Weiss v. La Suisse, SociÉtÉ D'Assurances

• Citation: 293 F.Supp.2d 397
• Decision Date: 25 November 2003
• Docket Number: No. 97 Civ.01352CMMDF.,97 Civ.01352CMMDF.
• Parties: Kalman WEISS, As Assignee, et al. Plaintiffs, v. LA SUISSE, SOCIÉTÉ D'ASSURANCES SUR LA VIE, Defendant.
• Court: U.S. District Court — Southern District of New York

293 F.Supp.2d 397

Kalman WEISS, As Assignee, et al. Plaintiffs, v. LA SUISSE, SOCIÉTÉ D'ASSURANCES SUR LA VIE, Defendant.

No. 97 Civ.01352CMMDF.

United States District Court, S.D. New York.

November 25, 2003.

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Richard M. Mahon, Drake, Sommers, Loev, Tarhis & Catania, P.C., Newburg, NY, for Plaintiffs.

Richard N. Chassin, Richard Niles Chassin, Becker, Glynn, Melamed & Muffly, New York City, for Defendants.

DECISION ON OUTSTANDING IN LIMINE MOTIONS

MCMAHON, District Judge.

Plaintiffs, thirty members of New York's Chassidic communities, bring this action against defendant La Suisse, a Swiss insurance company, alleging discrimination under 42 U.S.C. § 1981 ("Section 1981") and breach of contract. This decision is the sixth in a series of reported decisions dating back to September of 1999. See Weiss v. La Suisse, 260 F.Supp.2d 644 (S.D.N.Y.2003) ("Weiss VI"); Weiss v. La Suisse, 161 F.Supp.2d 305 (S.D.N.Y.2001) ("Weiss IV"); Weiss v. La Suisse, 154 F.Supp.2d 734 (S.D.N.Y.2001) ("Weiss III"); Weiss v. La Suisse, 131 F.Supp.2d 446 (S.D.N.Y.2001) ("Weiss II"); Weiss v. La Suisse, 69 F.Supp.2d 449 (S.D.N.Y. 1999) ("Weiss I"). The relevant facts of this case have been outlined in prior opinions, and familiarity with the facts is assumed.

Before this court now are several motions in limine from 2001 and 2003. In its May 22, 2003 motion, La Suisse moved to dismiss Plaintiffs' contract claims and exclude certain evidence regarding non-similarly situated policy holders. In response, Plaintiffs have renewed their request for a Rule 44.1 ruling on foreign law issues, initially raised in the December 2001 motion in limine. In the December 3, 2001 motion in limine, Plaintiffs also sought to exclude evidence regarding Defendant's dismissed counterclaim for fraud and evidence of La Suisse's loss on the marriage policy portfolio at issue in this case. In their own 2001 motion in limine, La Suisse sought to preclude: testimony from Dr. Rosenberg; evidence regarding certain administration rules for brokers; parol evidence regarding terms of the insurance contracts that relate to claims for a prorata refund; evidence of reinsurance purchased by Defendant; evidence about "Operation Tell"; evidence regarding Defendant's corporate parent and; testimony from witnesses not listed in Plaintiffs' interrogatory responses. Each of these motions will be addressed below, beginning with the most recent.

I. Defendant's May 22, 2003 Motion In Limine

A. Choice of Law

In Weiss III, I held that the policies' choice of law provision, which provides that "the policy is governed by ... Swiss law, in particular the Federal Law on Insurance Contract of April 2, 1908" did not violate New York's public policy and could therefore be enforced. Weiss, 154 F.Supp.2d at 740-741. I address this issue in light of Plaintiffs' contention that Swiss law "points back" to New York law in certain cases involving consumer contracts. Both parties have addressed this issue in several briefs and through expert reports, which I have considered. I now adhere to my prior ruling that Swiss substantive law not New York law, governs the construction and effect of the policies in this case.

In response to Defendant's Motion In Limine Seeking to Dismiss all Contract Claims or Exclude Evidence Related to Them (discussed below), Plaintiffs have renewed their contention that New York law should govern the construction and effect of the marriage policies. According to Plaintiffs' experts, Dr. Schnyder and Dr. Patocchi, the choice of law provision in § 2.2 of the General Conditions governing the policies at issue is not binding on the Plaintiffs because a choice of law clause accepted by a consumer is inadmissible under Art. 120 of the Swiss Federal Private International Law Act of 1987 ("1987 Act"). (Expert Opinion of Drs. Schnyder and Patoochi, "Pl. Exp. Report", pp. 9, 15). The 1987 Act contains the Swiss conflicts of laws provisions. Id. Plaintiffs argue that under Swiss law, specifically Art. 120 of the 1987 Act, choice of law provisions in consumer contracts are disfavored and courts are directed to apply the law of the consumer's "habitual residence." (Pl. Mem. in Opp., 2). Plaintiffs' experts have provided a detailed analysis explaining why these insurance policies qualify as consumer contracts, and argue that New York law governs their construction, the choice of law clause not withstanding.

