Green v. First Liberty Insurance Corporation
Filing
10
MEMORANDUM & ORDER, Defendant's 8 Motion to Dismiss for Failure to State a Claim is DENIED. So Ordered by Judge Nicholas G. Garaufis on 5/7/2018. (Lee, Tiffeny)
^jr
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-X
NEFETERI GREEN,
Plaintiff,
MEMORANDUM & ORDER
-against17-CV-6975(NGG)
(CLP)
FIRST LIBERTY INSURANCE CORP.,
Defendant.
X
NICHOLAS G. GARAUFIS,United States District Judge.
Before the court is Defendant's motion to dismiss Plaintiffs complaint for failure to state
a claim. (Def. Mot. to Dismiss(Dkt. 8); Def. Mem.in Supp. of Mot. to Dismiss("Def. Mem.")
(Dkt. 8-1).) The motion is meritless and is therefore DENIED.
I.
BACKGROUND
This case arises from an ordinary traffic accident with an international twist. While
driving in Manhattan,Plaintiffs car was struck by a Jeep driven by one Marco Suazo, who is not
a party to this case. (Compl.(Dkt. 1)^1,11.) Plaintiff alleges that Suazo was driving
negligently and that this negligence caused the accident. (Id ^ 12.) The twist is that the Jeep
was owned or leased by the Principality of Monaco and registered to Isabelle F. Picco, Monaco's
permanent representative to the United Nations. (Id fl 3,6-7.) Suazo was also connected to the
Monegasque mission to the United Nations, either as an employee ofthe mission, as Plaintiff
alleges(id ^ 6), or as Picco's husband, as Defendant avers(Def. Mem. at 2).
Rather than bringing a state-law negligence action directly against either Picco or Suazo
(whom Plaintiff presumably believes to be shielded from suit by diplomatic immunity ^see
Compl. H 2)), Plaintifffiled suit directly against Defendant—^which had issued a liability
insurance policy for the Jeep(id ^ 7)—^under Section 7 ofthe Diplomatic Relations Act of 1978,
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Pub. L. 95-393, 92 Stat 808, codified at 28 U.S.C. § 1364. As the court explains below,that
provision authorizes an individual harmed by certain diplomatic personnel to sue the personnel's
liability insurer directly.
Defendant now moves to dismiss the complaint under Rule 12(b)(6) ofthe Federal Rules
of Civil Procedure, arguing that, for various reasons. Plaintiff cannot maintain a direct action
against it without first obtaining ajudgment against Picco or Suazo.
n.
LEGAL STANDARD
The purpose of a Rule 12(b)(6) motion is to test the legal sufficiency of a plaintiffs
complaint. Patane v. Clark. 508 F.3d 106,111-12(2d Cir. 2007)(per curiam). "To survive a
motion to dismiss, a complaint must contain sufficient factual material, accepted as true, to 'state
a claim to reliefthat is plausible on its face.'" Ashcroft v. IqbaL 556 U.S. 662,678(2009)
(quoting Bell Atl. Corp. v. Twomblv. 550 U.S. 544,570(2007)). When considering a
Rule 12(b)(6) motion, the court accepts the plaintiff's well-pleaded factual allegations as true and
draws all reasonable inferences in the plaintiffs favor. Id; ATSI Commc'ns. Inc. v. Shaar Fund.
Ltd,493 F.3d 87, 98(2d Cir. 2007).
m.
DISCUSSION
The court begins with some background on the Diplomatic Relations Act,then explains
why Plaintiff may bring a direct action under Section 7 ofthe Act, and finally considers and
rejects Defendant's baseless arguments to the contrary.
A. Diplomatic Immunity and the Diplomatic Relations Act's Direct Action
Under the common law, a tort victim had no right of action against a tortfeasor's liability
insurer, because the two were not in privity of contract. Lang v. Hanover Ins. Co.. 820 N.E.2d
855,857(N.Y. 2004); 7A Steven Plitt et al.. Couch on Insurance § 104:2(3d ed. updated 2017).
Consistent with this common-law rule, most states prohibit a party injured in a traffic accident
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from bringing suit solely and directly against the alleged tortfeasor's liability insurer.
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Charles A. Wright et al., Federal Practice and Procedure § 3629, at 186 n.4(3d ed. 2009). Some
states—^among them New York—^have softened this prohibition on direct actions by permitting a
tort victim to sue the alleged tortfeasor's liability insurer, provided that, among other things, the
victim first obtains ajudgment against the tortfeasor. N.Y. Ins. Law § 3420; see also, e.g., Md.
Code., Ins. § 19-102(b)(2); Va. Code § 38.2-2200(2).
