D.F. Pray, Inc. v. Wesco Insurance Company ( 2023 )

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22-P-734 Appeals Court
D.F. PRAY, INC. vs. WESCO INSURANCE COMPANY.
No. 22-P-734.
Suffolk. May 9, 2023. – September 14, 2023.
Present: Sacks, Shin, & D'Angelo, JJ.
Jurisdiction, Personal, Nonresident, Long-arm statute. Due
Process of Law, Jurisdiction over nonresident. Insurance,
Coverage. Practice, Civil, Waiver, Summary judgment.
Civil action commenced in the Superior Court Department on
August 9, 2016.
The case was heard by Catherine H. Ham, J., on a motion for
summary judgment.
Richard E. Briansky for the plaintiff.
Max W. Gershweir, of New York (William A. Schneider also
present) for the defendant.
SACKS, J. The dispositive question presented in this
insurance coverage dispute is whether the Superior Court erred
in ruling that it had personal jurisdiction over the defendant,
Wesco Insurance Company (Wesco), a Delaware corporation with a
principal administrative office in New York. The plaintiff
2
construction company, D.F. Pray, Inc. (Pray), a Rhode Island
corporation with a principal place of business in Massachusetts,
was an additional insured on a commercial general liability
policy that Wesco issued to one of Pray's subcontractors, a New
York corporation, covering (among other things) the
subcontractor's work on Pray's project in New York. Pray asked
Wesco to indemnify it for certain costs related to correcting
the subcontractor's faulty work on the project, but Wesco
refused. Pray then brought this action, and Wesco moved to
dismiss the complaint for lack of personal jurisdiction. A
judge (first motion judge) denied that motion, but a second
motion judge later allowed Wesco's motion for summary judgment
on the merits of the coverage dispute. Pray now appeals from
that judgment.
On appeal, Wesco renews its personal jurisdiction defense
and asks us to rule on that basis. We first conclude that,
contrary to Pray's argument, Wesco did not forfeit the defense
by later seeking summary judgment on the merits. We also
conclude that the first motion judge erred in rejecting the
defense. We therefore vacate the judgment and remand for the
3
entry of a new judgment dismissing the complaint, not on the
merits but instead for lack of personal jurisdiction over Wesco.1
Background. The material facts are undisputed for purposes
of this appeal. In January of 2014, Pray, as general contractor
on an office renovation project in New York, subcontracted the
drywall work to Xtreme Drywall & Acoustics, Inc. (Xtreme), a New
York corporation. The subcontract required Xtreme to indemnify
Pray for any losses caused by Xtreme's negligence (among other
things), and it included an insurance rider requiring Xtreme to
maintain a commercial general liability policy on which Pray
would be an additional insured.
In August of 2014, Xtreme applied to Wesco for one year of
commercial general liability coverage, to take effect on August
22, 2014, the date that Xtreme stated its coverage with another
carrier would expire. The application further stated that
Xtreme did all of its business in New York. The application
sought various "blanket additional insured" coverages, without
referring specifically to Pray or any other person or entity.
1 "A judgment is void if the court from which it issues
lacked personal jurisdiction over the defendant." Lamarche v.
Lussier, 65 Mass. App. Ct. 887, 889 (2006). "We address the
question of personal jurisdiction first because other issues are
obviously moot if the court is without power to adjudicate at
all." Akinci-Unal v. Unal, 64 Mass. App. Ct. 212, 215 (2005),
cert. denied, 547 U.S. 1206 (2006).
4
The application was not limited to any particular project in
which Xtreme was or might become engaged.
