Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-almd-2_11-cv-00045/USCOURTS-almd-2_11-cv-00045-1/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Breach of Contract

---

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF ALABAMA

NORTHERN DIVISION

WALTER WINGARD, )

 )

Plaintiff, )

 )

v. ) CASE NO. 2:11-CV-45-WKW

 ) [WO]

LÄNSFÖRSÄKRINGAR AB, )

LÄNSFÖRSÄKRINGAR ALLIANCE )

AB, and LF KRONOBERG, )

 )

Defendants. )

MEMORANDUM OPINION

Plaintiff Walter Wingard, as the assignee of the insureds’ rights, brings claims

against Defendant LF Kronoberg (“LFK”) for breach of an insurance contract and

negligent failure to settle, and to enjoin a related lawsuit filed by LFK in a Swedish

court. Before the court is Defendant LFK’s Motion to Dismiss (Doc. # 43), which is

accompanied by a supporting brief and evidentiary submissions. (Docs. # 44 & 45.) 

Plaintiff filed a response (Doc. # 59), to which LFK replied (Doc. # 62). 

LFK moves to dismiss this action for lack of personal jurisdiction and for

improper venue based upon the policy’s forum selection clause that designates the

courts of Sweden as the appropriate venue. Plaintiff claims that LFK has sufficient

contacts with the state of Alabama to justify the imposition of personal jurisdiction,

and that the forum selection clause is unenforceable. Upon careful consideration of

Case 2:11-cv-00045-WKW-CSC Document 68 Filed 10/23/12 Page 1 of 24
counsel’s briefs, the relevant law, and the record as a whole, the court previously

denied LFK’s Motion to Dismiss. (Doc. # 66.) This is the opinion referenced in that

Order.

I. SUBJECT MATTER JURISDICTION

The court exercises subject matter jurisdiction pursuant to 28 U.S.C. § 1332. 

The amount in controversy exceeds $75,000, and there is complete diversity of

citizenship between Plaintiff and Defendants. The parties do not dispute subject

matter jurisdiction, and the record establishes an adequate basis for it.

II. STANDARDS OF REVIEW

A. Lack of Personal Jurisdiction

A Rule 12(b)(2) motion tests the court’s exercise of personal jurisdiction over

a defendant. See Fed. R. Civ. P. 12(b)(2). Where a Rule 12(b)(2) motion to dismiss

is decided without an evidentiary hearing, the plaintiff need only establish a prima

facie case of personal jurisdiction over a non-resident defendant. See Madara v. Hall,

916 F.2d 1510, 1514 (11th Cir. 1990). A plaintiff demonstrates a “prima facie case

of personal jurisdiction” by submitting sufficient evidence to defeat a motion made

pursuant to Rule 50(a) of the Federal Rules of Civil Procedure. See Snow v. DirecTV,

Inc., 450 F.3d 1314, 1317 (11th Cir. 2006). Allegations in the complaint are

presumed true, if uncontroverted by the defendant’s evidence. Madara, 916 F.2d

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at 1514. “When the parties submit conflicting affidavits, the court, in the absence of

an evidentiary hearing, ‘is inclined to give greater weight to the plaintiff’s version of

the jurisdictional facts and to construe such facts in the light most favorable to the

plaintiff.’” Estate of Myhra v. Royal Caribbean Cruises, Ltd., No. 10–15840, 2012

WL 4207303, at *3 (11th Cir. Sept. 21, 2012) (quoting Home Ins. Co. v. Thomas

Indus., Inc., 896 F.2d 1352, 1355 (11th Cir. 1990)). 

B. Improper Venue

Rule 12(b)(3) of the Federal Rules of Civil Procedure provides for dismissal

for “improper venue.” A Rule 12(b)(3) motion is the proper way to invoke a forum

selection clause. Hollis v. Fla. State Univ., 259 F.3d 1295, 1300 n.5 (11th Cir. 2001). 

A Rule 12(b)(3) challenge based on a forum selection clause presents a pure question

of law. Lipcon v. Underwriters at Lloyd’s, London, 148 F.3d 1285, 1290–91 (11th

Cir. 1998). “The validity of a forum selection clause is determined under the usual

rules governing the enforcement of contracts in general.” P & S Bus. Machs., Inc. v.

