Opinion
CIVIL ACTION No. 01-2608-CM
March 31, 2003.
MEMORANDUM AND ORDER
Plaintiff Employers Reinsurance Corporation (ERC) filed this declaratory action against defendant MSK Insurance, Ltd. (MSK). This matter comes before the court on defendant MSK's Motion to Dismiss or Transfer (Doc. 10).
I. Background Facts
From April 1976 to April 2000, ERC reinsured a substantial portion of Memorial Hospital for Cancer Allied Diseases' (Hospital) first layer excess insurance policies. Defendant MSK is a wholly owned subsidiary of the Hospital and is the captive insurer of New York's Memorial Sloan Kettering Cancer Center (MSKCC), the not-for-profit corporation operating the Hospital. MSK is incorporated and has its principal place of business in the Cayman Islands.
MSK has written the Hospital's excess coverage policies since April 1993. Specifically, the initial Faculative Reinsurance Binder (Binder) that reinsured the initial policy issued by MSK to the Hospital was signed and became effective April 16, 1993, three days after MSK was incorporated. Reinsurance Certificate FCM-51914 eventually replaced the Binder, and every reinsurance certificate issued thereafter was a renewal of the previously issued certificate.
This dispute arises over Reinsurance Certificate FCM-0617297-03-1999 (1999 Reinsurance Certificate), which was issued in April 1999 and expired in April 2001. The Certificate included an unlimited Extending Reporting Period (ERP) option, which entitled MSKCC to convert its coverage upon expiration to an "occurrence" basis, covering all losses actually occurring during the policy period, no matter when they were reported. The ERP option was first introduced by the parties into their reinsurance arrangement in the April 1997 reinsurance certificate (1997 Reinsurance Certificate), which was renewed by the 1999 Reinsurance Certificate at issue here. Before April 1997, there was no ERP option included in the reinsurance certificates.
The underlying policy covered professional liability on a "claims made" basis, meaning that the policy covered only loss occurrences actually reported during the policy period.
The ERP option provided that MSKCC could buy such extended coverage by paying 125% of the expiring annual premium. When the 1999 Reinsurance Certificate expired in April 2001, MSKCC notified MSK, who in turn notified ERC, that MSK was invoking the ERP option for its professional liability coverage. MSK requested an invoice for $1,100,000 — 125% of the 1999 Reinsurance Certificate's expiring annual premium. ERC representative Richard Pistilli, who was involved in the 1997 reinsurance negotiations, responded that ERC would require a new aggregate retention of $17 million in order to reinsure the ERP. MSK's insurance agent, Marsh USA, Inc. (Marsh), responded to Mr. Pistilli by letter disputing ERC's right to a new retention.
In May 2001, Marsh, on behalf of MSK, forwarded a check in the amount of $1,023,000 to ERC's Kansas office, payable "To the order of: Employers Reinsurance Corp, P.O. Box 2991, Overland Park, KS 66201." This amount has been transferred by ERC to a segregated interest bearing account pending resolution of this matter.
In March and May 2002, mediation sessions took place in New York. Before mediation began, in December 2001, ERC filed the instant action. Meanwhile, in March 2002, unaware of this action, MSK filed a lawsuit in the Southern District of New York seeking declaratory relief as well as damages for breach of contract and breach of ERC's duty of good faith and fair dealing. MSK Ins., Ltd. v. Employers Reinsurance Corp., No. 02-CIV-1880 (S.D.N.Y. 2002). After the mediation proved futile, each of the parties disclosed their pending suits, and subsequently agreed to exchange service of process simultaneously on May 31, 2002.
Judge Naomi Reice Buchwald of the Southern District of New York has stayed the New York litigation pending this court's determination of where this dispute should be litigated. Both parties agree that this dispute must be litigated in a single action in one court. MSK argues that this court should dismiss this action for lack of personal jurisdiction or, in the alternative, transfer this action to the Southern District of New York.
