932 F. Supp. 2d 304
D. Conn.2013Background
- Insurance coverage dispute arising from Shell's property damage suit; Discover insured Shell under a policy issued to TETCO and Mission, seeking contract, unjust enrichment, and related relief.
- Indemnity Agreement with Connecticut forum and personal-jurisdiction clauses; amendment added Discover’s CGL policy to the agreement; Shell demanded coverage from Discover which paid a confidential settlement with Shell with TETCO’s consent.
- Letter Agreement required mediation in Texas and, if unresolved, binding arbitration in Texas; arbitration deadline stated within 90 days after mediation.
- Consolidated actions: Discover/TETCO/Mission filed federal suit in Connecticut; Mission and TETCO separately sought arbitration in Texas; related Texas case was transferred via first-to-file rule and consolidated.
- Motions before court: TETCO moves to dismiss for lack of personal jurisdiction and improper venue; TETCO and Mission move to transfer to Texas; Discover argues forum selection clause permits Connecticut forum; court denies motions to dismiss and to transfer.
- Key issue: whether the Connecticut forum selection clause in the Indemnity Agreement binds TETCO and Mission, thereby controlling jurisdiction, venue, and transfer questions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CT forum selection clause gives CT jurisdiction over TETCO | Discover asserts clause binds TETCO, extending to closely related entities. | TETCO contends no jurisdiction or that clause not enforceable against it. | Forum selection clause enforceable; jurisdiction sustained. |
| Whether CT forum selection clause dictates venue in this CT action | Clause controls and prohibits improper venue. | Venue should be CT under clause or otherwise improper. | Venue controlled by forum selection clause; improper venue denied. |
| Whether this case should be transferred under 28 U.S.C. § 1404(a) to Texas | Transfer to Texas would be convenient given Texas contracts and witnesses. | Forum selection clause favors Connecticut; transfer inappropriate. | Transfer denied; forum selection clause prevails. |
| Whether Mission, non-signatory to Indemnity Agreement, can be bound by its forum selection clause | Mission is closely related via the CGL policy and benefits from Indemnity Agreement. | Non-signatory cannot be bound; no personal jurisdiction. | Closely related doctrine applies; Mission bound to enforce forum selection. |
| What controls: arbitration clause or forum selection clause on jurisdiction/venue | Arbitration clause may govern arbitrability; forum selection remains enforceable. | Arbitration clause could supersede forum selection. | Forum selection clause recoverable; sufficient facts show CT forum remains appropriate for arbitrability questions. |
Key Cases Cited
- Bank Julius Baer & Co. v. Waxfield Ltd., 424 F.3d 278 (2d Cir. 2005) (forum selection clause may align with or complement arbitration)
- Suez, S.A. v. Jersey, 585 F.3d 696 (2d Cir. 2009) (non-signatories may enforce forum selection; closely related test applied)
- U.S. Trust Co. v. Bohart, 197 Conn. 34, 495 A.2d 1034 (1985) (enforceability of forum selection clauses in commercial contexts)
- Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22 (1988) (forum selection clauses are a significant factor in transfer analysis)
- D.H. Blair & Co. v. Gottdiener, 462 F.3d 95 (2d Cir. 2006) (discusses transfer factors and forum selection impact)