Canon USA, Inc., 331 F.3d 804, 807 (11th Cir. 2003) (citing In re Ricoh Corp., 870

F.2d 570, 573 (11th Cir. 1989)).

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III. BACKGROUND

This lawsuit arises fromLFK’s actionsin defending its insured, Texo, Inc., and

Texo AB (collectively “Texo”), and LFK’s alleged breach of an insurance contract

and negligent failure to settle a wrongful death action brought against Texo in an

Alabama court. The deceased isBeverlyn Wingard. Ms. Wingard worked for Albany

International (“Albany”) at its plant in Montgomery, Alabama. She operated a

machine known as a warper during the course of her employment with Albany. The

warper was not properly guarded, and as a result, on January 28, 2008, Ms. Wingard

died when her body was pulled into the rotating parts of the machine. Plaintiff, asthe

administrator of Ms. Wingard’s estate, filed an action against Texo under the

Alabama Wrongful Death Act, see Ala. Code § 6-5-410, alleging that Texo

negligently or wantonly inspected, repaired, or altered the warper machine owned by

Albany (the “underlying action”). Texo filed claims under its general liability

1

insurance policy with LFK (“the policy”).

LFK is an independent mutual insurance company incorporated under the laws

of and headquartered in Sweden. It has no offices, officers, employees, or agents in

 Since his sister’s death, Plaintiff has worn two litigation hats. The first hat is that of the 1

administrator of Ms. Wingard’s estate. Wearing that hat, Plaintiff instituted the underlying

action. In this litigation, Plaintiff wears a different hat – the hat of the assignee of Texo’s rights

under the LFK policy. It is important to keep that distinction in mind. 

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Alabama. It is not licensed to do business in the state of Alabama. It has never

issued an insurance policy to an individual or entity domiciled in Alabama and has

never insured an Alabama citizen. Notwithstanding its physical absence in Alabama,

LFK issued a general liability policy to Texo that insured risks arising from Texo’s

activities in the United States and thus necessarily in Alabama, pursuant to a

worldwide territory-of-coverage clause. LFK concedes that nothing in the policy 2

would have precluded Texo from conducting insured activities in the state of

Alabama. 

Pursuant to the insurance policy, LFK defended Texo in the underlying action

brought by Plaintiff (wearing his first litigation hat) against it in an Alabama court. 

It hired Länsförsäkringar AB to manage the Alabama litigation process. (See Lars 3

Gustafsson’s Dep. 5, 7; see also Fredrik Daveby’s Dep.’s 5–6 (testifying that LFK

“purchased . . . legal services from [Länsförsäkringar AB] in connection with” the

underlying action).) Länsförsäkringar AB contacted a legal firm in New York, and

that firm recommended an Alabama law firm. LFK funded the defense by paying the

feesincurred by the Alabama law firm. LFK also actively participated in discussions

 Texo AB is the named insured and Texo, Inc., is as an additional insured. Texo, Inc., is 2

a United States corporation, and Texo AB is a Swedish corporation.

 LFK owns an interest in Länsförsäkringar AB. (See Daveby’s Dep. 5–6 (testifying that

3

LFK is one of several mutual insurance companies that owns Länsförsäkringar AB).) 

5

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with Länsförsäkringar AB regarding the progress ofthe litigation and received advice

and instructions from Länsförsäkringar AB. (See Gustafson’s Dep. 7.) LFK also

allegedly received, but refused, an offer to settle the underlying action for the

applicable policy limits.4

After a nonjury trial in the underlying action to which Texo agreed, the trial

court found Texo liable under the Alabama Wrongful Death Act. The Alabama

Wrongful Death Act only permits the recovery for punitive damages, and, 5

accordingly, judgment was entered in Plaintiff’s favor for punitive damages in the

amount of $5,250,000, an amount that exceeds Texo’s policy limits. LFK denied

Texo’s indemnity claim for payment of the judgment on the basis of the policy’s

punitive damages exclusion. (Certificate of Insurance (Ex. G to Doc. # 59).) At some

point, Texo, Inc., and Texo AB assigned their contractual rights with LFK to Plaintiff

in accordance with § 8-5-20 of the Alabama Code. This lawsuit arises from that

assignment of rights.