However, according to Plaintiffs' own experts, Art. 120 of the 1987 Act is a conflicts of law provision under Swiss law, not a rule of substantive law. (Pl.Exp. Rpt., 22, 28) Accepting this proposition as true (which I do), I conclude that Art. 120 drops out of the case because New York courts look to New York and not foreign conflicts provisions. See Anderson v. SAM Airlines, 939 F.Supp. 167, 175 (E.D.N.Y.1996).

This has long been the rule. In Siegelman v. Cunard White Star, Ltd., 221 F.2d 189 (2d Cir.1955), Judge—later Justice— Harlan, held that a choice of law provision on a passenger ticket requiring application of English law embraced only the substantive law and not the whole law of England including conflicts provisions. Harlan reasoned that "surely the major purpose of including the provision in the ticket was to assure [defendant] of a uniform result in any litigation no matter where the ticket was issued or where the litigation arose." Id. at 194; see also Sears Roebuck & Co. v. Enco Assoc. Inc., 43 N.Y.2d 389, 401 N.Y.S.2d 767, 372 N.E.2d 555 (N.Y.1977) (contract provision that the agreement was to be governed by Michigan law operated only to import the substantive law of Michigan) (statute of limitations holding overruled by statute limiting SoL in malpractice actions); Reger v. National Ass'n of Bedding Mfrs. Group Ins. Trust Fund, 83 Misc.2d 527, 372 N.Y.S.2d 97, (N.Y.Sup.Ct. 1975) (applying chosen law in group insurance policy despite fact that the "paramount interests" weighed heavily in favor of applying New York law); Chan v. Society Expeditions, Inc., 123 F.3d 1287, 1297 (9th Cir.1997) (reversing lower court, which applied U.S. conflicts of law analysis when U.S. was chosen state, because choice of law provision refers only to the substantive laws of the chosen state); Odin Shipping Ltd. v. Drive Ocean V MV, 221 F.3d 1348, 1348 (9th Cir.2000) (Despite contractual election of laws of British Columbia, United States [forum] law determined the enforceability of a choice of law provision, but not its scope).

More recently in Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 115 S.Ct. 1212, 131 L.Ed.2d 76 (1995), the Supreme Court noted that a "choice of law provision, when viewed in isolation, may reasonably be considered a substitute for the conflicts-of-laws analysis that otherwise would determine what law to apply to disputes arising out of the contractual relationship." 514 U.S. at 59, 115 S.Ct. 1212. In that case, the Court interpreted a contract with a choice-of-law clause electing New York law (which precludes arbitrators from awarding punitive damages) and an arbitration clause calling for arbitration in accordance with the NASD rules (which empowers arbitrators to impose punitive damages). The Court held that "the best way to harmonize the choice-of-law provision with the arbitration provision is to read `the laws of the State of New York' to encompass substantive principles that New York courts would apply, but not to include special rules limiting the authority of arbitrators. Thus, the choice-of-law provision covers the rights and duties of the parties, while the arbitration clause covers arbitration; neither sentence intrudes upon the other." Id. at 63-64, 115 S.Ct. 1212. (emphasis added).

Thus, courts typically do not apply a conflicts analysis—let alone the conflicts law of the state whose law has been selected as governing—where the parties have expressly provided that a certain law applies. Were courts to apply the chosen state's conflicts analysis, there would be no guarantee that the chosen state's laws would apply.

La Suisse included the choice of law provision in the insurance policies to create some predictability regarding the interpretation of its insurance contracts which are sold throughout the world. Were I to follow Plaintiffs' analysis, there would be no such predictability. In some cases Swiss law might apply; in others, Israeli, English or U.S. law might apply—all because Swiss conflicts-of-law principles (rather than its substantive law principles) point back to the law of the beneficiaries' state.

Moreover, applying Plaintiff's logic would draw the case into the renvoi "bog" generally disfavored by New York courts.¹ See Makarova v. U.S., 201 F.3d 110 (2d Cir.2000) (declining to enter the renvoi "bog"); Ledwith v. Sears Roebuck and Co., Inc., 231 A.D.2d 17, 24, 660 N.Y.S.2d 402, 406 (1st Dep't.1997) (noting courts disfavor applying renvoi with respect to statutes of limitations); Rescildo v. R.H. Macy's, 187 A.D.2d 112, 594 N.Y.S.2d 139 (1st Dep't 1993) (court would not apply doctrine of renvoi which would have required, when applying borrowing statute, that court borrow foreign jurisdiction's choice-of-law rules, which prescribed use of New York's statute of limitations). The Second Restatement of Conflict of Laws likewise favors applying the "local law" (i.e., the substantive law) of the chosen state (as opposed to its conflicts provisions) in order to avoid the renvoi problem, particularly in contract and tort cases. (See Rest.2d Conf. § 8(a), comment j).

For these reasons, I find that Swiss conflicts of law provisions have no applicability. Since Art. 120 is a conflicts provision it has no applicability in this case. Per the terms of the policies, their construction and effect are governed by Swiss law.

B. What is Swiss Law?

The jury in this case will be charged regarding the applicable Swiss contract principles. It is the Court's role to decide what...