Lee v. Ohio Cas. Ins. Co.

• Decision Date: 17 January 1978
• Docket Number: Civ. A. No. 77-20.
• Citation: 445 F. Supp. 189
• Parties: Ralph W. LEE, III, Plaintiff, v. The OHIO CASUALTY INSURANCE COMPANY, an Insurance Corporation, Defendant.
• Court: U.S. District Court — District of Delaware

445 F. Supp. 189

Ralph W. LEE, III, Plaintiff, v. The OHIO CASUALTY INSURANCE COMPANY, an Insurance Corporation, Defendant.

Civ. A. No. 77-20.

United States District Court, D. Delaware.

January 17, 1978.

Samuel R. Russell, of Biggs & Battaglia, Wilmington, Del., for plaintiff.

Albert L. Simon, Wilmington, Del., for defendant.

OPINION

WRIGHT, Senior District Judge.

Plaintiff, Ralph W. Lee, III, seeks a declaratory judgment that defendant, the Ohio Casualty Insurance Company ("Ohio Casualty"), is required under an insurance policy issued to Lee by Ohio Casualty to provide a defense for him in a second action pending in the Delaware Superior Court, and to pay any judgment rendered against him therein.¹ Two motions are presently pending before this Court. Plaintiff has moved for summary judgment.² Defendant has moved to transfer the present action to the United States District Court for the District of Maryland pursuant to 28 U.S.C. § 1404(a).³

The facts of the case are as follows. In 1973 Lee possessed a Plymouth automobile which he insured under a policy with Ohio Casualty. In March of that year he purchased a Volkswagen. Lee contacted Bartlett, Griffin & Vermilye, Inc. ("Bartlett"),⁴ an independent insurance agency, and requested that the Volkswagen be added to the automobile insurance policy which already covered the Plymouth. Apparently Bartlett notified Ohio Casualty not only that the Volkswagen should be added, but also that the Plymouth should be deleted from the policy.

On April 1, 1974, while Lee was driving the Plymouth, he was involved in a collision with a motorcycle in Delaware. In a letter to Ohio Casualty, dated April 17, 1974, Bartlett admitted its earlier error in notifying Ohio Casualty that the Plymouth was to be removed from the policy and requested that Ohio Casualty back up Bartlett by endorsing the insurance policy to include coverage of the Plymouth retroactive to the date of the accident. A confusing series of communications among Ohio Casualty, Bartlett, and Lee followed. As a result of the 1974 accident, the motorcyclist sued Lee in Delaware Superior Court in 1976.⁵ Ohio Casualty refused to defend the suit on the grounds that the policy which it had issued to Lee did not cover the Plymouth at the time of the accident. Lee then commenced the present action.

MOTION FOR SUMMARY JUDGMENT

Lee's Motion for Summary Judgment will be denied. The record discloses genuine issues of material fact, especially as to whether the Change of Endorsement issued by Ohio Casualty in May of 1974 was ever effective.⁶

MOTION FOR TRANSFER⁷

Ohio Casualty, an Ohio corporation, has moved to transfer the present action to the United States District Court for the District of Maryland, pursuant to 28 U.S.C. § 1404(a).⁸ Section 1404(a) provides that a case may be transferred only to a district where the action might have been brought. That requirement is met in the present case. Lee could have originally sued Ohio Casualty in diversity in the United States District Court for the District of Maryland, since Ohio Casualty is qualified to do business in Maryland and can be served with process in the District of Maryland.⁹

There are three further criteria which a court must consider in deciding whether to transfer a case pursuant to 28 U.S.C. § 1404(a): convenience of parties, convenience of witnesses, and the interest of justice. The burden is on the moving party to establish that these criteria weigh in favor of a transfer. Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3rd Cir. 1970), cert. denied, 401 U.S. 910, 91 S.Ct. 871, 27 L.Ed.2d 808 (1971); SmithKline Corp. v. Sterling Drug, Inc., 406 F.Supp. 52, 54 (D.Del.1975); Scovill Manufacturing Co. v. Sunbeam Corp., 357 F.Supp. 943, 946 (D.Del.1973). The balance of convenience must be strongly in favor of the movant. Shutte, supra; Morgan Guaranty Trust Co. of New York v. George Washington Corp., Civil Action No. 77-219 (D.Del., November 18, 1977); General Instrument Corp. v. Mostek Corp., 417 F.Supp. 821, 822 (D.Del.1976). If the balance of factors is equal or is only slightly in favor of the movant, a court should not transfer the case. SmithKline, supra at 54-55; Scovill, supra.

The Third Circuit has held that considerable deference is due to the plaintiff's choice of a forum. Shutte, supra. See also, SmithKline, supra at 54; Scovill, supra; Kaiser Industries Corp. v. Wheeling-Pittsburgh Steel Corp., 328 F.Supp. 365, 368 (D.Del.1971). However, the movant's burden is less when a plaintiff has not sued in a district which is his "home turf". Morgan Guaranty Trust Co. of New York, supra; General Instrument Corp., supra at 822-823; Burroughs Wellcome Co. v. Giant Food, Inc., 392 F.Supp. 761, 763 (D.Del. 1975). In addition, the plaintiff's choice of forum is given less weight when the subject matter of the suit has no connection with the forum selected by the plaintiff. See, Burroughs Wellcome, supra; Mims v. Proctor and Gamble Distributing Co., 257 F.Supp. 648, 657 (D.S.C.1966), and cases cited therein.

