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Leech v. National Interstate Insurance Co.

United States District Court, S.D. Indiana, Indianapolis Division

August 7, 2018

MICHAEL LEECH, JR., as Personal Representative of the Estate of Michael Jay Leech, Sr., Deceased, and DEBBIE MARSHALL, as Court-Appointed Conservator of the Estate of and Next Friend of A.L., a Minor, Plaintiffs,
v.
NATIONAL INTERSTATE INSURANCE COMPANY, INTACT INSURANCE COMPANY, ECONOMICAL MUTUAL INSURANCE COMPANY, KAMALJEET SANGRA, and J&R LOGISTICS, INC., Defendants.

          REPORT AND RECOMMENDATION

          Mark J. Dinsmore Judge.

         This matter is before the Court on Economical Mutual Insurance Company's Motion to Dismiss Plaintiff's Amended Complaint for Declaratory Judgment. [Dkt. 59.] Defendant Economical Mutual Insurance Company (“Economical”) seeks an order dismissing Plaintiffs' Amended Complaint [Dkt. 22] for lack of personal jurisdiction. On July 16, 2018, District Judge William T. Lawrence designated the undersigned Magistrate Judge to issue a report and recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). [Dkt. 89.] For the reasons set below, the Magistrate Judge recommends that Economical's Motion be DENIED.

         I. Background

         The following facts are not necessarily objectively true. But as required when reviewing a motion to dismiss, the Court accepts as true all factual allegations in the Amended Complaint and draws all reasonable inferences in favor of the Plaintiffs as the non-moving parties. See Bielanski v. Cty. of Kane, 550 F.3d 632, 633 (7th Cir. 2008).

         On December 29, 2016, Kamaljeet Sangra was transporting goods by semi-tractor trailer in his capacity as a driver for J&R Logistics, Inc. (“J&R”). [Dkt. 22 at 2.] While transporting these goods, he drove in the wrong direction in the north-bound lanes of Indiana State Road 63 near Cayuga, Indiana. Id. By driving south in the north-bound lanes, Sangra negligently caused a head-on collision with a vehicle operated by Michael Jay Leech, Sr., who was properly driving north in the north-bound lanes. Id. As a result of the collision, Leech, Sr., died, and A.L., a minor who was also in the vehicle, sustained personal injuries. Id.

         According to Plaintiffs, there are three insurance companies involved, all of whom insured J&R and, by extension, Sangra. National Interstate Insurance Company (“NIIC”) is an insurance company organized under the laws of Ohio and is registered to do business in Indiana. [Dkt. 26 at 1.] Intact Insurance Company (“Intact”) is a Canadian insurance company organized under the laws of Ontario, Canada. [Dkt. 26 at 1.] Economical is an insurance company organized under the laws of Waterloo, Ontario, Canada. [Dkt. 22 at 1.] Plaintiff Michael Jay Leech, Jr., as the Personal Representative of the Estate of Michael Jay Leech, Sr., brings this action seeking a court order declaring which Defendant insurance company has primary coverage for the automobile accident and which Defendant insurance company has secondary coverage. [Dkt. 22 at 3, ¶ 14.] Plaintiff Michael Jay Leech, Jr., has asserted negligence and wrongful death claims against Sangra and J&R in a state court action for damages resulting from the motor vehicle accident. [Dkt. 29.] Similarly, Plaintiff Debbie Marshall has asserted in state court negligence claims on behalf of A.L. against Sangra and J&R for damages resulting from the accident. [Dkt. 30.]

         II. Procedural History

         Michael Leech, Jr., as personal representative of the Estate of Michael Jay Leech, Sr., brought suit in Vermillion County state court against Intact, NIIC, J&R, and Sangra. [Dkt. 1-2 at 1.] Intact and NIIC removed the case to federal court [seeDkt. 1] and properly pleaded subject matter jurisdiction pursuant to the Court's Order regarding their jurisdictional allegations [Dkt. 88]. Plaintiff Leech, Jr., moved to amend his initial Complaint in order to add Economical as a defendant in the case. [Amended Complaint, Dkt. 22.] Intact moved to join Debbie Marshall as an additional Plaintiff pursuant to Rule 19 of the Fed.R.Civ.P. [Dkt. 27.] Debbie Marshall, as the Conservator of the Estate of and Next Friend of A.L., had brought a negligence action arising out of the same incident involving Sangra and Leech, Sr., on behalf of A.L., a minor. [Dkt. 27 at 30.] The Court granted Intact's joinder motion [Dkt. 47].

