Filing 34

OPINION. Signed by Judge Kevin McNulty on 4/12/2016. (JB, )

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY AMTRUST AT LLOYD’S LTD, No. 15-cv-1615 (KM)(JBC) Plaintiff, OPINION V. MARQISE LEE, Defendant. KEVIN MCNULTY, U.S.D.J.: This matter comes before the Court on the motion (ECF No. 4) of defendant Marqise Lee to dismiss the complaint (ECF No. 1) of the plaintiff AmTrust at Lloyd’s LTD for lack of personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2); to dismiss or transfer the venue of this action, pursuant to Fed. R. Civ. P. 12(b)(3) and 28 U.S.C. 1406(a); or, alternatively, to transfer the venue pursuant to 28 U.S.C. 1406(a), to the Central District of California. Reviewing the parties’ submissions, I find that the Central District of California is a more appropriate venue for this action. Accordingly, the motion to transfer venue is GRANTED, and the motion to dismiss for lack of personal jurisdiction is denied as moot. 1 I. BACKGROUND A. Parties Marqise Lee was a college football player at the University of Southern California from 2011—13. (Lee Deci. ¶J 2—3 (ECF No. 8))’ AmTrust, a United Kingdom corporation with its place of business in the UK, is an underwriter at Lloyd’s, London. (Compi. 9; Southall Deci. ¶ 4 (ECF No. 25—1)) B. Facts Lee’s stellar performance on the football field during his sophomore year at USC (2012) earned him the Fred Biletnikoff Award, given to the best collegiate wide receiver. (Lee Deci. ¶ 3) Lee was an elite prospect for the National Football League, but was not eligible to enter the NFL draft, which requires players to be out of high school for three years. (Lee Decl. ¶ 4); see http: / / the-players/the-nfl-draft! the-rules-of-the-draft/ (last visited April 6, 2016). The NCAA offered certain athletes, such as Lee, the opportunity to purchase loss of value insurance. The purpose of such a policy is to protect them against the risk of suffering an injury while participating in college athletics that would impair their draft prospects and future earnings. (Lee Deci. ¶ 5) In August 2013, Lee received proposals from insurance agents through the USC Office of Athletic Compliance in California. (Lee Decl. ¶ 6) Hanleigh Management, Inc., a New Jersey agent for insurance companies issuing highlimit special risk disability insurance policies, has acted on behalf of AmTrust as a surplus lines agent. (Southall Decl. ¶j 2—3) On August 8, 2013, Ronnie AmTrust alleges in its complaint that Lee is a California resident. (Compl. ¶ 10) AmTrust argues in its brief that Lee’s home forum is Florida where he plays football for the Jacksonville Jaguars. (AmTrust Br. 13 (ECF No. 25)) Lee represents that he maintains a substantial presence in California during the NFL off-season. (Lee Aff. ¶ 2) 1 2 Kaymore, a licensed insurance broker in New Jersey, contacted Hanleigh for a quote for Lee. (Southall Deci. ¶J 6—7, 9)2 On August 23, 2013, Lee completed an application for a policy at the USC Office of Athletic Compliance covering August 15, 2013, to August 1, 2014, which was “proposed by Lloyd’s of 8—9) The policy covered as much as $10 million in total disability coverage and $5 million in loss of value coverage. (Zucker Aff. Ex. 2 at 5 (ECF No. 6—2)) The policy lists a $94,600 premium. (Id.) London.” (Lee Deci. ¶J On September 28, 2013, Lee was injured in a game against Arizona State University. (Lee Deci. ¶ 11) He sought treatment from the USC medical and training staff and then at USC’s Keck Hospital in California. (Lee Deci. ¶J 11— 12) On October 3, 2013, USC sent Lee’s medical records to Hanleigh. (Southall 21) On November 15, 2013, Hanleigh issued and delivered the policy to Lee through Kaymore. (Compl. ¶J 14, 16) On November 15, 2013, Lee received a copy of his policy from USC’s Office of Athletic Compliance. (Lee Deci. ¶ 13) Decl. ¶ AmTrust claims that the policy was negotiated and formed in New Jersey through November 15, 2013. (Compi. ¶ 14; Southall Deci. ¶j 10—11) Lee did not physically enter the State of New Jersey during this period, nor does he currently live in New Jersey. (Lee Aff. ¶J 14—15) On May 23, 2014, Lee submitted a claim for benefits under the policy. (Compi. ¶ 17) AmTrust investigated the claim. It alleges that Lee’s application “made misstatements, omission and/or concealments” and that Lee did not disclose the changes to his health from his injury before the policy issued on November 15, 2013. (Compl. ¶ 18) On March 3, 2015, AmTrust sent Lee a Lee’s relationship with Kaymore is disputed. AmTrust claims that Kaymore was Lee’s agent. (See e.g., Southail Decl. ¶ 8) Lee maintains he dealt only with the USC Office of Athletic Compliance and that he was under the impression that this was required according to NCAA and USC rules. (Lee Dccl. ¶ 6—7) 3 That there was any negotiation is