UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
July 19, 1984
TRANSAMERICA ICS, INC., Plaintiff,
TUGU INSURANCE CO., LTD., Defendant.
The opinion of the court was delivered by: EDELSTEIN
MEMORANDUM OPINION AND ORDER
EDELSTEIN, District Judge:
Plaintiff brought this action to obtain an award of money for lost equipment allegedly due from defendant under an insurance policy. Jurisdiction is based on diversity of citizenship -- the plaintiff is a Delaware corporation with its principal place of business in New York engaged in leasing shipping containers, and the defendant is an insurance company with its principal place of business in Hong Kong.28 U.S.C. §§ 1132 and 1441. Defendant has moved pursuant to Fed. R. Civ. P. 12(b)(2) and 12(b)(4) for an order dismissing the complaint for lack of jurisdiction over the defendant or for forum non conveniens.
In June 1978 the plaintiff, Transamerica ICS, Inc., ("ICS"), entered into an agreement with Universial Container Service (H.K.) Ltd., trading as Hong Kong Container Lines, ("HK"), whereby ICS would lease overseas cargo shipping containers to HK for use in HK's carrier business. The agreement required the lessee, HK, to obtain insurance on the leased equipment with a loss payable clause in favor of ICS with respect to ICS equipment.
In November 1980 defendant Tugu issued policy no. HVM8052107 ("the Policy") to HK essentially renewing a former policy.
The policy named ICS as an insured. In March, 1981 HK ceased operations. ICS duly demanded return of its equipment, but HK failed to return much of the equipment it had leased from ICS. ICS notified Tugu that it would claim under the Policy for the lost equipment. It did so claim, and Tugu has refused to pay. ICS brought this suit to compel payment of $904,145.84 allegedly owed under the Policy.
After reviewing the parties' papers on the defendant's motion to dismiss, the court requested the parties to submit affidavits listing the situs of crucial exhibits and witnesses and memoranda briefing the issue of what law should apply to this action. The parties have submitted affidavits and memoranda.
In evaluating the defendant's motion to dismiss on the ground of forum non conveniens, the standard under which the court makes its decision is as follows: "Unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed." Alcoa Steamship Co. v. M/V Nordic Regent, 654 F.2d 147, 151 (2d Cir. 1980). The Supreme Court has stated, "there is ordinarily a strong presumption in favor of the plaintiffs choice of forum," and this is especially so, "when the plaintiffs has chosen the home forum." Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255, 70 L. Ed. 2d 419, 102 S. Ct. 252 (1981). Ultimately, however, the decision lies within the discretion of the district court. Overseas Airways, Inc. v. Cargolux Airlines International, S.A., 712 F.2d 11, 14 (2d Cir. 1983).
The parties have submitted to the court lists of witnesses and exhibits that they assert will be necessary for trial. After a careful consideration of the items on these lists, the court concludes that the defendant has met its burden of showing that the balance is strongly in its favor.
The plaintiff, in order to prove its prima facie case, will need to show that the containers on which it claims insurance are indeed lost or constructively lost, and it will need to show its expenses incurred in salvaging the remaining containers. To do this the plaintiff will need documents, most of which are in New York (the others are around the world), and the documents' custodians, most of whom are in New York. Plaintiff might be able to make a prima facie case based on these documents, but defendant will need to bring other witnesses and documents to prove its defense, which it has raised in its motion papers, that the loss was caused by the wilful acts of the insured.
Defendant will need to bring witnesses of the salvage operations from around the world if it is to fairly contest the plaintiff's asserted expenses. Further, it is likely that defendant is correct in its contention that plaintiff also will need these witnesses to bolster its case. These witnesses are in the Far East, many in Hong Kong, or elsewhere around the world outside the United States.
The defendant further contends the plaintiff's documents are hearsay and are not admissible under the business records exception based on merely the authentication of the New York custodians. The court sees no need to engage in a long disquisitiion on the rules of evidence relating to the question raised by defendant. It cannot be ruled out that the plaintiff may be able to persuade the court at trial that the documents should be admitted under Fed. R. Evid. 803(6), yet it is a fact of life in this case that many other documents from around the world, as discussed above, will also have to be introduced.
In addition, the defendant points to two issues that cannot be tried based solely on sources in New York. First, the defendant asserts that it will need to introduce evidence of the inntent of the parties in signing the insurance contract and that all the relevant documents and witnesses are in Hong Kong or England. Second, because Hong Kong law applies to this dispute,
defendant asserts that expert witnesses in Hong Kong law will have to be introduced and that they will have to come from Hong Kong.
As to proving the intent of the parties in signing the contract, the parties have submitted briefs on the hong Kong parole evidence rule, and these submissions indicate that the Hong Kong rule is substantially the same as that applied in =P0001*8 United States courts. The defendant has raised the issue of to what extent the insurance policy covers losses that are the the indirect result of bankruptcy, see note 3 supra. The contract appears to be ambiguous on this point. For the purposes of this motion, the defendant as the moving party has met its burden of persuasion by showing an ambiguity in the "wilful act" exclusuion, which will likely call for the introduction of extrinsic evidence. Defendant's list of witnesses on this issue show that all but one are in Hong Kong where the contract was negotiated and executed.
As a matter of fairness, it would be excessibely burdensome to require a Hong Kong defendant to bring its Hong Kong witnesses and exhibits around the world to New york to defend itself in a dispute over what is essentially a Hong Kong transaction.
Finally, since Hong Kong Law applies to this dispute, adjudication will proceed more smoothly through Hong Kong courts than it would through courts in the United States.
In concluding an analysis of a convenient forum question, the court must consider the interests of the governments of the jurisdictions involved. Piper, supra, 454 U.S. at 259-61. New York has an interest in providing a forum for its insured if the policy is issued or delivered in New York. New York Insurance Law § 59-a manifests this interest. Here, however, section 59-a, as discussed supra, n. 5, does not provide for jurisdiction over defendant in the circumstances of this case. Hence, plaintiff has failed satisfactorily to demonstrate a sufficient New York interest in having such a case tried in the state. Hong Kong's interest in enforcing contracts negotiated and executed in Hong Kong clearly outweighs any New York interest.
The defendant's motion to dismiss the case on the ground of forum non conveniens is granted. The court need not reach the issue of personal jurisdiction on which the facts are not yet fully developed. This case is dismissed.