United States District Court, E.D. North Carolina, Western Division
CERTAIN INTERESTED UNDERWRITERS SUBSCRIBING TO POLICY NO. B1262P20017013, Plaintiff,
AMERICAN REALTY ADVISORS; SVF WESTON LAKESIDE, LLC; AND DOES 1-25, INCLUSIVE, Defendants. SVF WESTON LAKESIDE, LLC; and AMERICAN REALTY ADVISORS, Plaintiffs,
CERTAIN UNDERWRITERS AT LLOYD'S OF LONDON, Defendant.
W. FLANAGAN UNITED STATES DISTRICT JUDGE
matter is before the court on defendants' motion for
application of California law and designation as plaintiffs,
which the court construes as a motion for partial summary
judgment,  (DE 47), and plaintiff's motion for
partial summary judgment regarding governing law. (DE 49).
The motions have been fully briefed, and, in this posture,
the issues presented are ripe for ruling. Defendants request
hearing for oral argument on their motion. Because the facts
and legal arguments adequately are presented in the briefs
and record, the court dispenses with any hearing, as the same
would not aid significantly the decisional process. For the
reasons that follow, defendants' motion is granted in
part and denied in part, and plaintiff's motion is
consolidated cases each concern applicability of an insurance
policy (“the policy”) to water intrusion damage
inflicted upon certain property owned by defendants.
Plaintiff initiated case number 5:16-CV-940-FL September 21,
2016, in the General Court of Justice, Superior Court
Division for Wake County, North Carolina, seeking declaratory
judgment that it is not liable under the policy to cover
water intrusion damage to defendants' property and,
relatedly, that it is under no duty to pay defendants under
the policy. Defendants removed that action to this court
December 9, 2016.
initiated case number 5:17-CV-74-FL October 14, 2016, in the
U.S. District Court for the Central District of California,
seeking damages for breach of contract and breach of the
covenant of good faith and fair dealing, alleging that
plaintiff is liable under the policy to cover defendants'
losses. By order dated February 9, 2017, Hon. Dolly M. Gee,
to whom the case originally was assigned, transferred the
case to this district.
both cases pending before the undersigned, on motion by
defendants, this court consolidated the actions for pretrial
purposes on April 11, 2017. In initial order entered the same
day, the court invited the parties to inform whether
efficiencies may accrue upon early resolution of any choice
of law issues raised in the case. In their Rule 26(f) joint
report and plan, the parties indicated that early decision on
choice of law issues may indeed prove efficient, and the
court permitted limited discovery to facilitate resolution of
the same. Following completion of early discovery, the
parties filed the instant motions.
support of their motion, defendants rely upon the policy and
the deposition of Nick West, whom plaintiff designated as
representative for purposes of the deposition authorized by
the Case Management Order. In support of its cross-motion,
plaintiffs rely also upon the policy and the deposition of
Nick West, and, in addition, declaration of Paul Vacherson
who is plaintiff's managing director of asset management.
OF THE UNDISPUTED FACTS
undisputed facts pertinent to the instant motions may be
summarized as follows. Defendant SVF Weston Lakeside, LLC
(“SVF”) owns real estate at various locations
throughout the United States. SVF's principal place of
business is California, and plaintiff issued and delivered
the policy to defendants through an insurance broker located
in California. (DE 68 ¶¶ 9, 19). SVF owns an
apartment complex located in North Carolina that suffered
water intrusion damage (“the property”). (DE 18
¶ 8). Defendant American Realty Advisors
(“ARA”) serves as real estate investment manager
for the property, (DE 18 ¶ 1), and purchased from
plaintiffs the policy in issue. (Id. ¶ 2).
policy contains a choice of law provision, which reads as
CHOICE OF LAW & JURISDICTION: Law: State
of California, United States of America.
Jurisdiction: United States of America per the LMA5020
Service of Suit Clause.
(DE 52-4 at 5).
policy provides excess all-risk property insurance, (DE 35
¶ 15), but the parties dispute whether the policy covers
damage to the property. In any event, defendants filed a
claim under the policy on the basis of water intrusion damage
to the property. (Id. ¶ 5). After denying
defendants' claim, plaintiff initiated its action for
declaratory judgment. Defendants ...