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Smith v. S&S Dundalk Engineering Works

April 18, 2001


The opinion of the court was delivered by: Walls, District Judge



Defendant Royal & Sun Alliance Insurance PLC ("Royal & Sun UK") moves to dismiss the complaint under Fed. R. Civ. P. Rule 12(b)(2) for lack of personal jurisdiction, or in the alternative to dismiss due to forum non conveniens. Pursuant to Fed. R. Civ. P. 78, this matter is decided without oral argument. The motion to dismiss for lack of personal jurisdiction is granted, and the motion to dismiss due to forum non conveniens is denied as moot.


Plaintiffs Donald Smith ("Smith") and Eleanor Smith (collectively, "plaintiffs") filed this action which seeks a declaratory judgment that various defendants are required to provide insurance coverage, under an unspecified insurance policy, which allegedly provided product liability coverage to defendant S&S Dundalk Engineering ("Dundalk"). Plaintiffs filed an action in 1991 against several defendants, including Dundalk and Q.M.I., Ltd. ("QMI"), Dundalk's successor in interest. Plaintiffs alleged that Smith was injured in 1989 during the course of his employment by a box folding machine that had been manufactured in Ireland by Dundalk, an Ireland-based company. Judgment was entered in favor of plaintiffs against defendant Dundalk in July, 1997. Plaintiffs agreed to the dismissal of QMI as a defendant in that action on the condition that QMI would supply to plaintiffs the name and address of the insurance company who provided product liability insurance coverage for Dundalk. QMI later advised plaintiffs that Dundalk was insured for the loss by "Royal & Sun Alliance Insurance," with principal offices located at 13/17 Dawson Street, Dublin 2, Ireland and 1 Chase Manhattan Plaza, New York City, New York. Plaintiffs allege that they attempted to "confirm coverage" with "Royal & Sun Alliance Insurance" at the Dublin address, which denied coverage. This action followed.

Plaintiffs sought and received an ex parte order for substituted service on the defendants at their last known and present addresses by regular mail, certified mail, return receipt requested and Federal Express. In accordance with that order, plaintiffs served "Royal & Sun Alliance" by regular mail and certified mail in Dublin and New York. *fn1

Royal & Sun UK moves to dismiss for lack of personal jurisdiction, or in the alternative, due to forum non conveniens. As evidence that jurisdiction is absent, it advances: (1) Royal & Sun UK is an English company, organized under the laws of England and with its principal place of business in London, England; (2) the company issues insurance policies in the United Kingdom and European Community; (3) Royal & Sun UK has no offices, employees, agents or other presence in New Jersey and has never had any such presence; (4) it has never conducted business meetings in New Jersey; (5) it has never advertised, solicited, or conducted business in New Jersey; (6) it has never filed New Jersey tax returns or paid New Jersey taxes; (7) it has never had agents for service of process or other agents in New Jersey; (8) it has never owned real or personal property or maintained bank accounts or lines of credit in New Jersey; (9) it never issued an insurance policy that would have provided products liability coverage for Smith's accident in the United States in 1989; (10) none of Royal & Sun UK's English subsidiaries ever issued a policy that would have provided the coverage sought for the 1989 accident; and (11) Royal Insurance (UK) Ltd. ("Royal UK"), a wholly owned English subsidiary of Royal & Sun UK, also lacks any of these types of contacts with New Jersey.

Royal & Sun UK asserts that in 1985, Royal UK provided an insurance policy to Dundalk Engineering Works Limited, a company in receivership in Ireland, under policy No. RNN116605 (the "1985 policy"), which (1) expired on November 13, 1988; (2) was occurrence-based-i.e., provided coverage only for accidents during the policy term; and (3) contained an express exclusion for claims that arose from goods sold or supplied to North America. *fn2

Plaintiffs respond that: (1) "Royal & Sun Alliance" was served at its places of business in New York City and Dublin; (2) plaintiffs' counsel received a telephone call from Royal & Sun Alliance's general counsel, located in Charlotte, North Carolina shortly after the summons and complaint were served; (3) the North Carolina general counsel informed plaintiffs that it forwarded the matter to Royal & Sun Alliance's "major case unit" in Philadelphia, Pennsylvania; (4) a representative from that Philadelphia office referred the matter to the One Chase Manhattan Plaza location; (5) Royal & Sun UK's present counsel requested from plaintiffs, with the Court's approval, several extensions of time within which to answer or respond to the Complaint; (6) plaintiffs' and Royal & Sun UK's counsel corresponded regarding the 1985 insurance policy; (7) the 2001 Lawyers' Diary lists an address for a "Royal & Sun Alliance" in Parsippany, New Jersey and thus Royal & Sun Alliance "appears as doing business in the State of New Jersey"; and (8) "presumably, the defendant has filed Certificates of Authority to do business in the States listed as discovered by plaintiffs' counsel to date, pending further investigation." See Plaintiffs' Brief in Opposition to the Motion to Dismiss ("Plaintiff Br."), at 1-6.

Plaintiffs argue:

[I]t has been demonstrated that the defendant, Royal & Sun Alliance Insurance Company, has maintained and continues to maintain active business offices within the State of New Jersey as well as the State of Pennsylvania, North Carolina and the State of New York. Due to the broad scope of Federal judicial power, there is no Constitutional objection to exercising nationwide jurisdictional power when an action is brought in the Federal District Court. . . . Pending further discovery, it is probable that the defendant, Royal & Sun Alliance, has filed Certificates of Authority to do business in the States referenced and operates actively within those States. Plaintiff Br., at 9.