These rules had unfortunate consequences for Americans injured in domestic traffic
accidents with foreign diplomats. After such accidents, these victims were often left without
legal recourse. As a diplomat, the actual tortfeasor could claim immunity from suit. See
Windsor v. State Farm Ins. Co., 509 F. Supp. 342, 344(D.D.C. 1981); Diplomatic Privileges and
Immunities: Hearings Before the Subcomm. on Int'l Operations ofthe House Comm. on fritT
Relations. 95th Cong, 1st Sess., at 3, 5-6(1977)(hereinafter Diplomatic Privileges Hearings)
(statement of Rep. Fisher). Even ifthe plaintiff could bring a direct action against the diplomat's
liability insurer, the insurer could escape liability by asserting the insured's diplomatic immunity
as a defense to the suit. S. Rep. 95-1108, at 3(1978)(statement of Sen. Mathias).
Partly to address "the inequities associated with the immunity of members of diplomatic
missions in civil court proceedings," Congress enacted the Diplomatic Relations Act, which
substantially revised the law of diplomatic immunity. Rodriguez v. Hanover Ins. Co.. No. 14CV-1478(GJH),2014 WL 3405258, at *3(D. Md. July 9,2014)(internal quotation marks and
citation omitted); see also Windsor. 509 F. Supp. at 343; S. Rep.No. 95-958, at 1 (1978). Three
provisions ofthe Diplomatic Relations Act are relevant to this lawsuit. See Rodriguez. 2014 WL
3405258, at *3. The first. Section 5 (codified at 22 U.S.C. § 254d),"continues the long-standing
concept of diplomatic immunity by providing for the dismissal of any action or proceedings
brought against an individual entitled to such protection" under the Vienna Convention on
Diplomatic Relations of April 18,1961,23 U.S.T. 3227(entered into force with respect to the
U.S. Dec. 13,1972),the Diplomatic Relations Act itself, or any other laws extending diplomatic
immunity or privileges. Windsor, 509 F. Supp. at 344. The second. Section 6(codified at 22
U.S.C. § 254e), requires diplomatic missions in the United States, members ofthose missions,
and members' families to maintain adequate liability insurance against the risks of bodily injury,
death, and property damage arising from their use of motor vehicles, vessels, or aircraft in the
United States. See generallv 22 C.F.R. §§ 151.11-151.11 (implementing this provision). The
third. Section 7(codified at 28 U.S.C. § 1364), provides that someone injured by certain
diplomatic personnel—^namely, a member of a diplomatic mission, a senior United Nations
official, or a family member ofeither—can sue the alleged tortfeasor's liability insurer directly
in federal court, and that such a suit is tried without ajury and is not subject to the defense that
the insured is protected by diplomatic immunity. By requiring individuals who are likely to be
entitled to diplomatic immunity to maintain liability insurance and permitting tort victims to
bring direct actions against those individuals' insurers. Sections 6 and 7 ofthe Diplomatic
Relations Act provide an effective remedy for Americans injured by foreign diplomatic
personnel. Windsor. 509 F. Supp. at 345.
B. Plaintiffs Direct Action
Subsection 7(a)ofthe Diplomatic Relations Act provides that federal courts may hear
tort suits brought directly against the insurers of certain diplomatic personnel and their families.
In full, this subsection reads as follows:
The district courts shall have original and exclusive jurisdiction,
without regard to the amount in controversy, of any civil action
commenced by any person against an insurer who by contract has
insured an individual, who is, or was at the time of the tortious act
or omission, a member of a mission (within the meaning of section
2(3) of the Diplomatic Relations Act(22 U.S.C.[§] 254a(3))) or a
member of the family of such a member of a mission, or an
individual described in section 19 of the Convention on Privileges
and Immunities ofthe United Nations ofFebruary.13,1946, against
liability for personal injury, death, or damage to property.
28 U.S.C. § 1364(a).
Plaintiff's allegations easily satisfy Section 7. Plaintiff alleges that Defendant insured the
Jeep that crashed into her car(Compl.
2, 6-7), and Defendant concedes not only that it insured
the Jeep, but also that it therefore insured the party or parties allegedly responsible for the
accident(Answer(Dkt. 6); Def. Mem. at 1). As the head of Monaco's mission to the United
Nations,Picco was a"member" ofthat mission for purposes ofthe Diplomatic Relations Act.
See 22 U.S.C. § 254a(l)(A). Furthermore,Plaintiff's allegation that Suazo worked for the
mission(Compl. 6)is sufficient, at least at this stage ofthe litigation, to allege that he was a
"member" ofthe mission under the Diplomatic Relations Act, which defines that term to include
not only the mission's diplomatic staff, but also its administrative, technical, and service staff.
