Nat'l Football League v. Fireman's Fund Ins. Co.

• Citation: 157 Cal.Rptr.3d 318,216 Cal.App.4th 902
• Decision Date: 28 May 2013
• Docket Number: B245619
• Court: California Court of Appeals
• Parties: NATIONAL FOOTBALL LEAGUE et al., Plaintiffs and Appellants, v. FIREMAN'S FUND INSURANCE COMPANY et al., Defendants and Respondents.

216 Cal.App.4th 902

157 Cal.Rptr.3d 318

NATIONAL FOOTBALL LEAGUE et al., Plaintiffs and Appellants,

v.FIREMAN'S FUND INSURANCE COMPANY et al., Defendants and Respondents.

B245619

Court of Appeal,

Second District, Division 5, California.

Filed May 28, 2013

See 2 Witkin, Cal. Procedure (5th ed. 2008) Jurisdiction, § 374 et seq.

APPEAL from orders of the Superior Court of Los Angeles County, John Shepard Wiley, Jr., Judge. Affirmed. (Los Angeles County Super. Ct. No. BC490342)

Covington & Burling, Donald W. Brown, Michael S. Greenberg, Jeffrey M. Davidson; Munger, Tolles & Olson and Cary B. Lerman, for Plaintiffs and Appellants.

Cozen O'Connor, Charles E. Wheeler, Matthew Walsh, Amanda M. Lorenz; Carroll, McNulty & Kull, Christopher R. Carroll and Heather E. Simpson, for Defendants and Respondents TIG Insurance Company, The North River Insurance Company and U.S. Fire Insurance Company.

Selman Breitman, Sheryl W. Leichenger and Elisabeth M. D'Agostino, for Defendant and Respondent American Guarantee & Liability Insurance Company.

Tressler, Michaela L. Sozio, Elizabeth L. Musser; White & Williams, Michael O. Kassak and Edward M. Koch, for Defendants and Respondents Federal Insurance Company, Vigilant Insurance Company and Great Northern Insurance Company.

The Aguilera Law Group, A. Eric Aguilera; Hermes, Netburn, O'Connor & Spearing, Kevin J. O'Connor, Peter C. Netburn and Matthew C. Kalin, for Defendants and Respondents Discovery Property & Casualty Insurance Company, St. Paul Protective Insurance Company, Travelers Casualty & Surety Company, Travelers Indemnity Company and Travelers Property Casualty Company of America.

Troutman Sanders, Terrence R. McInnis and William D. Burger, Jr., for Defendant and Respondent XL Insurance America, Inc.

Clyde & Co. U.S., David A. Gabianelli, Andrew G. Wanger, Daren S. McNally and Barbara M. Almeida, for Defendants and Respondents, Ace American Ins. Co., Century Indemnity Ins. Co., Illinois Union Ins. Co. and Westchester Fire Ins. Co.

Gordon & Rees, Peter Schwartz and Gary Collis, for Defendant and Respondent Alterra America Insurance Company.

Arnold & Porter, Brian K. Condon, Jake R. Miller; Jackson & Campbell, Warren Lutz, Timothy R. Dingilian and Paul D. Smolinsky, for Defendants and Respondents Chartis Property Casualty Company, Chartis Specialty Insurance Company, Illinois National Insurance Company and National Union Fire Insurance Company of Pittsburgh, PA.

Wilson, Elser, Moskowitz, Edelman & Dicker, William K. Enger and James J. Pulliam, for Defendant and Respondent Guarantee Insurance Company.

O'NEILL, J.^*

I. INTRODUCTION

The National Football League has returned to Los Angeles, but not, as many Angelenos hope, bearing the gift of a new home team. The league administration and its intellectual property marketing arm have been sued in multiple states by dozens of former players alleging lifelong brain damage from on-field injuries dating back to the 1950's. In this case the plaintiffs, National Football League and NFL Properties LLC, seek a Los Angeles Superior Court declaratory relief judgment regarding the coverage duties of 32 insurance carriers pursuant to some 187 commercial liability policies that were issued over a 50–60 year period. All the same entities are parties to parallel coverage actions filed by some of the insurers in New York state courts at approximately the same time as the California case.

The insurer defendants sought a dismissal or stay of the California case on a theory of forum non conveniens. Following extensive briefing and a hearing, the California trial court ordered the California proceeding stayed pending the outcome of the New York actions. The plaintiffs appeal, contending the trial court misapprehended the applicable legal test, and abused its discretion in any event. We affirm and clarify the standards to be applied by a trial court which intends to stay rather than dismiss a California case on grounds of forum non conveniens. We also hold the plaintiffs, whose principal places of business are in New York City, are not California residents in the inconvenient forum context, even though three teams reside in California. Finally, we find no abuse of discretion in the trial court's analysis and conclusion that the California action should be stayed.