Wesco issued the policy, which included three "additional
insured" form endorsements. None of those endorsements
expressly named Pray as an additional insured or limited the
coverage to any particular project. Rather, two of the
endorsements, in the space provided for the names of additional
insureds, stated, "[b]lanket as required by written contract."2
The third endorsement amended the policy definition of the term
"[w]ho [i]s [a]n [i]nsured" to include "any person or
organization for whom you are performing operations when you and
such person or organization have agreed in writing in a contract
or agreement that such person or organization be added as an
additional insured on your policy."3
By September of 2014, Pray had encountered problems with
Xtreme's work.4 In February of 2016, Pray learned that Xtreme,
2 These were the endorsements for "Additional Insured --
Owners, Lessees or Contractors -- Scheduled Person or
Organization" and "Additional Insured -- Owners, Lessees or
Contractors -- Completed Operations."
3 This was the endorsement for "Additional Insured --
Owners, Lessees or Contractors -- Automatic Status When Required
in Construction Agreement with You -- Primary Insurance."
4 Specifically, Xtreme failed to supply sufficient personnel
to timely complete its work. Pray exercised its right to
complete the work and, in March of 2015, commenced an action
against Xtreme in Superior Court in the Commonwealth. Xtreme
5
in working on the project's twelve-story mechanical shaft, had
failed to include the three layers of drywall that Pray has
maintained were both contractually required and necessary to the
shaft wall's fire rating. To gain access to and repair the
work, Pray needed to demolish other portions of the building
adjacent to the shaft wall, including bathrooms, janitorial
closets, and kitchenettes. Pray thus notified Wesco that Pray
was making a claim for indemnification under the policy for what
it asserted was "property damage" caused by Xtreme's negligence.
Wesco, while not disputing that Pray was an additional insured,
denied the claim, asserting (among other things) that Pray
sought indemnification merely for an economic loss, not for
"property damage" caused by an "occurrence," as the policy
defined those terms.
Pray then brought this action, asserting claims for breach
of the insurance contract, declaratory relief, and unfair
settlement practices in violation of G. L. c. 93A.5 Wesco moved
defaulted, Pray moved for an assessment of damages, Wesco
intervened, and the case was stayed at Wesco's request pending
the outcome of this case. Xtreme was named as a party in
interest in this case but has not appeared.
5 Pray's claims were premised on Wesco's asserted direct
liability to Pray as an additional insured, as well as on
Wesco's responsibility as Xtreme's insurer to pay amounts for
which Xtreme was or might be found to be liable to Pray. On
appeal, Pray appears to rely only on its status as an additional
insured.
6
to dismiss the complaint for lack of personal jurisdiction,
among other grounds. See Mass. R. Civ. P. 12 (b) (2), 365 Mass.
754 (1974). After limited discovery directed to the
jurisdictional issue, Pray established as undisputed fact that,
as of 2016, for at least the preceding twelve years, Wesco had
been transacting business in the Commonwealth by providing
workers' compensation and general liability coverage to
commercial entities. Also as of 2016, Wesco had more than one
hundred licensed agents in Massachusetts and, in 2015, generated
approximately $30 million in direct insurance premiums in the
Commonwealth.6 Wesco's motion to dismiss was denied.
Wesco then filed an answer asserting lack of personal
jurisdiction as a defense. Wesco also asserted counterclaims
seeking declarations, based on various provisions of the policy,
that it had no duty to indemnify Pray for the damages sought in
the complaint. Wesco moved for summary judgment on Pray's
claims, asserting that Xtreme's faulty work did not qualify
under the policy as "property damage" caused by an "occurrence,"
and that the policy included multiple "[b]usiness [r]isk"
exclusions that precluded coverage for faulty work. The second
6 In addition, although the record does not reflect the
basis for doing so, the parties have treated as undisputed fact
that Wesco previously brought at least one declaratory judgment
action in Federal court in Massachusetts. The record is silent
about the nature of that action.
7
motion judge allowed that motion, but on a ground not asserted
by Wesco: that once Pray began to encounter problems with
Xtreme's work, Pray could foresee that Xtreme's further work
would be defective, meaning that the defective work was not an
"accident," and thus not an occurrence. Judgment entered
dismissing the case, and Pray appealed.