II. Motion to Dismiss for Lack of Personal Jurisdiction
A. Standards
A plaintiff opposing a motion to dismiss for lack of personal jurisdiction bears the burden of establishing that the exercise of personal jurisdiction over the defendant is proper. Kuenzle v. HTM Sport-Und Freizeitgerate AG, 102 F.3d 453, 456 (10th Cir. 1996). If the motion to dismiss is submitted prior to trial on the basis of affidavits and other written materials, the plaintiff need only make a prima facie showing to avoid dismissal for lack of personal jurisdiction. Id. Although the plaintiff will be required to prove the factual basis for jurisdiction by a preponderance of the evidence at trial, on a pre-trial motion to dismiss, all factual disputes are resolved in favor of the plaintiff. Id. If the plaintiff makes the required prima facie showing that personal jurisdiction exists, "a defendant must present a compelling case demonstrating `that the presence of some other considerations would render jurisdiction unreasonable.'" OMI Holdings, Inc. v. Royal Ins., 149 F.3d 1086, 1091 (10th Cir. 1998) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985)).
In the instant case, the court must determine that the exercise of jurisdiction comports with due process and that an applicable statute potentially confers jurisdiction by authorizing service of process. Peay v. BellSouth Med. Assistance Plan, 205 F.3d 1206, 1209 (10th Cir. 2000). The Kansas long-arm statute is construed liberally to allow jurisdiction to the full extent permitted by due process; therefore, the court proceeds directly to the constitutional analysis. Federated Rural Elec. Ins. Corp. v. Kootenai Elec. Co-op., 17 F.3d 1302, 1305 (10th Cir. 1994).
Under the due process analysis, the "constitutional touchstone" is "whether the defendant purposely established `minimum contacts' in the forum state." Burger King, 471 U.S. at 474 (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). There must be some act by which the nonresident party purposefully avails itself of the privilege of conducting activities in the forum state. Hanson v. Denckla, 357 U.S. 235, 253 (1958). The purposeful availment requirement ensures that a defendant will not be sued in a foreign jurisdiction solely as a result of the unilateral activity of another party. Burger King, 471 U.S. at 475.
Consistent with due process, specific jurisdiction may be conferred over a nonresident defendant where the court's exercise of jurisdiction directly arises from a defendant's forum related activities. To determine whether specific jurisdiction is appropriate, the court must first decide whether the defendant has such minimum contacts within the forum state "that he should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1979). Second, the court must then consider whether the exercise of personal jurisdiction offends "traditional notions of fair play and substantial justice." Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 113 (1987).
B. Discussion
To determine whether minimum contacts exist in a contract case, the court must evaluate "prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing." Burger King, 471 U.S. at 478-79; Rainbow Travel Serv., Inc. v. Hilton Hotels Corp., 896 F.2d 1233, 1237 (10th Cir. 1990). A contract with an out-of-state resident is insufficient, standing alone, to establish minimum contacts in that out-of-state forum. Id.
MSK argues that the only contacts to be considered in this court's jurisdictional inquiry are those arising out of the negotiations and execution of the 1997 and 1999 Reinsurance Certificates and that, as a result, this court lacks personal jurisdiction. In support, MSK alleges the following: MSK does not have an office in Kansas, is not registered to do business in Kansas, has no registered agent in Kansas, has never conducted any business in Kansas, and no representative of MSK has ever gone to Kansas to do business with ERC. MSK claims that the 1997 Reinsurance Certificate, which was the first policy to include the ERP option, was negotiated for MSK by its New York-based Vice President-Treasurer Mark Svenningson, and by Patrick Hickey, Sherry Boyar, and Lily Han of Marsh, all of whom live and work in New York. MSK contends that, with the exception of a single conference call, all of MSK's and Marsh's communications with ERC regarding this dispute were with Mr. Pistilli of ERC's New York branch. Further, ERC negotiated and issued the 1997 Reinsurance Certificate through its New York branch and sent representatives to MSKCC's Manhattan offices for annual claims audits.
In further support, MSK claims that it did not remit its premium payments to ERC's Kansas officer; rather, Marsh sent payments on MSK's behalf to Chicago, Illinois. MSK contends that its only routine contacts with ERC in Kansas were quarterly "loss runs" provided by its claims administrator, claims notifications, and litigation updates. Moreover, MSK maintains its files of all significant documents, including copies of policies, loss reports, and relevant correspondence, in New York.
ERC, on the other hand, argues that the court must look to the contacts arising from the origin of MSK's and ERC's contractual relationship. ERC points to the language set forth in Burger King, which directs the court to evaluate "prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing." Burger King, 471 U.S. at 478-79 (emphasis added). Therefore, for purposes of analyzing personal jurisdiction, the court examines the prior negotiations and the parties' actual course of dealing throughout the duration of MSK and ERC's contractual relationship.
