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December 16, 1996


The opinion of the court was delivered by: BARTELS

 Plaintiff Royal Indemnity Company ("Royal") moves under Rules 12(f) and 56 of the Federal Rules of Civil Procedure for an order striking the defense of subject matter jurisdiction and granting summary judgment. Defendant Wyckoff Heights Hospital ("Wyckoff") cross-moves for summary judgment and, in the alternative, moves to remand the action to state court for lack of diversity jurisdiction. For the reasons set forth below, the motion to strike is granted, the motion to remand is denied, Royal's motion for summary judgment is granted, and Wyckoff's cross-motion for summary judgment is denied.


 The Court discussed the background of this action in its Memorandum-Decision and Order dated September 11, 1995 ("September Decision"), which decided motions to amend and to dismiss for lack of capacity, and will not here repeat itself unnecessarily. The September Decision directed the parties to submit additional evidence as to Royal's principal place of business and reserved decision on the cross motions for summary judgment.


 I. Subject Matter Jurisdiction and Corporate Citizenship

 For the purpose of diversity jurisdiction, a corporation finds itself a citizen of "any state by which it has been incorporated and of the state where it has its principal place of business." 28 U.S.C. ยง 1332(c)(1); See also, Wm. Passalacqua Builders v. Resnick Developers, 933 F.2d 131, 141 (2d Cir. 1991); In re Joint E. and S. Dist. Asbestos Litig., No. 87- CV-0537, 1990 WL 129194, at *2 (E. & S.D.N.Y. Aug. 30, 1990). As discussed in the September Decision, Wyckoff is incorporated in New York and has its principal place of business in New York, while Royal is incorporated in Delaware. As to citizenship, only the question of Royal's principal place of business remains. Royal contends that its principal place of business is in North Carolina, while Wyckoff contends that it is in New York.

 In this circuit, the principal place of business of a corporation is determined by one of two multi-factored judicial tests: either the "nerve center test" for corporations with operations spread over numerous states or the "place of the activities/public impact test" for corporations with more localized operations. R. G. Barry Corp. v. Mushroom Makers, Inc., 612 F.2d 651, 654-55 (2d Cir. 1979); In re Asbestos Litig. at *2-3; Powers v. Fox Television Stations, 907 F. Supp. 719, 721-22 (S.D.N.Y. 1995); Hungarian Broad. Corp. v. Coleman and Co. Sec., 1996 U.S. Dist. LEXIS 9204, No. 96- CV-0048, 1996 WL 374173 at *1-2, (S.D.N.Y. July 2, 1996).

 It is undisputed that Royal is a major insurance company, conducting business in all fifty states and has offices throughout the nation. (Wheeler Aff. PP 6, 7.) As such, Royal is the paradigm of the "corporation with operations spread over numerous states," and the nerve center test applies. The nerve center test looks to "those factors that identify the place where overall corporate policy originates," R. G. Barry Corp., 612 F.2d at 655, or the "nerve center from which it radiates out to its constituent parts and from which its officers direct, control and coordinate all activities without regard to locale, in the furtherance of the corporate objectives." Id. (quoting Scot Typewriter Co. v. Underwood Corp., 170 F. Supp. 862, 865 (S.D.N.Y. 1959)).

 In response to the September Decision, Royal submits the affidavits of Joyce Wethington Wheeler, Vice President and Corporate Secretary of Royal, and Paul R. Cullinan, a claims consultant employed by Royal. In her affidavit, Ms. Wheeler states that Royal moved its headquarters from New York to North Carolina in 1986 and that all administrative functions have been performed in North Carolina since then. (Wheeler Aff. P 2.) All of Royal's senior executives are located in North Carolina, and eight of Royal's nine directors are employed by Royal in North Carolina. (Id. at PP 2, 4.) The ninth director recently retired from the North Carolina headquarters, and continues to live in North Carolina, as do the other eight. (Id. at P 4.) The board of directors meets in North Carolina. (Id. at P 4.) Royal makes all of its underwriting, marketing and claims policy decisions in North Carolina, and handles all of its regulatory and actuarial functions in North Carolina. (Id. at P 2.) Royal keeps its corporate books and records in North Carolina. (Id. at P 2.) Finally, Royal performs all of its accounting functions in North Carolina and meets its regulatory obligations for all fifty states out of its North Carolina headquarters. (Id. at PP 4, 5.)

