White Knight Yacht LLC v. Certain Lloyds at Lloyd's London

• Decision Date: 10 September 2019
• Docket Number: Case No. 18-cv-02616-BAS-BLM
• Citation: 407 F.Supp.3d 931
• Parties: WHITE KNIGHT YACHT LLC, Plaintiff, v. CERTAIN LLOYDS AT LLOYD'S LONDON and Other London Market Insurers, et al., Defendants.
• Court: U.S. District Court — Southern District of California

407 F.Supp.3d 931

WHITE KNIGHT YACHT LLC, Plaintiff,

v.CERTAIN LLOYDS AT LLOYD'S LONDON and Other London Market Insurers, et al., Defendants.

Case No. 18-cv-02616-BAS-BLM

United States District Court, S.D. California.

Signed September 10, 2019

Douglas M. Field, McDonnell and Associates, Michael B. McDonnell, Novare Law Group, San Diego, CA, for Plaintiff.

Pamela L. Schultz, Hinshaw & Culbertson, LLP, Andrew Ira Port, Gordon Rees Scully Mansukhani, LLP, San Francisco, CA, Curtis Darrrow Parvin, Michael Scott Wilde, Clyde & Co US LLP, Irvine, CA, for Defendants.

ORDER:

(1) GRANTING DEFENDANTS CERTAIN LLOYDS AT LLOYD'S LONDON'S AND H.W. WOOD LIMITED'S MOTIONS TO DISMISS [ECF Nos. 11, 13];

(2) GRANTING DEFENDANT UNITED YACHT TRANSPORT LLC'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION [ECF No. 33];

AND

(3) TERMINATING AS MOOT DEFENDANT H.W. WOOD LIMITED'S MOTION TO STRIKE [ECF No. 12]

Hon. Cynthia Bashant, United States District Judge

California-based Plaintiff White Knight Yacht LLC ("White Knight") arranged for transportation of a Yacht—White Knight —from Victoria, Canada to Ensenada, Mexico, pursuant to a shipping contract ("Shipping Contract") with Washington state-based Raven Offshore Shipping LLP ("Raven"). Raven is not a party to this lawsuit.¹

Raven further contracted with Delaware and Florida-based Defendant United Yacht Transport LLC ("UYT") to perform the actual transport. The Yacht was insured under an insurance policy through non-party International Marina Underwriters ("IMU") (the "Marine Policy"), but because IMU told Plaintiff certain Shipping Contract provisions would void the Marine Policy during transport, Plaintiff contracted with Raven for additional insurance during transport.

Thus, the Shipping Contract included the cost of cargo insurance to cover White Knight during transport. UYT obtained a cargo insurance policy (the "Cargo Policy") via England-based Defendant insurance broker H.W. Wood Limited ("H.W. Wood"), who obtained the Cargo Policy from England-based Defendant Certain Lloyds at Lloyd's London and Other London Market Insurers ("Lloyds").

When the Yacht was allegedly damaged during transport, Plaintiff sought recovery from: non-party IMU, non-party Raven, and now, in this lawsuit, UYT, H.W. Wood, and Lloyds.

Lloyds and H.W. Wood each move to dismiss Plaintiff's claims on various grounds, including that the Cargo Policy's forum selection clause provides for exclusive jurisdiction in the Courts of England and Wales. (ECF Nos. 11, 13, 22, 26.) Plaintiff opposes in a consolidated opposition. (ECF No. 19.) H.W. Wood also moves to strike Plaintiff's request for punitive damages. (ECF Nos. 12, 24.) Plaintiff opposes. (ECF No. 18.) And, after filing an answer to the Complaint, UYT separately moves to dismiss Plaintiff's claims against it for lack of personal jurisdiction and improper venue. (ECF Nos. 33, 35.) Plaintiff opposes. (ECF No. 34.) For the reasons herein, the Court: (1) grants Defendants Lloyds' and H.W. Wood's motions to dismiss based on the Cargo Policy's forum selection clause; (2) terminates H.W. Wood's motion to strike punitive damages, and (3) grants UYT's motion to dismiss for lack of personal jurisdiction.

RELEVANT BACKGROUND

A. Factual Background

Plaintiff is a limited liability company organized and existing under Delaware law. (ECF No. 1, Compl. ¶ 2.) Plaintiff sought to have the Yacht transported from Victoria, Canada to Ensenada, Mexico in April 2017. (Id. ¶¶ 7–8, Ex. B at 1, Ex. C at 1.) Chris Ashby, Plaintiff's president and CEO, is not a named plaintiff, but he entered into the Shipping Contract on Plaintiff's behalf and tendered Plaintiff's payment for the contract's cost. (ECF No. 19-2, Chris Ashby Decl. ¶ 1.)

Each of the Defendants has some relationship with the Cargo Policy. Lloyds is the insurer that issued the Cargo Policy. (Compl. ¶¶ 3, 11, Ex. C (copy of the Cargo Policy).) H.W. Wood is the insurance broker that acquired the Cargo Policy. (Id. ¶¶ 5, 10, Ex. C at 2.) And UYT's vice president allegedly signed the Cargo Policy "for the purposes of binding [Lloyds] to the insurance contract." (Id. ¶ 11.)

1. The Shipping Contract and Cargo Policy

The Yacht was insured under an insurance policy through non-party IMU (the "Marine Policy") at the time of the Yacht's shipment from Canada to Mexico. (Compl. ¶ 7, Ex. A.) However, IMU apparently represented to Plaintiff that certain Shipping Contract provisions would have the effect of voiding the Marine Policy during its transport. (Id. ¶¶ 9–10.)

