Thomson v. Continental Ins. Co.

• Decision Date: 25 May 1967
• Citation: 427 P.2d 765,66 Cal.2d 738,59 Cal.Rptr. 101
• Court: California Supreme Court
• Parties: , 427 P.2d 765 Waldemar THOMSON, Plaintiff and Appellant, v. CONTINENTAL INSURANCE COMPANY et al., Defendants and Respondents. L.A. 29343. In Bank

Page 101

59 Cal.Rptr. 101

66 Cal.2d 738, 427 P.2d 765

Waldemar THOMSON, Plaintiff and Appellant, v. CONTINENTAL INSURANCE COMPANY et al., Defendants and Respondents.

L.A. 29343.

Supreme Court of California,

In Bank.

May 25, 1967.

Waldemar Thomson, in pro. per.

Thomas P. Menzies and James O. White, Los Angeles, for defendants and respondents.

PETERS, Justice.

Plaintiff appeals from a judgment of the Superior Court of Los Angeles County dismissing his action on the basis of Forum non conveniens. The primary question presented on appeal is under what circumstances, if any, may an action brought by a resident of California in California courts be dismissed on the ground that the forum selected by the plaintiff is inconvenient.

The allegations of the complaint may be summarized as follows: Plaintiff, at all relevant times a resident of California, owned real property in Houston, Texas. He insured this property with defendants Continental and Trinity Universal insurance companies. In 1961 the premises were damaged by winds and vandals. Plaintiff filed timely proof of loss and began negotiations with defendant General Adjustment Bureau in regard to settlement of his claims. The defendants refused to settle and entered into a civil conspiracy to coerce plaintiff to accept for his losses a sum representing only a small fraction of the actual damages. In the course of the conspiracy Trinity and Continental canceled their policies with plaintiff and so damaged his reputation in the business community that no company would offer him insurance. He seeks recovery for breach of the insurance contracts and for various damages caused by the conspiracy.

In September 1962 plaintiff filed suit against the three defendants in the federal District Court for the Southern District of California, alleging facts as summarized above. The defendants moved for a change of venue for the convenience of parties and witnesses. (28 U.S.C. § 1404, subd. (a). ¹) In June 1963 this motion was granted, and the action was transferred to the federal District Court for the Southern District of Texas, Houston Division. In Texas, plaintiff filed an amended complaint, and defendants filed an answer. Plaintiff states that by further amendments he has dropped the civil conspiracy charges in the Texas action and is proceeding there solely on a theory of breach of the contracts of insurance. At the time of oral argument of the instant appeal, the posture of the Texas action had not changed, and no trial date had been set.

Later in 1963 plaintiff filed suit in the Superior Court of Los Angeles County. The complaint is substantially identical to the complaint originally filed in federal court and includes the civil conspiracy allegations. Defendants filed an answer and at the same time filed notice of motion to dismiss the California action on the basis of Forum non conveniens. In an affidavit supporting the motion, counsel for the defendants set out the pendency of the suit in Texas federal court and alleged that the insurance policies involved were issued in Texas, that the property damaged is located in Texas where it can be viewed by the trier of fact, and that the acts of defendants complained of occurred in Texas. It was also alleged that defendants intended to call seven witnesses who had examined plaintiff's premises shortly after they were damaged. Five of these witnesses reside in Houston, Texas, one in Paris, Texas, and one in Long Beach, Mississippi. The attorney noted that the cost of flying these witnesses to Los Angeles was considerable and concluded that the Los Angeles Superior Court was a highly inconvenient forum.

The trial judge granted defendants' motion, stating in his order: 'Suit for breach of an insurance contract. The contract was made in Texas, the insured property is real property in Texas, the alleged damage occurred in Texas, and the defendants' witnesses are in Texas. On these facts a dismissal on the ground of Forum non conveniens is warranted. * * *' Thereafter, plaintiff, who had not submitted a timely affidavit in opposition to defendants' motion for dismissal, moved the trial judge to vacate his order on grounds of extrinsic fraud and mistake. Plaintiff alleged that he had not received a copy of defendants' notice of motion to dismiss for five days after it was filed (seven days before the motion was made in court) and that defense counsel had refused to stipulate to a continuance of the motion. Since plaintiff's attorney was then engaged in another trial, it is alleged that plaintiff was deprived of an opportunity to prepare to oppose defendants' motion to dismiss. In his order denying plaintiff's motion to vacate, the trial judge indicated that he considered the pendency of the action in Texas to be an alternative ground for dismissing the California suit.

Plaintiff then filed his notice of appeal from the judgment of dismissal and from the order refusing to vacate the dismissal for extrinsic fraud.

The doctrine of Forum non conveniens does not permit the dismissal of plaintiff's California action. That doctrine is typically applied to litigation where all of the parties are out-of-state residents and where the cause of action arose outside the forum state. (E.g., Price v. Atchison, T. & S.F. Ry. Co., 42 Cal.2d 577, 268 P.2d 457, 43 A.L.R.2d 756.) Forum non conveniens has only an extremely limited application to a case where, as here, the plaintiff is a bona fide resident of the forum state. As this court observed in Goodwine v. Superior Court, 63 Cal.2d 481, 485, 47 Cal.Rptr. 201, 204, 407 P.2d 1, 4: 'A determination that a plaintiff is domiciled here would ordinarily preclude granting the defendant's motion for dismissal on the ground of Forum non conveniens.'

