Opinion
Case No. F05-0002 CV (RRB).
July 14, 2005
ORDER GRANTING MOTION TO TRANSFER
I. INTRODUCTION
Before the Court is Defendant Property Casualty Insurance Company of Hartford ("Hartford") with a Motion to Transfer Action to Eastern District of Wisconsin. Plaintiff Jeffrey Davis ("Davis") opposes and argues that Alaska is the correct venue for this insurance dispute.
Clerk's Docket No. 9.
Clerk's Docket No. 13.
II. FACTS
Davis purchased a Hartford Personal Automobile Insurance Policy in Wisconsin. At the time he purchased the policy, Davis was a resident of Montello, Wisconsin. The policy covered Davis's 2001 Chevy Silverado truck, which was principally garaged in Wisconsin. Davis is now a resident of Pennsylvania. Hartford is organized under and has its principal place of business in Indiana.
Complaint at ¶ 5.
Id. at ¶ 2.
Clerk's Docket No. 9 at Ex. A at 8-9.
Complaint at ¶ 2.
Clerk's Docket No. 9 at 4.
On or before July 3, 2002, Davis drove his truck to Fairbanks, Alaska, and rented a camping spot at River's Edge Resort ("Resort"). On July 3, Patricia Pickens ("Pickens") was also at the Resort. Pickens leashed her dog to her truck's trailer hitch and proceeded to drive through the Resort with the dog running along. As Pickens drove through the Resort, Davis was walking along one of the roads in the Resort. Somehow, Davis ended up between Pickens' dog and her truck and was injured when the dog's leash caught his leg and flipped him over. Davis was taken to the hospital where he received medical attention.
Complaint at ¶ 6.
Id. at ¶ 7. Though Hartford's motion refers to a "Patricia Perkins," the Court relies on the name supplied by Davis.
Id. at ¶¶ 7-8.
Id. at ¶ 9.
Id.
Id.
Pickens' insurer paid liability policy limits of $100,000 to Davis. However, Davis's damages exceeded this limit and he sought under-insured motorist coverage from his Hartford automobile insurance policy. However, this policy contains a reducing clause that limits Davis's potential for recovery. Under this clause, even though Davis has $250,000 in under-insured motorist coverage, Hartford would only be required to pay $150,000 because of his liability recovery from Pickens' insurer. This clause is not enforceable under Alaska law, but is enforceable under Wisconsin law. Thus, Davis seeks a declaration that Alaska law applies and that $250,000 of under-insured motorist coverage is available, regardless of the liability payment already received. Hartford seeks to transfer the action to Wisconsin.
Id. at ¶ 11.
Id.
Clerk's Docket No. 9 at Ex. A at 22. The reducing clause states:
B. The limit of liability shall be reduced by all sums:
1. Paid because of the bodily injury by or on behalf of persons or organizations who may be legally responsible. This includes all sums paid under part A; and
2. Paid or payable because of the bodily injury under any of the following or similar law:
a. Workers' compensation law; or
b. Disability benefits law.
Complaint at ¶ 13. Hartford has already paid $100,000.Id.
Id. at ¶ 16.
Id. at 6.
Clerk's Docket No. 9.
III. LEGAL STANDARD
28 U.S.C. § 1404(a) provides that "[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil matter to any other district or division where it might have been brought." The purpose of section 1404(a) is to "prevent the waste of time, energy, and money and to protect litigants, witnesses, and the public against unnecessary inconvenience and expense." A motion for transfer lies within the broad discretion of the district court and must be determined on an individualized basis.
Van Dusen v. Barrack, 376 U.S. 612, 616 (1964) (citation and internal quotations omitted).
Jones v. GNC Franchising, Inc., 211 F.3d 495, 498 (9th Cir. 2000).