Prior to the Hospital's decision to form MSK as a captive insurer, two representatives acting on behalf of the Hospital telephoned Jean Stalcup at ERC's Kansas office inquiring of ERC's services as a hospital captive. In response, Paul Longman of ERC's Kansas office met with Hospital representatives in New York to discuss the formation of a captive insurer.
As a result of those discussions, MSK was incorporated. Mr. Longman subsequently signed at ERC's Kansas office the initial Binder that reinsured the Hospital's initial insurance policy. Reinsurance Certificate FCM-51914 eventually replaced the Binder, and every reinsurance certificate issued thereafter was a renewal of the previously issued certificate. The court believes that the proper jurisdictional inquiry centers upon MSK's contacts with Kansas from 1993, the time at which the parties signed the original Binder, since every reinsurance certificate issued thereafter was merely a continuation of that Binder.
Foremost, the parties' relationship began when the Hospital, MSK's parent company, purposefully reached into Kansas to contact ERC representatives. Thereafter, from 1994 to 2000, MSK sent letters addressed to Mr. Longman at ERC's Kansas office requesting ERC's assistance in the auditing of MSK's financial statements due to ERC's role in providing MSK's reinsurance. Moreover, MSK admits it routinely provided claims notifications and litigation updates to ERC's Kansas office, and MSK's claims administrator sent quarterly loss reports to ERC's Kansas office. Additionally, pursuant to the terms of the reinsurance certificates, MSK made indemnification requests to ERC's Kansas office. ERC's Kansas office then made indemnification payments by either by issuing a check or by authorizing a wire transfer.
Under these facts, the court finds that MSK engaged in contacts with Kansas such that the exercise of personal jurisdiction is proper. MSK affirmatively reached into Kansas to establish a relationship with ERC and later entered into a contract with ERC, a Kansas resident. That contract, and subsequent reinsurance certificates issued thereafter, required at least partial performance in Kansas. The requirement of partial performance in Kansas is significant to this court. Marcus Food Co. v. Family Foods of Tallahassee, Inc., 729 F. Supp. 753, 757 (D.Kan. 1990) (holding that partial performance of contract in Kansas rendered defendant subject to the exercise of personal jurisdiction in Kansas). As such, the court holds that the requirement of minimum contacts was satisfied.
However, even if the court were to accept MSK's argument, that the court should look only to the parties' relationship after the negotiation of the ERP option at issue in this case, the court would still find that MSK engaged in minimum contacts with Kansas. MSK points to the fact that the terms of the 1997 Reinsurance Certificate were negotiated in New York. MSK proffers that ERC created the initial draft of the 1997 Reinsurance Certificate and that it was ERC's draft that was then modified through negotiations in New York between ERC's New York office, MSK representatives, and Marsh. One of the provisions explicitly negotiated in those New York discussions was the ERP option at issue here.
In response, plaintiff points to other Kansas contacts in which MSK engaged with respect to the 1997 and 1999 Reinsurance Certificates. First, on August 10, 1999, within the 1999 Reinsurance Certificate period, MSK attempted to renegotiate a notice provision such that ERC would be deemed on notice of any claims contained in the quarterly loss runs sent by MSK to ERC's Kansas office. Specifically, Marsh, on behalf of MSK, sent a letter to ERC's Kansas office addressed to Craig Zahnd, ERC Claims Counsel, stating that Marsh hoped ERC would agree to being deemed on notice of such claims. Next, MSK admits it routinely provided notification and litigation updates to ERC's Kansas office. ERC points out that MSK continued to send such notifications of claims to ERC's Kansas office even during the extended reporting period at issue here (after April 16, 2001) and that such claims would be covered under the very ERP option in dispute. Moreover, the letters sent by MSK to ERC's Kansas office requesting ERC's assistance in the auditing of MSK's financial statements continued up until May 30, 2000. Finally, ERC directs the court's attention to MSK's attempted payment for the ERP coverage presently in dispute, specifically a check in the amount of $1,023,000 forwarded to ERC's Kansas office, payable "To the order of: Employers Reinsurance Corp, P.O. Box 2991, Overland Park, KS 66201."
The court determines that these transactions, some of which arise directly from the ERP provision at issue here, are sufficient to establish MSK's minimum contacts with the state of Kansas. The court further concludes that the quantity and quality of MSK's contacts are such that the exercise of personal jurisdiction would not offend traditional notions of fair play and substantial justice. Accordingly, the court holds that it has personal jurisdiction over MSK.
