Riffe v. Magushi

• Decision Date: 08 July 1994
• Docket Number: Civ. A. No. 3:92-0531.
• Court: U.S. District Court — Southern District of West Virginia
• Parties: Anne Jane RIFFE, as next friend of Robert Gale Riffe, and Anne Jane Riffe, Individually, Plaintiffs, v. Harumi MAGUSHI, a.k.a. Harumi Nagaishi, Defendant/Cross-Claim Defendant, and Naomi HAIGASHI, a.k.a. Naomi Higashi, Defendant/Crossclaimant/Third-Party Plaintiff, v. CIGNA WORLDWIDE INSURANCE COMPANY, et al., Third-Party Defendants, and Anne Jane RIFFE, as next friend of Robert Gale Riffe, and Anne Jane Riffe, Individually, Plaintiffs, v. GENERAL MOTORS CORPORATION, Defendant.

859 F. Supp. 220

Anne Jane RIFFE, as next friend of Robert Gale Riffe, and Anne Jane Riffe, Individually, Plaintiffs, v. Harumi MAGUSHI, a.k.a. Harumi Nagaishi, Defendant/Cross-Claim Defendant, and Naomi HAIGASHI, a.k.a. Naomi Higashi, Defendant/Crossclaimant/Third-Party Plaintiff, v. CIGNA WORLDWIDE INSURANCE COMPANY, et al., Third-Party Defendants, and Anne Jane RIFFE, as next friend of Robert Gale Riffe, and Anne Jane Riffe, Individually, Plaintiffs, v. GENERAL MOTORS CORPORATION, Defendant.

Civ. A. No. 3:92-0531.

United States District Court, S.D. West Virginia, Huntington Division.

July 8, 1994.

Menis E. Ketchum, Greene, Ketchum, Bailey & Tweel, Huntington, WV, Richard W. Martin, David Justice, Martin, Picklesimer, Justice and Vincent, Ashland, KY, for Anne Jane Riffe.

Edward M. Kowal, Jr., Charles F. Bagley, III, Campbell, Woods, Bagley, Emerson, McNeer & Herndon, Huntington, WV, for Harumi Magushi.

D.C. Offutt, Jr., Jenkins, Fenstermaker, Krieger, Kayes & Farrell, Huntington, WV, for Naomi Haigashi.

James D. Lamp, Lamp, O'Dell, Bartram & Enstminger, Huntington, WV, for General Motors Corp.

Michael Bonasso, Flaherty, Sensabaugh & Bonasso, Charleston, WV, for Cigna Ins. Co.

Arden J. Curry, II, Pauley, Curry, Sturgeon & Vanderford, Charleston, WV, for Budget Rent a Car Co.

W.T. Shaffer, Jackson & Kelly, Charleston, WV, for American Express Co., American Express Travel Related Services Co., Inc., Amex Assurance Co.

Martin R. Smith, Jr., Cynthia R. Cokeley, Steptoe & Johnson, Charleston, WV, for AIU Ins. Co.

MEMORANDUM OPINION AND ORDER

HADEN, Chief Judge.

Pending are the motions for summary judgment filed by Third-Party Defendants AIU Insurance Company ("AIU") and CIGNA Insurance Company ("CIGNA") and several American Express affiliated companies ("AMEX"); a cross-motion for summary judgment has been filed by Third-Party Plaintiff Naomi Higashi. Each motion asserts no issue of material fact exists surrounding the terms and conditions of various insurance contracts issued by the Third-Party Defendants to the Third-Party Plaintiffs.¹ Higashi and Harumi Nagaishi are co-defendants in the underlying action and assert the Third-Party Defendants owe them duties to defend and indemnify under the terms of the various insurance policies.

I. CHOICE OF LAW

The Third-Party Defendants assert Japanese law governs the interpretation of the insurance contracts. Both insurance contracts contain the following provision: "matters not provided under this policy shall be governed by the laws and ordinances of Japan." AIU's motion for summary judgment, Exhibit B at 15; CIGNA's motion for summary judgment, Exhibit 1(3) at 8. Third-Party Defendants assert the choice of law provisions in the insurance contracts mandate Japanese law be applied to interpret the contracts. Third-Party Plaintiffs contend West Virginia law applies.

Where a conflict of laws question arises, the conflict of laws doctrine of the forum state are used to determine what law applies. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021-22, 85 L.Ed. 1477, 1480 (1941). Under West Virginia law, a "choice of laws" provision in a contract is valid unless it falls into one of the exceptions outlined in Syllabus Point 1, General Electric Company v. Keyser, 166 W.Va. 456, 275 S.E.2d 289 (1981):

"A choice of law provision in a contract will not be given effect when the contract bears no substantial relationship with the jurisdiction whose laws the parties have chosen to govern the agreement, or when the application of the law would offend the public policy of this state."²

The insurance contracts were created in Japan between citizens of Japan. Thus, the choice of law provision in the contract bears substantial relationship with Japan, the jurisdiction whose laws the parties have chosen to govern the agreements. The Third-Party Plaintiffs have not asserted any public policy reasons why the choice of laws provision should not be given effect. Therefore, it appears this Court must apply the laws of Japan to any interpretation of the policies.

For obvious reasons, the application of foreign law presents special problems for courts of justice. Not the least among these is the difficulty in obtaining legal materials from which foreign law may be applied. Application of foreign law is governed by Rule 44.1 of the Federal Rules of Civil Procedure, which states:

"A party who intends to raise an issue concerning the law of a foreign country shall give notice by pleadings or other reasonable written notice. The court, in determining foreign law, may consider any relevant material or source, including testimony, whether or not submitted by a party or admissible under the Federal Rules of Evidence. The court's determination shall be treated as a ruling on a question of law." (emphasis added).