         Economical has now moved to be dismissed as a party, asserting that this Court lacks personal jurisdiction over Economical. [Dkt. 59.] In support of its motion, Economical asserts that it is domiciled and has its principal place of business in Waterloo, Ontario, Canada. [Dkt. 60 at 2; Dkt. 60-1 at 1.] Economical further asserts that it has not “maintained an office in Indiana, maintained a registered agent in Indiana, conducted print, radio, or television advertisement in Indiana, or owed or had to pay taxes in Indiana” and also is not “authorized to do business in Indiana.” [Dkt. 60 at 2.] Therefore, according to Economical, this Court may not exercise either general or specific jurisdiction over Economical in this case.

         III. Legal Standard

         A motion to dismiss under Rule 12(b)(2) is a pre-answer motion asserted by defendants who wish to challenge a district court's exercise of personal jurisdiction over the defendant as a party. Typically for a Rule 12(b) motion to dismiss, a court must “accept all well-pleaded allegations in the plaintiff's complaint as true and draw all reasonable inferences in favor of the plaintiff.” Tobin for Governor v. Ill. State Bd. of Elections, 268 F.3d 517, 521 (7th Cir. 2001). However, a court ruling on a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction “must decide whether any material facts are in dispute.” Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 713 (7th Cir. 2002). If there any material facts are in dispute and if the court rules on the motion based on written materials and affidavits submitted rather than on an evidentiary hearing, then the plaintiff must make out a prima facie case of proper personal jurisdiction. Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). Under the prima facie standard, “the plaintiff is entitled to have any conflicts in the affidavits (or supporting materials) resolved in its favor.” Id. at 783.

         IV. Discussion

         Because this is a case removed to federal court based on diversity jurisdiction [seeDkt. 6], this Court may only exercise personal jurisdiction over Economical if a state court in Indiana would have jurisdiction over Economical as well. Purdue Research Found., 338 F.3d at 779; see also Fed. R. Civ. P. 4(k)(1)(A) (“Serving a summons or filing a waiver of service establishes personal jurisdiction over a defendant who is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located.”). This requires a two-step inquiry. First, the Court must determine whether Indiana's long-arm statute, Indiana Trial Rule 4.4(A), subjects Economical to in personam jurisdiction. Id. Second, the Court must determine “whether the exercise of jurisdiction over [Economical] comports with the requirements of federal due process.” Id. Whether this Court's exercise of personal jurisdiction over Economical comports with the requirements of federal due process requires an analysis of both general jurisdiction and specific jurisdiction. Hyatt Int'l Corp., 302 F.3d at 713. If the Court determines that Indiana's long-arm statute reaches Economical and that Economical is subject to either general or specific jurisdiction, then this Court may exercise personal jurisdiction over Economical, and the Motion must be denied.

         A. Indiana's Long-Arm Statute

         Indiana's long-arm statute, codified in Indiana Trial Rule 4.4, governs the jurisdiction of courts within Indiana over anyone who is “a nonresident of this state, a resident of this state who has left the state, or a person whose residence is unknown.” Plaintiff Debbie Marshall specifically points to Indiana Trial Rule 4.4(A)(1), (4), and (6), which state that such nonresidents submit to the jurisdiction of Indiana courts “as to any action arising from the following acts committed by him or her or his or her agent”:

(1) doing any business in this state;
(4) having supplied or contracted to supply services rendered or to be rendered or goods or materials furnished or to be furnished in this state; . . . [or]
(6) contracting to insure or act as surety for or on behalf of any person, property or risk located within this state at ...

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