 The Cullinan affidavit adds nothing to Ms. Wheeler's statements.

 In opposition to the Wheeler and Cullinan affidavits, Wyckoff submits the affirmation of its attorney, David N. Hoffman. This affirmation submits no contrary information, but only serves to offer alternate interpretations of the information in Royal's affidavits. The only evidence offered in Hoffman's affirmation is a series of pages from the 1995 New York Lawyers Diary and Manual which list several subsidiaries of the Royal Insurance Company of America, including Royal, and direct the reader's attention to the main entry for information. Hoffman's affirmation argues that this information indicates that Royal Group, and possibly not Royal itself, has its principal place of business in North Carolina. (Hoffman Affirm. P 4.) Hoffman's affirmation goes on to state that Royal has "huge contact" with New York. (Id. at P 5.) The remainder of the affirmation attacks the propriety of using Mr. Cullinan to establish the principal place of business of Royal, arguing that Mr. Cullinan did not know the same information during his deposition, and that at the deposition, his attorney argued that Mr. Cullinan "is not the witness to ask [sic] questions about the corporate status." (Hoffman Affirm. Ex. C at 14.) As noted above, the Cullinan affidavit adds nothing to the Wheeler affidavit, and even assuming arguendo that the Cullinan affidavit should not be considered by the Court, Wyckoff has submitted no evidence tending to show that Royal's principal place of business is anywhere other than North Carolina. The information supplied by Wyckoff merely indicates that Royal does business in New York, an issue of personal jurisdiction which is not in controversy. Wyckoff also offers the possibility that the information indicates that Royal does not have a corporate identity separate from that of Royal Insurance Company of America, a legal theory never suggested by either party and which, as noted in the September Decision's "alter ego" discussion also would seem to indicate Royal's principal place of business as North Carolina.

 In short, the evidence unquestionably establishes that Royal's principal place of business is North Carolina. Thus diversity jurisdiction *fn1" is preserved, and Royal's motion to strike the defense of subject matter jurisdiction is granted and Wyckoff's motion to remand is denied.

 II. The Insurance Policy

 The gravamen of this action is the interpretation of Commercial Umbrella Liability Policy No. EB 102395 (the "Policy") issued to Wyckoff by Royal and in effect at all times relevant to this action. The Policy provided Wyckoff with maximum coverage of $ 20 million in excess of Wyckoff's self-insured retention ("SIR") of $ 1 million per occurrence of professional liability. The parties agree that the Policy unambiguously required Wyckoff to satisfy the first $ 1 million of a malpractice judgment or settlement before Royal's obligation to provide excess insurance would be triggered.

 As the result of a settlement during trial of a professional malpractice action in state court, Wyckoff paid $ 750,000 to purchase an annuity scheduled to make payments totaling $ 1 million over twelve years. Wyckoff maintained that this arrangement satisfied its SIR. Royal disagreed, but when Wyckoff refused to contribute additional money, Royal contributed $ 750,000 cash to the settlement in order not to upset the negotiated settlement and risk a larger jury award. Royal reserved its right to seek reimbursement from Wyckoff.

 The parties limit their dispute to whether Wyckoff's purchase of the $ 1 million annuity at a cost of $ 750,000 satisfied its obligations under the Policy. Wyckoff urges that the Policy is ambiguous because it fails to specify the time and manner in which it must satisfy the SIR. Royal contends that the Policy requires Wyckoff to spend at least $ 1 million in present value dollars in order to trigger Royal's obligation to provide excess coverage.

 A. Wyckoff's Argument that the Policy is Ambiguous

 When interpreting an insurance policy, the Court must first look to the plain meaning of the policy. Francis v. INA Life Ins. Co. Of N.Y., 809 F.2d 183, 185 (2d Cir. 1987); In re Ambassador Group, Inc. Litig., 738 F. Supp. 57, 62-63 (E.D.N.Y. 1990); Maurice Goldman & Sons, Inc. v. Hanover Ins. Co., 80 N.Y.2d 986, 987, 592 N.Y.S.2d 645, 646, 607 N.E.2d 792, 793 (1992). The policy includes the following provisions:

The Company agrees to pay on behalf of the Insured the Ultimate Net Loss, in excess of the applicable Underlying or Retained Limit, which the Insured shall ...

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