Nat'l Indem. Co. v. Companhia Siderurgica Nacional S.A.
| Decision Date | 08 February 2016 |
| Docket Number | Civil Action No.: 15-752 (JLL) |
| Parties | NATIONAL INDEMNITY COMPANY, Plaintiff, v. COMPANHIA SIDERURGICA NACIONAL S.A. & CATALYST RE CONSLUTING, L.L.C. Defendants. |
| Court | U.S. District Court — District of New Jersey |
NOT FOR PUBLICATION
This matter comes before the Court by way of a motion to dismiss for lack of personal jurisdiction filed by Defendant Companhia Siderurgica Nacional, S.A. ("CSN").1 ). Plaintiff National Indemnity Company ("NICO") and Defendant Catalyst Re Consulting, L.L.C. ("Catalyst Re") have opposed CSN's motion.2 (ECF Nos. 80, "Pl.'s Opp. Br."; 81, "Catalyst Re's Opp. Br."). CSN has filed a reply to the opposition. (ECF No. 82, "CSN's Reply Br."). The Court decided this matter without oral argument pursuant to Federal Rule of Civil Procedure 78, and for the reasons stated herein, the Court grants in part and denies in part CSN's motion to dismiss for lack of personal jurisdiction.
Plaintiff NICO is a Nebraska insurance company that provides reinsurance (also known as "retrocessional coverage")4 to insurers in the United States and abroad. (Compl. ¶ 4). NICO's principle place of business is Omaha, Nebraska. (Id.). IRB Brasil Resseguros S.A. ("IRB") is a Brazilian insurance company (Compl. ¶ 16) who, although initially named as a defendant, has since been dismissed from the case without prejudice. (ECF No. 74). Defendant CSN is a Brazilian corporation and "one of the largest conglomerates in Brazil with interests in steel, iron ore, mining, and various other operations." (Compl. ¶ 13). Defendant Catalyst Re is a reinsurance broker located and operating out of New Jersey that specializes in securing reinsurance coverage for South American businesses. (Compl. ¶ 18).
Plaintiff filed the instant action on February 2, 2015, seeking declaratory relief as well as actual damages against Defendants for alleged tortious conduct relating to a reinsurance contract allegedly entered into between Plaintiff and IRB. Specifically, Plaintiff alleges claims of tortiousinterference with a contractual relationship (Count II), tortious interference with economic advantage (Count III), unjust enrichment (Count IV), injurious falsehood (Count V), prima facia tort (Count VI), and civil conspiracy (Count VII).
According to Plaintiff, in 2007, CSN purchased a direct insurance policy (the "2007 CSN-Sul America Policy") from Sul America Cia Nacional de Seguros ("Sul America") for the period of January 21, 2007 to November 21, 2007 (the "Original Period"). (Compl. ¶¶ 14-15). Sul America is a Brazilian insurance company, and is not a party to this action. (Id. ¶ 15). Sul America and CSN later extended the 2007 CSN-Sul America Policy from November 21, 2007 to February 21, 2008 (the "Extension Period"). (Id.). CSN's direct policy provided for $750 million in coverage. (Id.).
To protect itself against risk of loss, Sul America reinsured about $748 million of the $750 million 2007 CSN-Sul America Policy through IRB. (Id. ¶ 16). IRB, in turn, sought retrocessional coverage of approximately $725 million of the $748 million in reinsurance of the 2007 CSN-Sul America Policy. (Id. ¶ 17). To that end, Plaintiff alleges that "[o]n or about November 5, 2007, Alexandre Leventhal of Cataylst Re [the New Jersey-based reinsurance broker] approached NICO describing himself as an agent for IRB, to request that NICO provide retrocessional coverage for IRB's reinsurance of the 2007 CSN Policy (for the Extension Period only)." (Id. ¶ 18). NICO alleges that NICO and IRB entered into an agreement whereby IRB paid NICO approximately $760,000 in premium in consideration of NICO providing retrocessional coverage in the amount of $60,850,000 (the "2007 Retrocessional Contract"). (Id. ¶ 19).
CSN thereafter secured direct insurance from a Brazilian insurance company by the name of Mapfre Seguros (the "2008 CSN-MS Policy") for the period of February 21, 2008 through February 21, 2009. (Id. ¶ 21). Plaintiff alleges that IRB reinsured the 2008 CSN-MS Policy andthat IRB again acted through its New Jersey-based reinsurance broker, Catalyst Re, to purchase reinsurance coverage from NICO as well as other non-Brazilian reinsurers. (Id. ¶ 22). Plaintiff alleges that NICO and IRB entered into an agreement whereby NICO agreed to provide $189,680,000 in retrocessional coverage (the "2008 Retrocessional Contract") in exchange for IRB's payment of an approximately $9 million premium. (Id. ¶ 23).
