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INTERMETALS CORP. v. HANOVER INTERN.

August 2, 2001

INTERMETALS CORPORATION, PLAINTIFF,
v.
HANOVER INTERNATIONAL AKTIENGESELLSCHAFT FUR INDUSTRIEVERSICHERUNGEN, DEFENDANT.



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

MEMORANDUM OPINION

Plaintiff Intermetals Corporation ("Intermetals") has filed a complaint seeking payment from the defendant Hanover International Aktiengesellschaft Fur Industrieversicherungen ("Hanover"), an insurance carrier, for a claim under a marine insurance contract issued to Intermetals by Hanover. This matter is presently before the Court on Hanover's motion to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2) claiming insufficient contacts with New Jersey; or in the alternative, that the court should enforce the forum selection clause and dismiss the claim in this forum. For the reasons stated below, the court will deny Hanover's motion to the extent it is based on lack of personal jurisdiction but will grant it to the extent it is based on enforcement of the forum selection provision in the insurance contract.

BACKGROUND

Intermetals is a New Jersey corporation engaged in the business of importing steel from foreign countries. (Decl. of James F. Campise ("Campise Decl.") Ex. 1: Aff. of Laurence M. Traub ("Traub Aff.") ¶ 2.) In 1997, Intermetals began a joint venture with Safin, an exporter of steel, to purchase steel from Russia and Eastern Europe. (Id. ¶ 3.) Hannover is an insurance company with its head office in Austria that provides, among other things, marine insurance to exporters. (Decl. of Robert G. Clyne ("Clyne Decl.") Ex. 2: Aff. of Guenther Weiss ("Weiss Aff.") ¶¶ 2, 4.) Hanover insured the joint venture operations of Intermetals and Safin beginning in 1997. (Id. ¶ 3.) In 1998, the trade relationship between Intermetals and Safin ended. (Id. ¶ 5.) Thereafter, Intermetals sought insurance quotes from Hanover and Willis Corroon Marine, a New York insurance broker, in order to continue the insurance coverage of their international shipments of steel. (Traub Aff. ¶ 7.) On February 26, 1999, Hanover faxed a quote to Intermetals to insure an upcoming shipment of steel from Latvia to the United States. (Clyne Decl. Ex. B: Reply to Insurance Inquiry dated 2-26-99.) The quote did not contain a forum selection clause. (Id.) On March 1, 1999, Intermetals faxed a letter to Hanover requesting that the insurance contract be written and that a copy of the policy and certificate be returned to Intermetals. (Campise Decl. Ex. E: Reply to Insurance Quote dated 3-1-99.) On March 2, 1999, Hanover accepted the offer and faxed the Certificate of Marine Insurance no. 1 to Intermetals. (Clyne Decl. Ex. E: Acceptance of Application for Insurance dated 3-2-99.) The forum selection clause in question was on the back of the form and thus was not received by Intermetals at that time. (Traub Aff. ¶ 10.) On March 29, 1999, Intermetals received a copy of the policy and a complete copy of Certificate No. 1. (Id. ¶ 11.) The policy stated that the policy was subject to English law and the certificate included the following forum selection clause:

The court of jurisdiction — even where claims are agreed payable through an agent — is to be at the place where this insurance certificate is issued or at the head offices of the insurers.

(Clyne Decl. Ex I: Institute Cargo Clauses (A) ¶ 19; Clyne Decl. Ex K: Certificate of Marine Insurance "Certificate No. 6.") In addition, the certificate stated that the place of issuance was in Austria. (Certificate No. 6; Weiss Aff. ¶ 2.)

From 1999 to 2000, Hanover continued to provide marine insurance coverage to Intermetals. (Pl. Br. at 5.) In May 2000, Intermetals submitted an insurance claim for an allegedly damaged shipment that was insured by Hanover under Certificate of Marine Insurance No. 6. (Traub Aff. ¶ 15.) The shipment originated in Poland and was traveling to Detroit. (Pl. Br. at 5.) The claim was investigated by Hanover's appointed agent in New Jersey, Ewig International Marine Corporation. (Traub Aff ¶ 15.) On October 2, 2000, Intermetals received notification that Hanover denied the claim. (Pl. Br. at 5.) Intermetals filed its complaint on January 10, 2001, claiming exemplary and punitive damages because of Hanover's alleged failure to pay a valid insurance claim. (Compl. ¶¶ 35, 44.) Hanover subsequently filed a motion to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure, or in the alternative to dismiss based upon enforcement of the forum selection clause.

DISCUSSION

I. Personal Jurisdiction

Hanover's first argument for dismissal is that this Court lacks personal jurisdiction over it because it does not have sufficient contacts with New Jersey. (Def.'s Mem. of Law in Supp. of Mot. to Dismiss ("Def.'s Br.") at 5.) New Jersey Statutes Annotated 17:51-1, which is entitled Unauthorized Insurers: Submission to Jurisdiction of State, outlines acts by which insurers will be deemed to have appointed the New Jersey Commissioner of Insurance as their agent for purposes of submitting themselves to the jurisdiction of the New Jersey courts. Hannover appears to have committed two of the acts mentioned within the statute by issuing and delivering a contract of insurance to a resident of New Jersey and collecting premiums related to the insurance policy. See N.J. Stat. Ann. § 17:51-1(a)(1), (3). During oral argument, on June 18, 2001, counsel for Hanover conceded that, based on N.J. Stat. Ann. § 17:51-1, New Jersey has personal jurisdiction over Hanover for purposes of resolving this dispute. Accordingly, the Court will deny Hanover's motion to the extent it is based upon lack of personal jurisdiction.

II. Forum Selection Clause

Hanover's alternate argument for dismissal asserts that the forum selection clause found on the back of Certificate No. 6 is valid, enforceable, and mandatory, and therefore the exclusive jurisdiction for this case is Austria. (Defs Br. at 12, 14.) Intermetals argues it would be unreasonable to enforce the clause because of (1) the high cost of litigating in Austria, (2) the unavailability of witnesses, (3) the lack of bargaining between the parties, and (4) the location of the forum selection clause on the insurance certificate. (Pl. Br. at 2-3.) Intermetals also argues that the forum selection clause is permissive rather than mandatory and therefore jurisdiction should remain in the United States. (Id. at 2.)

Hanover has not specified which of the Federal Rules of Civil Procedure, 12(b)(1), 12(b)(3) or 12(b)(6), that it is relying upon in moving for dismissal. There is no consensus as to what procedural mechanism to apply when bringing a motion to dismiss on the basis of a forum selection clause. Union Steel Am. Co. v. M/V Sanho Spruce, 14 F. Supp.2d 682, 685 (D.N.J. 1998); see also New Moon Shipping Co. v. MAN B & W Diesel AG, 121 F.3d 24, 28-29 (2d Cir. 1997). The Third Circuit, however, has held that courts in this circuit should apply Federal Rule of Civil Procedure 12(b)(6) to a motion to dismiss based on enforcement of a forum selection clause. Instrumentation ...


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