AMTRUST AT LLOYD'S LTD. v. LEE

Filing 34

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

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: / / operations.nfl.com/ 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