Calavo Growers of California v. Generali Belgium

• Decision Date: 04 August 1980
• Docket Number: Nos. 1100,1241,D,s. 1100
• Parties: CALAVO GROWERS OF CALIFORNIA, Plaintiff-Appellant-Cross Appellee, v. GENERALI BELGIUM; Compagnie D'Assurances Maritimes Aeriennes et Terrestres; Deutsche Versicherungs-Gesellschaft in Bremen; Black Sea and Baltic General Insurance Company Limited; Assurantie Van de Belgische Boerenbond; General Accident Fire and Life Assurance Corporation Limited; Groep Josi; Mercator; De Ster (L'Etoile); Fidelitas; L'Europeene; La Securite Belge; Naviga; Compagnie Europeene D'Assurances Industrielles (C.E.A.I.); Belgamar; Assubel; Assurances Generales; and La Royale Belge, Defendants-Appellees-Cross Appellants. ockets 80-7016, 80-7046.
• Court: U.S. Court of Appeals — Second Circuit

Page 963

632 F.2d 963

CALAVO GROWERS OF CALIFORNIA, Plaintiff-Appellant-Cross Appellee, v. GENERALI BELGIUM; Compagnie D'Assurances Maritimes Aeriennes

et Terrestres; Deutsche Versicherungs-Gesellschaft in

Bremen; Black Sea and Baltic General Insurance Company

Limited; Assurantie Van de Belgische Boerenbond; General

Accident Fire and Life Assurance Corporation Limited; Groep

Josi; Mercator; De Ster (L'Etoile); Fidelitas; L'Europeene;

La Securite Belge; Naviga; Compagnie Europeene D'Assurances

Industrielles (C.E.A.I.); Belgamar; Assubel; Assurances

Generales; and La Royale Belge, Defendants-Appellees-Cross Appellants.

Nos. 1100, 1241, Dockets 80-7016, 80-7046.

United States Court of Appeals, Second Circuit.

Argued May 29, 1980.

Decided Aug. 4, 1980.

Jerry L. Siegel, New York City (Coudert Brothers, Mark D. Lebow, Lynne M. Barry, New York City, Tuttle & Taylor, Charles B. Rosenberg, Los Angeles, Cal., of counsel), for plaintiff-appellant-cross appellee.

Donald M. Kennedy, New York City (Donovan, Maloof, Walsh & Kennedy, David L. Maloof, Gerard S. Doyle, Jr., New York City), for defendants-appellees-cross appellants.

Before FEINBERG, Chief Judge, and NEWMAN and KEARSE, Circuit Judges.

FEINBERG, Chief Judge:

Calavo Growers of California appeals from a judgment of the United States District Court for the Southern District of New York, Robert W. Sweet, J., that found jurisdiction over defendants, eighteen foreign insurance underwriters, but dismissed on the ground of forum non conveniens Calavo's action for breach of contract and fraud. Sixteen of the underwriters cross-appeal from so much of the judgment as denied their motion to dismiss on the ground of lack of jurisdiction. Calavo argues that the lower court properly found jurisdiction over these underwriters but erred in holding that New York was an inconvenient forum; in contrast, the cross-appellants contend that the court erred as to jurisdiction, but correctly decided the issue of forum non conveniens. Since we conclude that the district judge did not abuse his discretion in dismissing this action on the basis of forum non conveniens, we find it unnecessary at this time to determine whether he erred in finding jurisdiction over the cross-appellant underwriters. We believe, however, that a forum non conveniens dismissal of plaintiff's action should have been conditioned on the agreement of all the underwriters to terms set forth below; accordingly, we remand this case for further proceedings consistent with this opinion.

I.

The relevant facts are as follows: Calavo, a California corporation authorized to do business in New York, is an agricultural marketing cooperative. In 1977, Calavo purchased several shipments of Turkish figs through its purchasing agent Effron Brokerage Corp., a New York corporation. Effron also arranged insurance for the fig shipments by contacting Bain Dawes (Int'l) Ltd. (Bain Dawes), a broker for Lloyd's of London located in London. Effron instructed Bain Dawes to acquire both standard marine insurance and "rejection" insurance for the figs; the latter type of insurance protects against the risk of rejection or condemnation of the insured goods by the government of the country of import for failure to meet local health standards.

In order to arrange the insurance, Bain Dawes apparently contacted Ch. Van den Bosch-J.F. De Laet (Van den Bosch), a Belgian insurance broker. Van den Bosch in turn contacted defendant underwriters all of whom were organized, and have their principal place of business, in Europe. ¹ Only two of the underwriters are authorized to do business in New York. By a cover note issued on a Van den Bosch form, the underwriters bound themselves to a policy of marine and rejection insurance naming Effron as the insured. This cover note evidently was forwarded to Bain Dawes in London, which then issued another cover note directly to Effron. As the various shipments were made, Effron would notify Bain Dawes; individual insurance certificates naming Calavo as the insured would then be issued on Van den Bosch forms that were signed by an agent for all the underwriters. The certificates, as well as the bills for premiums due upon them, were mailed to Effron in New York.