Discussion. 1. Forfeiture of personal jurisdiction
defense. We first dispose of Pray's argument that Wesco
forfeited its objection to personal jurisdiction by (a) filing
an answer that included counterclaims as well as the
jurisdictional defense and then (b) moving for summary judgment
on the merits, without simultaneously reasserting the
jurisdictional defense. An objection to personal jurisdiction
"may be waived by conduct, express submission, or extended
inaction." Lamarche v. Lussier, 65 Mass. App. Ct. 887, 889
(2006). Merely raising a defense of lack of personal
jurisdiction in an answer or other responsive pleading "may not
alone suffice to preserve that defense." American Int'l Ins.
Co. v. Robert Seuffer GmbH & Co. KG, 468 Mass. 109, 119, cert.
denied, 574 U.S. 1061 (2014). "If a party alleges a lack of
personal jurisdiction in an answer and then fails timely to
8
pursue the defense, a forfeiture of that defense may result."7
Id. Critically, however, a party who "raise[s] such a defense
in a responsive pleading may ensure its preservation by moving
to dismiss pursuant to rule 12 (b) (2) within a reasonable time,
prior to substantially participating in discovery and litigating
the merits of the case" (quotation and citation omitted). Id.Here, Wesco did even more; it moved to dismiss pursuant to
rule 12 (b) (2) before filing its answer, let alone taking any
steps to litigate the merits. It follows that, once that motion
was denied, Wesco did not forfeit the defense by filing its
counterclaims or by seeking summary judgment on the merits. As
the Supreme Judicial Court has said in the related context of
quasi-in-rem jurisdiction, "a defendant who has unsuccessfully
challenged the court's jurisdiction over him may proceed to the
merits without waiving his right to appellate review of the
question of jurisdiction." Morrill v. Tong, 390 Mass. 120, 125
(1983). See Lamarche, 65 Mass. App. Ct. at 890, citing Walling
v. Beers, 120 Mass. 548, 550 (1876). See also Northern Laminate
Sales, Inc. v. Davis, 403 F.3d 14, 23 (1st Cir. 2005). Wesco
7The court explained that a personal jurisdiction defense
may be "waived" by failure to assert it, but where the defense
is initially raised, and then lost through action or inaction,
"the term 'forfeiture' is more appropriate" (citation omitted).
American Int'l Ins. Co., 468 Mass. at 110 n.2.
9
did just that, and so its jurisdictional defense is properly
before us.
2. Personal jurisdiction. Wesco is not a "resident" of
the Commonwealth,8 nor does Pray argue that Wesco's "in-state
contacts were sufficiently 'continuous and systematic' to
justify the exercise of general jurisdiction over claims
unrelated to those contacts." Goodyear Dunlop Tires Operations,
S.A. v. Brown, 564 U.S. 915, 925 (2011). See Exxon Mobil Corp.
v. Attorney Gen., 479 Mass. 312, 314 (2018), cert. denied, 139
S. Ct. 794 (2019); von Schönau-Riedweg v. Rothschild Bank AG, 95
Mass. App. Ct. 471, 482 (2019) (no claim that bank's "activities
in Massachusetts reach the volume required for an assertion of
general jurisdiction"). Therefore, "our inquiry in this case
concerns the exercise of specific jurisdiction," which "requires
an affiliatio[n] between the forum and the underlying
controversy" (quotation and citation omitted). Exxon Mobil
Corp., supra at 315.
"For a nonresident to be subject to the authority of a
Massachusetts court, the exercise of jurisdiction must satisfy
both Massachusetts's long-arm statute, G. L. c. 223A, § 3, and
8 "A business is a 'resident,' and therefore subject to the
forum's general jurisdiction, if the business is domiciled or
incorporated or has its principal place of business in the forum
State." Exxon Mobil Corp. v. Attorney Gen., 479 Mass. 312, 314
(2018), cert. denied, 139 S. Ct. 794 (2019).
