Kinsale Ins. Co. v. Clearview Horizon, Inc.

• Decision Date: 11 March 2022
• Docket Number: 2:21-cv-00360-DCN
• Court: U.S. District Court — District of Idaho
• Parties: KINSALE INSURANCE COMPANY, Plaintiff, v. CLEARVIEW HORIZON, INC. Defendant.

KINSALE INSURANCE COMPANY, Plaintiff,
v.
CLEARVIEW HORIZON, INC. Defendant.

No. 2:21-cv-00360-DCN

United States District Court, D. Idaho

March 11, 2022

MEMORANDUM DECISION AND ORDER

David C. Nye Chief U.S. District Court Judge.

I. INTRODUCTION

Pending before the Court is Defendant Clearview Horizon, Inc.'s (“Clearview”) Motion to Dismiss due to Lack of Personal Jurisdiction and Improper Venue, or, in the Alternative, Motion to Change Venue (“Motion to Dismiss”). Dkt. 5. Having reviewed the record, the Court finds the parties have adequately presented the facts and legal arguments in the briefs. Accordingly, in the interest of avoiding further delay, and because the Court finds the decisional process would not be significantly aided by oral argument, the Court decides the pending motion on the record and without oral argument. Dist. Idaho Loc. Civ. R. 7.1(d)(1)(B).

Upon review, and for the reasons set forth below, Clearview's Motion to Dismiss is GRANTED.

II. BACKGROUND

Plaintiff Kinsale Insurance Company (“Kinsale”) is an eligible surplus lines insurance company incorporated in Arkansas, with its principal place of business in

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Richmond, Virginia. Clearview is a domestic profit corporation of good standing in Montana, with its principal place of business in Heron, Montana. On or about April 3, 2020, Kinsale issued a Professional and General Liability Policy to Clearview, policy number 0100111759-0 (“Kinsale Policy” or the “Policy”). Kinsale requests that the Court declare there is no coverage under the Policy, and, because coverage under the Policy is purportedly precluded, Kinsale further asks the Court to find that Kinsale does not have a duty to defend or indemnify Clearview for underlying tort claims made against it.

Clearview operates a therapeutic boarding school in Montana. Clearview purchased liability insurance through PayneWest Insurance, Inc. (“PayneWest”). Clearview's representative worked with PayneWest's Missoula, Montana office to obtain insurance for Clearview's operations. PayneWest procured Markel Insurance Police No. QBSMMN000711 for the term beginning October 16, 2020, and ending October 16, 2021. PayneWest also procured the Kinsale Policy, which covered the term beginning April 1, 2020, and ending April 1, 2021.^[1] In January and April of 2021, students who attended Clearview's Montana boarding school filed tort claim lawsuits against Clearview in Montana state court (“state court lawsuits”). The students allege they suffered emotional distress as a result of the negligence of Clearview and two of its employees.

Clearview tendered the state court lawsuits to Markel and Kinsale. In response, Markel filed a declaratory judgment action in the United States District Court for the District of Montana. Like Kinsale in this action, Markel seeks a declaration that it is not

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obligated to provide a defense to Clearview in the state court lawsuits. Clearview answered Markel's complaint and also filed a Third-Party Complaint against PayneWest for failing to procure appropriate insurance coverage. The Markel suit remains pending in the District of Montana. On September 9, 2021, Kinsale filed the instant suit against Clearview in the District of Idaho.

Clearview's physical address is 20 Bear Foot Lane, Heron, MT 59844. Clearview's principal place of business is registered with the Montana Secretary of State as 54 Serenity Lane, Heron, Montana 59844. However, because Clearview's facility is located in a rural area, and for convenience and reliability, Clearview receives mail at a post office box located in Clark Fork, Idaho, which is approximately 20 minutes away from Clearview's Montana campus. As such, documentation relating to the Kinsale Policy lists Clearview's mailing address as P.O. Box 155, Clark Fork, Idaho 83811 (“Idaho mailing address”). The same documentation identifies Jason Thielbahr, Clearview's managing member and Corporate Secretary, as the contact for Clearview. Given this, and because Thielbahr resides in Idaho, Kinsale served Thielbahr with the instant Complaint and Summons at his home address in Idaho.^[2]

Thielbahr was served on September 13, 2021, and Clearview's response to the Complaint was due on October 4, 2021. On September 27, 2021, Clearview asked Kinsale for “an additional two weeks to [a]nswer or move to change venue.” Dkt. 10-9, at 2.^[3]

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Kinsale agreed to a two-week extension for Clearview to “[a]nswer or move to change venue, ” and Clearview's response deadline was accordingly October 18, 2021. Id. On October 18, 2021, Clearview notified Kinsale that it would instead be filing a motion to dismiss based on lack of personal jurisdiction and improper venue. Dkt. 11-2, at 1. Later that day, Clearview filed the instant Motion.

