Ruiz de Molina v. Merritt & Furman Ins. Agency

• Decision Date: 30 March 2000
• Docket Number: Nos. 98-6958,98-6975,s. 98-6958
• Parties: (11th Cir. 2000) Eladio RUIZ de MOLINA, Plaintiff-Appellant, v. MERRITT & FURMAN INSURANCE AGENCY, INC., a corporation; Skip Smith, Defendants-Appellees, Worldwide Marine Underwriters, a corporation; Bob Luellen, an individual, Defendants-Cross Defendants-Appellees. Eladio Ruiz de Molina, Plaintiff, v. Merritt & Furman Insurance Agency, Inc., a corporation; Skip Smith, an individual, Defendants-Cross-Claimants-Appellants, Worldwide Marine Underwriters, a corporation; Bob Luellen, an individual, Defendants-Cross-Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1351

207 F.3d 1351 (11th Cir. 2000)

Eladio RUIZ de MOLINA, Plaintiff-Appellant, v. MERRITT & FURMAN INSURANCE AGENCY, INC., a corporation; Skip Smith, Defendants-Appellees Worldwide Marine Underwriters, a corporation; Bob Luellen, an individual, Defendants-Cross Defendants-Appellees.

Eladio Ruiz de Molina, Plaintiff, v. Merritt & Furman Insurance Agency, Inc., a corporation; Skip Smith, an individual, Defendants-Cross-Claimants-Appellants Worldwide Marine Underwriters, a corporation; Bob Luellen, an individual, Defendants-Cross-Defendants-Appellees.

Nos. 98-6958, 98-6975.

United States Court of Appeals, Eleventh Circuit.

March 30, 2000.

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Appeals from the United States District Court for the Northern District of Alabama.

Before ANDERSON, Chief Judge, WILSON, Circuit Judge, and HILL, Senior Circuit Judge.

HILL, Senior Circuit Judge:

Plaintiff sued defendants for damages incurred when his boat was damaged and defendants denied insurance coverage. Two defendants moved to dismiss for lack of personal jurisdiction. The district court construed the motion as one for summary judgment and granted it. After trial, plaintiff won a judgment against the remaining defendants and was awarded damages including $90,000 for mental anguish. Upon motion, the district court struck the mental anguish damages. Plaintiff appeals both judgments.

I.

Eladio Ruiz de Molina purchased a sloop named Ariel in June of 1994.¹ The boat was moored in Alabama at the time and was part of a fleet of charter boats. In August or September of 1995, Ruiz de Molina telephoned Frank Smith, an insurance broker, at his office in Pompano Beach, Florida to inquire about insurance for the boat were it moored in Mexico. Smith contacted Robert Luellen, an insurance broker who worked for Worldwide Underwriters Marine, Inc. (Worldwide Marine) in Michigan, and obtained a verbal quote, followed by a fax, for insurance for the boat if moored in Mexico. Smith transmitted the quote to Ruiz de Molina in Alabama. Sometime later, Ruiz de Molina decided to moor the boat in Ft. Myers, Florida instead of Mexico. In early December 1995, he again contacted Smith and requested that insurance be bound on the boat with a mooring in Florida. He asked Smith to provide him with a written binder setting forth the coverage obtained. Smith contacted Luellen to obtain a new quote for the premium and, on December 6, sent a fax to Luellen in Michigan requesting that coverage be bound. According to Smith, he had several phone conversations that day with Luellen in Michigan concerning the placement of this coverage and Luellen informed him that a binder could be issued to Ruiz de Molina. Following these conversations, Smith faxed a binder to Ruiz de Molina in Alabama. The binder indicated that the coverage would be effective that day, December 6, 1995.

On December 8, 1995, Ruiz de Molina set sail from Alabama destined for Ft. Myers, Florida. On or about December 9, 1995, the boat was damaged at sea. On December 11, 1995, Ruiz de Molina telephoned Smith in Pompano Beach, Florida, and reported the loss. Smith faxed a notice of the claim to Luellen in Michigan. Later that day, Luellen and Smith discussed the claim by telephone. After these discussions, Luellen telephoned an insurance broker in Georgia and obtained coverage for the boat as of December 12, 1995, with an effective date of December 6, 1995, provided no known or reported losses had occurred. Sometime in January 1996, an employee of Worldwide Marine telephoned Ruiz de Molina and told him that he would "help the plaintiff get his boat repaired" and that he was helping Smith. Subsequently, however, Luellen told Ruiz de Molina that he had no effective coverage through Worldwide Marine at the time of the damage to the boat.

Ruiz de Molina filed this action against Luellen and Worldwide Marine, alleging that they had misled him into believing that his coverage was bound as of December 6, 1995. He claimed that defendants had negligently, wantonly, willfully or recklessly caused him to be denied benefits under the policy of insurance. He also claimed that defendants had defrauded him concerning his coverage and that they had acted in bad faith.