22 U.S.C. § 254a(l)(A)-(C); set Rodriguez. 2014 WL 3405258, at *3.^ Defendant thus wisely
concedes that "the alleged tortfeasors"—^presumably both Picco and Suazo^—^"fall within the
definitions set forth in 28 U.S.C. § 254a." (Def. Mem. at 11.)
'Defendant avers that Suazo was not a mission employee and that he was driving the Jeep for personal reasons at
the time ofthe accident(Def. Mem. at 2), but this is immaterial. First, on a motion to dismiss, the court must accept
the Plaintiffs well-pleaded factual allegations as true. Iqbal. 556 U.S. at 678. Second, even ifthe court were to
credit Defendant's factual contentions, Suazo would nevertheless satisfy Section 7, because he is, according to
Defendant, married to Picco, and Section 7 authorizes direct actions against the liability insurers of"a member of
the family of...a member of a [diplomatic] mission." 28 U.S.C. § 1364.
^ In its memorandum in support of its motion to dismiss. Defendant sometimes refers to the "tortfeasor" responsible
for the accident(presumably Suazo), and at other times to the alleged "tortfeasors"(presumably both Suazo and
Picco). (Compare Def. Mem. at 1,4,11-12(singular^ with id. at 1,9,10-12(plural).) This inconsistency is of no
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C. Defendant's Arguments
Defendant offers several reasons why Plaintiff supposedly cannot maintain this suit.
These arguments lack merit.
1. Plaintiff need not obtain a iudsment against Picco or Suazo before bringing a
direct action against Defendant.
First, Defendant argues at some length that, under New York law, an injured party may
not bring a direct action against an alleged tortfeasor's liability insurer without first obtaining a
judgment against the actual tortfeasor. (Def. Mem. at 1, 3-7.) Tme enough. See N.Y. Ins. Law
§ 3420; Lang. 820 N.E.2d at 857-58. Defendant further argues, however,that "the doctrine of
diplomatic immunity is not an exception to the rule barring a direct action against an insurer."
(Def. Mem. at 1; accord id. at 7.)
This argument is confused. It may be true that, as a matter ofNew York law, a plaintiff
cannot maintain a direct action against a tortfeasor's liability insurer simply because the
tortfeasor is himselfimmune from suit. That is a question that the court need not and does not
address here. What matters is that a plaintiff can bring a direct action under Section 7 ofthe
Diplomatic Relations Act without first obtaining a judgment against the actual tortfeasor.
Rodriguez. 2014 WL 3405258, at *2-3.
This conclusion follows from the text and evident purpose of Section 7. As to the first.
Section 7 plainly authorizes individuals harmed by certain diplomatic personnel to proceed
directly against the personnel's liability insurers. Nothing in the text suggests any requirement
that the victim first obtain ajudgment agaiust the actual tortfeasor. Indeed, such a requirement
would render nugatory Section 7, and with it the Diplomatic Relations Act's remedial scheme for
moment because both Picco and Suazo are covered individuals for purposes of Section 7 ofthe Diplomatic Relations
Act.
tort victims. In cases described by Section 7,the actual tortfeasor will generally be immune from
suit,^22 U.S.C. § 254d, making it impossible for a plaintiff to obtain ajudgment against him
or her before proceeding against the insurer. The court will not adopt such a construction ofthe
statute. See United States v. Tohono O'Odham Nation. 563 U.S. 307,315 (2011).
It is true that, in enacting Section 7, Congress appears to have contemplated that the
substantive law applicable in these direct actions against insurers would be the tort law ofthe
state in which the allegedly tortious act or omission occurred. S. Rep. 95-1108, at 5. It would
make no sense, however,for federal courts to incorporate into Section 7, which expressly creates
a direct action against insurers in certain cases, state-law limitations on the availability of direct
actions. Indeed, the legislative history for the Diplomatic Relations Act shows that, in drafting
the Act, Congress deleted draft language providing that Section 7 actions "shall be subject to the
law ofthe place where the act or omission occurred" precisely to avoid giving rise to "the
erroneous interpretation that a federal direct cause of action against insurers of diplomats is
available only in those jurisdictions where state law creates a direct cause of action against
insurers generally." Id at 7.
Accordingly, Plaintiff need not obtain ajudgment against Picco or Suazo before bringing
a direct action against Defendant under Section 7 ofthe Diplomatic Relations Act.
2. The Foreign Sovereign Immunities Act does not alter Picco's or Suazo's
diplomatic immunity.
