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July 26, 1983

KOA FIRE & MARINE INSURANCE CO., LTD., Defendant; KOA FIRE & MARINE INSURANCE CO., LTD., Third-Party Plaintiff, v. AMERICAN AGENCY UNDERWRITERS, INC., et al., Third-Party Defendants

Carter, District Judge.

The opinion of the court was delivered by: CARTER

CARTER, District Judge

Grupo de Empressas Segurodoras Brasileiras ("GESB"), a reinsurer and a third-party defendant in this action, now moves to dismiss for lack of subject-matter jurisdiction pursuant to Rule 12(b)(1), F.R.Civ.P., and for lack of in personam jurisdiction, pursuant to Rule 12(b)(2), F.R.Civ.P. However, because the parties have alleged facts outside the pleadings, the motion will be treated as one for summary judgment. Rules 12(c), 56, F.R.Civ.P.

 The Birmingham Fire Insurance Company of Pennsylvania ("Birmingham") and the Belgian General Insurance Company ("Belgian") brought this suit on October 30, 1981, against the KOA Fire & Marine Insurance Co., Ltd. ("KOA") after KOA allegedly failed to indemnify them pursuant to several reinsurance agreements. American Agency Underwriters, Inc. ("AAU") established a pooling arrangement to reinsure certain risks of Birmingham and Belgian and used KOA as the pool's front reinsurer. In the certificates of facultative reinsurance that Birmingham and Belgian obtained from AAU, AAU named KOA as 100 percent liable for each risk. AAU also purportedly arranged for a pool of reinsurers to reinsure or indemnify KOA -- they are known as retrocessionaires. The crux of this dispute is that KOA asserts that it never agreed to be 100 percent liable for the risks and contends that it had agreed to be just two percent liable for the risks in 1977 and one percent liable in 1978 and 1979.

 KOA began its third-party action on February 8, 1982; it named AAU, five reinsurance brokers or intermediaries, and fifty-five reinsurers or retrocessionaires as defendants. GESB was one of the reinsurers named as a defendant.

 GESB, until it stopped its underwriting activities in August, 1981, was a pool of five Brazilian insurance companies and had its office in Rio de Janeiro. KOA charges GESB and the other retrocessionaires with failing to remit "outstanding reinsurance recoverables." Third-Party Complaint para. 81.

 In his affidavit, Newton Augusto De Souza, the manager of the GESB pool, states that in July, 1975, GESB's office received a letter from Pierre LeBlanc (International) and Co., Ltd. ("LeBlanc"), a Paris-based reinsurance broker, soliciting GESB's participation in a reinsurance pool that AAU was managing. De Souza Aff. para. 6; Exh. A to De Souza Aff. On July 23, 1975, GESB telexed LeBlanc to notify it that it would assume a two-and-a-half percent participation in the AAU pool. De Souza Aff. para. 6; Exh. B to De Souza Aff. There was an exchange of documents between LeBlanc and GESB during the ensuing months. Exhs. C through E to De Souza Aff. According to De Souza, GESB accepted some reinsurance in the AAU pool through LeBlanc for five underwriting years, 1975 through 1979. De Souza Aff. para. 7. The GESB pool manager said that GESB "dealt solely with LeBlanc on this matter" and "at no time had any communications with KOA or AAU." Id. De Souza added that neither KOA, a Japanese corporation with a branch office in New York, nor AAU, a Pennsylvania corporation that KOA asserts does business in New York, ever demanded payment from it of any sums related to the AAU reinsurance pool. Id.

 De Souza states that neither GESB nor any of its member companies has ever been authorized or licensed to do business in New York. He adds that GESB maintained no office outside of Brazil, never had an office, bank account, or telephone number in New York, and employed no agents in New York. Id. P 9. He acknowledges, however, that approximately once yearly, he visited New York to meet brokers and insurance companies on matters relating to the GESB pool; he fails to say whether the AAU pool was discussed. Id. P 10. He states that while in New York, he accepted no business, received no funds, and paid no claims on behalf of GESB.

 Until GESB ceased its underwriting operations in 1981, it participated in several reinsurance pools managed by companies in New York. Id. P 11. According to De Souza, any reinsurance ceded to GESB by these pools was accepted in Brazil by one of GESB's five member companies. Id. He states that "to my knowledge no business was ever accepted on behalf of GESB in New York by a broker or insurance or reinsurance company." Id. He also acknowledges that occasionally companies that were part of the GESB pool posted letters of credit in New York at the request of the beneficiary, which might or might not have been located in New York. Id.

 Lastly, De Souza states that the AAU pool agreement was solicited by LeBlanc in France and signed by GESB in Brazil and AAU in Pennsylvania. He notes that as far as he knows all transactions between GESB and the pool were handled by AAU in Pennsylvania and LeBlanc in France. Id. P 12. If GESB owes any money to KOA, De Souza says, then the obligation will be due KOA in Japan, possibly through AAU or LeBlanc. He adds that "GESB has not communicated with anyone in New York, has received no funds from New York, and has not paid, or been requested to pay, any claims to any person or firm there in connection with the reinsurance described in the third party complaint." Id. at P 13.

 KOA has submitted only the affidavit of its attorney, Roy Pomerantz, who evidently was not speaking from personal knowledge in his affidavit. Pomerantz makes such general, somewhat speculative statements as "GESB is intimately involved with ther [sic] international insurance markets, and particularly, with the market for reinsurance in the United States." Pomerantz Aff. para. 12. He also states that "GESB knew that the overwhelming majority of risks to be reinsured pursuant to the AAU reinsurance pool would be risks located in the United States" and that "New York comprises the largest segment of the United States reinsurance market." Id. P 17.


 The plaintiff has the burden of proving that the court has in personam jurisdiction over the defendant. Wisehart, Friou & Koch v. Hoover, 473 F. Supp. 945, 948 (S.D.N.Y. 1978) (Tenney, J.). When a plaintiff's efforts to prove jurisdictional facts consist of written materials only, in order to overcome a motion to dismiss, these materials need only demonstrate facts that support a finding of jurisdiction. Societe de Conditionnement v. Hunter Engineering Co., 655 F.2d 938, 942 (9th Cir. 1981); Data Disc, Inc. v. Systems Technology Associates, Inc., 557 F.2d 1280, 1285 (9th Cir. 1977).

 GESB first argues that the entire case should be dismissed on the ground that there are aliens on both sides of the action and thus there is not complete diversity. This motion is rejected for the reasons set forth in the court's April 21, 1983 opinion in this case with which familiarity is assumed.

 GESB's second argument is that a lack of personal jurisdiction requires dismissal. In response to that argument, KOA contends that the court has jurisdiction over GESB under NYCPLR section 302(a)(1). *fn1" The strongest contention KOA makes in this regard is that AAU, by running the reinsurance pool, is an agent of GESB and that because AAU allegedly "transacts business" and "supplies services" in New York, GESB, as AAU's principal, should also be found to be transacting business and ...

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