To support a transfer, the moving party must show that the forum to which transfer is sought is a forum where the action could originally have been brought. To determine whether transfer is appropriate in a particular case, the Ninth Circuit has identified ten nonexclusive factors that the court may consider in its analysis: (1) the location where the relevant agreements were negotiated and executed; (2) the state that is most familiar with the governing law; (3) the plaintiff's choice of forum; (4) the respective parties' contacts with the forum; (5) the contacts relating to the plaintiff's cause of action in the chosen forum; (6) the differences in the costs of litigation in the two forums; (7) the availability of compulsory process to compel attendance of unwilling non-party witnesses; (8) the ease of access to sources of proof; (9) whether a forum selection clause is present; and (10) the relevant public policy of the forum state, if any. Here, the Court will only apply those factors that are relevant and, given that this matter involves a pure question of law, all factors relating to witnesses or evidence will not be included in its analysis.
Hoffman v. Blaski, 363 U.S. 335, 343-44 (1960).
Jones, 211 F.3d at 498-99. However, there are other Ninth Circuit decisions that characterize the factors a court should consider as "private and public interest factors." Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986). Under this style of analysis, the private factors include "the relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining witness of willing, witnesses; possibility of view of premises, if view would be appropriate to the action; and all other practical problems that make trial of a case easy, expeditious and inexpensive." Id. (citation omitted). The public factors include "the administrative difficulties flowing from court congestion; the local interest in having localized controversies decided at home; the interest in having the trial of a diversity case in a forum that is at home with the law that must govern the action; the avoidance of unnecessary problems in conflict of laws, or in the application of foreign law; and the unfairness of burdening citizens in an unrelated forum with jury duty." Id. (citation and internal quotations omitted). Regardless of how the factors are listed, they all relate to the essential question under section 1404(a) of which location is more convenient for the parties and witnesses and in the interest of justice. In following the Jones factors, the Court has addressed all pertinent factors to the case at hand, and the result and analysis would be the same had it followed the public and private division of factors.
IV. DISCUSSION
A. Whether the action could have originally been brought in Wisconsin.
Here, Davis does not contest the fact that this action could have been brought in the Eastern District of Wisconsin. Thus, the Court proceeds to consider whether transfer is appropriate in this instance.
B. Whether transfer is appropriate in this instance.
1. Location where the relevant agreements were negotiated or executed.
Here, the insurance contract was negotiated and executed in Wisconsin. However, Davis argues that this factor should be accorded little weight because "adhesion insurance contracts are not negotiated anywhere." While the Court agrees that this insurance policy may be considered an adhesion contract, that does not change the fact that Davis chose to purchase the policy in Wisconsin. There was no insurance purchased in Alaska. Thus, this factor leans towards transferring the action to Wisconsin.
Clerk's Docket No. 13 at 2.
See Mogck v. Unum Life Ins. Co. of America, 292 F.3d 1025, 1028 (9th Cir. 2002) (finding an adhesion contract where the policy was drafted entirely by the insurance company).
2. State most familiar with the governing law.
Here, it must first be determined whether Alaska law or Wisconsin law will apply to decide whether the reducing clause is enforceable. To make this determination, the Court applies the choice of law principles of the forum state. Alaska courts refer to the Restatement (Second) of Conflict of Laws for guidance in choice of law analysis. However, the parties disagree on which Restatement section is applicable. Hartford argues that section 187, "Law of the State Chosen by the parties," applies because the insurance policy contains a conformity clause. In contrast, Davis argues that section 188, "Law Governing in Absence of Effective Choice by the Parties," applies because the conformity clause was not a choice of law clause.
Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941).
Long v. Holland America Line Westours, Inc., 26 P.3d 430, 432 (Alaska 2001).
Clerk's Docket No. 9 at 10-11.
Clerk's Docket No. 13 at 4-5.
The conformity clause in the insurance policy states: "Any provision of this policy (including endorsements which modify the policy) that is in conflict with a Wisconsin statute or rule is hereby amended to conform to that statute or rule." Whether this implies a choice of law provision has not yet been answered by the Ninth Circuit. However, two other courts that considered similar policy language concluded that such a clause could be evidence that the parties intended for that state's law to apply. In the Court of Appeals for the District of Columbia, the Court examined similar language and stated:
Clerk's Docket No. 9 at Ex. A at 39.
