AmTrust N.A., Inc. v. Safebuilt Ins. Servs., Inc., No. 16-cv-6033 (CM), 2016 U.S. Dist. LEXIS 139886 (S.D.N.Y. Oct. 6, 2016).

We have previously reported on earlier decisions in related actions concerning the dispute between a retrocedent and affiliated retrocessional and cell companies and their ownership involved in a complex insurance and reinsurance program for small and mid-sized construction contractors. The disputes involved general agency agreements and participation agreements. Essentially, the retrocessionaires were allegedly undercapitalized and could not fulfill their reinsurance obligations. The retrocedent’s dispute with the retrocessionaires resulted in an arbitration award that was confirmed and a judgment was entered on the award in New York federal court. This petition seeks to compel the underwriting manager to turn over funds to satisfy the judgment.

The underwriting manager moved to dismiss the petition. The court denied the motion. In denying the motion, the court found that the underwriting manager waived personal jurisdiction by purposely availing itself of the court’s jurisdiction by seeking affirmative relief in the court. The court found that the underwriting manager failed to raise lack of personal jurisdiction in a related case in the same court and brought a counterclaim and third-party complaint in that related action. The court held that the waiver extended to this judgment enforcement action because it stemmed from the same set of facts and involved the same relevant parties.

In a couple of related actions concerning enforcing the judgment obtained by the retrocedent, the court granted a motion for entry of a judgment against the “participant” in the participation agreement and compelled a related risk-retention group to provide information about funds in its possession belonging to the retrocessionaire and to restrain the use of any of those funds. AmTrust N.A., Inc. v. Safebuilt Ins. Servs., Inc., No. 16-cv-6033 (CM), 2016 U.S. Dist. LEXIS 153399 (S.D.N.Y. Nov. 3, 2016) and AmTrust N.A., Inc. v. Preferred Contractors Ins. Co. Risk Retention Grp., No. 16-mc-0340 (CM), 2016 U.S. Dist. LEXIS 145705 (S.D.N.Y. Oct. 18, 2016). In the former case, the court rejected the argument that the participant was not a signatory because there was no signature block, when there were multiple judicial admissions that the party was in fact the participant under the reinsurance participation agreement. In the latter case, the court upheld an enforcement subpoena and restraining notice because it was clear that the risk retention group held an account as a liability to the retrocessionaire.