Thursday, February 5, 2015

A Substantial Nexus It Ain't

Greenwell v. Auto-Owners Ins. Co., No. C074546 (D3 Jan. 27, 2015)

It’s not too often that a defendant successfully gets a case dismissed for lack of personal jurisdiction in California. This is one of the few. It’s an insurance case where the insurer is out-of-state and the coverage involved property coverage for an apartment building in Arkansas, as well as general liability for a property management business, which was operated out of California. The claim dispute is over whether two fires at the Arkansas property count as a single or separate loss. 

Addressing specific jurisdiction only, the court holds that, while there was purposeful availment, the second element of the specific jurisdiction test—relatedness between the subject matter of the lawsuit and the in-state contacts—was not met. Which is rare because of the three versions of the relatedness test recognized in US jurisdictions, California has the loosest one. It requires only a “substantial nexus” that does not, per se, require any causal link between in-state contacts and the claim. Here, the claim—based as it was on the Arkansas fires—had little if any relationship to the insurers California contacts, much less a substantial one. The fact that the policy also covered hypothetical California losses didn’t change that.


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