Sparkowich v. AMERICAN SS OWNER'S MUT. PROTECTION

• Decision Date: 06 July 1988
• Docket Number: Civ. No. 87-0370 P.
• Citation: 687 F. Supp. 695
• Parties: Ronald SPARKOWICH, Plaintiff, v. AMERICAN STEAMSHIP OWNER'S MUTUAL PROTECTION AND INDEMNITY ASSOCIATION, INC., Defendant.
• Court: U.S. District Court — District of Maine

687 F. Supp. 695

Ronald SPARKOWICH, Plaintiff, v. AMERICAN STEAMSHIP OWNER'S MUTUAL PROTECTION AND INDEMNITY ASSOCIATION, INC., Defendant.

Civ. No. 87-0370 P.

United States District Court, D. Maine.

July 6, 1988.

U. Charles Remmel, R. Terrance Duddy, Kelly, Remmel & Zimmerman, Portland, Me., for plaintiff.

Martin R. Johnson, Donna M. Katsiaficas, Johnson, Jewell & Boutin, Portland, Me., for defendant.

MEMORANDUM OF DECISION AND ORDER GRANTING SUMMARY JUDGMENT UNDER FED.R.CIV.P. 56

GENE CARTER, District Judge.

In this action, the plaintiff, a seaman and a judgment creditor, attempts to proceed under Maine's "Reach and Apply" statute, 24-A M.R.S.A. § 2904,¹ against the insurer of a shipowner, who is the judgment debtor.² Before the court are the plaintiff's motion to amend the complaint, the defendant's motion to dismiss or for summary judgment, and the plaintiff's motion for summary judgment.

The plaintiff originally asserted diversity subject matter jurisdiction, and he now seeks to amend his complaint by adding a count in admiralty based on the maritime nature of the insurance policy in question. The defendant has not objected to this motion nor asserted any prejudice to his defense.³ The amendment of a pleading to add an identifying statement regarding an admiralty claim is permitted under Fed.R. Civ.P. 9(h) and 15. Our legal system has long recognized that a marine insurance policy brings an action within federal admiralty jurisdiction, although state law is applied in the construction and application of that policy. See Wilburn Boat Co. v. Fireman's Fund Insurance Co., 348 U.S. 310, 75 S.Ct. 368, 99 L.Ed. 377 (1955), citing Insurance Co. v. Dunham, 11 Wall 1, 20 L.Ed. 90 (1871). Accordingly, I hereby GRANT the plaintiff's motion to amend the complaint under Fed.R.Civ.P. 15(a). I also GRANT the plaintiff's motion to exceed the five page limit applicable to reply memoranda under Local Rule 19(e).

The defendant American Steamship has moved to dismiss or for summary judgment based on lack of personal jurisdiction in diversity, lack of personal jurisdiction in admiralty, insufficiency of service of process, and improper venue. The plaintiff has objected to this motion. Pursuant to Local Rule 19(b), the defendant has submitted a statement of material facts, an affidavit, and interrogatory answers. The court, therefore, treats this as a motion for summary judgment; under Fed.R.Civ.P. 56 the test is whether the movant has established the absence of any genuine issue of material fact.

In its statement of material facts and affidavit, the defendant asserts that it is a New York corporation, that the insurance policy in question was issued and delivered in New York, that it was never registered to do business in Maine, that it never insured a Maine entity, and that it has never before this case hired Maine counsel. The plaintiff does not controvert these facts⁴ but appears to rely on this court's assertion of personal jurisdiction over the judgment debtor in the previous action, see n. 2, supra, and on the argument that insurance is a product in the stream of commerce.⁵

In a diversity action, a federal court's jurisdictional reach is governed by "`traditional notions of fair play and substantial justice'" embodied in the Due Process Clause of the Fourteenth Amendment. International Shoe v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). The Due Process Clause thus protects an individual from suit in a forum with which that individual has had no meaningful "contacts, ties, or relations." Id. at 319, 66 S.Ct. at 159. To be subject to the court's personal jurisdiction, an individual need not be physically present in the forum but must have purposefully directed his activities towards the residents of the forum; the delivery of products "`into the stream of commerce with the expectation that such products will be purchased by consumers in the forum state'" is considered a sufficiently meaningful contact. Burger King v. Rudzewicz, 471 U.S. 462, 473, 105 S.Ct. 2174, 2182, 85 L.Ed.2d 528 (1985), citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297-98, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980). But a defendant may "not be haled into a jurisdiction solely as a result of ... `fortuitous' ... contacts," Burger King, 471 U.S. at 475, 105 S.Ct. at 2183, citing World-Wide Volkswagen, supra, "or of the `unilateral activity of another party or third person,'" id., citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 417, 104 S.Ct. 1868, 1873, 80 L.Ed.2d 404 (1984). Nor may a state exercise jurisdiction over an absent defendant with no forum contacts based solely on the fact that the defendant's insurance company does business in that state. Rush v. Savchuk, 444 U.S. 320, 330, 100 S.Ct. 571, 578, 62 L.Ed.2d 516 (1980).

Based on the foregoing principles, the court rejects the plaintiff's first argument that the assertion of personal jurisdiction over the defendant's insured in the prior judgment is somehow imputed to the insurer. Such an imputation would indeed violate "`traditional notions of fair play and substantial justice,'" International Shoe, supra, 326 U.S. at 316, 66 S.Ct. at 158, and would appear to rely on the "`unilateral activity of ... a third person,'" Helicopteros Nacionales supra, 466 U.S. at 417, 104 S.Ct. at 1873. Moreover, the Supreme Court has stated explicitly that although an insurance company may be "`found,' in the sense of doing business, in all 50 states and the District of Columbia" based on the fortuitous presence of one of its insureds, "such a `contact' can have no jurisdictional signifiance." Rush v. Savchuk, supra, 444 U.S. at 330, 100 S.Ct. at 578.

The plaintiff also argues that insurance protection travels with the insured's vessels and takes on the same qualities as a product which is purposefully delivered into the stream of commerce, thereby establishing a sufficiently meaningful contact with this forum. The plaintiff relies on Hedrick v. Dalko Shoji Co., Ltd., Osaka, 715 F.2d 1355 (9th Cir.1983), where the court determined that the Japanese manufacturer of a defective wire rope had purposefully directed his activities towards any forum where injury could occur because the product had been specifically intended for use in ocean-going vessels. Here, the plaintiff has made no allegation which suggests that the ship was ever within the territorial reach of Maine, or that the injury occurred in Maine. Moreover, the language of Rush v. Savchuk, supra, establishes conclusively that, without more, an insurance obligation cannot be considered a jurisdictionally significant contact. The court concludes, therefore, that the plaintiff has failed to show sufficient minimum contacts with the forum to permit this court to assert personal jurisdiction over the defendant on the diversity count.

The plaintiff has also brought a count in admiralty, and the defendant has challenged the court's ability to assert personal jurisdiction on this count. Admiralty comes under federal question subject matter jurisdiction, and thus raises issues of federal law, not state law. In contrast to diversity cases, in which courts adjudicate state-created rights and adhere to Fourteenth Amendment due process standards and state long-arm statutes in determining the limits of personal jurisdiction, admiralty cases might logically depend on Fifth Amendment due process standards, Wright & Miller, Federal Practice and Procedure § 1067.1 (1969). Despite nondiversity subject matter jurisdiction,...