10
the requirements of the due process clause of the Fourteenth
Amendment to the United States Constitution." Exxon Mobil
Corp., 479 Mass. at 314. "Because the long-arm statute imposes
specific constraints on the exercise of personal jurisdiction
that are not coextensive with the parameters of due process, and
in order to avoid unnecessary consideration of constitutional
questions, a determination under the long-arm statute is to
precede consideration of the constitutional question." SCVNGR,
Inc. v. Punchh, Inc., 478 Mass. 324, 325 (2017). "We review the
question of personal jurisdiction de novo." Sullivan v. Smith,
90 Mass. App. Ct. 743, 746–747 (2016). See Doucet v. FCA US
LLC, 492 Mass. 204, 207 (2023).
a. Long-arm analysis. The long-arm statute provides in
pertinent part as follows: "A court may exercise personal
jurisdiction over a person, who acts directly or by an agent, as
to a cause of action in law or equity arising from the person's
. . . (f) contracting to insure any person, property or risk
located within this commonwealth at the time of contracting."
G. L. c. 223A, § 3. The first motion judge ruled that this
clause "is applicable on its face." We agree.
More specifically, we agree that Wesco "contract[ed] to
insure [a] person . . . located within this commonwealth" --
i.e., Pray, which has its principal place of business here --
and that Pray's causes of action "aris[e] from" that contract of
11
insurance.9 G. L. c. 223A, § 3. We recognize, of course, that
Wesco did not contract directly with Pray. Instead, Wesco
contracted with Xtreme, a New York corporation, to insure Xtreme
and whatever entities might fall within the terms of any of the
"additional insured" form endorsements on the policy Wesco wrote
to Xtreme. But neither the language of clause (f), nor any case
cited by the parties, requires that an insurer have contracted
directly with a person in the Commonwealth in order for that
clause to apply. Relatedly, although Wesco argues that clause
(f) cannot apply because it did not "specifically" contract to
insure Pray, Wesco cites nothing in the statute, and no other
authority, to support such a limitation. The court has
repeatedly said that we are to examine whether "the literal
requirements of the statute are satisfied"; if so, we proceed to
the due process analysis. Tatro v. Manor Care, Inc., 416 Mass.
763, 767 (1994). See Exxon Mobil Corp., 479 Mass. at 318 n.4;
9 In the context of the long-arm statute's clause (b)
("contracting to supply services or things in this
commonwealth"), the court has "construe[d] the phrase 'in this
commonwealth' as referring to the place where the services or
things are to be supplied, rather than referring to the place of
the contracting." Droukas v. Divers Training Academy, Inc., 375
Mass. 149, 157 (1978). Wesco does not argue that any different
approach should apply under clause (f) or that Pray was not
located in the Commonwealth at the time Wesco contracted to
insure Xtreme (and thus, indirectly, Pray).
12
Good Hope Indus., Inc. v. Ryder Scott Co., 378 Mass. 1, 6-7, 8
n.13 (1979). The literal requirements are satisfied here.10
Having concluded that clause (f) applies based on Wesco's
having contracted to insure a person located in the
Commonwealth, we need not determine whether, as the judge
concluded, it also applies on the ground that Wesco contracted
to insure a "risk" located here, G. L. c. 223A, § 3 (f), or
whether Wesco "contract[ed] to supply services or things in this
commonwealth," i.e., defense and indemnification, G. L. c. 223A,
§ 3 (b). "Since a finding of personal jurisdiction under any
one of the subsections of § 3 is sufficient to [support long-arm
jurisdiction], we need not consider whether jurisdiction might
also be conferred by virtue of [other subsections]." Good Hope
Indus., Inc., 378 Mass. at 2 n.3. See Bulldog Investors Gen.