also contested. (Lee Br. 20 (ECF No. 22) (citing Lee Dccl. ¶j 8—9)) 2 3 formal decision letter rescinding his policy and refunding his insurance premium. (Compi. ¶ 22) The next day, March 4, 2015, this action for declaratory judgment was filed in the District of New Jersey. (ECF No. 1) Later that same day, Lee filed an action for breach of contract and the duty of good faith and fair dealing against AmTrust and two other insurance entities in the United States District Court for the Central District of California, No. 15—cv—01614. (See Zucker Aff. ¶ 3; Ex. 1 (ECF Nos. 6, 6—i)) Now before the Court is a motion by Lee to dismiss the complaint for lack of personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2), to dismiss or transfer the venue of this action, pursuant to Fed. R. Civ. P. 12(b)(3) and 28 U.S.C. 1406(a), or, alternatively, to transfer venue, pursuant to 28 U.S.C. 1404(a), to the Central District of California. II. DISCUSSION A. Standard of Review Personal jurisdiction over a non-resident defendant, such as Lee, is proper in this Court if the defendant has “‘certain minimum contacts with [New Jersey] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Provident Nat’l Bank v. Cal. Fed. Say. & Loan Ass’n, 819 F.2d 434, 437 (3d Cir. 1987) (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310,316,66 S. Ct. 154 (i945)).4 on a motion to dismiss for lack of personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2), a court must accept the plaintiffs allegations as true and construe disputed facts in favor of the plaintiff, Pinker v. Roche Holdings, Ltd., 292 F.3d 361, 368 (3d Cir.2002), but the court must still examine any evidence presented with regard to disputed factual allegations. See, e.g., Eurofins Pharma US. Holdings v. BioAlliance Pharma SA, 623 F.3d 147, 155—56 (3d Cir.2010) (examining the evidence supporting the plaintiffs allegations); Patterson v. FB1 893 F.2d 595, 603—04 (3d is inherently a matter which requires resolution Cir. 1990) (“‘A Rule 12(b)(2) motion of factual issues outside the pleadings, i.e. whether in personam jurisdiction actually lies. Once the defense has been raised, then the plaintiff must sustain its burden of ... 4 ses, Section 1404(a) provides: “For the convenience of parties and witnes court may transfer any civil action to any other in the interest of justice, a 1404(a). district or division where it might have been brought.” 28 U.S.C. § ‘contacts’ with “The [relevant] test for determining venue is not the defendant’s omissions giving a particular district, but rather the location of those ‘events or ... o, 36 F.3d rise to the claim....”’ Cottman Transmission Systems, Inc. v. Martin 28 U.S.C. 291, 294 (3d Cir. 1994); accord Bockman, 459 F. App’x at 161; see § or 139 1(b)( “a judicial district in which a substantial part of the events 5 omissions giving rise to the claim occurred”). The Third Circuit, as well as courts within this Circuit considering of nonmotions for permissive transfer, have been guided by a number exclusive public and private interest factors: as The private interests have included: plaintiffs forum preference manifested in the original choice, the defendant’s preference, whether the claim arose elsewhere, the convenience of the parties as indicated by their relative physical and financial condition; the convenience of the witnesses—but only to the extent that the witnesses may actually be unavailable for trial in one of the fora, and the location of books and records (similarly limited to the extent that the files could not be produced in the alternative forum). The public interests have included: the enforceability of the judgment; practical considerations that could make the trial easy, in expeditious, or inexpensive; the relative administrative difficulty the two fora resulting from court congestion, the local interest in deciding local controversies at home; the public policies of the fora, competent proof in establishing jurisdictional facts through sworn affidavits or other 735 F.2d 61, 66 n.9 evidence.”’) (quoting Time Share Vacation Club v. Ati. Resorts, Ltd., (3d Cir. 1984)). ), the On a motion to dismiss or transfer venue under Fed. R. Civ. P. 12(b)(3 s those court generally accepts the allegations in the pleadings as true, “unles ants’ affidavits.” Bockman v. First Am. Mktg. allegations are contradicted by the defend al Corp., 459 F. Appx 157, 158 n.1 (3d Cir. 2012). By contrast with a person venue has the burden of jurisdiction motion, the Rule 12(b)(3) movant for a change of 716, 724— demonstrating that venue is improper. Myers v. Am. Dental Ass’n, 695 F.2d 25 (3d Cir.1982). 