If the convenience of parties and witnesses were the only factors to be considered, transfer would not be warranted in this case. In light of the relatively short distance between Wilmington and Baltimore (approximately sixty miles), it is unlikely that any of the parties or witnesses, most of whom are located in Maryland, would be unduly burdened by the need to travel the additional distance to Wilmington. See, Burroughs Wellcome, supra at 764.

However, the primary justification which Ohio Casualty puts forward for transfer is that it wishes to implead Bartlett, a Maryland corporation, as a third-party defendant in the present action.¹⁰ Ohio Casualty asserts that if Lee prevails against Ohio Casualty in the present action, Ohio Casualty will have a right to recover from Bartlett, since Bartlett's negligence caused the elimination of the Plymouth from coverage under the insurance policy. Ohio Casualty argues that if the action remains in this Court, it cannot implead Bartlett, since Bartlett is not amenable to process issuing from this Court.¹¹

The desire of a party to implead as a third-party defendant a person who cannot be subjected to the jurisdiction of the original forum may be an appropriate reason for granting a transfer to a different district. The interest of justice is served by the elimination of an unnecessary additional trial. See, Brown v. Blidberg Rothchild Co., 222 F.Supp. 18, 19 (D.Del.1963); Kellum v. United States Lines, Inc., 365 F.Supp. 1026, 1030 (E.D.Pa.1973); 15 Wright, Miller & Cooper, supra § 3854. The ability to implead a third-party defendant is a particularly important factor when, as in the present case, the defendant may be entitled to a right over against the third party if the plaintiff proves his case. See, Fitzgerald v. Texaco, Inc., 521 F.2d 448, 453 (2d Cir. 1975), cert. denied, 423 U.S. 1052, 96 S.Ct. 781, 46 L.Ed.2d 641 (1976); Brown, supra; Popkin v. Eastern Air Lines, Inc., 253 F.Supp. 244, 248 (E.D.Pa.1966); Allied Petro-Products, Inc. v. Maryland Casualty Co., 201 F.Supp. 694, 695 (E.D.Pa.1961).

However, the Court has concluded that there is no need to transfer the present action in order for Lee to be able to implead Bartlett pursuant to Fed.R.Civ.P. 14(a). Under Fed.R.Civ.P. 4(f), persons who are brought in as third-party defendants pursuant to Rule 14 may be served with process "at all places outside the state but within the United States that are not more than 100 miles from the place in which the action is commenced, or to which it is assigned or transferred for trial". Bartlett has its principal offices in Easton, Maryland, which is within 100 miles of the Federal Courthouse in Wilmington, Delaware (U.S. Geological Survey, The National Atlas of the United States of America, 1970).¹² Therefore, contrary to Ohio Casualty's contention, Bartlett could be subjected to service of process issuing from this Court.

Furthermore, this Court may assert personal jurisdiction over Bartlett, even though Bartlett could not be reached under Delaware's long-arm statutes.¹³ Most courts which have considered the question have concluded that when service is made on a person pursuant to Rule 4(f), the federal court is not obligated to look to the long-arm statute of the forum state in determining amenability to suit. See, e. g., Coleman v. American Export Isbrandtsen Lines, Inc., 405 F.2d 250 (2d Cir. 1968); Spearing v. Manhattan Oil Transportation Corp., 375 F.Supp. 764 (S.D.N.Y.1974); McGonigle v. Penn-Central Transportation Co., 49 F.R.D. 58 (D.Md.1969). Contra, Karlsen v. Hanff, 278 F.Supp. 864 (S.D.N.Y. 1967).¹⁴ This principle has been applied in diversity cases as well as in federal question cases. See, Pierce v. Globemaster Baltimore, Inc., 49 F.R.D. 63 (D.Md.1969); Sevits v. McKiernan-Terry Corp. (New Jersey), 270 F.Supp. 887 (S.D.N.Y.1967).¹⁵ This approach is consistent with the fact that the 100-mile "bulge" provision of Rule 4(f) is a liberalizing measure designed to allow some complicated controversies to be decided in a single lawsuit. See, Advisory Committee Note on 1963 Amendment to Rule 4(f); Coleman, supra at 252; Pierce, supra at 66, 67. Cf., Vestal, Expanding the Jurisdictional Reach of the Federal Courts: The 1963 Changes in Federal Rule 4, 38 N.Y.U.L.Rev. 1053, 1063 n. 59 (1963).

Most courts which have considered the 100-mile provision of Rule 4(f) have applied some form of "minimum contacts" standard in determining an out-of-state party's amenability to suit. Some courts have tested amenability by the jurisdictional law of the state in which service was made. See, e. g., Coleman, supra at 252-253; Spearing, supra at 771. Cf., McGonigle, supra at 63 n. 6. Other courts have held that a party served in a non-forum state should be amenable to suit if, considering its activities within the 100-mile "bulge" area, it would have been amenable to the forum state's jurisdiction had the forum state embraced...