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Lexington Insurance Co. v. Zurich Insurance (Taiwan) Ltd.

United States District Court, W.D. Wisconsin

December 21, 2017

LEXINGTON INSURANCE COMPANY, Plaintiff,
v.
ZURICH INSURANCE (TAIWAN) LTD. and TAIAN INSURANCE CO., LTD., Defendants.

          OPINION & ORDER

          JAMES D. PETERSON District Judge

         This insurance dispute arises from an accident in Texas in which a Louisiana resident was seriously injured while riding a Trek bicycle. Plaintiff, Massachusetts-based Lexington Insurance Company, insured Wisconsin-based Trek Bicycle Corp. Lexington settled a lawsuit on Trek's behalf, and now it seeks contributions from defendants Zurich Insurance (Taiwan) Ltd. and Taian Insurance Co., Ltd. Zurich and Taian insured the manufacturers of some of the components of the bicycle, and thus they are indirect insurers of Trek.

         Zurich and Taian move to dismiss for lack of personal jurisdiction and for improper venue. Dkt. 13 and Dkt. 22. The evidence shows that Zurich and Taian had only attenuated contacts with Wisconsin, and the assertion of jurisdiction would not comport with constitutional due process. The court will grant Zurich's and Taian's motions to dismiss under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction. All other pending motions will be denied as moot.

         FACTS

         In deciding a motion to dismiss for lack of personal jurisdiction, the court may consider the well-pleaded allegations in the complaint, affidavits, and written materials. Kipp v. Ski Enter. Corp. of Wis., Inc., 783 F.3d 695, 697 (7th Cir. 2015); Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003)). Here, the court draws the following facts from Lexington's complaint, affidavits from the parties, and relevant contracts. The court can decide the issue on written evidence without an evidentiary hearing because the material facts are not disputed. See Abbott Labs., Inc. v. BioValve Techs, Inc., 543 F.Supp.2d 913, 918 (N.D. Ill. 2008) (citing Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 713 (7th Cir.2002)).

         Lexington is a Delaware company with its principal place of business in Massachusetts. Defendants Zurich and Taian are both insurance companies organized in the Republic of China (Taiwan).[1]

         A. The Texas lawsuit

         In 2012, Louisiana resident James Giessler rented a Trek mountain bike in Texas. The front wheel of the bike detached from the bike's frame, and Giessler sustained permanent serious injuries. Giessler, his wife, and his son filed a lawsuit in Texas against Trek, Mellow Johnny's LLC (the business that rented the bike to Giessler), and SRAM, LLC, and Rock Shox (both manufacturers of the bike's component parts). On the eve of the trial, the case settled. Lexington, an insurer for Trek, indemnified Trek and paid the settlement.

         Zurich and Taian were not parties to the Texas lawsuit. Zurich had insured the manufacturer of the bike, Giant Manufacturing Co., Ltd., a Taiwanese company. Taian had insured the manufacturer of the bike wheel, Hubtec International Ltd. a/k/a Formula Hubs, also a Taiwanese company. Neither Zurich nor Taian had insured Trek directly, but they both had extended insurance coverage to Trek by allowing Trek to be named as an additional insured under the policies issued to Giant and Formula Hubs. Lexington demanded that Zurich and Taian contribute to the cost of defending Trek and the settlement amount, but Zurich and Taian refused.

         B. Defendants' contacts with Wisconsin

         Neither Zurich nor Taian does business in Wisconsin. The parties agree that for the purposes of this dispute, Zurich and Taian have no contact with Wisconsin other than the insurance policies that name Trek as an additional insured. The two insurance policies at issue were negotiated and signed in Taiwan. Lexington is a party to neither policy.

         1. Zurich Policy

         The first insurance policy (the Zurich Policy) is an agreement between Zurich and Giant. Dkt. 1-2. The policy includes Giant's vendors as “[A]dditional Insured” and lists Trek as one of Giant's vendors. Id. at 4, 6.

         Under the Zurich Policy, Zurich agreed to indemnify Giant and its vendors for “[c]ompensation resulting from judgments delivered by or obtained from a court of competent jurisdiction in the Geographical Limits” and “charges, expenses, and legal costs incurred or recoverable in the Geographical Limits.” Id. at 12. The term “Geographical Limits” is defined as “the Geographical Limits stated in the Schedule, ” id. at 16, and the Schedule provides that the Geographical Limits is “worldwide, ” id. at 2.

         The Zurich Policy also includes an arbitration clause. The clause provides,

If any difference arises as to the amount to be paid under this Policy (liability being otherwise admitted) such difference will be referred to an arbitrator in accordance with the relevant statutory provisions in force at that time or, if there are no relevant statutory provisions in force, by agreement between Zurich and the Insured. Where any difference is by this Condition to be referred to arbitration the making of an award will be a condition to precedent to any right of action against Zurich.

Id. at 18. The Zurich Policy is governed by Taiwanese law. Id. at 12. The policy allows Zurich to control the litigation or settlement of any covered claim against an insured, but Zurich has no obligation to do so. Id. at 18.

         2. Taian Policy

         The second insurance policy at issue is an agreement between Taian and Formula Hubs (the Taian Policy). Dkt. 26-2 and Dkt. 26-4. Like the Zurich Policy, the Taian Policy's insurance coverage extends to Formula Hub's vendors. The Taian Policy as filed with the court does not include a list of Formula Hub's vendors, but such a list is contemplated. Dkt. 26-4, at 18. Taian sent Trek a certificate of insurance, and the certificate states that Trek is insured “in conjunction with” the Taian Policy. Dkt. 1-4, at 2. and Dkt. 26-2, at 1.The certificate includes a territorial limit, but the term “Territorial Limit” is defined as “Worldwide including USA/Canada.” Dkt. 1-4 at 1.

         Under the section titled “applicable law and jurisdiction, ” Taian and Formula Hub agreed to litigate their disputes applying “the law and practice” of Taiwanese courts:

Each party agrees to submit to the jurisdiction of any court of competent jurisdiction within Taiwan and to comply with all requirements necessary to give such court jurisdiction. All matters arising hereunder shall be determined in accordance with the law and practice of such court.

Dkt. 26-2, at 12. The policy gives Taian a right, but not an obligation, to control the litigation or settlement of any covered ...


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