In early 2008, Mr. Leventhal of Catalyst Re notified NICO that IRB would not be able to pay the set premium within the timeframe provided for in the 2008 Retrocessional Contract. (Id. ¶ 25). After learning about the delay in payment, "CSN, out of concern that such delay might negatively impact its recovery of losses under the 2008 CSN Policy, instructed Mr. Leventhal to communicate to NICO, on its behalf and as its agent, that CSN would guarantee payment of the premium owed by IRB to NICO under the 2008 Retrocessional Contract." (Id. ¶ 26). The Complaint alleges that Mr. Leventhal, acting as CSN's agent, wrote to NICO informing it that CSN would pay the approximately $9 million premium and requesting an extension of time by which CSN could make the payment. (Id. ¶28). NICO agreed to the extension. (Id. ¶29). Then, "[i]n April 2008, CSN, to fulfill IRB's premium obligation to NICO, wired over $20 million into a 'premium account' located in Ridgewood, New Jersey which was owned and controlled by Catalyst Re to be used to pay the premium owed by IRB to NICO (as well as to other IRB retrocessionaires)." (Id. ¶ 31). On or about April 22, 2008, Catalyst Re wired approximately $9 million of the premium funds from CSN to NICO. (Id. ¶ 32).
Plaintiff alleges that (Id. ¶ 33). It is the existence and circumstances surrounding this 2008 Retrocessional Contract,and CSN's payment of the approximately $9 million premium to NICO, via Catalyst Re, which is at the center of this dispute.
In 2008, CSN filed a claim for property loss under the 2007 and 2008 CSN Policies, but later limited its claim to coverage of the Original Period of the 2007 CSN-Sul America Policy. (Id. ¶ 34). CSN then filed a coverage action in Brazil against Sul America and IRB relating to coverage under the 2007 CSN-Sul America Policy (the "Coverage Action"). (Id. ¶ 34). This claim was settled in November 2013, and IRB thereafter turned to NICO for coverage under the 2007 Retrocessional Contract. (Id. ¶ 35). IRB's coverage claim with NICO was ultimately resolved in arbitration. (Id.).
On November 26, 2014, CSN e-mailed NICO requesting that NICO pay CSN the $9 million premium that Catalyst Re had wired to NICO to effectuate the 2008 Reinsurance Contract between NICO and IRB. (Id. ¶ 36). In that same e-mail, CSN explained that it had filed a lawsuit in Brazil (the "Court Action") against IRB (separate from the above-discussed Coverage Action) when IRB failed to acknowledge that it was the reinsurer of CSN's 2008 Policy. (Id.). The Court Action was settled by way of a Settlement Agreement executed on November 27, 2013. (Id. ¶ 38). In the November 26, 2014 e-mail to NICO, CSN stated "that IRB, in the Settlement Agreement, had confirmed that it was, in fact, the reinsurer of the 2008 CSN Policy but denied that it had purchased any retrocessional coverage, including the 2008 Retrocessional Contract with NICO, for its reinsurance of the 2008 CSN Policy." (Id. ¶ 39). CSN informed NICO that IRB agreed to help CSN retrieve the $9 million premium that CSN paid to NICO to secure the completion of the 2008 Retrocessional Contract. (Id.).
Against this backdrop, Plaintiff alleges that "[t]he Settlement Agreement was an [sic] wrongful and collusive act by IRB and CSN to deprive NICO of premium that it had rightfully and duly earned more than five years earlier in 2008 as consideration for assuming substantial risk of loss under the 2008 Retrocessional Contract (i.e., up to $189,680,000 in losses) from February 21, 2008 to February 21, 2009, when the agreement was in full force and effect." (Id. ¶ 43). Accordingly, Plaintiff requests a judgment from this Court:
(1) Declaring that the 2008 Retrocessional Contract is a binding and enforceable agreement between IRB and NICO; (2) Declaring that CSN is not in privity with NICO under the 2008 Retrocessional Contract or any other agreement; (3) Declaring that CSN has no rights or interests in any of the premium paid to NICO under the 2008 Retrocessional Contract; [and] (4) Declaring that CSN has no rights or interests in any of the premium paid to NICO under the 2008 Retrocessional Contract.
(Id. at 17).
In addition to seeking declaratory relief, Plaintiff alleges the following claims against CSN, which are premised upon its allegedly wrongful execution of the Settlement Agreement: (1) tortious interference with a contractual relationship (Count II); (2) unjust enrichment (Count IV); (3) injurious falsehood (Count V), and; (4) civil conspiracy (Count VII). In Count III, Plaintiff alleges tortious interference with economic advantage against Catalyst Re, specifically alleging that NICO entered into the 2008 Retrocessional Contract based in part upon Catalyst Re's representations, on behalf of CNS and IRB, that the these parties intended to effectuate that Contract.5
Once a defendant files a motion to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), the "plaintiff must prove by affidavits or other competent evidence that jurisdiction...
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