Second, Defendant argues that a direct action is unavailable under Section 7 because
Plaintiff could have sued Picco and Suazo directly. (Def. Mem. at 1, 8-9,10-12.) The crux of
Defendant's argument is that the tortious-activity exception to the Foreign Sovereign Immunities
Act("FSIA"),28 U.S.C. § 1605(a)(5), allows diplomatic personnel to be held liable for trafficaccident torts. (Def. Mem. at 8.)
This argument is frivolous. The FSIA addresses the immunity offoreign states, not
foreign diplomats and their family members.
28 U.S.C. § 1604("[A]foreign state shall be
immune from the jurisdiction ofthe courts of the United States and ofthe States ...."). As the
Supreme Court has observed,"Congress did not intend the FSIA to address position-based
individual immunities such as diplomatic and consular immunity." Samantar v. Yousuf. 560
U.S. 305, 319 n.l2(2010). Defendant's argument that the FSIA's tortious-activity exception has
any bearing on Picco's or Suazo's entitlement to diplomatic immunity is refuted by the clear text
ofthe exception, which provides that "[a] foreign state shall not be immune" in a case "in which
money damages are sought against a foreign state" for certain torts "caused by the tortious act or
omission ofthat foreign state or ofany official or employee ofthat foreign state while acting
within the scope of his office or employment." 28 U.S.C. § 1605(a)(5)(emphasis added); see
also Swama v. Al-Awadi.622 F.3d 123,144(2d Cir. 2010)("The tortious[-]activity exception
permits courts to exercise jurisdiction over foreign sovereigns
"
(emphasis added)).^
Because Picco and Suazo are not "[a]foreign state," the tortious-activity exception does not alter
their entitlement to diplomatic immunity. Ifthat were not reason enough to reject Defendant's
argument,the court would also note that the legislative history ofthe FSIA states that because
"the [FSIA] deals only with the immunity offoreign states and not its diplomatic or consular
representatives,[§] 1605(a)(5)[does] not govem suits against diplomatic or consular
representatives but only suits against the foreign state." H.R. Rep. 94-1487, at 21. Although
Article 31 ofthe Vienna Convention creates certain exceptions to diplomatic immunity, it does
' this reason, Defendant's concern that Plaintiff may obtain a double recovery from both it and from "the
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alleged tortfeasors," whom Plaintiff has sued in state court, is misdirected. (Def. Reply Affirmation(Dkt. 8-3)at 3
(citing Green v. Suazo. No. 500543/2018(N.Y. Sup. Ct.).) IfPicco and Suazo are indeed entitled to diplomatic
immunity, they may assert that immunity in state court. See 22 U.S.C. § 254d.
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not retract diplomatic immunity with respect to tort suits. Indeed, ifthere were a tortious-activity
exception to diplomatic immunity, Congress would not have needed to enact Sections 6 and 7 of
the Diplomatic Relations Act in the first place.
Defendant cites two cases in support of its baffling argument that "diplomatic immunity
is inapplicable to personal injury actions arising from traffic accidents": Foxworth v. Permanent
Mission ofthe Republic of Uganda,796 F. Supp. 761 (S.D.N.Y. 1992), and Beato v. Pakistan
Embassy,754 N.Y.S.2d 633(App. Div. 2003). (Def. Mem. at 9.) Unsurprisingly, neither case
supports Defendant's position. In each,the court held or stated in dicta that a tort victim co\ild
sue a diplomatic mission or embassy. Foxworth, 796 F. Supp. at 762, 764; Beato, 754 N.Y.S.2d
at 633. These holdings make sense imder the FSIA, because a country's United Nations mission
"is indisputably the embodiment ofthat state," USAA Gas. Ins. Co. v. Permanent Mission of
Republic of Namibia, 681 F.3d 103,108(2d Cir. 2012)(internal quotation marks and citation
omitted), and is thus not immune from tort suits described in 28 U.S.C. § 1605(a)(5). Neither
Foxworth nor Beato addressed diplomatic immunity, nor did Foxworth uphold a default
judgment "against a Permanent Representative to the United Nations," as Defendant mistakenly
asserts. (Def. Mem. at 8.)
Finally, to the extent Defendant suggests that New York State courts in particular do not
recognize diplomatic immunity in traffic-accident tort suits (Def. Mem. at 1, 9), Defendant is
plainly wrong. Federal courts have exclusive jurisdiction over civil suits against "members of a
mission or members oftheir families," so suits against these individuals should not be in state
court at all. 28 U.S.C. § 1351(2); MHM Sponsors Co. v. Permanent Mission ofPakistan to the
United Nations. 672 F. Supp. 752, 754(S.D.N.Y. 1987). Defendant cites no authority that
actually supports its position. To the contrary, the New York Court of Appeals has
acknowledged that"a diplomat who drives a vehicle negligently is immune from suit" under
federal law. Tikhonova v. Ford Motor Co., 830 N.E.2d 1127,1128(N.Y. 2005)(citing 22
U.S.C. § 254d).