He also named Frank Smith and the Merritt & Furman Insurance Agency, Inc. (Merritt & Furman) as defendants. He alleged that these defendants had breached their contract to procure insurance for him and that they were also guilty of negligence and innocent misrepresentation with respect to the effective date of the coverage.

Luellen and Worldwide Marine moved to dismiss the complaint on the grounds that the district court lacked personal jurisdiction over them because they had insufficient contact with Alabama. The district court converted the motion into one for summary judgment, see Fed.R.Civ.P. 12(b); Fikes v. City of Daphne, 79 F.3d 1079, 1083 (11th Cir.1996), and granted it. The first issue on appeal is whether the district court erred in so doing. We review the grant of summary judgment de novo. Alexander Proudfoot Co. World Headquarters v. Thayer, 877 F.2d 912, 916 (11th Cir.1989).²

The case proceeded to trial against the remaining defendants-Smith and his agency, Merritt & Furman. The jury found Merritt & Furman liable for breach of contract and both Smith and Merritt & Furman liable for negligence and innocent misrepresentation. The jury awarded damages, including $90,000 for mental anguish. The second issue on appeal is whether the jury's verdict can support the award for mental anguish. We review this issue of law de novo. Hibiscus Assocs. Ltd. v. Bd. of Trustees of Policemen and Firemen Retirement Sys., 50 F.3d 908, 920 (11th Cir.1995).

II. A.Personal Jurisdiction

A federal court sitting in diversity may exercise jurisdiction over a nonresident defendant to the same extent as a court of that state. Prejean v. Sonatrach, Inc., 652 F.2d 1260 (5th Cir. Unit A 1981). Alabama permits its courts to exercise jurisdiction over nonresidents to the fullest extent allowed under the Due Process Clause of the Fourteenth Amendment to the Constitution. Ala. R. Civ. P. 4.2(a)(2)(I); Martin v. Robbins, 628 So.2d 614, 617 (Ala.1993); Horn v. Effort Shipping Co., Ltd., 777 F.Supp. 927, 929 (S.D.Ala.1991). The Due Process Clause permits a court to summon a nonresident to defend himself in the forum so long as that person has some "minimum contacts" with that state and, the exercise of personal jurisdiction over the defendant would not offend "traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945); Williams Elec. Co. v. Honeywell, Inc., 854 F.2d 389, 392 (11th Cir.1988).

The nonresident defendant's contacts with the forum must be such that he has "fair warning" that a particular activity may subject him to the jurisdiction of a foreign sovereign. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). A person has fair warning if he "purposefully directs" his activities at the forum, and claims of injury result from these activities. Id. The exercise of jurisdiction over him does not "offend traditional notions of fair play and substantial justice" because his conduct and connection with the forum are such that he should reasonably anticipated being haled into court there. Id. The Supreme Court has made very clear that:

[i]t is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.

Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958); Francosteel Corp. v. M/V Charm, 19 F.3d 624, 627 (11th Cir.1994) (quoting Vermeulen v. Renault, U.S.A., Inc., 985 F.2d 1534, 1546 (11th Cir.1993)).

In resolving a motion for summary judgment based upon lack of personal jurisdiction, the court is required to accept as true the allegations of plaintiff's complaint, and deny the motion if these allegations state a prima facie case of jurisdiction. Bracewell v. Nicholson Air Services, Inc., 748 F.2d 1499, 1504 (11th Cir.1984). If there is conflict between the plaintiff's and the defendant's allegations or in the evidence, the plaintiff's evidence is to be believed and all reasonable inferences must be drawn in his favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir.1990).

Furthermore, it is important to remember that the conduct at issue is that of the defendants. No plaintiff can establish jurisdiction over a defendant through his own actions. Hanson, 357 U.S. at 253, 78 S.Ct. 1228. The unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum state. Id. Therefore, we must determine what these defendants did to purposefully avail themselves of the benefits of doing business in Alabama such that the notions of reasonableness and fairness are not offended by requiring them to defend themselves in an Alabama court.

Defendants Luellen and Worldwide Marine are insurance brokers. They were contacted by Smith, the insurance broker in Florida, to locate marine insurance for Ruiz de Molina's boat anchored in Alabama. Ruiz de Molina contends that jurisdiction in Alabama is proper because these defendants "expected to make a commission off selling an insurance policy to an Alabama resident that covered a boat that would be departing an Alabama port once a binder was issued." Ruiz de Molina argues that Worldwide Marine and Luellen foresaw or should have foreseen that they would be called upon to defend themselves in an Alabama court against a claim of fraud arising out of the issuance of the binder.

Luellen and Worldwide Marine concede that they were in the...