III. Motion to Transfer
As an alternative to its motion to dismiss for lack of personal jurisdiction, MSK moves the court to transfer this case to the Southern District of New York.
A. Standards
Motions to transfer venue are governed by 28 U.S.C. § 1404(a), which provides in pertinent part: "For the convenience of the parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." 28 U.S.C. § 1404(a).
Section 1404(a) affords the district court broad discretion to adjudicate motions to transfer based upon a case-by-case review of convenience and fairness. Chrysler Credit Corp. v. Country Chrysler, Inc., 928 F.2d 1509, 1516 (10th Cir. 1991). "The party moving to transfer a case pursuant to § 1404(a) bears the burden of establishing that the existing forum is inconvenient." Id. at 1515. "[U]nless the balance is strong in favor of the movant the plaintiff's choice of forum should rarely be disturbed." Scheidt v. Klein, 956 F.2d 963, 965 (10th Cir. 1992) (quoting William A. Smith Contracting Co. v. Travelers Indem. Co., 467 F.2d 662, 664 (10th Cir. 1972)).
The court must consider the following factors in determining whether to transfer a case:
[T]he plaintiff's choice of forum; the accessibility of witnesses and other sources of proof, including the availability of compulsory process to insure attendance of witnesses; the cost of making the necessary proof; questions as to the enforceability of a judgment if one is obtained; relative advantages and obstacles to a fair trial; difficulties that may arise from congested dockets; the possibility of the existence of questions arising in the area of conflict of laws; the advantage of having a local court determine questions of local law; and, all other considerations of a practical nature that make a trial easy, expeditious and economical.
Chrysler Credit Corp., 928 F.2d at 1516. The court bears in mind that transfer is not appropriate if the result is merely to shift the inconvenience from one party to the other. KCJ Corp. v. Kinetic Concepts, Inc., 18 F. Supp.2d 1212, 1214 (D.Kan. 1998).
B. Discussion
a. First-to-File Rule
The present action was filed in this court in December 2001. Eleven weeks later, MSK filed suit in the Southern District of New York, seeking declaratory relief and damages for breach of contract and breach of duty of good faith and fair dealing, and further seeking punitive damages based on ERC's "reckless, willful and wanton disregard for MSK's rights."
As a general rule, the first suit filed has priority, unless there are circumstances which justify giving priority to a later-filed action. Venture Corp. v. J.L. Healy Constr. Co., Civ. A. No. 88-1351-T, 1988 WL 131354, at *2 (D.Kan. Nov. 22, 1988). However, the presumption usually afforded the party who files first is not a mechanical rule. Courts have carved out an exception where the first-filed suit constitutes an improper anticipatory filing, or one made under threat of a presumed adversary filing the mirror image of that suit in a different district. Universal Premium Acceptance Corp. v. Oxford Bank Trust, No. 02-2448-KHV, 2002 WL 31898217, at *2 (D.Kan. Dec. 10, 2002) (citing Boatmen's First Nat'l Bank v. KPERS, 57 F.3d 638, 641 (8th Cir. 1995) (stating "red flags" that suggest compelling circumstances to disregard first-filed rule include notice that other side was considering filing lawsuit, and fact that first-filed suit was declaratory judgment action)). "A district court may decline to follow the first-to-file rule and dismiss a declaratory judgment action if that action was filed for the purpose of anticipating a trial of the same issues in a court of coordinate jurisdiction." Buzas Baseball, Inc. v. Bd. of Regents, 1999 WL 682883 (10th Cir. 1999) (citing Tempco Elec. Heater Corp. v. Omega Eng'g, Inc., 819 F.2d 746, 749 (7th Cir. 1987)).
The present suit is a declaratory judgment action. ERC filed this declaratory action in December 2001 as the parties prepared for mediation. ERC did not reveal the suit or serve MSK until after the mediation failed in May 2002. Considering the parties were involved in a contractual dispute, such that mediation was necessary, ERC was effectively on notice that MSK was considering filing a lawsuit asserting affirmative claims for relief in the event mediation proved unsuccessful. The court concludes that the instant declaratory action was filed for the purpose of anticipating a trial of the same issues in another jurisdiction and that ERC's declaratory judgment action is essentially a preemptive strike, rather than a suit for damages or equitable relief. For these reasons, the court declines to apply the first-filed rule.
