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Webcor Construction, LP v. Zurich American Insurance Company

United States District Court, N.D. California

November 3, 2017

Webcor Construction, LP, et al., Plaintiffs,
v.
Zurich American Insurance Company, et al., Defendants.

          ORDER GRANTING MOTION OF ACUITY TO DISMISS THIRD PARTY COMPLAINT FOR LACK OF PERSONAL JURISDICTION DKT. NO. 120

          YVONNE GONZALEZ ROGERS UNITED STATES DISTRICT COURT JUDGE.

         Third-party defendant Acuity brings the instant motion to dismiss the third-party complaint filed against it by defendant Old Republic General Insurance Corporation for lack of personal jurisdiction under Rule 12(b)(2) of the Federal Rules of Civil Procedure. (Dkt. No. 120.) Old Republic's third party complaint (Dkt. No. 69) against Acuity is for contribution based upon the policy issued to non-party Midwest Curtainwalls (“Midwest”), a material supplier for the construction work that was the subject of the underlying litigation in the state court.

         Having carefully considered the papers submitted, the pleadings in this action, and the matters properly subject to judicial notice, and for the reasons set forth below, the Court Grants the Motion to Dismiss Acuity for lack of personal jurisdiction. Old Republic fails to offer evidence to establish that Acuity is subject to personal jurisdiction in this Court.

         I. Background

         Plaintiffs Webcor Construction, L.P. (“Webcor”) and Architectural Glass and Aluminum Co., Inc. (“AGA”) bring the instant federal action for breach of insurance contracts, breach of the implied covenant of good faith and fair dealing, and declaratory relief. The instant action arises from litigation in the Superior Court of California, County of San Francisco. There, CDC San Francisco LLC (“CDC”) brought a construction defect case against Webcor, AGA, Midwest, Viracon, Inc. (“Viracon”), and Quanex I.G. Systems, Inc. (“Quanex”). (See RJN filed in connection with National's Motion to Dismiss, Dkt. No. 53, “the SF Action.”) CDC had entered into a contract with Webcor for construction of the InterContinental San Francisco Hotel. (Second Amended Complaint [“SAC”], Dkt. No. 159, ¶ 19.) Webcor contracted with AGA for the design, construction, and installation of a curtain wall glazing system to consist of an interconnected system of blue glass forming the building's entire exterior.[1] AGA subcontracted with Midwest to design, engineer, and fabricate the aluminum curtain wall frames. AGA purchased the IGUs from their manufacturer, Viracon. Viracon purchased the PIB used to manufacture the IGUs from Quanex. Viracon shipped the IGUs to Midwest, and Midwest fabricated the individual aluminum curtain wall units to be installed on the project by AGA. (Id. ¶¶ 20-23.)

         The SF Action was filed on June 9, 2015. It alleged that the IGUs used to create the curtain walls for the project developed a film and discoloration due to use of incompatible materials. CDC sought to hold the defendants in the SF Action liable for the cost of replacing and repairing 6, 400 IGUs. (Id. ¶¶ 25, 33-38.) Trial of the action commenced March 14, 2017. (Id. ¶ 40.) After bouts of unsuccessful mediation, on April 24, 2017, a settlement of the underlying action was reached. (Id. ¶¶ 88, 97, 102.)

         The instant insurance action was brought by AGA and Webcor against defendants National Union Fire Insurance (“National”), Old Republic, Liberty Insurance Underwriters Inc., and Zurich American Insurance.[2] Plaintiffs filed their first amended complaint on June 12, 2017, and a second amended complaint on October 10, 2017. (Dkt. Nos. 38, 159.) Old Republic is alleged to be the insurer of AGA, and Webcor is alleged to be an additional insured on the policies. (See Exh. A. to SAC.)

         In this federal action, Old Republic filed a third-party complaint against Acuity and Motorists Mutual Insurance Company on July 21, 2017. (Dkt. No. 69.) Old Republic alleges that it paid out monies to provide a defense for AGA and Webcor in the SF Action, and incurred other costs of defense. Old Republic alleges that the policy issued to non-party Midwest, the material supplier, by Acuity required that Acuity defend Webcor and AGA as well. Old Republic seeks contribution for these defense costs from Acuity.

         II. Applicable Standard

         Under Rule 12(b)(2), a case may be dismissed if the Court lacks personal jurisdiction over the defendant. Plaintiff bears the burden of demonstrating that jurisdiction is appropriate. Federal courts ordinarily follow state law in determining the bounds of their jurisdiction over persons, looking to the state's long arm statute regarding service of summons. See Fed. Rule Civ. Proc. 4(k)(1)(A) (service of process effective to establish personal jurisdiction over defendant subject to jurisdiction in the state court where the district is located); Daimler AG v. Bauman, 134 S.Ct. 746, 753 (2014) (same). California's long-arm statute, in turn, permits exercise of personal jurisdiction to the fullest extent permitted by federal due process. Id.; see also Williams v. Yamaha Motor Co., 851 F.3d 1015, 1020 (9th Cir. 2017). The party filing the complaint bears the burden to establish jurisdiction. Boschetto v. Hansing, 539 F.3d 1011, 1015 (9th Cir. 2008); see also Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004).

         III. Discussion

         Old Republic has failed to establish a basis for personal jurisdiction over Acuity in this forum. For purposes of federal due process, two types of personal jurisdiction exist: general jurisdiction (sometimes called “all-purpose”) and specific jurisdiction (sometimes called “case-linked”). Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco Cty., 137 S.Ct. 1773, 1779-81 (2017). “A court with general jurisdiction may hear any claim against that defendant, even if all the incidents underlying the claim occurred in a different State.” Id. A court with only specific jurisdiction over a defendant is limited to hearing claims deriving from the facts that establish jurisdiction in the forum. Id.

         A. General Jurisdiction

         General jurisdiction has not been established over Acuity. In order to establish general jurisdiction over Acuity in California, Old Republic must show that Acuity has contacts that are “so ‘continuous and systematic' as to render [it] essentially at home in” California. Williams v. Yamaha Motor Co., 851 F.3d 1015, 1020 (9th Cir. 2017) (citing Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)). Acuity is a Wisconsin insurance company with its principal place of business in Sheboygan, Wisconsin. It conducts no business in California, is not licensed to do business in California, does not sell insurance in California, and has no brokers or agents based in California. ...


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