The effect of such language, which applies to all provisions of the policy, is to ensure that the contract will be altered to comply with the law of the state in which the policy was issued. There is no provision in the policy stating that the contract will be altered to conform with the law of the forum where an accident giving rise to coverage occurs . . . The policy language noted above supports the conclusion that the parties intended that the contract (policy) be controlled by the law of the state where the policy was issued. . . . Indeed, to conclude otherwise would render the language of that provision meaningless.
Vaughan v. Nationwide Mutual Ins. Co., 702 A.2d 198, 201 (D.C. 1997).
In the Third Circuit, the Court examined a policy that repeatedly referenced Indiana law, but did not have an explicit conformity or choice of law clause. The Court stated that comment "a" to section 187 "made clear that a contract's references to the laws of a particular state may provide persuasive evidence that the parties to the contract intended for that state's law to apply." Here, unlike inAssicurazioni, there is an explicit conformity clause and a cover page to the policy that states: "The Hartford Personal Auto Insurance Policy Wisconsin." Given the conformity clause, the specificity of Wisconsin as the location of Davis throughout the policy, references to Wisconsin statutes within the policy, and the cover page, the Court agrees that deciding whether Alaska or Wisconsin law applies is governed by section 187 of the Restatement.
Assicurazioni Generali, S.P.A. v. Clover, 195 F.3d 161, 165 (3d Cir. 1999).
Clerk's Docket No. 9 at Ex. A at 9.
Under section 187, "The law of the state chosen by the parties to govern their contractual rights and duties will be applied if the particular issue is one which the parties could have resolved by an explicit provision in the agreement directed to that issue." As Wisconsin is the chosen law, Wisconsin law would apply to determine whether the reducing clause is enforceable, and a Wisconsin court would be more familiar with its law than an Alaskan court.
This conclusion is bolstered by section 193 of the Restatement that concerns "Contracts of Fire, Surety or Casualty Insurance." Section 193 states:
The validity of a contract of fire, surety or casualty insurance and the rights created thereby are determined by the local law of the state which the parties understood was to be the principal location of the insured risk during the term of the policy, unless with respect to the particular issue, some other state has a more significant relationship under the principles stated in § 6 to the transaction and the parties, in which event the local law of the other state will be applied.
In comment "b", the Restatement clarifies that for an automobile insurance policy, the principal location of the insured risk is where the "automobile will be garaged at least during most of the period in question." Here, Davis's truck was principally garaged in Wisconsin. Thus, the enforceability of the clause should be determined under Wisconsin law as that was the state both parties understood to be the principal location of the truck.
See also Brown v. Home Ins. Co., 176 F.3d 1102, 1106 (8th Cir. 1999) ("The location of the insured risk in an auto insurance contract is generally the state where the vehicle is expected to be during the major portion of the insurance period; for auto liability that is where the vehicle is principally garaged.").
Clerk's Docket No. 9 at Ex. A at 7-8.
However, even if section 188 of the Restatement applied, Wisconsin law would still be the governing law. Under section 188, the choice of law depends on which state has the most significant relationship to the transaction. To determine this, the factors to be considered include: (1) the place of contracting; (2) the place of negotiation of the contract; (3) the place of performance; (4) the location of the subject matter of the contract; and (5) the domicile, residence, nationality, place of incorporation and place of business of the parties.
Restatement (Second) Conflict of Laws § 188(2).
In applying these factors, the first and second factors both point to the application of Wisconsin law. The Court recognizes, however, that there was very little, if any, negotiation regarding the insurance policy. The third factor, place of performance, points to Alaska because that is where the accident occurred. However, this factor has less weight in the insurance context because the contact with the forum state only results from an accident. The fourth factor, location of the subject matter of the contract, is Wisconsin because, as already discussed, that was the location where Davis's truck was primarily garaged. Finally, at the time Davis purchased the policy, his domicile and residence was Wisconsin. Thus, the factors more strongly point to Wisconsin as having the most significant relationship to the transaction.
