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Marsh & Mclennan Companies, Inc v. Gio Insurance Limited

August 31, 2012


The opinion of the court was delivered by: Honorable Paul A. Crotty, United States District Judge:



DOC #: _________________


In this insurance dispute, Plaintiff Marsh & McLennan Companies, Inc. ("MMC") seeks payment on an insurance policy for professional liability coverage issued by Defendant GIO Insurance, Ltd. ("GIO"). On October 19, 2011, MMC filed its Complaint in Supreme Court, New York County, alleging breach of contract. GIO removed this action by notice of removal, filed on November 18, 2011, asserting diversity jurisdiction under 28 U.S.C. § 1332(a). GIO now moves to dismiss for lack of personal jurisdiction under Fed.R.Civ.P. 12(b)(2). For the reasons discussed below, GIO's motion is denied.


MMC is incorporated in Delaware and has its principal place of business in New York, New York. GIO is an Australian corporation with its principal place of business in Sydney, Australia. MMC alleges that it purchased $350,000,000 of professional liability insurance from several insurers for "Errors & Omissions" or "E&O" coverage. (Compl. ¶ 6.) During the period from September 30, 1999 through September 30, 2000, MMC's E&O coverage included two layers of excess coverage, each valued at $50,000,000. GIO insured a portion of these two layers. Specifically, MMC purchased GIO policy number CI-0026968, which has a liability limit of $1,000,000 for the First Excess Layer, and policy number CI-0037270, which insured up to $300,000 of the $50,000,000 Second Excess Layer (collectively the "GIO Policies" or the "Policies").*fn1 (Id. ¶¶ 11-12.) The GIO Policies provide for automatic reinstatement of the full limit of liability when the original liability limits are expended (the "Reinstatement Provision"). (Id. ¶ 15.)

MMC alleges that it made various claims under the GIO Policies and other insurers' policies for the period from September 30, 1999 to September 30, 2000 (the "99-00 E&O Claims"). (Id. ¶ 18.) MMC further alleges that it incurred approximately $404,000,000 in losses relating to the 99-00 E&O Claims, and that this amount exceeded the total $350,000,000 limit of MMC's E&O coverage. (Id. ¶ 22.) The exhaustion requirements of the Reinstatement Provision have been satisfied, and GIO has paid its original policy limits of $1,000,000 and $300,000 under the First and Second Excess Layer, respectively. (Id. ¶ 25.) MMC contends, however, that GIO has breached its contractual obligations by refusing to pay its reinstated limits under the GIO Policies, as well as $28,414 of its limit under the Second Excess Layer Policy.


GIO contends that the Court does not have personal jurisdiction over it in this case. GIO, an Australian insurer, issued the Policies to MMC's Australian subsidiary. All negotiations with respect to the issuance of the Policies took place in Australia, and the Policies were delivered to MMC's Australian subsidiary in Australia. In short, according to GIO's contentions, all "contacts between the parties took place in Australia between GIO and MMC's Australian subsidiary." (Def's Mem. at 1.) MMC contends that as a New York based company, it is entitled "to enforce the terms of an insurance policy governed by New York law covering liabilities substantially incurred in New York." (Pl's Mem. in Opp. at 1.)

A. 12(b)(2) Standard "When responding to a Rule 12(b)(2) notion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing that the court has jurisdiction over the defendant." DiStefano v. Carozzi N. Am., Inc., 286 F.3d 81, 84 (2d Cir. 2001) (quotation omitted). Prior to discovery, the plaintiff need only make "a prima facie showing" of personal jurisdiction to defeat a motion to dismiss under Rule 12(b)(2). Id.; see also Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir. 1990) (stating that the Court may rely on "information in the complaint as well as supporting documentation" to determine whether prima facie showing of jurisdiction exists). The Court must construe all pleadings and affidavits in the light most favorable to the plaintiff. See PDK Labs, Inc. v. Friedlander, 103 F.3d 1105, 1108 (2d Cir. 1997).

A district court sitting in diversity exercises personal jurisdiction over a defendant to the same extent as courts of general jurisdiction in the forum state, here New York. See Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 305 F.3d 120, 124 (2d Cir. 2002). The parties agree that New York law governs the Court's analysis. See Volkswagenwerk Aktiengessellschaft v. Beech Aircraft Corp., 751 F.2d 117, 120 (2d Cir. 1984).

The personal jurisdiction inquiry is two-fold: "First, [the Court] must determine whether there is personal jurisdiction over [Defendants] under New York state law; second, if New York law provides for personal jurisdiction, the Court must determine whether the assertion of jurisdiction comports with the constitutional requirements of due process." Beatie and Osborn LLP v. Patriot Scientific Corp., 431 F. Supp. 2d 367, ...

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