Partnership v. Secretary of the Commonwealth, 457 Mass. 210, 215
(2010) (personal jurisdiction is statutorily "authorized when
one of the provisions of our long-arm statute . . . is
satisfied").
b. Due process analysis. "The due process analysis
entails three requirements. First, minimum contacts must arise
10 Had Wesco wished to limit how clause (f) applied to it,
Wesco could have written its endorsements more narrowly, e.g.,
to exclude persons or entities not specifically listed as
additional insureds or to exclude persons or entities then
located in the Commonwealth.
13
from some act by which the defendant 'purposefully avails itself
of the privilege of conducting activities within the forum
State, thus invoking the benefits and protections of its laws.'
Second, the claim must arise out of or relate to the defendant's
contacts with the forum. Third, 'the assertion of jurisdiction
over the defendant must not offend "traditional notions of fair
play and substantial justice."'" (Citations omitted.) Bulldog
Investors Gen. Partnership, 457 Mass. at 217, quoting Tatro, 416
Mass. at 772-773. See Burger King Corp. v. Rudzewicz, 471 U.S.
462, 472, 474-478 (1985); Doucet, 492 Mass. at 210-211, 213,
217.
Addressing these three requirements in turn, we conclude
that, although Wesco has certain minimum contacts with
Massachusetts, Pray's claims do not sufficiently relate to those
contacts to satisfy the due process standards for personal
jurisdiction. We therefore need not decide whether the exercise
of jurisdiction would also be consistent with traditional
notions of fair play and substantial justice.
i. Purposeful availment. There is no doubt that Wesco, by
selling insurance policies in Massachusetts, has "purposefully
avail[ed] itself of the privilege of conducting activities
within the forum State" so as to give rise to minimum contacts
(citation omitted). Bulldog Investors Gen. Partnership, 457
Mass. at 217. As noted supra, as of 2016, for at least the
14
preceding twelve years, Wesco had been transacting business here
by providing insurance coverage to commercial entities. Also as
of 2016, Wesco had more than one hundred licensed agents here,
and in 2015, it generated approximately $30 million in direct
insurance premiums here.
ii. Relationship of contacts to claims. The difficulty
for Pray is that its claims do not "arise out of or relate to
[Wesco's] contacts with the forum." Bulldog Investors Gen.
Partnership, 457 Mass. at 217. "For a State to exercise
jurisdiction consistent with due process, the defendant's suit-
related conduct must create a substantial connection with the
forum State" (emphasis added). Walden v. Fiore, 571 U.S. 277,
284 (2014). See Bristol-Myers Squibb Co. v. Superior Court of
Cal., San Francisco County, 582 U.S. 255, 264 (2017) (rejecting
"sliding scale approach" under which "strength of the requisite
connection between the forum and the specific claims at issue is
relaxed if the defendant has extensive forum contacts that are
unrelated to those claims"); Goodyear Dunlop Tires Operations,
S.A.,, 564 U.S. at 930 n.6 ("even regularly occurring sales of a
product in a State do not justify the exercise of jurisdiction
over a claim unrelated to those sales"); Exxon Mobil Corp., 479
Mass. at 321 n.8.
We recognize that Wesco is generally in the business of
selling insurance policies in Massachusetts and elsewhere and
15
that Wesco has done substantial business here. Nevertheless,
the particular policy that Wesco sold to Xtreme, by which Wesco
contracted to insure Pray and which gave rise to Pray's claims,
was not sold in Massachusetts, not sold to a Massachusetts
resident, not related to a Massachusetts project, and not
otherwise related to Wesco's contacts with the Commonwealth.11
The burden is on Pray to establish the facts showing personal
jurisdiction, see Exxon Mobil Corp., 479 Mass. at 314, and Pray
has not shown that the insurance contract under which it claims
coverage has any connection whatsoever to the Commonwealth.12
11Looking more closely at the particulars of this
transaction does not assist Pray. Wesco is a Delaware
corporation with a principal administrative office in New York.