See Vaughan v. Nationwide Mutual Ins. Co., 702 A.2d 198, 202 (D.C. 1997) ("The location of fortuitous events, such as automobile accidents, generally is not considered a persuasive factor in choice of law analysis in situations of economic loss rather than personal injury.").
Complaint at ¶ 2. Regarding Hartford, Alaska is neither its place of incorporation nor its place of business.
3. Plaintiff's choice of forum.
Normally, the plaintiff's choice of forum is afforded substantial weight. However, the plaintiff's choice carries less weight when the chosen forum is not the plaintiff's home. Here, Davis is not and never has been a resident of Alaska. At the time of the accident, he was a resident of Wisconsin and he now resides in Pennsylvania. Thus, while this factor points to Alaska, it is not a strong factor.
Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986).
The Home Indemnity Co. v. Stimson Lumber Co., 229 F. Supp. 2d 1075, 1085 (D. Or. 2001); The Carolina Cas. Co. v. Data Broadcasting Corp., 158 F. Supp.2d 1044, 1047 (N.D. Cal. 2001).
Complaint at ¶ 2.
4. Parties' contacts with the forum and the relation of the cause of action to the forum.
Davis's contacts with Alaska are limited to the fact that his injuries occurred here. The car accident happened here and many of his medical bills were incurred in Alaska. There is no evidence that Hartford has any contacts with Alaska, except that Davis, a policy holder, was injured in this state.
5. Public policy of the forum state.
The public policy of Alaska significantly differs from that of Wisconsin concerning reducing clauses. In Alaska, the Supreme Court held that the legislature had implicitly repealed legislation allowing reducing clauses. The Court reasoned that in passing new legislation, the legislature intended to provide "full compensation for actual damages" and uphold "consumer expectations" regarding the insurance coverage purchased. In contrast, the Wisconsin legislature enacted a statute expressly allowing reducing clauses.
Progressive Ins. Co. v. Simmons, 953 P.2d 510 (Alaska 1998).
Id. at 519.
Badger Mut. Ins. Co. v. Schmitz, 647 N.W.2d 223, 230 (Wisc. 2002).
Davis primarily relies on a Ninth Circuit decision to support his argument that a state's public policy interest in its insurance laws is quite high. In Abramson, a case with similar facts, the Ninth Circuit affirmed the district court judge's decision not to apply another state's law because the forum state's interest in applying its law to insurance policies was not outweighed by any other state's interests. However, the district judge's decision in Abramson was based on Hawaii's choice of law approach which provides a "presumption that Hawaii law applies unless another state's law would best serve the interests of the states and persons involved." This choice of law approach is not followed in Alaska, as already discussed, and thus there is not the emphasis placed on public policy concerns under Alaska's approach. Nonetheless, this factor does point to Alaska as Davis is better served under Alaska's policy regarding reducing clauses.
Clerk's Docket No. 13 at 10 (discussing Abramson v. Aetna, 76 F.3d 304 (9th Cir. 1996)).
Abramson, 76 F.3d at 305.
Id. (citation and internal quotations omitted).
In the end, the factors, both quantitatively and qualitatively, favor Wisconsin as the more appropriate forum for determining the enforeceability of a clause of an insurance contract issued under Wisconsin law to a Wisconsin resident. The only factors that favor Alaska are that Alaska is Davis's choice of forum and Alaska's public policy regarding reducing clauses. On the other side, the factors favoring Wisconsin are that the policy was purchased in Wisconsin by a Wisconsin resident for a vehicle principally garaged in Wisconsin, Wisconsin law applies to determine whether the reducing clause is enforceable, and the only connection Davis has to Alaska is because of a chance accident with a non-Alaskan resident.
V. CONCLUSION
For the reasons stated herein, Defendant's Motion to Transfer is GRANTED.