Employers Mut. Cas. Co. v. Bartile Roofs Inc

Decision Date07 September 2010
Docket NumberNo. 08-8064,08-8068.,08-8064
Citation618 F.3d 1153
PartiesEMPLOYERS MUTUAL CASUALTY COMPANY, an Iowa corporation, Plaintiff-Appellee/Cross-Appellant,v.BARTILE ROOFS, INC., a Utah corporation, Defendant-Appellant/Cross-Appellee.
CourtU.S. Court of Appeals — Tenth Circuit

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Jack W. Reed, Peterson Reed Warlaumont & Stout, Salt Lake City, UT, for Defendant-Appellant/Cross-Appellee.

Robert C. Evans, Evans & Co., Durango, CO, for Plaintiff-Appellee/Cross-Appellant.

Before MURPHY and HOLMES, Circuit Judges, and POLLAK, District Judge. *

HOLMES, Circuit Judge.

This appeal arises out of an insurance dispute involving the construction of a luxury hotel in the vicinity of Jackson Hole, Wyoming. Employers Mutual Casualty Co. (EMC) brought a diversity action in federal district court, pursuant to 28 U.S.C. §§ 1332 and 2201, requesting a declaratory judgment as to its duty to defend or indemnify Bartile Roofs, Inc. (Bartile), against claims pending in California state court. EMC also sought to recoup the costs it had incurred in defending Bartile in the underlying state-court action. After denying Bartile's motion to dismiss and motion to transfer venue, the district court granted in part, and denied in part, EMC's motion for summary judgment. Specifically, the district court concluded that EMC owed no duty to defend Bartile, but it refused to allow EMC to recoup its defense costs.

On appeal, Bartile challenges the district court's order denying its motion to dismiss and motion to transfer venue, as well as the choice-of-law determination in the summary judgment order. EMC cross-appeals the order denying its motion for summary judgment with respect to the recoupment of defense costs. We exercise jurisdiction under 28 U.S.C. § 1291 and affirm the district court's orders.

BACKGROUND

EMC is an insurance company organized under the laws of Iowa and has its principal place of business in Des Moines, Iowa. Bartile is organized under the laws of Utah and has its principal place of business in Centerville, Utah. Between 2001 and 2003, EMC issued three commercial general liability (“CGL”) insurance policies to Bartile, providing coverage in the aggregate from November 1, 2001, to November 1, 2004. Although Bartile renewed the CGL policy each year, the policies provided liability insurance via a standard coverage form and contained the same language in all relevant terms, conditions, and definitions.1 These CGL policies were negotiated in Utah, underwritten in Colorado, and executed in Utah.

In mid-2001, FS Jackson Hole Development Company, LLC (the “Owner”), hired Jacobsen Construction Company (“Jacobsen”) to construct the Four Seasons Resort Jackson Hole in Teton Village, Wyoming. As the general contractor, Jacobsen subcontracted the roofing work for this luxury hotel to Bartile. Bartile began work on the construction project in November 2002 and substantially completed its activities in February 2004. Bartile finished all of its work on the hotel in October 2005.

On March 11, 2004, Jacobsen filed a civil action against the Owner in California state court. The Owner countered with a cross-complaint against Jacobsen, alleging various defects in the construction. On October 4, 2004, Jacobsen filed a cross-complaint against Bartile and other subcontractors. 2 The project architect also filed a cross-complaint against Bartile on April 27, 2006, which was amended on July 24, 2007, alleging essentially the same claims as Jacobsen.3

On November 22, 2004, Bartile requested defense and indemnification against these claims, pursuant to the relevant CGL policies. On October 25, 2005, EMC agreed to provide a defense. However, EMC reserved its right to investigate the claims further and “to deny coverage for part or all of the claimed damage.” Aplt.App. at 691; accord id. at 692; Aplee. Opening Br. at 4. On August 17, 2007, EMC issued a second letter to Bartile in which it announced that the claims [we]re not covered by [the] policy.” Aplt.App. at 1272. Although EMC stated that it would “continue to defend Bartile in this litigation,” EMC reserved the right “to enforce any rights it may have to recoup defense costs from Bartile should it be determined that EMC had no duty to defend Bartile in this litigation.” Id.

On August 20, 2007, EMC filed a declaratory judgment action in the U.S. District Court for the District of Wyoming. EMC argued that it was not obligated to defend or indemnify Bartile for the claims and damages asserted in the underlying state-court action. EMC also sought to recoup the costs it had incurred in defending Bartile against those claims. On December 21, 2007, EMC moved for summary judgment. On the same day, Bartile moved to dismiss the federal claims for lack of personal jurisdiction and improper venue and, in the alternative, asked the district court to transfer the action to the U.S. District Court for the District of Utah.