It sold a policy to Xtreme, a New York corporation that
assertedly does business only in New York. Xtreme's application
for the policy was prepared by a separate entity located in New
York and submitted by an insurance agent, also located in New
York, to an entity located in Pennsylvania that managed the
Wesco insurance program under which Xtreme sought coverage. So
far as the record reflects, after coverage was bound, the
Pennsylvania entity sent the policy electronically to the New
York agent, which would then have been responsible for
delivering the policy to Xtreme or its agent.
12Pray makes no argument that Wesco's activities in
Massachusetts had any relationship to the decision to purchase
the Wesco policy at issue, which in any event was a decision
made by Xtreme rather than Pray. Contrast Ford Motor Co. v.
Montana Eighth Judicial Dist. Court, 141 S. Ct. 1017, 1023,
1028-1029 (2021) (manufacturer's efforts to foster and serve
vehicle markets in forum States supported exercise of personal
jurisdiction by those States, notwithstanding that particular
vehicles at issue were first sold elsewhere and arrived in forum
States only through later resales and relocations by consumers;
ultimate owners might never have bought vehicles, and thus suits
16
To be sure, Wesco contracted with Xtreme to cover
additional insureds such as Pray, and Pray in turn has a
principal place of business in the Commonwealth. But that does
not create a sufficient relationship between Wesco and the
Commonwealth, for two reasons.
First, the defendant's relationship with the forum State
must "proximately result from actions by the defendant himself
that create a 'substantial connection' with the forum State."
Burger King Corp., 471 U.S. at 475, quoting McGee v.
International Life Ins. Co., 355 U.S. 220, 223 (1957). "[The]
unilateral activity of another party or a third person is not an
appropriate consideration when determining whether a defendant
has sufficient contacts with a forum State to justify an
assertion of jurisdiction." Helicopteros Nacionales de
Colombia, S.A. v. Hall, 466 U.S. 408, 417 (1984). Pray offered
no evidence that Wesco, when contracting with Xtreme, knew of
Xtreme's contract with Massachusetts-based Pray. Xtreme's act
of entering the contract with Pray does not constitute a contact
that Wesco created with Massachusetts.13 "The contacts must be
might never have arisen, but for manufacturer's contacts with
their home States).
13Relatedly, "[d]ue process limits on the State's
adjudicative authority principally protect the liberty of the
nonresident defendant -- not the convenience of plaintiffs or
third parties." Walden, 571 U.S. at 284. Accordingly, the
17
the defendant's own choice and not 'random, isolated, or
fortuitous.'" Ford Motor Co. v. Montana Eighth Judicial Dist.
Court, 141 S. Ct. 1017, 1025 (2021), quoting Keeton v. Hustler
Magazine, Inc., 465 U.S. 770, 774 (1984).
Second, "[w]hat is needed -- and what is missing here -- is
a connection between the forum and the specific claims at
issue," Bristol-Myers Squibb Co., 582 U.S. at 265; the
connection must result from "the defendant's suit-related
conduct" (emphasis added), Walden, 571 U.S. at 284.14 See
Fletcher Fixed Income Alpha Fund, Ltd. v. Grant Thornton LLP, 89
Mass. App. Ct. 718, 722–723 (2016) (same). Wesco's suit-related
conduct -- its sale of a policy to Xtreme under which Pray
Court has "consistently rejected attempts to satisfy the
defendant-focused 'minimum contacts' inquiry by demonstrating
contacts between the plaintiff (or third parties) and the forum
State." Id. Although doubtless it would be more convenient for
the plaintiff, Pray, to litigate here, we must focus on the
defendant, Wesco, and Wesco's "suit-related conduct." Id. That
conduct occurred in New York, and perhaps in Pennsylvania, not
in Massachusetts.
14In Bristol-Myers Squibb Co., although the California
courts had jurisdiction of claims with substantial connections
to California, jurisdiction was held lacking with respect to
claims by other plaintiffs that were factually and legally
similar except that the relevant conduct and injuries occurred
in other States. Bristol-Myers Squibb Co., 582 U.S. at 264-265.
