trustee from contracting with
any insurance company or “Trustor” without the Administrator’s approval. (Doc.
59 at 29). The Administrator may change, terminate or replace a policy at any time
if deemed to be in the best interests of the Trust. (Doc. 59 at 27). Indeed, the
caliber of involvement that the Administrator exercises through the Trust’s
Agreement and Declaration undermines any claim that an Administrator of the
Trust would doubt that an insured, like Irmadel Dun, would hale it into a court in a
forum where the insurance policy had been solicited and purchased.
FPS similarly availed itself to this Court’s jurisdiction. The Agreement and
Declaration of the Trust requires FPS to apply to an insurer for the issuance of a
policy or policies. (Doc. 59 at 23-24). In fact, FPS acts as the owner of the group
policy at issue here. FPS, as the Trustee, serves as the policy holder for any
insurance plan. (Doc. 59 at 4, 23). The Trustee remains fully protected and will
face no liability while acting in accordance with the Administrator’s instructions.
(Doc. 59 at 24). The Administrator will indemnify the Trustee for any claims and
actions against the Trustee. (Doc. 59 at 23-24).
FPS, unlike ADMS, has been associated with the group policy at issue since
its inception in 1982. FPS has served as Trustee of the Trust since that date. As a
result, FPS served as the Trustee who applied to Transamerica, or its predecessor,
for the group policy at issue here. FPS, as Trustee, should have understood that
Transamerica would solicit customers across the country, including in Montana, to
purchase the group policy at issue. The Agreement and Declaration of the Trust
further demonstrate that the Trustee must assume that a claim or action may be
raised against it and would require FPS, as Trustee, to be haled into court in any of
the forums where Transamerica had solicited customers to purchase the insurance
policy. Like in Farmers Ins. Exch., little doubt exists that the Trustee could not
foresee being haled into court in the forum where Transamerica had solicited
Irmadel Dun and where she had purchased the group insurance policy that FPS
B. Where the Action Could Have Been Brought
The Court next must evaluate whether this action might have been brought
in the District of Columbia. Hatch v. Reliance Ins. Co., 758 F.2d 409, 414 (9th
Cir. 1985). The venue statute provides that a civil action may be brought in a
judicial district in which any defendant resides or in which a substantial part of the
events or omissions giving rise to the claim occurred. 28 U.S.C. § 1391. The
phrase “where it might have been brought” relates to the time of bringing the
action, and if at that time “the transferee forum [had] the power to adjudicate the
issues of the action, it is a forum in which the action might have been brought.”
Hoffman v. Blaski, 363 U.S. 335, 342 (1960).
Defendants argue that Dun could not have brought this action in the District
of Columbia. (Doc. 69 at 26). Defendants allege that Dun’s original Complaint
simply asserted that Transamerica improperly had denied insurance benefits owed
in Montana that had nothing to do with the District of Columbia. Id. Defendants
further allege that these claims in Dun’s original Complaint completely
encompassed the scope of “the situation which existed when the suit was filed”
under a § 1404(a) transfer analysis. Id.
The Supreme Court’s decision in Hoffman, 363 U.S. at 342, sets forth what a
court may consider when determining “the situation which existed when the suit
was filed.” Plaintiffs, all Illinois residents, brought a patent infringement action in
a federal district court in Texas against a Texas resident and a corporation
amenable to suit only in Texas. Id. at 336. Defendants initially answered the
complaint in Texas. Defendants then sought to transfer the action to a federal
district court in Illinois. In so doing, Defendants agreed to waive all objections to
improper venue and lack of personal jurisdiction by the court in Illinois. Id. at 336
& n. 2.
The Supreme Court reversed the transfer of the action from Texas to Illinois.
Plaintiffs sought to expand the scope of “where the action may have been brought”
under the 28 U.S.C. § 1404(a) analysis. Id. at 342. Plaintiffs argued that the
phrase “the situations which existed when the suit was filed” should relate not only
to the time of the bringing the action, but also should relate to the situation at the
time of transfer. Id. The Supreme Court disagreed.
The Supreme Court rejected the effort to transfer the case to Illinois because,
at the time the action was brought, the action was not one that could have been
brought in Illinois. Id. at 343. The Supreme Court refused to interpret the phrase
“where it might have been brought” to mean “where [the action] may now be
brought.” Id. (emphasis added). The Supreme Court explained that to expand the
scope in this way would conflict directly with the purpose of a § 1404(a) transfer.
The Supreme Court further explained that it “do[es] not see how the conduct
of a [party] after a suit has been instituted can add to the forums where ‘it might
have been brought.’” Id. (emphasis added). The conduct of a party after the filing
of a complaint has no bearing on the proper forum. The meaning of this phrase
“might have been brought” simply directs the presiding judge to consider the
“situation which existed when [the] suit was instituted.” Id. The Supreme Court
expressly rejected the proposition that the defendants' subsequent waiver of
improper venue and lack of personal jurisdiction cured this defect: The power of a
District Court under § 1404(a) to transfer an action to another district “is made to
depend not upon the wish or waiver of the defendant” but, rather, upon whether the
transferee district was one in which the action “might have been brought” by the
plaintiff. Id. at 343-344; see also Great-West Annuity & Life Ins. Co. v.