On March 4, 2008, the district court denied the motion to dismiss and the motion to transfer venue. On August 6, 2008, the district court granted the motion for summary judgment in part and denied it in part. Although the district court held that the underlying state-court action did not trigger EMC's duty to defend Bartile, it denied EMC's request for recoupment of the defense costs.

Bartile now appeals the district court's orders denying its motion to dismiss and motion to transfer venue. Bartile also challenges the district court's grant of partial summary judgment in favor of EMC. EMC cross-appeals the order denying its motion for summary judgment on the recoupment of defense costs.

DISCUSSION

On appeal, Bartile contends that the district court (1) erred in exercising personal jurisdiction in this declaratory-judgment action; (2) erred in denying Bartile's motion to dismiss this action for improper venue; (3) abused its discretion in declining to transfer venue to the District of Utah; and (4) erred in applying Wyoming law to the analysis of EMC's duty to defend. 4 On cross-appeal, EMC contests the denial of its request to recoup the costs of defending Bartile in the underlying state-court action.

I. PERSONAL JURISDICTION

We review de novo the district court's decision to exercise personal jurisdiction over [Bartile].” Pro Axess, Inc. v. Orlux Distribution, Inc., 428 F.3d 1270, 1276 (10th Cir.2005). “Where a district court considers a pre-trial motion to dismiss for lack of personal jurisdiction without conducting an evidentiary hearing, the plaintiff need only make a prima facie showing of personal jurisdiction to defeat the motion.” AST Sports Sci., Inc. v. CLF Distribution Ltd., 514 F.3d 1054, 1056-57 (10th Cir.2008). The plaintiff may carry this burden “by demonstrating, via affidavit or other written materials, facts that if true would support jurisdiction over the defendant.” TH Agric. & Nutrition, LLC v. Ace European Grp. Ltd., 488 F.3d 1282, 1286 (10th Cir.2007) (internal quotation marks omitted). “All factual disputes are resolved in favor of the plaintiff[ ] when determining the sufficiency of this showing.” Rusakiewicz v. Lowe, 556 F.3d 1095, 1100 (10th Cir.2009). [T]o defeat a prima facie showing of jurisdiction, the defendant must demonstrate that the presence of some other considerations would render jurisdiction unreasonable.” TH Agric. & Nutrition, 488 F.3d at 1286 (internal quotation marks omitted).

“To obtain personal jurisdiction over a nonresident defendant in a diversity action, a plaintiff must show that jurisdiction is legitimate under the laws of the forum state and that the exercise of jurisdiction does not offend the due process clause of the Fourteenth Amendment.” Id. at 1286-87 (internal quotation marks omitted). The Wyoming long-arm statute authorizes jurisdiction to the full extent of the federal constitution. Wyo. Stat. Ann. § 5-1-107(a). Thus, we need not conduct a statutory analysis apart from the due process analysis. Kuenzle v. HTM Sport-Und Freizeitgerate AG, 102 F.3d 453, 455 (10th Cir.1996).

The due process analysis consists of two steps. First, we consider “whether the defendant has such minimum contacts with the forum state ‘that he should reasonably anticipate being haled into court there.’ OMI Holdings, Inc. v. Royal Ins. Co. of Can., 149 F.3d 1086, 1091 (10th Cir.1998) (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980)). This minimum-contacts standard may be satisfied by showing general or specific jurisdiction. See id. Because the parties agree that Bartile is not subject to “general” personal jurisdiction,5 we proceed to the issue of “specific” personal jurisdiction. Pro Axess, 428 F.3d at 1276. Second, if the defendant has minimum contacts within the forum state, we determine “whether the exercise of personal jurisdiction over the defendant offends ‘traditional notions of fair play and substantial justice.’ OMI Holdings, 149 F.3d at 1091 (quoting Asahi Metal Indus. Co. v.Super. Ct. of Calif., 480 U.S. 102, 105, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987) (plurality opinion)). This analysis is fact specific. TH Agric. & Nutrition, 488 F.3d at 1287, 1292.

A. Minimum Contacts

Under the specific-jurisdiction requirement, a plaintiff satisfies the minimum-contacts standard by showing that (1) the defendant has “purposefully availed itself of the privilege of conducting activities or consummating a transaction in the forum state,” Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1071 (10th Cir.2008) (emphasis omitted) (internal quotation marks omitted); and (2) ‘the litigation results from alleged injuries that arise out of or relate to those activities,’ TH Agric. & Nutrition, 488 F.3d at 1287 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)).

1. Purposeful Availment

“Purposeful availment requires actions by the Defendant which create a substantial connection with the forum...

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