Moreover, when competing actions are filed within a short time of each other, courts may disregard the first-filed rule. Universal Premium, 2002 WL 31898217 at *2. In this case, ERC filed suit eleven weeks before MSK filed in New York. The court concludes that the two competing lawsuits are close enough in time to convince this court that the first-to-file rule should be disregarded. See Affinity Memory Micro v. K Q Enter., 20 F. Supp.2d 948, 954-55 (E.D.Va. 1998) (transfer to second court when second action filed only two weeks after first action). Accordingly, given the close proximity of the initiation of the two actions, and the simultaneous service of process in May, the court concludes that first-to-file rule is not applicable in this case.
b. Balance of Convenience
Having determined that the first-filed rule does not apply, the court looks to whether MSK has met its burden of establishing that the existing forum is inconvenient such that transfer of this case to the Southern District of New York is appropriate. The court looks to the factors set forth above that are relevant to this dispute.
Availability of Non-Party Witnesses. The court lacks power to compel the appearance of non-party witnesses who reside beyond the 100-mile limit of this court's subpoena power. Fed.R.Civ.P. 45(b)(2). Thus, the availability of non-party witnesses is important to the court's transfer analysis.
MSK contends that, in offering its proof, it will essentially rely upon three non-party witnesses, Patrick Hickey and Lily Han, current employees of Marsh, and Sherry Boyar, a former employee of Marsh. These three non-party witnesses actively participated in the 1997 and 1999 Reinsurance Certificate negotiations and are, according to MSK, critical to its case. Each of these three non-party witnesses lives and works in New York. These three witnesses would be subject to compulsory process in the Southern District of New York, but could not be compelled to appear before this court. MSK claims that these witnesses will be inconvenienced by having to travel to Kansas to testify and that Ms. Boyer, who no longer works for Marsh, is unlikely to come to Kansas at all.
The court agrees that these non-party witnesses, should they testify at a trial in this court, would be seriously inconvenienced by having to travel to Kansas. Moreover, in addition to the personal inconvenience of these three non-party witnesses, the availability of compulsory process is an important consideration in this transfer analysis. Cook v. Atchison, Topeka Santa Fe R.R. Co., 816 F. Supp. 667, 669 (D.Kan. 1993) ("The availability of process to compel the testimony of witnesses is . . . an important factor.") (citation omitted). In Westhampton Care, Inc. v. Law Co., Inc., 896 F. Supp. 1093, 1095 (D.Kan. 1995), the court granted a motion to transfer in part because "key witnesses present in New York cannot be compelled to testify in Kansas." See also Boilermaker-Blacksmith Pension Fund v. Boiler Mech. Servs., Inc., No. 95-2289-JWL, 1995 WL 584500, at *2 (D.Kan. Sept. 27, 1995) (granting transfer motion in part because key witnesses present in Colorado could not be compelled to testify in Kansas); Cook, 816 F. Supp. at 669 ("[T]he defendant faces a real prospect of not being able to exercise the court's compulsory subpoena power.").
ERC argues that MSK would not be prejudiced by the inability to compel these witnesses to testify in Kansas because MSK can present its testimony by deposition. The court agrees that, in some circumstances, deposition testimony is adequate. However, the central issue in this case is the interpretation of the ERP option contained in the 1997 and 1999 Reinsurance Certificates, and the parties' intent in negotiating that option is key. Thus, MSK's proof will consist primarily of the testimony of these three witnesses, all of whom negotiated the option provision on MSK's behalf. The court concludes that it would be unfair to force MSK to present a significant portion of its case by deposition, Farr v. Designer Phosphate Premix Int'l., 777 F. Supp. 895, 896 (D.Kan. 1991), especially in light of the fact that the central issue of the parties' intent may ultimately turn on the credibility of these witnesses.
In contrast, there are no non-party witnesses who reside in Kansas. Rather, ERC's only non-party witness, Collin Suttie, resides in St. Louis, Missouri. Mr. Suttie is a former ERC employee and has testified by affidavit that Kansas would be a more convenient forum than New York. The court takes note that, in either forum, Mr. Suttie would have to travel.