Plaintiffs also rely upon the fact that defendant delayed its response to the complaint and waited several months to raise personal jurisdiction defense while it investigated and "defended" this lawsuit. Plaintiff Br. at 9-10.

In reply, Royal & Sun UK states: (1) it is irrelevant that there are insurance companies within the U.S. that operate under the "Royal & Sun Alliance" tradename; (2) the companies referenced by plaintiffs are "US businesses of Royal subsidiaries domiciled in the United States"; (3) the "Royal subsidiaries to whose domestic offices plaintiffs refer are independent companies, separately organized under the laws of various states, that are only indirect subsidiaries of Royal & Sun UK"; and (4) "No Royal company operating under the Royal & Sun Alliance tradename and organized in any of the states of the United States ever issued an insurance policy to [Dundalk or QMI]." Royal & Sun UK Reply Br., at 1-2. These assertions are supported by the Affidavit of Lisa Pettigrew, the Corporate Secretary of the Royal Group, Inc. ("Pettigrew Aff."). Ms. Pettigrew declares that Royal Group, Inc. ("Royal Group") is a corporation organized under the laws of Delaware. She further states that no company that operates under the Royal & Sun Alliance tradename and organized under the laws of any of the states in the United States ever issued an insurance policy to Dundalk. Id. at ¶ 2. She asserts that Royal Group's counsel communicated with plaintiffs' counsel at the beginning of this action because "a New York office of certain Royal domestic companies received a copy of the summons and complaint in the action. That office was not authorized to accept service for Royal & Sun UK." Id. at ¶ 3. The Supplemental Reply Declaration of Peter Mancini, a solicitor for Soyal & Sun UK in London, indicates that Royal & Sun UK's office in Dublin was the office served with the Summons & Complaint.

Because it appeared that plaintiffs had named one company with the name "Royal & Sun Alliance Insurance" as a defendant but possibly served two different and separately incorporated companies-one located in New York, and one located in Dublin-this Court contacted the parties through its law clerk to obtain additional information. Specifically, the Court requested that plaintiffs determine (1) whether Royal & Sun UK was in fact the defendant they intended to name, and (2) if not, which party they meant to name as a defendant, as only one "Royal & Sun Alliance Insurance" was named in the Complaint. In addition, the Court asked how, if at all, the companies in New York and Dublin whose offices were served were related to each other

In response to the Court's inquiry, Royal & Sun UK submits the Supplemental Reply Affidavit of Lisa Pettigrew ("Supp. Pettigrew Aff."). Ms. Pettgrew declares that the subsidiaries of Royal Group Inc. that do business in the State of New Jersey and issue insurance policies are "fully capitalized, distinct corporate entities that are subsidiaries of Royal Group, Inc., a Delaware corporation, which itself is an indirect subsidiary of Royal & Sun UK." Supp. Pettigrew Aff., at ¶ 1. Attached to the Affidavit is a three-page chart that documents the relationship of Royal & Sun Alliance Insurance plc to its subsidiaries. According to the chart, Royal & Sun UK is the ultimate parent company, six levels removed, of Royal Group, Inc. of Delaware. There are over forty separately incorporated entities that are shown as indirect subsidiaries of Royal Group, Inc. in the U.S. Ms. Pettigrew asserts that five of those companies do business in New Jersey, but each is separately incorporated and is several levels beneath Royal & Sun UK. Id. at ¶¶ 3-4. *fn3 The Court's own reading of the chart reveals that each of the five companies is a direct subsidiary of Royal Group and is seven layers removed from Royal & Sun Insurance Alliance plc. Moreover, Ms. Pettigrew asserts-albeit in somewhat conclusory form-that none of the subsidiaries here satisfies the tests of having "played a part in the transaction at issue" or the parent's "dominat[ion of] the subsidiary [such that the subsidiary] is the `alter ego' of the parent and the independence of the companies is disregarded." Id. at ¶ 2.

In addition, Ms. Pettigrew has supplied a Second Supplemental Reply Affidavit, in which she asserts that the New York office that was served is the address of the principal offices of five different Royal subsidiaries, one of which is named Royal & SunAlliance Personal Insurance Company. ¶ 2. She also states that none of those subsidiaries is licensed to issue policies in New Jersey and none is authorized to accept service of behalf of Royal & Sun UK.

Plaintiffs insist that Royal & Sun UK and the New York companies it served are one and the same. *fn4 They submit a "Supplementary Certification" [sic] of Randall Tashjian, Esq., counsel for plaintiffs ("Tashjian Supp. Cert."). In his Certification, plaintiffs' counsel claims that he received a check from "Royal & Sun Alliance" in partial settlement of an unrelated case that was pending in Bergen County, "wherein Royal & Sun Alliance represented a defendant designated as Wooden Environments, Inc." Tashjian Supp. Cert. at ΒΆ 4. He further insists that the logo on this check, issued out of a bank in Atlanta, Georgia, is the same as the logo on the letterhead of a June 10, 1998 letter from Royal & SunAlliance, at the 13/17 Dawson Street, Dublin address which notified him that Royal & Sun UK did not hold a product liability policy that covered plaintiff's accident in this case. Because of the logo similarity, he ...

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