Horne v. Ace Ltd. et al

Filing 62

ORDER Granting 52 Motion to Dismiss. Signed by Judge James C. Mahan on 3/13/2014. (Copies have been distributed pursuant to the NEF - SLR)

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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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ORLAN CHARLES HORNE,

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2:12-CV-1142 JCM (GWF)

Plaintiff(s),

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v.

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ACD LTD., et al.,

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Defendant(s).

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ORDER

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Presently before the court is defendants Ace, Ltd.’s and Ace Seguros, S.A.’s (collectively

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“defendants”) motion to dismiss. (Doc. #52). Plaintiff Orlan Charles Horne (“plaintiff”) has

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responded (doc. #55), and defendants have replied (doc. #56).

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I.

Background Facts

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The instant case concerns the plaintiff’s ability to receive compensation for injuries he

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sustained in or around April 2007. During that time, Hidro-Grubert USA Inc., (“Hidro-Grubert”)

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manufactured a “cherry picker” machine that malfunctioned and injured plaintiff. (Doc. # 1 at 5).

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Plaintiff filed a lawsuit against Hidro-Grubert in Nevada state court. (Doc. # 1 at 5). It is unclear if

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Hidro-Grubert still operated in the United States at the time of the Nevada state court lawsuit. In any

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event, Hidro-Grubert never appeared and thereby defaulted. (Doc. # 1 at 5-6).

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Following the default, plaintiff obtained a judgment against Hidro-Grubert in the amount of

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$5,169,829.15. (Doc. # 1 at 6). Hidro-Grubert maintained an insurance policy with defendant ACE

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Seguros S.A. (Doc. # 1 at 5). When the Nevada state court awarded plaintiff default judgment,

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James C. Mahan
U.S. District Judge

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plaintiff was assigned the right to Hidro-Grubert’s claims in the insurance policy.

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Plaintiff now seeks indemnification from defendants as they insure Hidro-Grubert. Plaintiff

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alleges that Hidro-Grubert’s policy of insurance with defendants can be located under either policy

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number 0820228, 823.773 or 818.984, “with liability limits in the amount of $4,000,000 per event.”

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(Doc. # 1 at 5). Because plaintiff’s accident is alleged to have occurred on April 19, 2007, the only

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policy that could be relevant is policy number 818.984 (the “policy”), which covered the policy

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period from October 9, 2006 to October 9, 2007. (Doc. # 52, ex. A).

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ACE Seguros is an Argentinian company duly organized under the laws of Argentina. The

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policy was issued to Hidro-Grubert’s parent company, Andres N. Bertotto S.A.I.C. (“Bertotto”), also

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an Argentinian company duly organized under the laws of Argentina. (Doc. #52 at 3). Notably, the

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policy states “any suit that is brought in relation with this agreement shall be settled before the

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competent ordinary courts of the jurisdiction where this policy was issued.” (Doc. #52, ex. A). The

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policy was issued in Argentina. (Doc. # 52 at 4).

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II.

Legal Standard

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Under the Federal Rules of Civil Procedure, a defendant may rely on improper venue as a

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valid defense to a plaintiff’s claim. FED. R. CIV. P. 12(b)(3). “A motion to enforce a forum selection

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clause is treated as a motion to dismiss pursuant to Rule 12(b)(3).” Doe 1 v. AOL LLC, 552 F.3d

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1077, 1081 (9th Cir. 2009) (citing Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 324 (9th Cir.

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1996)). Furthermore, “the party seeking to avoid a forum selection clause bears a heavy burden to

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establish a ground upon which [the court] will conclude the clause is unenforceable.” AOL LLC, 552

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F.3d at 1083.