More significant, the court questions whether Mr. Suttie's testimony would be central to ERC's proof in this case. Mr. Suttie did not personally participate in the 1997 and 1999 Reinsurance Certificate negotiations. Instead, Mr. Suttie's testimony would concern how he "assisted the underwriters" at ERC, his "recommendations of an appropriate aggregate retention," the "assumptions that went into [his] pricing recommendations," and "industry standards and practice." (Suttie Aff. ¶¶ 7-10). Thus, while Mr. Suttie would be more inconvenienced by having to travel to New York rather than Kansas, his testimony is not as central to ERC's case as the testimony of MSK's three non-party witnesses. Thus, ERC would not be as prejudiced by presenting Mr. Suttie's testimony by deposition. The court determines that the factor of the convenience and availability on non-party witnesses weighs strongly in favor of transferring this case to the Southern District on New York.
Availability of Party Witnesses. MSK contends there will be only two critical party witnesses: Mark Svenningson of MSK and Richard Pistilli of ERC, both of whom work in New York. Mr. Pistilli and Mr. Svenningson, along with the three Marsh employees, actively participated in the negotiation and drafting of the disputed reinsurance contracts. The court concludes that Mr. Svenningson's testimony is critical to MSK's case and that, because he lives and works in New York, his convenience favors New York. ERC argues that there are at least four additional party witnesses, all of whom are employed by ERC in Kansas, and that the convenience of these parties favors Kansas.
ERC contends that these witnesses are knowledgeable about the issues in this case. Specifically, these witnesses' affidavits assert that they have direct knowledge regarding the ERP at issue, negotiations regarding the reinsurance agreement at issue, negotiations regarding the failed attempt of the reinsurance agreement at issue, and pricing of ERPs. The court concludes that, while these witnesses may have knowledge of the transactions involving the agreements at issue, their testimony would not be as critical as the testimony of those who actively participated in the communications and negotiations with MSK representatives. Moreover, these witnesses would likely be available to testify because they are employed by ERC. See Hill's Pet Prods. v. A.S.U., Inc., 808 F. Supp. 774, 778 (D.Kan. 1992). In Hill, the court ordered a transfer to California even though plaintiff's witnesses resided in Kansas, stating that "[a]lthough [plaintiff's witnesses] may not be subject to compulsory process in California, they would nevertheless be available as witnesses in California as a practical matter because of their employment relationship with [plaintiff], a defendant in the California litigation." Id. The court concludes that the convenience of the party witnesses whose testimony is most central to this case (Mr. Svenningson and Mr. Pistilli) favors trying this case in New York.
Substantive Law: At the outset, the court notes that, while another state's law may govern the substantive aspects of the parties' contractual dispute, that factor does not, standing alone, require a case to be transferred. See F.J. Joseph, Inc. v. Lida Adver., Inc., 991 F. Supp. 1283, 1285 (D.Kan. 1998). However, such a fact may nevertheless be pertinent to the court's analysis of whether the requested transfer should be granted. See Chrysler, 928 F.2d at 1516 (in assessing appropriateness of venue transfer, the court is to consider "the advantage of having a local court determine questions of local law").
MSK argues that New York law would govern the Reinsurance Certificate at issue in this case. ERC, on the other hand, contends that the location of contract formation has not been established and that, as a result, ERC is unwilling to concede that New York law applies to this case. However, ERC never suggests that Kansas law would apply.
The court concludes that, in all likelihood, New York law would in fact govern this dispute. As set forth by MSK, the 1999 Reinsurance Certificate was executed by Mr. Pistilli of ERC's New York office, and states on its face that it was issued by ERC's "New York Branch." Moreover, when ERC issued the certificate, it sent the document from ERC's New York office to Marsh in New York, and when Mr. Pistilli signed endorsement no. 1 to that certificate, it was sent from ERC's New York office to MSK's office in Grand Cayman with a letter requesting that it be executed and returned to ERC's New York office. In addition, the ERP provision at issue was mandated by New York Insurance Department Regulations. See 11 N.Y.A.D.C. § 73.4. As such, the court determines that the consideration of having a local court determine questions of local law favors transferring this case to the Southern District of New York.
In sum, the locus of the controversy in this case concerns a Reinsurance Certificate negotiated in New York by an ERC New York representative, and issued by ERC's New York Branch to cover an insured risk in New York. Clearly, the center of gravity of this dispute is in New York. "There is a local interest in having localized controversies decided at home." Ferens v. John Deere Co., 494 U.S. 516, 530 (1990). The court therefore concludes that the balance is strongly in favor of transferring this case to New York, where it can be consolidated with the nearly identical case pending in the Southern District of New York.
IT IS THEREFORE ORDERED that MSK's Motion to Dismiss or Transfer (Doc. 10) is granted in part and denied in part. This case is hereby transferred to the Southern District of New York.