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New York Appellate Court Gives a Lesson on Forum Non Conveniens
     The New York Appellate Division dismissed an insurance coverage case, noting that most relevant factors favored a Massachusetts forum, in Shipyard Quarters Marina, LLC, v. New Hampshire Insurance Company (Nov. 2016).

     Shipyard Quarters Marina, owned by the plaintiff, a Massachusetts limited liability company of the same name, is located in Boston Harbor. In 2013 the company was sued by the Commonwealth of Massachusetts, which alleged that the marina had fallen into disrepair, its pilings deteriorating, and constituted a public nuisance to the Harbor. The company’s manager, Martin Oliner, is a New York resident, and the company’s business offices were moved there in 2014. The company notified its insurer, New Hampshire Insurance Company (NHIC), of the Commonwealth’s lawsuit and demanded full coverage for the lawsuit as well as the cost of repairs. NHIC agreed to defend the lawsuit under a reservation of rights, declining all other coverage. Shipyard Quarters Marina, LLC, and Martin Oliner brought suit against NHIC, a New York corporation, in New York, for breach of the insurance contract.

     New Hampshire moved to dismiss the New York lawsuit, urging that it should proceed in Massachusetts, home of the insured and the insured property, and the principal witnesses and evidence, and whose insurance law would most likely govern the dispute. The Appellate Division affirmed the trial court’s decision, agreeing that Massachusetts is the proper forum. The facts that New Hampshire is a New York corporation, and the insured’s offices and manager are now in New York, do not constitute a substantial nexus of the dispute to New York. Massachusetts is the more appropriate available forum. The insured is a Massachusetts limited liability company with its principal place of business there; the action seeks coverage for a lawsuit in Massachusetts; the policies concern property located there; the witnesses and evidence located in that State will be dispositive on coverage issues; and, finally, the coverage lawsuit will likely require application of Massachusetts law.

     The Court dismissed the New York lawsuit on the condition that New Hampshire Insurance Company agrees to submit to the jurisdiction of the Massachusetts courts, where the coverage lawsuit can proceed.


© November 2016, Law Offices of John C. Lane


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