This limitation on the Forum non conveniens doctrine reflects a state policy that California residents ought to be able to obtain redress for grievances in California courts, which are maintained by the state for their benefit. (Cf. One Hundred and Ninety-Four Shawls (S.D.N.Y.) 18 Fed.Cas. pp. 703, 705 (No. 10,521); Empire Steel Corp. of Texas, Inc., v. Superior Court, 56 Cal.2d 823, 833, 17 Cal.Rptr. 150, 366 P.2d 502; Root v. Superior Court, 209 Cal.App.2d 242, 247, 25 Cal.Rptr. 784.) This state is concerned with the welfare of California residents (see Rest.2d Conflict of Laws (Tent.Draft No. 4) § 117e, com. f) and has 'a decided interest in assuring that its citizens are not denied damages because of the inconvenience or expense of bringing suit in a distant jurisdiction.' (Cecere v. Ohringer Home Fur. Co., Div. of Tilmore Corp., 208 Pa.Super. 138, 220 A.2d 350, 356.)

The restricted operation of Forum non conveniens in cases where plaintiff is a local resident is acknowledged in every state where the Forum non conveniens doctrine has been adopted. (See 20 Am.Jur.2d, Courts, § 178, pp. 517--518; Comment, 29 U.Chi.L.Rev. 740, 744.) In several jurisdictions, led by New York, a Forum non conveniens dismissal is never permissible if either plaintiff or defendant resides in the forum state. (De la Bouillerie v. De Vienne, 300 N.Y. 60, 89 N.E.2d 15; Franco v. Standard Marine Insurance Company, 11 A.D.2d 643, 201 N.Y.S.2d 230; Wagner v. Braunsberg, 5 A.D.2d 564, 173 N.Y.S.2d 525; Marx v. Katz, 20 Misc.2d 1084, 195 N.Y.S.2d 867; cf. Dietrich v. Texas National Petroleum Co. (Del.Super.) 193 A.2d 579; Hill v. Upper Mississippi Towing Corporation, 252 Minn. 165, 89 N.W.2d 654, 659.)

Other jurisdictions define Forum non conveniens as a doctrine that applies when all the litigants are non-residents. (E.g., Hagen v. Viney, 124 Fla. 747, 169 So. 391, 392; Harbrecht et al. v. Harrison, 38 Hawaii 206, 209; Loftus v. Lee (Mo.) 308 S.W.2d 654, 658; Elliott v. Johnston, 365 Mo. 881, 292 S.W.2d 589, 593; Forcum-Dean Co. v. Missouri Pacific Railroad Co. (Tex.Civ.App.) 341 S.W.2d 464, 465.) Adherence to this definition of Forum non conveniens would preclude dismissal for Forum non conveniens reasons of a suit brought by a local resident.

A few states, led by Massachusetts, hold as a general rule that jurisdiction must be retained if one of the litigants is a resident of the forum state. (Cressey v. Erie R. Co., 278 Mass. 284, 180 N.E. 160, 163.) But exceptions have been carved out for particular classes of cases, as where the resident litigant is merely an assignee of a foreign creditor (Universal Adjustment Corporation v. Midland Bank, 281 Mass. 303, 184 N.E. 152) or administrator of a nonresident decedent (Atchison, Topeka & Santa Fe Ry. Co. v. District Court (Okl.) 298 P.2d 427).

The approach taken in most federal court cases (and in a few states) is to consider a litigant's residence in the forum state 'a fact of 'high significance" which helps to weight the balance of convenience in his favor. (Koster v. (American) Lumbermens Mutual Cas. Co., 330 U.S. 518, 525, 67 S.Ct. 828, 91 L.Ed. 1067; Gonzales v. Atchison, Topeka and Santa Fe Railway Co., 189 Kan. 689, 371 P.2d 193, 199; cf. Vandam v. Smit, 101 N.H. 508, 148 A.2d 289, 291; Marshall v. Geo. M. Brewster & Son, Inc., 37 N.J. 176, 180 A.2d 129, 135, 95 A.L.R.2d 1153; Gore v. United States Steel Corp., 15 N.J. 301, 104 A.2d 670, 672--676, 48 A.L.R.2d 841; Lau v. Chicago & North Western Ry. Co., 14 Wis.2d 329, 111 N.W.2d 158, 162--163.) Under the federal approach the local litigant will 'not be deprived of the presumed advantages of his home jurisdiction except upon a clear showing of facts which either (1) establish such oppressiveness and vexation to a defendant as to be out of all proportion to plaintiff's convenience, which may be shown to be slight or nonexistent, or (2) make trial in the chosen forum inappropriate because of considerations affecting the court's own administrative and legal problems.' (Koster v. (American) Lumbermens Mutual Cas. Co., supra, 330 U.S. 518, 524, 67 S.Ct. 828, 831.) ²

The judgment of dismissal in the instant case must be reversed whether we apply the strict New...