III. LEGAL STANDARDS

Clearview moves to dismiss Kinsale's Complaint under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction, and under Rule 12(b)(3) for improper venue. In the alternative, Clearview contends the Court should transfer this case to the District of Montana.

A. Rule 12(b)(2)

When a defendant moves to dismiss a complaint for lack of personal jurisdiction, the plaintiff “bear[s] the burden of demonstrating that jurisdiction is appropriate.” Dole Food, Inc. v. Watts, 303 F.3d 1104, 1108 (9th Cir. 2002) (citation omitted). In determining whether the plaintiff has met this burden, the “‘uncontroverted allegations in the complaint must be taken as true” and “[c]onflicts between parties over statements contained in affidavits must be resolved in the plaintiff's favor.” Id. Where, as here, a court resolves the question of personal jurisdiction using motions and supporting affidavits, and without an evidentiary hearing, the plaintiff “must make only a prima facie showing of jurisdictional facts through the submitted materials in order to avoid a defendant's motion to dismiss.” Data Disc., Inc. v. Sys. Tech. Associates Inc., 557 F.2d 1280, 1285 (9th Cir. 1977).

When there is “no applicable federal statute governing personal jurisdiction, the

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district court applies the law of the state in which the district court sits.” Yahoo! Inc. v. La Ligue Contre Le Racisme Et L'Antisemitisme, 433 F.3d 1199, 1205 (9th Cir. 2006) (“La Ligue”) (citations omitted). Idaho's long-arm statute, “codified in Idaho Code § 5-514, allows a broader application of personal jurisdiction than the Due Process Clause.” Wells Cargo, Inc. v. Transport Ins. Co., 676 F.Supp.2d 1114, 1119 (D. Idaho 2009). As such, the Court need only look to the Due Process Clause to determine personal jurisdiction. Id. A court's exercise of jurisdiction over a nonresident defendant complies with federal due process if the defendant has “at least ‘minimum contacts' with the relevant forum such that the exercise of jurisdiction ‘does not offend traditional notions of fair play and substantial justice.'” Dole Food, 303 F.3d at 1110-11 (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).

“Sufficient minimum contacts can result in general or specific jurisdiction.” Wells Cargo, 676 F.Supp. at 1119. A state may assert general jurisdiction over a nonresident defendant if the defendant's activities are “substantial or continuous and systematic . . . even if the cause of action is unrelated to those activities.” Haisten v. Grass Valley Med. Reimbursement Fund, Ltd., 784 F.2d 1392, 1396 (9th Cir. 1986) (cleaned up). “The standard for establishing general jurisdiction is fairly high, and requires that the defendant's contacts be of the sort that approximate physical presence” in the forum state. SpeedConnect LLC v. Idaho Falls Wireless P'ship, 960 F.Supp.2d 1114, 1120 (D. Idaho 2013).

If a defendant has not had continuous and systematic contacts with the forum state sufficient to confer general jurisdiction, a court may exercise “specific jurisdiction” over

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the defendant if the defendant's “contacts with the forum gave rise to the cause of action before the court.” Wells Cargo, 676 F.Supp. at 1119 (citation omitted). The Ninth Circuit has established a three-prong test for analyzing a claim of specific personal jurisdiction:

(1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws;

(2) the claim must be one which arises out of or relates to the defendant's forum-related activities; and

(3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e., it must be reasonable.

Dole Food, 303 F.3d at 1111 (emphasis in original) (citations omitted).

The plaintiff bears the burden of satisfying the first two prongs of the specific jurisdiction test. Menken v. Emm, 503 F.3d 1050, 1057 (9th Cir. 2007). If the plaintiff does so, the burden...