3. Plaintiff need not demonstrate that she cannot recover from Monaco before
bringing a direct action against Defendant.
Charitably construed, Defendant's motion papers might be read as making the somewhat
less implausible argument that a direct action under Section 7 ofthe Diplomatic Relations Act
should be available only where a plaintiff cannot recover directly from the foreign state under the
FSIA's tortious activity exception. (Def. Mem. at 12; Def. Reply Affirmation(Dkt. 8-3) at 4-5.)
In support ofthis apparent contention. Defendant cites a committee report stating that Section 7
would "mak[e]it possible to bring actions directly against an insurer where the person is entitled
to diplomatic immunity, and the situation conceivably may not be one falling within the
coverage ofthe provisions of section 1605 oftitle 28 concerning jurisdiction over the state
itself." H.R. Rep. 95-1410, at 3(1978k see also id. at 2("This bill... would make possible
actions resulting from incidents occurring when diplomatic personnel are not acting within the
scope oftheir employment but are still entitled to immunity.").
This argument suffers from at least two fatal defects. First, the Diplomatic Relations Act
itself says nothing to the effect that a plaintiff may bring a direct action under Section 7 only
when he or she cannot sue the tortfeasor's home country. Nor do absurd results follow from
declining to read such a restriction into the Act. Congress could have reasonably decided that it
would be better if Americans injured by foreign diplomatic personnel sued those diplomats'
liability insurers rather than their home countries, insofar as suits against foreign countries both
could create international frictions and might not offer tort victims an effective remedy, in light
ofthe risk that foreign states would not honor adverse judgments. Because the text and structure
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ofthe Diplomatic Relations Act reveal no ambiguity as to whether an American injured by a
foreign diplomat must sue the diplomat's home country before bringing a direct action against
the diplomat's liability insurer, the court need not resort to legislative history.
State Farm
Fire & Cas. Co. v. U.S ex rel. Riesbv. 137 S. Ct. 436,444(2016).
Second, even ifthe court were to accept the argument that a direct action under the
Diplomatic Relations Act is available only with respect to torts falling outside the FSIA's
tortious-activity exception, it would not help Defendant. The tortious-activity exception applies
only to torts conunitted by foreign officials or employees within the scope oftheir office or
employment. 28 U.S.C. § 1605(a)(5). Defendant avers, however,that, at the time ofthe
accident, Suazo was not a mission employee and "was operating the subject motor vehicle for
personal reasons." (Def. Mem. at 2.) Thus, even under Defendant's apparent theory. Plaintiff
would still be entitled to pursue a direct action under the Diplomatic Relations Act because
(accepting Defendant's factual contentions solely for the sake of argument)she could not
proceed against Monaco under the FSIA's tortious-activity exception.
D. Sanctions
"By presenting to the court a... written motion[,]... an attorney ... certifies that to the
best of[her] knowledge, information, and belief,formed after an inquiry reasonable under the
circumstances[,]...the claims, defenses, and other legal contentions are warranted by existing
law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for
establishing new law." Fed. R. Civ. P. 11(b)(2); Morlev v. Giba-Geiev Corp.. 66 F.3d 21,25(2d
Cir. 1995)(stating the standard for imposing Rule 11 sanctions based on frivolous legal
arguments). Among other problems, Defendant's memorandum in support of its motion to
dismiss confuses diplomatic and sovereign immunity, misstates the holdings of several cases,
and fails to cite contrary authority. By no later than fourteen days from the entry ofthis
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Memorandum and Order, Defendant's counsel is directed to file a brief, not to exceed ten pages
in length, showing cause why the court should not impose Rule 11 sanctions, including awarding
Plaintiff reasonable legal fees incurred in responding to the motion to dismiss. Plaintiff may file
a response ofthe same length no later than seven days after Defendant's counsel files her brief.
Defendant may file a reply, not to exceed five pages in length, no later than seven days after
Plaintifffiles her response.
IV.
CONCLUSION
Defendant's motion to dismiss for failure to state a claim (Dkt. 8)is DENIED.
SO ORDERED.
s/Nicholas G. Garaufis
Dated: Brooklyn, New York
NICHOLAS G. GARAUF^
May jJ,2018
United States District Judge
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