Coverage dispute lacks connection to EDVA

Where the suit over denial of coverage required interpretation of a policy issued by an Ohio insurer to a Maryland insured about an accident in Maryland, venue in the Eastern District of Virginia was lacking. Because neither party argued the case should be transferred to an appropriate venue, it was dismissed.

Background

Colony Insurance Company brings this insurance coverage action against Progressive Casualty Insurance Company, alleging that Progressive improperly denied coverage for an underlying tort claim. This matter now comes before the court on defendant’s motion to dismiss.

Defendant argues that the court should dismiss plaintiff’s claims for improper venue because none of the events giving rise to this claim occurred in the Eastern District of Virginia. Defendant points to a number of facts supporting its position, to include that: (1) the underlying incident occurred in Maryland; (2) the tort claimant resides in Maryland; (3) the incident involved a truck garaged in Maryland and owned by a Maryland corporation and (4) defendant’s policy constitutes a Maryland insurance policy governed by Maryland law.

Analysis

Plaintiff relies solely on 28 U.S.C. § 1391(b)(2) in arguing that this court constitutes a proper venue. With respect to insurance coverage disputes, “[f]ederal courts have been somewhat inconsistent in deciding how to apply [§ 1391(b)(2)]. Some courts have focused on the underlying events for which coverage is sought. Others have looked to factors such as where the contract was negotiated or executed, where it was to be performed, or where the alleged breach occurred.” Courts in this district have preferred to take the former approach, focusing on the underlying events for which coverage is sought.

Here, plaintiff bases its venue argument on two grounds – i.e., that plaintiff resides in this district and that plaintiff issued its insurance policy from this district. However, plaintiff neglects to account for the fact that the core issue raised in this case requires the court to interpret defendant’s insurance policy.

Specifically, plaintiff asks the court to find that defendant improperly denied coverage for the May 2019 accident in which an individual sustained injuries. And, as plaintiff acknowledges, defendant issued its policy from Cleveland, Ohio, to Lawson Concrete in Riverdale, Maryland. Thus, even if the relevant analysis centered on the formation, issuance and execution of the insurance contract, such analysis would not render this court a proper venue, given that an Ohio insurer issued the relevant insurance contract to a Maryland company.

Moreover, all acts and omissions relevant to the underlying tort claim transpired in Maryland. Accordingly, under the prevailing venue analysis in this district, venue proves improper. In short, neither the circumstances giving rise to the insurance policy at issue (i.e., defendant’s insurance policy) nor the facts relating to the underlying tort action have any connection whatsoever to this forum.

While district courts generally favor transfer over dismissal, unless there is evidence that a case was brought in an improper venue in bad faith or to harass defendants, the parties here have provided no argument on whether the United States District Court for the District of Maryland could exercise personal jurisdiction over defendant. Indeed, neither party has moved for transfer at all, or has asked the court to consider where the case could be transferred. As such, without the benefit of the parties’ briefing on the issue or a sufficient record, the court declines to determine whether another court can exercise personal jurisdiction over defendant.

Defendant’s motion to dismiss for improper venue granted.

Colony Insurance Company v. Progressive Casualty Insurance Company, Case No. 3:21-cv-11, March 31, 2021. EDVA at Richmond (Novak). VLW 021-3-169. 9 pp.