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The U.S. Supreme Court recognized three reasons that would make enforcement of

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a forum selection clause unreasonable: (1) "if the inclusion of the clause in the agreement

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was the product of fraud or overreaching"; (2) "if the party wishing to repudiate the clause

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would effectively be deprived of his day in court were the clause enforced"; and (3) "if

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enforcement would contravene a strong public policy of the forum in which suit is

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brought.” Richards v. Lloyd's of London, 135 F.3d 1289, 1294 (9th Cir. 1998) (citing and

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U.S. District Judge

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quoting Bremen, 407 U.S. at 12-13, 15, 18, 92 S.Ct. 1907).

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In determining whether a party would be deprived of his day in court due to a forum selection

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clause, “courts are to consider a party’s financial ability to litigate in the forum selected by the

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contract.” Murphy v. Schneider National, Inc., 362 F.3d 1133, 1141-42 (9th Cir. 2003).

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III.

Discussion

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Defendants allege that this court is the improper venue for this matter. Defendants issued a

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policy of insurance to Bertotto, the parent company of Hidro-Grubert. The policy states, inter alia,

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that any lawsuit resulting out of the policy agreement shall be settled before the competent courts

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of the jurisdiction where the policy was issued; in this case, Argentina. Therefore, defendants assert

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that if plaintiff seeks legal action against defendants under the policy, he must do so in Argentina.

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Plaintiff argues in response that it is unreasonable to enforce the forum selection clause set

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forth in the policy because plaintiff does not have the financial ability to litigate in Argentina.

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Plaintiff further alleges he suffers from physical pain that would make traveling difficult. Plaintiff

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has submitted an affidavit describing his financial situation and physical limitations. (Doc. #55, ex.

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4). In the affidavit, plaintiff describes his monthly household income as $3,800, with his bills

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exceeding $4,000 monthly. Furthermore, plaintiff addresses his physical limitations including a

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hernia, “24/7 pain in [his] feet,” and difficulty sleeping. Thus, plaintiff argues enforcement of the

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forum selection clause would deprive him of his day in court, thereby making enforcement of the

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clause unreasonable under the second prong of Bremen.

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Plaintiff’s arguments are misplaced. “An assignee of a claim against an insurance company

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can have no stronger claim than the assignor who assigned the claim.” See Biltmore Assocs., LLC

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v. Twin City Fire Ins. Co., 572 F.3d 663, 670 (9th Cir. 2009). As an assignee, plaintiff cannot shift

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the Bremen inquiry to himself. See Kostelac v. Allianz Global Corporate & Specialty AG, 517 F.

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App'x 670, 676 (11th Cir. 2013).

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In Kostelac, the court explained that when a plaintiff steps into the shoes of an assignee in

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an insurance policy, the plaintiff must stand in the same position as its assignor stood. Id. at 675-76.

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Therefore, in order to establish that a forum selection clause would be unreasonable, plaintiff must

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U.S. District Judge

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allege facts demonstrating the terms of the forum selection clause make it unreasonable to enforce

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the clause against Hidro-Grubert, or its parent company Bertotto. Plaintiff has alleged no such facts.

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Even if this were not the case, plaintiff’s hardships do not rise to the level of

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unreasonableness so as to deprive plaintiff of his day in court under Bremen. In the instant matter,

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plaintiff has alleged a hernia in his abdomen, constant pain in his feet, and difficulty sleeping. While

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all of these medical conditions pose an inconvenience to plaintiff in traveling, they cannot reasonably

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be said to deprive him of his ability to pursue his claims.

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Plaintiff has not satisfied his “heavy burden” of establishing a ground for the court to

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conclude the clause is unenforceable. See AOL LLC, 552 F.3d at 1083. The court therefore finds the

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forum selection clause reasonable and enforceable. Accordingly, venue is improper in the District

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of Nevada and defendants’ motion to dismiss for lack of proper venue is granted.

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Accordingly,

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IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that defendants’ motion to

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dismiss (doc. #52) be, and the same hereby is, GRANTED.
DATED March 13, 2014.

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UNITED STATES DISTRICT JUDGE
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James C. Mahan
U.S. District Judge

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