553 F. App'x 110
2d Cir.2014Background
- Underwriters at Lloyds (plaintiffs-appellees) sued insurers including Insurance Company of the State of Pennsylvania (ICSOP) and Continental (defendants-appellants) over coverage disputes arising from an auto accident in New York.
- Two policies at issue: ICSOP's automobile policy issued to Norbet Trucking (vehicles registered/garaged in New Jersey) and Continental's umbrella policy that incorporates the ICSOP policy and provides excess coverage.
- District Court denied the Insurers' motion for summary judgment and denied reconsideration; Insurers brought an interlocutory appeal under 28 U.S.C. § 1292(b).
- Central legal question: which state's law governs the insurance contracts — New York or New Jersey — under New York choice-of-law principles.
- The Second Circuit applied New York’s “center of gravity” test (Restatement factors: place of contracting, negotiation, performance, subject matter, and parties’ domiciles/places of business).
- Court concluded that relevant contacts (issuance in New Jersey; vehicles registered and garaged in New Jersey; insured’s principal place of business in New Jersey) favor New Jersey law and affirmed the District Court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Choice of law for ICSOP auto policy: New York vs New Jersey | Underwriters: New Jersey law governs because policy issued in NJ; subject matter (vehicles) and insured’s principal place of business point to NJ | ICSOP: New York law should govern because the underlying accident occurred in New York | Held: New Jersey law governs the ICSOP policy under NY "center of gravity" test |
| Choice of law for Continental umbrella policy | Underwriters: Continental’s policy follows ICSOP’s law; same contacts point to NJ | Continental: no compelling distinction from ICSOP but contends closer connection to NY | Held: New Jersey law also governs Continental’s umbrella policy |
| Whether place of accident controls in contract choice-of-law | Underwriters: place of accident is a tort contact and not dispositive for contract issues | ICSOP: relied on situs of accident to invoke NY law | Held: Court rejected accident situs as decisive for contract disputes absent strong governmental policy favoring that law |
| Whether to decide coverage under NJ law on appeal | Underwriters: requested decline to rule on NJ-law coverage issues now | Insurers: sought resolution under NY law and summary judgment | Held: Court declined to address New Jersey substantive law issues on this appeal; remanded/apply NJ law later as appropriate |
Key Cases Cited
- In re Allstate Ins. Co. (Stolarz), 81 N.Y.2d 219 (N.Y. 1993) (articulates New York’s center-of-gravity approach for insurance contract choice of law)
- Zurich Ins. Co. v. Shearson Lehman Hutton, 84 N.Y.2d 309 (N.Y. 1994) (endorses Restatement factors for choice-of-law in contracts)
- Mario v. P & C Food Mkts., Inc., 313 F.3d 758 (2d Cir. 2002) (standard of review for summary judgment appeals)
- Schwartz v. Liberty Mut. Ins. Co., 539 F.3d 135 (2d Cir. 2008) (discusses Restatement factors and choice-of-law analysis)
- Certain Underwriters at Lloyd’s v. Foster Wheeler Corp., 9 N.Y.3d 928 (N.Y. 2007) (principal place of business as proxy for insured risk when risks span multiple states)