Federal courts are given great discretion in choosing source materials when application of foreign law is necessary. Argyll Shipping Co. v. Hanover Ins. Co., 297 F.Supp. 125, 128 (S.D.N.Y.1968) ("A federal court is given great leeway in determination and application of foreign law."). Moreover, where the parties have not shown the applicable foreign law is different from the law of the forum state, the law of the forum state is applied. United States v. Westinghouse Elec. Corp., 648 F.2d 642, 647 n. 1 (9th Cir.1981) ("Absent a showing to the contrary, it is presumed that foreign law is the same as the law of the forum." Citing 1700 Ocean Ave. Corp. v. GBR Associates, 354 F.2d 993, 994 (9th Cir.1966); San Rafael Compania Naviera, S.A. v. American Smelting & Refining Co., 327 F.2d 581, 587 (9th Cir.1964)). See, e.g., The Arizpa, 63 F.2d 42, 43 (4th Cir.), cert. denied, U.S. v. Consolidated Coal Co., 290 U.S. 648, 54 S.Ct. 66, 78 L.Ed. 562 (1933); Heredia v. Davies, 12 F.2d 500, 501 (4th Cir.1926) ("In absence of proof to the contrary, the presumption is that the law of the foreign country is the same as the law of this country, the lex fori."); In re Charter Co., 93 B.R. 286, 289 (Bankr.M.D.Fla.1988) ("The parties were required to present sufficient proof to establish the principles of foreign law which they contend are applicable. Otherwise it is to be presumed that the law of the foreign state is the same as that of the present forum."), citing Symonette Shipyards Ltd. v. Clark, 365 F.2d 464 (5th Cir. 1966), cert. denied, 387 U.S. 908, 87 S.Ct. 1690, 18 L.Ed.2d 625 (1967); Seguros Tepeyac, S.A., Compania Mexicana de Seguros Generales v. Bostram, 347 F.2d 168 (5th Cir.1965); Todd Shipyards Corp. v. The City of Athens, 83 F.Supp. 67, 83 (D.Md.1949).

Where foreign law is applicable, the parties have the burden of sufficiently proving foreign law in such a way that the court may apply it to the facts of the case. The Fort Gaines, 18 F.2d 413, 414 (D.Md.1927) ("`There is no presumption that the law of foreign countries is unlike ours. One who would rely upon the difference * * * must prove its existence. If he does not, we apply our own law to the case.'" Citing The Hoxie, 297 F. 189 (C.C.A. 4), cert. denied, American Exp Co, Aktieselskab v. U.S., 266 U.S. 608, 45 S.Ct. 91, 69 L.Ed. 465 (1924)). See also Pfizer Inc. v. Elan Pharmaceutical Research Corp., 812 F.Supp. 1352, 1361 (D.Del. 1993), citing Cunningham v. Quaker Oats Co., 107 F.R.D. 66, 77 (W.D.N.Y.1985). The Court is under no obligation to undertake research of foreign law, although it may resort to any helpful source. Carey v. Bahama Cruise Lines, 864 F.2d 201, 205 (1st Cir. 1988); Pfizer Inc. v. Elan Pharmaceutical Research Corp., supra, 812 F.Supp. at 1361; Fabrica De Tejidos La Bellota S.A. v. M/V MAR, 799 F.Supp. 546, 561 (D.V.I.1992). Where foreign law is not sufficiently established, the court will apply the law of the forum state. Banco de Credito Industrial v. Tesoreria General de la Seguridad Social de Espana, 990 F.2d 827, 836 (5th Cir.1993), cert. denied, ___ U.S. ___, 114 S.Ct. 877, 127 L.Ed.2d 73 (1994) ("When the parties have failed to establish foreign law, a court is entitled to look to its own forum's law in order to fill in any gaps." Citing Cantieri Navali Riuniti v. M/V SKYPTRON, 802 F.2d 160 (5th Cir.1986)). As was stated in Pfizer Inc. v. Elan Pharmaceutical Research Corp., supra, 812 F.Supp. at 1360-61:

"The Court is free to disregard expert affidavits under Rule 44.1. See, e.g., Chantier Naval Voisin v. M/Y Daybreak, 677 F.Supp. 1563, 1567 (S.D.Fla.1988) (court not bound by evidence submitted by party's expert on foreign law). See also Banque Libanaise Pour Le Commerce v. Khreich, 915 F.2d 1000, 1006-07 (5th Cir. 1990) (party obligated to present to the district court proof of relevant foreign law). * * * Under Rule 44.1, a court is not required to engage in its own research and has the right to insist that the proponent of the foreign law present evidence on the question. See Cunningham v. Quaker Oats Co., 107 F.R.D. 66, 77 (W.D.N.Y. 1985). According to commentators, `in many instances the court will not utilize the prerogatives found in the second sentence of Rule 44.1 stated above.' 9 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 2444, at 408 (1971). Nothing in Rule 44.1 requires a court to engage in private research; the rule preserves the court's right to insist upon a complete presentation by counsel on the foreign law issue."

Citing Commercial Ins. Co. of Newark, N.J. v. Pacific-Peru Const. Corp., 558 F.2d 948, 952 (9th Cir.1977). See generally, 9 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 2447 (1971 & Supp. 1994). The court may insist upon a complete presentation of foreign law, one that sufficiently establishes the relevant foreign law to be applied.

In the instant case both Third-Party Defendants have submitted affidavits to support their contentions that application of Japanese law would result in summary judgment in their favor. AIU has submitted two affidavits from Japanese lawyer Masayoshi...