Woldemicael, 2006 WL 1638497 (W.D. Wash. 2006).
The “situation which existed when this suit was instituted” guides the Court
to the conclusion that this action could have been brought in the District of
Columbia. Defendants attempt to narrow the “situation which existed at the time
this suit was instituted” to the allegations contained in the four corners of Dun’s
original Complaint. (Doc. 69 at 26). The situation that existed, however,
encompassed much more than Dun understood at the time of the filing of his
original Complaint. Dun had no knowledge of the existence of the Trust or the
existence of FPS and ADMS at the time that he filed his original Complaint. It
appears that Dun had no ability to uncover these facts without first filing the
original action against Transamerica and then engaging in the discovery process.
(Doc. 21 at 2).
Dun’s understandable lack of knowledge regarding the existence of the
Trust, FPS, or ADMS had no effect on the “situation which existed at the time this
suit was instituted.” Unbeknownst to Dun, the Trust existed, FPS served as the
Trustee of the Trust, and ADMS served as the Administrator of the Trust. This
situation existed at the time that Dun filed suit. The Trust has existed since 1982.
(Doc. 59 at 20). FPS has served as Trustee since the Trust’s inception. Id. ADMS
has served as Administrator of the Trust since 2007. (Doc. 40 at 5). No conduct
by Dun, the Trust, FPS, or ADMS since Dun’s filing of the original Complaint has
changed “the reality of the situation that existed.” The mere fact that Dun properly
added the Trust, FPS, and ADMS by amending his original Complaint in no way
alters the situation which existed when Dun filed his original Complaint.
Defendants further allege that the Court cannot transfer this action based on
the District Court of the District of Columbia’s inability to exercise personal
jurisdiction over Transamerica and ADMS. (Doc. 69 at 28). Transamerica is an
Iowa corporation with its principal place of business in Iowa. Id. at 27. ADMS is
a Maryland corporation with its principal place of business in Maryland. (Doc. 63
at 12). The District of Columbia’s long-arm statute provides that the District of
Columbia may exercise personal jurisdiction over a party that transacts any
business in the District of Columbia, any party that possesses an interest in real
property in the District of Columbia, or any party that contracts to insure any
person or has an obligation to be performed within the District of Columbia. D.C.
Code § 13-423(a)(1), (5)-(6).
The Trust’s situs is in the District of Columbia and operates its business in
the District of Columbia. The Trust directs that D.C. law govern a dispute with the
Trust. (Doc. 69; Ex. A, at ¶ 9.1). Transamerica serves as Trustor of the Trust.
ADMS serves as the Administrator. Both the Trustor and Administrator possess
extensive authorities and responsibilities to be performed with the Trust’s situs in
the District of Columbia. The enumerated responsibilities contained in the
Agreement and Declaration of Trust guide the actions of the Trustee and the
Administrator of the Trust. These responsibilities highlight the possibility that the
Trustor and the Administrator of the Trust would be involved in any legal action
involving the Trust and would be haled into court in the District of Columbia. The
District of Columbia possesses the authority to exercise specific personal
jurisdiction over both Transamerica, as the Trustor, and ADMS, as the
Administrator of the Trust.
C. Convenience, Fairness, and Interests of Justice
In determining whether transfer is appropriate the Court must weigh
multiple factors. The Court may, and has already, considered “the respective
parties’ contacts with the forum,” as well as, “the contacts relating to the plaintiff’s
cause of action in the chosen forum.” Jones, 211 F.3d at 498.
The Court may consider “location where the relevant agreements were
negotiated and executed.” Id. The Trust’s situs is in the District of Columbia and
the master policy was delivered in the District of Columbia. (Doc. 69; Ex. A at ¶
9.1). FPS, an entity incorporated in the District of Columbia, applied to
Transamerica for the issuance of the group insurance product at issue in this case.
(Doc. 59 at 5). Transamerica applied to the insurance commissioner in the District
of Columbia for approval of the policy. Id. It is evident from these facts that the
parties negotiated and executed many relevant agreements in the District of
Another factor the Court may consider is “the state that is most familiar with
the governing law.” Jones, 211 F.3d at 498. The Trust’s Agreement and
Declaration itself states that “all questions pertaining to [the Trust’s] construction
and administration shall be determined in accordance with the laws of the District
of Columbia.” (Doc. 69; Ex. A at ¶ 9.1). Additionally, “the ease of access to
sources of proof” supports transfer to the District of Columbia as the Trust’s situs
is the District of Columbia and it is operated through the District of Columbia.
Jones, 211 F.3d at 498. Weighing all the factors considered, the Court determines
that transferring this matter to the District of Columbia proves most efficient and
serves the interests of justice.
Accordingly, IT IS ORDERED that Defendants’ motion to dismiss for lack
of personal jurisdiction (Doc. 62) is DENIED. IT IS FURTHER ORDERED that
Plaintiffs’ motion to transfer this matter to the Federal District Court of the District
of Columbia (Doc. 58) is GRANTED.
DATED this 2nd day of January, 2019.
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