 The policy limits were 20,000,000 Swedish Krona, approximately $3,000,000.00, for 4

General Liability and Products Liability. See http://www.xe.com/currency tables/

?from=SEK&date=2008-01-01 (last visited Oct. 22, 2012).

 The Alabama Wrongful Death Act is “unique” in that prevailing plaintiffs may recover 5

“‘only punitive damages.’” Entrekin v. Internal Med. Assocs. of Dothan, P.A., 689 F.3d 1248,

1253 (11th Cir. 2012) (quoting Black Belt Wood Co. v. Sessions, 514 So. 2d 1249, 1262 (Ala.

1986)). 

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Standing in the shoes of Texo as its assignee, Plaintiff brings three claims

against LFK. In Count I, Plaintiff alleges that LFK breached the contract of 6

insurance with Texo by failing to pay the underlying judgment. Specifically, Plaintiff

alleges that LFK violated Alabama’s public policy by relying on the punitive damages

exclusion to deny indemnity coverage for the underlying judgment. Plaintiffrequests

“all amounts under the insurance policy including the equivalent of $5,250,000.00

. . . .” (Am. Compl. ¶ 22.) In Count II, seeking unspecified damages, Plaintiff alleges

that LFK’s refusal to settle the underlying action within the applicable policy limits

was negligent and exposed Texo to damages liability exceeding the policy limits. In

Count III, Plaintiff alleges that in September 2011, LFK sued Plaintiff in a Swedish

court “in an effort to usurp this court’s authority . . . .” (Am. Compl. ¶ 31.) Plaintiff

requests an order enjoining Defendants from prosecuting the action pending in the

Swedish courts. 

IV. DISCUSSION

Part A addresses LFK’s Rule 12(b)(2) motion to dismiss for lack of personal

jurisdiction and examines whether the due process requirements are satisfied for the

 Plaintiff claims against Defendants Länsförsäkringar AB and Länsförsäkringar Alliance 6

AB are not implicated in the present motion. 

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court’s exercise of specific jurisdiction over LFK. Part B addresses LFK’s Rule

12(b)(3) motion to dismiss for improper venue based upon the forumselection clause.

A. Personal Jurisdiction

“When a defendant challenges personal jurisdiction, the plaintiff bears the

burden of establishing that the exercise of personal jurisdiction over the defendant

comports with the certain fundamental requirements.” Brannon v. Fin. Am., LLC,

7

483 F. Supp. 2d 1136, 1139 (M.D. Ala. 2007). In diversity cases, a federal court

considering whether it may exercise personal jurisdiction over a non-resident

defendant faces two separate constraints: the long-arm statute of the state in which

the federal court resides and the Due Process Clause of the Fourteenth Amendment. 

Sloss Indus. Corp. v. Eurisol, 488 F.3d 922, 925 (11th Cir. 2007). For a federal court

in Alabama, these considerations are merged, as “Alabama’s long-armstatute permits

the exercise of personal jurisdiction to the fullest extent constitutionally permissible.” 

Id. (citing Ala. R. Civ. P. 4.2(b); Sieber v. Campbell, 810 So. 2d 641, 644 (Ala.

2001)). 

The due process inquiry consists of two parts. First, the defendant must have

“certain minimum contacts” with the forum state. Burnham v. Superior Court of

 The jurisdictional issue is being considered based upon the pleadings and evidence. In

7

the exercise of its discretion, the court declines to hold an evidentiary hearing, and the parties

have not requested one. See Madara, 916 F.2d at 1514.

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Calif., 495 U.S. 604, 618 (1990). Two types of minimum contacts can form the basis

for personal jurisdiction: general and specific. See Stubbs v. Wyndham Nassau

Resort & Crystal Palace Casino, 447 F.3d 1357, 1360 n.3 (11th Cir. 2006). If

minimumcontacts exist, then the exercise ofjurisdiction over the defendant must “not

offend ‘traditional notions of fair play and substantial justice.’” Burnham, 495 U.S.

at 618 (quoting Int’l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945)). “This two-part

test embodies the controlling due process principle that a defendant must have ‘fair

warning’ that a particular activity may subject it to the jurisdiction of a foreign

sovereign.” Vermeulen v. Renault, U.S.A., Inc., 985 F.2d 1534, 1545 (11th Cir.