Here, that our courts would have jurisdiction of insureds' suits
against Wesco on policies with substantial connections to the
Commonwealth does not mean our courts necessarily have
jurisdiction of similar suits on policies that have little or no
such connection.
18
became an additional insured -- was an indirect contact with
Pray, attributable not to Wesco's "purposefully avail[ing]
itself of the privilege of conducting activities within" the
Commonwealth (citation omitted), Bulldog Investors Gen.
Partnership., 457 Mass. at 217, but to Xtreme's decision to work
for Massachusetts-based Pray. If Wesco's suit-related conduct
could be said to create any contact with the Commonwealth at
all, it was "too attenuated a contact to justify [the] exercise
of in personam jurisdiction."15 World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286, 299 (1980).
Matters might stand differently had the insurance policy
involved here been issued directly to and paid for by a
Massachusetts resident. Thus, in McGee, 355 U.S. 220, the
Supreme Court ruled that due process was not offended by a
California court's exercise of jurisdiction to hear a life
insurance beneficiary's suit against a Texas insurer "based on
15The first motion judge thought it significant that
Wesco's considerable Massachusetts insurance sales activity made
it "foreseeable to Wesco that it could be haled into court here
on a specific claim for coverage by an insured located in
Massachusetts," without acknowledging that the policy at issue
here was neither sold in Massachusetts nor sold to a
Massachusetts insured. The first motion judge also relied on
its being "reasonably foreseeable that defending this action in
Massachusetts might arise from Wesco agreeing to insure, as an
'additional insured,' a company located in Massachusetts." This
approach mistook indirect contact with a party from a forum
State for contact with the forum State itself.
19
[an insurance] contract which had substantial connection with
[California]." Id. at 223. Notwithstanding that the insurer
had "never solicited or done any insurance business in
California apart from the policy involved," id. at 222, it was
sufficient that "[t]he [insurance] contract was delivered in
California, the premiums were mailed from there and the insured
was a resident of that State when he died," id. at 223. But
here, unlike in McGee, Wesco did not deliver the policy to Pray
(let alone do so in Massachusetts), nor did Pray pay premiums to
Wesco (let alone do so from Massachusetts). And the principal
focus of the insurance contract was Xtreme's work in New York,
not any activity in Massachusetts.
Pray asserts that Wesco had suit-related contact with the
Commonwealth by "agreeing to defend Pray, a Massachusetts
resident, as an additional insured in an action in any state,
including Massachusetts." But this overstates the case. It is
true that the policy applies to property damage if caused by an
"occurrence" (defined in pertinent part as "an accident") that
takes place in the "coverage territory," and that the policy
includes a multiparagraph definition of "coverage territory"
that includes "[t]he United States of America (including its
territories and possessions), Puerto Rico and Canada." But all
of the cases Pray relies on for its coverage territory argument
20
found jurisdiction based on occurrences in the forum State
itself, a factor that is absent here.16
Accordingly, on this factual record -- which includes the
named insured Xtreme's representation to Wesco that it did
business only in New York -- we do not think the broad coverage
territory provision, in combination with the presence of a
blanket additional insured (Pray) in Massachusetts, adds
meaningfully to Wesco's suit-related contacts with
Massachusetts.17 To whatever extent it was foreseeable that
16The sole published decision upon which Pray relies,
Farmers Ins. Exch. v. Portage La Prairie Mut. Ins. Co., 907 F.2d
911 (9th Cir. 1990), ruled that a court in Montana had
jurisdiction over a Canadian insurer whose insured was injured
in a car accident in Montana and brought suit in Montana. Id.
at 912, 913.
17Wesco's argument that the coverage territory clause is
insufficient relies heavily on Lexington Ins. Co. v. Hotai Ins.