5 law in and the familiarity of the trial judge with the applicable state diversity cases. (internal Jumara v. State Farm Ins. Co., 55 F.3d 873, 879—80 (3d Cir. 1995) citations omitted). made for the “Section 1404(a) transfers are discretionary determinations jurisdiction and convenience of the parties and presuppose that the court has y v. St. Riel, 495 that the case has been brought in the correct forum.” Laffert Section 1404(a) F.3d 72, 76 (3d Cir. 2007). Thus a court make a discretionary See Lafferty, 495 determination without first establishing personal jurisdiction. F.2d 358 (3d F.3d at 80 (citing the holding in United States v. Berkowitz, 328 there was no Cir. 1964) “that a § 1404(a) transfer was available even though personal jurisdiction.”). B. Analysis io, Judge Chesler of this Court, faced with a nearly identical scenar t of California. decided to transfer the venue of the action to the Central Distric 88, (D.N.J. AmTrust at Lloyd’s Ltd. v. Breslin, No. CIV 14—776 1, 2015 WL 13995 se an NFL prospect Mar. 26, 2015). Morgan Breslin, Lee’s teammate, was likewi st through USC, who signed up for a loss of value insurance policy with AmTru * lly, in the same Kaymore, and Hanleigh. Id. at 1. He was injured—coincidenta and by other game as Lee—and was treated at USC, by doctors in California, the policy, doctors in Germany. AmTrust denied coverage and rescinded application or to contending that Breslin had failed to disclose injuries in his filed a declaratory update his health status. On December 12, 2014, AmTrust 16, 2015, judgment action in the District of New Jersey, and on January t of California. Breslin filed an action against AmTrust in the Central Distric that it The court in Breslin performed the Jumara analysis and found *5• As to the private factors, Judge Chesler favored transferring venue. Id. at AmTrust’s stressed that, because New Jersey was not AmTrust’s home forum, hand, Breslin preference deserved comparatively less deference. On the other the location did have a strong preference for California, his home state and 6 * r, California was a where he had filed a suit against AmTrust. Id. at 3. Furthe Breslin’s injury, more convenient venue for resolution of questions regarding ses and records because he was treated there, and most of the relevant witnes that the would be found there. Id. As for the public factors, Breslin found the suit in New disputed personal jurisdiction over Breslin would complicate venue transfer Jersey in a manner that would be avoided in California, so the es. Id. at *4_5 would save both the litigants and the court time and resourc in the The same reasoning applies to Lee. As for the first private factor, that the “heavy 6 analogous forum non conveniens context it is well established when the plaintiff burden in opposing the plaintiff’s chosen forum” is lessened (citing Piper does not choose its home forum. Sinochem, 549 U.S. at 430 (1981)); see also Aircraft Co. v. Reyno, 454 U.S. 235, 255—56, 102 S. Ct. 252 *3 (citing Lony v. E.L Dupont de Nemours & Co., Breslin, 2015 WL 1399588, at ation, does not 886 F.2d 628, 633 (3d Cir. 1989)). Thus AmTrust, a U.K. corpor in New benefit from a strong presumption in favor of its choice to litigate Jersey, which is likely attributable to litigation strategy. ed Further, AmTrust’s suit rests on the question whether Lee provid st after his accurate health records to AmTrust and properly updated AmTru California, injury. (Compi. ¶j 18—19) Thus, the basis for this claim arose in treated. (Lee where Lee’s health records were generated and his injuries were 21) As in Breslin, a significant portion of the testimony relevant witnesses and records will be located in California. Such for the and evidence will include information regarding the treatment allegedly did September 28, 2015 injury, as well as any possible injuries Lee Deci. ¶J 11—12; Southall Deci. ¶ g to the not disclose. Lee also alleges that he filled out all the forms relatin ) is in When the choice is between two sister federal courts, Section 1404(a for transfer essence a codification of the fonm non conveniens doctrine, providing Corp., 549 U.S. 422, rather than dismissal. Sinochem Int’l Co. v. Malaysia Int’l Shzpping 430, 127 S. Ct. 1184 (2007). 6 7 regarding policy through USC; it follows that any witnesses and documents that process will be in California. (Lee Deci. ¶{ 8—9) of As in Breslin, the only non-neutral public factor—the ease, or not, to establishing personal jurisdiction—supports transfer of this action ce of in California. “[W]here there is a bona fide dispute over the existen transfer of the personam jurisdiction, the interests of justice are furthered by been brought.” action to another district in which the action could have clearly *4 (citing Schwilm v. Holbrook, 661 F.2d 12, 16 Breslin, 2015 WL 1399588, at Lee is murky at (3d Cir. 1981)). This Court’s power to exercise jurisdiction over ons best. Lee argues that he did not set foot in or direct any communicati , and providing towards New Jersey throughout the process of choosing, signing d by a medical history and records for the policy; rather, he was solicite of Kaymore to insurance agents through USC. (Lee Deci. ¶ 6) The relationship in New both parties is disputed, and the attribution of Kaymore’s actions extent to which Jersey to Lee might require complex factual development. The proper minimum there was a negotiation over the policy’s terms is disputed. A further facts contacts analysis would at least require that the Court gather Hanleigh, Kaymore, about the relationships and interactions between AmTrust, ly resulting in USC, and Lee. That expenditure of resources and time—possib jurisdiction— nothing more productive than a finding of that this Court lacks could be avoided by simply transferring the action to California. One difference between Breslin and this case is that Breslin was WL unequivocally established to be a California resident. Breslin, 2015 for 1399588, at *4• Here, Lee’s home forum is disputed; he now plays still seems Jacksonville, a Florida team, but he was a California resident, and supra. This may 7 to spend substantial time there in the off-season. See note 1, of I say “disputed” advisedly. It is quite possible, based on the facts in front st certainly seems to have the Court, that Lee’s home forum is California. AmTru 8 his “home” forum, but temper the strength of Lee’s preference for California as gthen AmTrust’s claim does not by any means nullify it. It does nothing to stren ct from any of the that New Jersey is the proper venue, and it does not detra opriate venue. aforementioned reasons that California is a more appr Breslin’s): As Judge Chesler put it (I substitute Lee’s name for ered by While the transaction culminating in the Policy was brok rust through Kaymore, operating in New Jersey, and issued by Amt ts at the its New Jersey agent, Hanleigh, it is clear that the even t, core of this coverage dispute arose in California. In shor ection to the facts California is the forum with the greatest conn Policy and underlying both [Lee]’s claim for coverage under the and/or asserting the Amtrust’s stated reasons for denying coverage ive weight of Policy is invalid. These factors, together with the relat r of venue the parties’ expressed forum preferences, militate in favo transfer. *4• Breslin, 2015 WL 1399588, at preference for AmTrust argues that the “first filed” rule nullifies Lee’s t on reconsideration in California. (AmTrust Br. 13) It made a similar argumen insured’s action were Breslin, where the declaratory judgment action and the s. See AmTrust at separated by a month, rather than (as here) a few hour 669, at *2 (D.N.J. May Lloyd’s Ltd. v. Breslin, No. CIV 14-776 1, 2015 WL 2092 5, 2015) (on reconsideration). rule is not a “[C}ourts have consistently recognized that the first-filed EEOC v. Univ. of Pa., 850 rigid or inflexible rule to be mechanically applied....” S. Ct. 577 (1990). F.2d 969, 976 (3d Cir. 1988), aff’d, 493 U.S. 182, 110 the first-filing party Specifically, “courts have rejected the rule when sing party’s imminent instituted suit in one forum in anticipation of the oppo ecting cases). This is suit in another, less favorable, forum.” Id. at 976—77 (coll n was filed mere t especially so where, as here, a declaratory judgmen actio ... tiff/defendant hours before a mirror-image action, in the natural plain file this suit in New assumed so, as it did in the case of Breslin, when it raced to Jersey. (See Compi. ¶ 10) 9 Inc. v. configuration, seeking coercive relief. See Research Automation, (“we ordinarily Schrader—Bridgeport Int’l, Inc., 626 F.3d 973, 980 (7th Cir. 2010) filed first”); give priority to the coercive action, regardless of which case was F.3d 535, Certified Restoration Dry Cleaning Network, L.L.C. v. Tenke Corp., 511 a first filed 551—52 (6th Cir. 2007) (there is practically “a presumption that of the declaratory judgment action should be dismissed or stayed in favor Auto., substantive suit”); see also Honeywell Int’l Inc. v. Int’l Union, United (3d Cir. Aerospace & Agr. Implement Workers of Am., 502 F. App’x 201, 206 t cases). 2012) (non-precedential) (approvingly citing the 6th and 7th Circui be Under these circumstances, application of the “first filed” rule would arbitrary and technical in the extreme. than the The Central District of California is a more convenient venue pursuant to 28 District of New Jersey for litigation of this action, and I so find, U.S.C. § 1404(a). III. CONCLUSION TED. Lee’s motion to transfer venue under 28 U.S.C. 1404(s) is GRAN Central AmTrust’s declaratory judgment action will be transferred to the District of California. Dated: April 12, 2016 Hon. Kevin McNulty /‘ United States District<Jude 10

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