Eight of the thirteen shipments of figs sent from Turkey to New York were rejected in whole or in part by the United States Food and Drug Administration (FDA) on the ground that they were infested by insects. Upon receiving notice of the rejections and in compliance with the instructions given in the insurance certificates, Effron contacted Toplis & Harding (T & H), a maritime surveyor located in New York. After instructing Effron to warehouse the shipments, T & H surveyed them and prepared reports that apparently were sent to the underwriters; it then solicited bids for the resale of the figs, and recommended to Effron that the highest bid be accepted, which recommendation Effron followed.

Effron submitted formal insurance claims to the underwriters through T & H. The underwriters refused to pay these claims, however, allegedly on the ground that the insurance policies required Calavo to prove affirmatively that the contamination of the figs had occurred during, rather than before, the shipments. Thereafter, the underwriters commenced an action in the Commercial Court of Antwerp for a declaratory judgment that they were not liable on the policies. Approximately two weeks later, Calavo instituted the present action, alleging that the underwriters had breached the contract of insurance and had fraudulently failed to disclose their interpretation of the insurance policy.

II.

In the district court, defendants moved to dismiss the complaint both on the ground that the court lacked in personam jurisdiction over them and on the ground that New York was an inconvenient forum. The court below held that it had jurisdiction over all defendants; as noted, two of the underwriters were authorized to do business in New York and apparently do not now contest the court's jurisdiction over them. As to the remaining sixteen insurers, the court concluded that it had jurisdiction over N.Y.Ins.Law § 59-a. ² As to all eighteen defendants, the court then granted the motion to dismiss on the ground of forum non conveniens. On this appeal, Calavo attacks the district court's ruling on forum non conveniens, while defendants urge that we affirm that ruling, but reverse the lower court's finding of jurisdiction over the sixteen insurers not authorized to do business in New York.

If the district court had no jurisdiction over the sixteen unauthorized underwriters, New York clearly was an inconvenient forum, since only two of the eighteen defendants could have been sued here. On the other hand, if the court did have jurisdiction over all defendants, the question of whether New York was an inconvenient forum is a much closer one. However, while not all of us might have decided this issue as did the court below, we recognize that a district judge has "wide discretion" in determining the issue of forum non conveniens. See Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508, 67 S.Ct. 839, 843, 91 L.Ed. 1055 (1947); Alcoa Steamship Co. v. M/V Nordic Regent, 636 F.2d 860 at 871 (2d Cir. 1980) (in banc); Farmanfarmaian v. Gulf Oil Corp. 588 F.2d 880, 882 (2d Cir. 1978). Even on the assumption that the district court had jurisdiction over all eighteen defendants, we believe that the district court's dismissal of this action on the ground of forum non conveniens was not a clear abuse of discretion. See Farmanfarmaian, supra, 588 F.2d at 882. Therefore, we need not reach the question whether the court erred in finding that it had jurisdiction over the sixteen defendants unauthorized to do business in New York.

In determining whether New York was a convenient forum, the district court properly took into account the factors set forth in Gulf Oil, supra, 330 U.S. at 508-09, 67 S.Ct. at 843. The court considered first the "private interest" of the litigants, including the "relative ease of access to sources of proof," the "availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses," and "all other practical problems that make trial of a case easy, expeditious and inexpensive." Id. at 508, 67 S.Ct. at 843. These factors, in the court's view, all pointed to the conclusion that New York was an inconvenient forum. The focal point of this litigation is not New York, where the rejection of the figs took place, but rather Europe, where the contract of insurance was negotiated and where payment under the contract was refused. As the district court noted, Calavo did not contest in the court below either the findings of infestation made by the FDA or the assessment of damages made by T & H; instead, the gravamen of the complaint was breach of contract and fraud. ³ These allegations will necessitate an inquiry into the circumstances surrounding the formation of the contract and the intentions of the parties who negotiated it, almost all of whom are located in Europe. The underwriters all are organized and have their principal places of business in Europe; sixteen of them do no business in New York. Moreover, neither Bain Dawes, the London broker who apparently acted as Calavo's agent, nor Van den Bosch, the Belgian broker who negotiated the insurance contract, is subject to the court's compulsory process, although representatives of both may be key witnesses. Finally, the documents surrounding the negotiation are apparently located in Belgium. In contrast, the lower court found that with the possible exception of Effron and a representative of T & H, there were no essential witnesses located in New York. Furthermore, to the extent that evidence will be required as to the condition of the figs in Turkey prior to shipment, a European forum is certainly no less convenient than one in New York.

The court also looked to the "(f)actors of...