1993).

LFK assertsthatsubjecting it to personal jurisdiction in Alabama would violate

the Fourteenth Amendment’s Due Process Clause because Plaintiff cannot show

either general or specific jurisdiction and because exercising personal jurisdiction

over LFK would not comport with traditional notions of fair play and substantial

justice. Plaintiff concedes that general personal jurisdiction is absent. The issue is,

therefore, one of specific personal jurisdiction.

1. Minimum Contacts

Specific jurisdiction requires (1) that a defendant’s contacts with the forum

state be related to the cause of action or give rise to it; (2) involve “some act by which

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the defendant purposefully availsitself ofthe privilege of conducting activities within

the forum,” and (3) “be such that the defendant should reasonably anticipate being

haled into court there.” Sloss Indus. Corp., 488 F.3d at 925.

a. Contacts that Relate to or Give Rise to the Cause of Action

LFKcontends that Plaintiff’s alleged injuries arose out of Texo’s modifications

of the warper that caused Ms. Wingard’s death, not out of the insured-insurer

relationship between LFK and Texo. LFK further argues that thislawsuit constitutes

a direct action by the insured’s tort claimant (Ms. Wingard’s administrator) for

recovery of the $5.25 million judgment from the insurer (LFK). Based on these

contentions, LFK argues that it has no contacts that are related to the causes of action

against it or that gave rise to those causes of action. 

As a preliminary matter, LFK’s contention reflects a fundamental

misunderstanding of the nature of this lawsuit. Plaintiff is not proceeding in this 8

lawsuit in his capacity as the administrator of Ms. Wingard’s estate. This is the hat

he wore in the underlying action, see supra note 1. Contrary to LFK’s assertion,

Plaintiff has not invoked Alabama’s direct action statute against LFK to reach and

apply the policy’s proceeds for satisfaction of the $5.25 million judgment. See Ala.

Code § 27-23-2; (see also LFK’s Reply Br. 10 (continuing to assert erroneously that

 The court will presume that LFK’s misunderstanding is unwitting.

8

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Plaintiff, as the representative for Ms. Wingard, “has filed this declaratory judgment

action regarding insurance coverage for Texo . . . under Alabama’s Direct Action

Statute”).) Instead, Plaintiff is suing in his second hat, which is his capacity as the

assignee of Texo’s rights under the insurance contract at issue. (See Am. Compl.

¶ 5); see also Green Tree Fin. Corp. v. Channell, 825 So. 2d 90, 95 (Ala. 2002)

(When a party assigns its rights under a contract to an assignee, the assignee steps

into the shoes of the assignor and possesses all the rights the assignor originally

possessed.). 

This lawsuit is not about “what caused Plaintiff’s [decedent’s] injuries” (Doc.

# 44, at 18), but rather what caused Texo’s injuries. The causes of action seek

recovery for LFK’s alleged breach of its insurance contract with Texo for failing to

provide indemnity for any part of the $5.25 million judgment and for LFK’s alleged

negligent failure to settle the underlying action for the policy limits. The personal

jurisdiction issue is whether LFK’s contacts with Alabama are related to these causes

of action. Given LFK’s apparent confusion, LFK has not offered any meaningful

analysis as to whether it has contacts with Alabama that relate to or give rise to the

causes of action, and the court is not obligated to formulate arguments on its behalf. 