II. BACKGROUND

A. The NFL policyholder plaintiffs

Plaintiff National Football League (“NFL”), is an unincorporated association headquartered in New York City since 1960 and comprised of 32 member “clubs” based in various states throughout the country. Only two states, California and Florida, are home to three teams. New York is home to only the Buffalo Bills; the “New York” Giants and “New York” Jets are located in northern New Jersey, a short distance from New York City.¹ Over the past 50 years, more NFL regular season games have been played in California than in any other state. The annual Super Bowl and Pro Bowl games have been played in California 34 times, most often in Los Angeles County.

Plaintiff NFL Properties LLC is a Delaware corporation headquartered, since 1970, in New York City. At the time the actions at issue here were filed, NFL Properties was not licensed to do intrastate business in California. NFL Properties develops, licenses and markets the intellectual property of the NFL and its member clubs. NFL Properties is the successor to National Football League Properties, Inc. (“NFLP”), which was incorporated in California in 1963. NFLP was a California corporation throughout its existence, which ended in 2001. Its principal place of business until approximately 1970 was in Los Angeles County, where it and then NFL Properties maintained an office until 2005.²

NFL's largest offices are in New York, where the various NFL entities conduct the majority of their business.³ Anastasia Danias, Vice–President of Legal Affairs for NFL, works in New York, as do other NFL executives. NFL entities regularly file suit in New York state and federal courts, including insurance coverage actions against insurers located in eastern states other than New York.

B. The insurance and insurer defendants

Thirty-two insurers are named as defendants in the instant coverage case. NFL alleges those companies issued commercial general liability (“CGL”) policies providing primary and excess coverage over a roughly 45–year period from the late 1960's to 2012. Decades of policies are implicated in the underlying tort litigation because CGL policies generally cover only occurrences within the policy period and the tort plaintiffs allege injuries dating back to the 1950's. Plaintiffs NFL and NFL Properties separately purchased and maintained their own insurance programs over the years involved here up until 2000, when they fully integrated their programs.

Thus far, the NFL plaintiffs have identified at least 187 policies issued to one or both of them by the 32 defendants covering time periods between March 1968 and August 2012. The vast majority were brokered and delivered to NFL in New York City. The policies provide coverage in layers: a first-recourse “primary” layer and “umbrella” or “excess” layers of coverage. Fifty-two of the policies, issued by 12 of the insurer defendants, are primary policies, which include a duty to defend against lawsuits potentially covered by the policy. Prior to 1977, NFL relied primarily on California-based insurance brokers and offices. It is expected that some or all policies from that era, which are yet to be located, were issued through California brokers and/or to California-based NFL entities.

All the defendants are licensed and/or doing business in both California and New York. With one exception, the insurers currently have their principal places of business east of the Mississippi River, primarily in the northeast and mid-Atlantic states. The majority are located within 250 miles of New York City. Only Fireman's Fund has a principal business location in California, in the city of Novato. Three insurers have their principal place of business in New York. Fourteen defendants have their principal place of business in either Connecticut or New Jersey, which along with New York are collectively referred to as the “Tri–State Area.” Four insurers have their principal place of business in Pennsylvania. Four more are located in Illinois, and one each are in Florida, New Hampshire, North Carolina, Virginia, and Minnesota. Thirty of the 32 insurer defendants are incorporated in east coast states, Illinois or Indiana.

Chartis is the only primary carrier with a principal place of business in New York. NFL alleges that Chartis issued 12 policies under which NFL is entitled to coverage. Eleven policies were negotiated primarily between underwriters located in New York and NFL's New York broker, and the policies were delivered to NFL in New York. One Chartis policy was negotiated primarily between underwriters located in both Illinois and New York and an NFL broker in Indiana. NFL tendered its claims for coverage under the Chartis policies from its New York offices, and Chartis is handling those claims in New York, where documents concerning the claims are located.

TIG issued more duty-to-defend policies than any other insurer. Although TIG is incorporated in California and maintained its principal business location here at the time most of its NFL policies were written, the TIG policies were issued to NFL in New York through a New York-based broker. All relevant TIG documents and personnel are located in Manchester, New Hampshire. TIG's two affiliates have their principal places of business in New Jersey, where all their relevant documents and witnesses are located.

The Travelers policies were negotiated, issued, or issued for delivery to NFL in New York, often through New York brokers. Travelers is handling NFL's claims in New York City.

ACE is headquartered in Philadelphia. All 28 of its primary and secondary policies allegedly issued to NFL since 1968 were brokered,...