Co., Ltd., 938 F.3d 874 (7th Cir. 2019). There, the court said
that a policy's "worldwide coverage" clause defined the
territorial scope of the insurers' obligation to an additional
insured, but did not "establish[] a purposeful connection
between the insurers and every American state, all of which
[were] included in the covered territory." Id. at 882. The
Lexington Ins. Co. court noted, however, that its conclusion
"might" have been different if the policy there at issue had
included a duty-to-defend clause. Id. Here, Wesco's policy
does include such a clause, but Pray has not addressed Lexington
Ins. Co. at all. We treat that decision as informative, but not
directly on point. Other such cases are Repwest Ins. Co. v.
Country-Wide Ins. Co., 166 A.D.3d 61, 66 (N.Y. 2018) (discussing
split in authority; holding that foreign insurer's territory of
coverage clause did not constitute sufficient contact with forum
State to support specific jurisdiction over insurer in case
arising out of automobile accident in that State); and KCHM,
Inc. v. Mid-Continent Cas. Co., 264 F. Supp. 3d 697, 700-702
21
Xtreme might add a Massachusetts entity like Pray as a blanket
additional insured, and that Pray might later sue Wesco in
Massachusetts, "'foreseeability' alone has never been a
sufficient benchmark for personal jurisdiction under the Due
Process Clause." World-Wide Volkswagen Corp., 444 U.S. at 295.
What is critical is whether "the defendant's conduct and
connection with the forum State are such that he should
reasonably anticipate being haled into court there." Id. at
297. Wesco's conduct in insuring Xtreme (and thus, indirectly,
Pray) did not create a sufficient connection with Massachusetts
to satisfy that standard.
iii. Traditional notions of fair play and substantial
justice. The third requirement of due process is that "the
assertion of jurisdiction over the defendant must not offend
traditional notions of fair play and substantial justice"
(quotation and citation omitted).18 Bulldog Investors Gen.
(E.D.N.C. 2017) (broad territory of coverage clause did not
suffice to establish personal jurisdiction over foreign insurer
in additional insured's action to resolve coverage dispute,
where only connection to forum State was that additional insured
was incorporated and had principal place of business in that
State).
"Thus courts in 'appropriate case[s]' may evaluate 'the
18
burden on the defendant,' 'the forum State's interest in
adjudicating the dispute,' 'the plaintiff's interest in
obtaining convenient and effective relief,' 'the interstate
judicial system's interest in obtaining the most efficient
resolution of controversies,' and the 'shared interest of the
22
Partnership, 457 Mass. at 217. But this requirement applies
only "[o]nce it has been decided that a defendant purposefully
established minimum contacts within the forum State," Burger
King Corp., 471 U.S. at 476, and such contacts must give rise to
or relate to the claims asserted, id. at 472. See Phillips
Exeter Academy v. Howard Phillips Fund, Inc., 196 F.3d 284, 288
(1st Cir. 1999) ("if the [party arguing for jurisdiction] clears
the first two hurdles, the court then must analyze the overall
reasonableness of an exercise of jurisdiction"). "An
affirmative finding on each of the three elements of the test is
required to support a finding of specific jurisdiction." Id.Here, we have concluded that Wesco's contacts with
Massachusetts are unrelated to the claims in this case, and that
whatever indirect contact (if any) Wesco had with Massachusetts
related to Pray's claims is insufficient to satisfy due process.
It is therefore unnecessary to address whether the exercise of
jurisdiction by Massachusetts courts would comport with
traditional notions of fair play and substantial justice.19
several States in furthering fundamental substantive social
policies.'" Burger King Corp., 471 U.S. at 476-477, quoting
World-Wide Volkswagen Corp., 444 U.S. at 292.
19 Pray's request for appellate attorney's fees and costs is
denied.
23
Conclusion. The judgment is vacated, and a new judgment
shall enter dismissing the complaint for lack of personal
jurisdiction.
So ordered.