A federal district court in California recently dismissed a lawsuit brought by a cedent against its reinsurer for lack of a personal jurisdiction, where the reinsurer’s only contacts with the state derived from the fact that the operative reinsurance certificates were entered into with a California company and that it attempted resolve the claims at issue by engaging in certain activities in the state.
The lawsuit centered on certain reinsurance certificates between the American Insurance Company (“TAIC”) and R&Q Re, a Pennsylvania corporation, regarding coverage for underlying asbestos claims implicating certain excess policies reinsured by the certificates. When R&Q declined to pay amounts billed under the certificates based upon insufficient notice, TAIC commenced suit, and R&Q moved to dismiss for lack of jurisdiction.
In dismissing the action, the court found that it lacked both general and specific personal jurisdiction over the dispute. With regard to the former, the court held that it lacked general jurisdiction because R&Q Re is a Pennsylvania corporation, even though it is licensed to do business in California and maintains a registered agent in the state for purposes of service of process. As for the latter, the court found that the fact that the reinsurance certificates were entered into with TAIC, a California company, was insufficient to warrant specific personal jurisdiction. Similarly, R&Q’s contacts with TAIC purely related to its resolution of the subject claims were insufficient, even including a visit to California to conduct an audit where the visit occurred because TAIC refused to send files out-of-state. American Ins. Co. v. R&Q Reinsurance Co., Case No. 16-03044 (USDC N.D. Cal. Oct. 12, 2016).