United States District Court, E.D. North Carolina, Western Division
KCHM, INC. f/k/a FDH, INC. and AMERISURE INSURANCE COMPANY, Plaintiffs,
MID-CONTINENT CASUALTY COMPANY and NAVIGATORS INSURANCE COMPANY, Defendants.
TERRENCE W. BOYLE, UNITED STATES DISTRICT JUDGE
cause comes before the Court on defendant Mid-Continent
Casualty Company's motion to dismiss pursuant to Rule
12(b)(2) of the Federal Rules of Civil Procedure. Plaintiffs
have responded, Mid-Continent has replied, and the matter is
ripe for ruling. For the reasons that follow,
Mid-Continent's motion is granted.
filed this action alleging claims for unfair or deceptive
trade practices, breach of contract, breach of the duty of
good faith and fair dealing, and for declaratory relief to
determine questions of controversy concerning the
availability of insurance coverage for plaintiff KCHM.
Defendant Mid-Continent issued a general liability insurance
policy and defendant Navigators issued a commercial excess
liability policy to S&S Communications Specialists, Inc.
(S&S), which is not a party to this action.
2013, SB A Communications (SB A) contracted with FHD
Engineering (now plaintiff KCHM) to design plans for
structural modifications to a cell phone tower owned by SBA
in Clarksburg, West Virginia. KCHM was later engaged as
construction manager for the project and subcontracted with
S&S to perform the structural modifications to the tower.
On February 1, 2014, the cell phone tower undergoing
structural modifications collapsed while S&S was
performing work. As the first tower collapsed it struck a
second tower, causing that tower to collapse. Three people,
two S&S employees and one firefighter, were killed as a
result of the collapse of the towers and at least two others
wrongful death, personal injury, and other suits arising out
of the collapsed towers are pending in the Circuit Court of
Harrison County, West Virginia and in the United States
District Court for the Northern District of West Virginia. In
June 2016, S&S filed for Chapter 7 bankruptcy liquidation
in the United States Bankruptcy Court for the Eastern
District of Oklahoma. In November 2016, Mid-Continent filed
an adversary proceeding arising out of the S&S Chapter 7
proceeding in which it asserts that the Mid-Continent policy
proceeds are assets of the bankruptcy estate.
seeks dismissal of the claims against it for lack of personal
jurisdiction. Fed R. Civ. P. 12(b)(2). Where a defendant
moves to dismiss for lack of personal jurisdiction, the
plaintiff has the burden of showing that jurisdiction exists.
See In re Celotex Corp., 124 F.3d 619, 628 (4th Cir.
1997); Young v. F.D.I.C, 103 F.3d 1180, 1191 (4th
Cir. 1997). When a court considers a challenge to personal
jurisdiction without an evidentiary hearing and on the papers
alone, it must construe the relevant pleadings in the light
most favorable to the plaintiff. Combs v. Bakker,
886 F.2d 673, 676 (4th Cir. 1989).
jurisdictional facts not in dispute in this case are as
follows. Plaintiff KCHM is a company organized under North
Carolina law with its principal place of business in Raleigh,
North Carolina. Mid-Continent is an Ohio Corporation with its
principal place of business in Tulsa, Oklahoma. Mid-Continent
is licensed to do business in North Carolina, but writes less
than one percent of its gross premiums to North Carolina
insureds. Mid-Continent does not maintain an office in North
Carolina nor does it own property in North Carolina. The
insurance policy at issue in this case was sold by
Mid-Continent to S&S Communications, which is an Oklahoma
corporation. The policy was negotiated and issued in
Oklahoma, and KCHM was not a party to the negotiations.
Pursuant to KCHM's master subcontracting agreement with
S&S, KCHM was added at S&S's request as a
conditional additional insured on the general liability
policy that S&S obtained from Mid-Continent. S&S paid
all premiums on the Mid-Continent policy. The policy offers a
broad coverage territory, including the United States, its
territories and possessions, Puerto - Rico, and Canada. The
accident giving rise to claims under the policy took place in
district court to properly assert personal jurisdiction over
a nonresident defendant, two conditions must be met: (1) the
exercise of jurisdiction must be authorized under the
state's long-arm statute; and (2) the exercise of
jurisdiction must comport with the due process requirements
of the Fourteenth Amendment. See Christian Sci. Bd. of
Dirs. of the First Church of Christ v. Nolan, 259 F.3d
209, 215 (4th Cir. 2001). Because North Carolina's
long-arm statute is construed to give "the North
Carolina courts the full jurisdictional powers permissible
under federal due process, " Vishay Intertechnology,
Inc. v. Delta Intern. Corp., 696 F.2d 1062, 1065 (4th
Cir. 1982), these inquiries collapse into one. See ESAB
Grp., Inc. v. Centricut, Inc., 126 F.3d 617, 623 (4th
Cir. 1997). This Court may exercise personal jurisdiction
consistent with due process if a defendant has "minimum
contacts" with the forum such that to require them to
defend their interests in North Carolina "does not
offend traditional notions of fair play and substantial
justice." Int'l Shoe Co. v. Washington, 326
U.S. 310, 316 (1945).
foreign party maintains "continuous and systematic"
contacts with a state, a court in that state may assert
general jurisdiction over the nonresident and it may be sued
in that state on any claim. See Perkins v. Benguet
Consol. Mining Co., 342 U.S. 437, 446 (1952).
Mid-Continent plainly does not maintain continuous and
systematic contacts with North Carolina. Mid-Continent's
place of incorporation is Ohio, its principal place of
business is Tulsa, Oklahoma, and none of Mid-Continent's
contacts with North Carolina are sufficient to render it at
home in North Carolina. Daimler AG v. Bauman, 134
S.Ct. 746, 754, 761 (2014) (noting further that the place of
incorporation and principal place of business are the
paradigm bases for general jurisdiction). This Court may not
therefore assert general personal jurisdiction over
determine whether specific jurisdiction exists, a defendant
must have purposefully availed itself of the privilege of
conducting business within the forum state, giving it
"fair warning that a particular activity may subject
[it] to the jurisdiction of a foreign sovereign."
CFA Inst. v. Inst, of Chartered Fin. Analysts of
India,551 F.3d 285, 293 (4th Cir. 2009); see also
Goodyear Dunlop Tires Operations, S.A. v. Brown, 564
U.S. 915, (2011) ("Specific jurisdiction ... depends on
an affiliation between the forum and the underlying
controversy, principally, activity or an occurrence that
takes places in the forum State and is therefore subject to
the State's regulation.") (internal alterations,
quotation, and citation omitted). A court thus considers (1)
the extent to which, the defendant has purposefully availed
itself of the privilege of conducting business in the state,
(2) whether the plaintiffs claims arise out of those
activities directed toward the state, and (3) whether the
exercise of specific jurisdiction would be constitutionally
reasonable to determine whether specific jurisdiction has
been established. ALS Scan, Inc. v. Digital Serv.