Plaintiff alleges that "prior to entering the Shipping Contract, Rick Gladych, on behalf of Raven, represented to Chris Ashby that the cargo insurance offered by [Lloyds] and included in the price of the shipping contract bearing Policy No. C21867/2016 (the ‘Cargo Policy’), would cover White Knight from the time the Yacht was moved to the place for loading until it was delivered." (Id. ¶ 10.) The Shipping Contract reflects a total transport price of $48,876.00 USD, which included the cost of Lloyds' cargo insurance. (Compl. Ex. B at 1, 7–9.) Plaintiff entered into the Shipping Contract with Raven. (Compl. ¶ 8, Ex. B.) Ashby reviewed the Shipping Contract's terms and signed the Shipping Contract on April 5, 2017, which he then returned to Raven. (Id. at 2, 15; Ashby Decl. ¶ 13.)

The Cargo Policy was effectuated after Ashby's initial review of the Shipping Contract, but before Ashby tendered Plaintiff's payment for the Shipping Contract. The Policy indicates that H.W. Wood, "acting on behalf of United Yacht Transport," deposited a certificate of insurance with Lloyds in accordance with a general insurances contract H.W. Wood possessed with Lloyds. (Compl. Ex. C at 1.) Under the certificate, Plaintiff would be insured up to $700,000 for the April 25, 2017 shipment of the Yacht. Gail Ryan, UYT's vice president, signed the Cargo Policy on April 25, 2017, which rendered the Cargo Policy valid. (Id. ) The Cargo Policy indicates that any claim notice under the policy should be provided to Lloyds' agent Pablo Ruiz Lara, for whom the certificate provides contact information. (Id. ) The Cargo Policy indicates that "[i]n the event of loss or damage which may result in a claim under this Insurance, immediate notice must be given to the [Lloyds'] agent at the port or place where the loss or damage is discovered in order that they may examine the goods and issue a survey report." (Id. ) The Cargo Policy also provides that "[t]his insurance is subject to the law and practice of England and Wales and to the exclusive jurisdiction of the Courts of England and Wales." (Id. at 3.) The day after Ryan signed the Cargo Policy, Ashby tendered Plaintiff's payment for the Shipping Contract, inclusive of the Cargo Policy's cost, by wiring money to Raven. (Compare Compl. Ex. C, with ECF No. 19-1 Ex. 2.)

2. Plaintiff's Discovery of Alleged Damage to the Yacht During Shipment and Its Attempts to Seek Coverage for Repair Cost

Plaintiff alleges that the Yacht suffered damage to its hull and interior "while being loaded and shipped by UYT under the Shipping Contract." (Compl. ¶ 12.) The damage occurred "after delivery of the vessel to the place for immediate loading and continued throughout transit due to rain water intrusion." (Id. ) Upon seeing the alleged damage, Ashby confronted Gladych, who initially "assured [ ] Ashby that he [on behalf of Raven] would pay to have the damage to White Knight repaid," but Gladych, at some point, "revoked his promise once he learned the extent of the damage." (Id. ¶ 14.) Plaintiff also tendered a claim under its Marine Policy to IMU to cover the cost to repair the damage, which IMU denied on the ground that certain provisions of the Shipping Contract voided Plaintiff's coverage. (Id. ¶ 15.)

Apparently after these unsuccessful attempts and over eight months after the date of the alleged loss, Plaintiff "formally tendered the loss to [Lloyds]" to Pablo Ruiz Lara on January 4, 2018. (Id. ¶ 16, Ex. C at 3.) During this period, the entity Plaintiff contracted to repair the Yacht ceased work on the repairs because there was no source of payment. (Id. ¶ 18.) Plaintiff sent a follow-up letter to Lara on February 7, 2018. (Id. ¶ 16.) That day, Plaintiff's counsel was advised by another employee at the company where Lara worked that "[w]e are a company of surveyors and we have not been assigned this claim[.]" (ECF No. 19-1 Ex. 5.) The employee indicated that Lloyds had identified Sarah Martin of H.W. Wood as the proper correspondent for future correspondence regarding the claim. (Id. )

Plaintiff then forwarded its claim to Martin on February 8, 2018. (Compl. ¶ 20.) Plaintiff sent a follow-up letter dated February 27, 2018 after receiving no response. (Id. ) Martin advised Plaintiff on February 28, 2018 that "Frilot Law"—an entity known to Plaintiff as Frilot LLC and with which Plaintiff "was familiar" because the entity represented Raven under Raven's "CGL Policy"—was dealing with the matter. (Id. ¶ 21.) Plaintiff communicated with Frilot LLC for a few weeks until a partner informed Plaintiff that Frilot LLC was not handling potential liability under the Cargo Policy, but only represented Raven under Raven's general liability policy. (Id. ¶¶ 22–25.)

Plaintiff alleges that on March 19, 2018, Martin informed Plaintiff that she had never tendered the claim to Lloyds "as directed." (Id. ¶ 28). Plaintiff demanded that "she immediately tender the claim as [Plaintiff] had directed back in January[.]" (Id. ¶ 29.) Thereafter, Martin advised that she was in communication with Lloyds. (Id. ¶ 30.) On May 8, 2018, Martin emailed Plaintiff stating, "[Lloyds] have advised they are awaiting a full response from ‘their’ insured, UYT, as they have still not formally informed us that they have received a claim in this regard." (Id. ¶ 31.) On July 30, 2018, after Plaintiff threatened suit against Lloyds absent a coverage position, Martin "stated that she was the insurance broker acting on behalf of UYT," and she w...