Eleventh Circuit precedent establishes, however, that one of LFK’s contacts

with Alabama is LFK’s inclusion of Alabama within the territory-of-coverage clause

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in the policy. See McGow v. McCurry, 412 F.3d 1207, 1214 (11th Cir. 2005),

abrogation recognized on other grounds in Diamond Crystal Brands, Inc. v. Food

Movers Int’l, Inc., 593 F.3d 1249 (11th Cir. 2010). Absent any argument to the

contrary, the court finds that this contact relates to and arises out of the causes of

action. That is so because the causes of action are steeped in LFK’s contractual

obligations under the policy and relate to its coverage conduct with respect to the

underlying action litigated in Alabama. In other words, had it not been for LFK’s

refusal to settle or provide indemnity for the judgment in the underlying action,

Plaintiff would not have needed to bring this lawsuit as the assignee of Texo’s

contractual rights under the policy. Cf. McGow, 412 F.3d at 1214 (holding that the

insurance company’s contact with the forum state was established based upon the

policy’s territory-of-coverage clause and that the contact was related to the insured’s

action for damages covered by the policy).

b. Purposeful Availment

The defendant must “purposefully avail[ ] itself of the privilege of conducting

activities within the forum State, thus invoking the benefits and protections of its

laws.” Hanson v. Denckla, 357 U.S. 235, 253 (1958). Considerations such as the

quality, nature, and extent of the activity in the forum, the foreseeability of

consequences within the forum from activities outside it . . . relate to whether it can

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be said that the defendant’s actions constitute ‘purposeful availment.’” Sea Lift, Inc.

v. Refinadora Costarricense de Petroleo, S.A., 792 F.2d 989, 993 (11th Cir. 1986).

LFK argues that it has not purposefully availed itself of the privilege of

conducting activities within the state of Alabama based upon its absence of a physical

presence in the state of Alabama. LFK contends further that its insurance contract

with Texo is insufficient to create any connection between it and the state of

Alabama, notwithstanding that Texo ultimately engaged in activities in Alabama that

led to the underlying action. LFK asserts that even if the insurance contract is

deemed a contact, the contract alone is insufficient to subject it to a lawsuit in

Alabama, absent additional contacts that are incidental to an ongoing contractual

relationship. Countering LFK, Plaintiff focuses on the worldwide territory-ofcoverage clause and the nature and extent of LFK’s activities in the actual defense of

Texo in the underlying action litigated in an Alabama court. Plaintiff contends that

this is enough to demonstrate purposeful availment. The court agrees with Plaintiff

based upon McGow. 

In McGow, the Eleventh Circuit examined whether a territory-of-coverage

clause in an insurance policy amounted to purposeful availment for purposes of

subjecting the insurer to suit in the coverage territory. See 412 F.3d at 1214. 

Following the reasoning ofthe Fourth, Sixth, Eighth, and NinthCircuits, the Eleventh

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Circuit answered in the affirmative, agreeing that presumably an insurer receives

higher premiums for providing broad territorial coverage and that an insurer desiring

to avoid suit in the forum state need only include that state in a policy territory

exclusion. See id. at 1215 (citing Rossman v. State Farm Mut. Auto. Ins. Co., 832

F.3d 282, 287 (4th Cir. 1987)); see also Ferrell v. West Bend Mut. Ins. Co., 393 F.3d

786, 791 (8th Cir. 2005) (observing that the insurer “presumably offered a broad

‘coverage territory’ in order to make its policies more marketable and profitable”). 

Based upon this rationale, the Eleventh Circuit concluded that the insurer

purposefully availed itself of the privileges in the state of Georgia. By including the

state of Georgia as a covered territory, the insurer “purposefully sought to provide

coverage for accidents occurring in Georgia, with full knowledge that litigation could

result and that [the insurer] could be haled into court in Georgia and required to make

payments in Georgia based on that coverage.” McGow, 412 F.3d at 1215. 

Additionally, the insurer “purposefully included Georgia in its coverage territory in

order to charge higher premiums.” Id.

Here, LFK’s policy issued to Texo included a worldwide territory-of-coverage

provision without a territorial limitation. That inclusion necessarily meant that

Alabama was a covered territory, and at no time has LFK denied that thisterritory-ofcoverage clause included Alabama. (See, e.g., Lars Gustafson’s Dep. 22 (affirming

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that the policy’s worldwide territory-of-coverage provision contained no “exclusion

just based on the fact that the accident occurred in Alabama”).) LFK also has not

disputed that the purpose of the insurance policy was to protect Texo from the

consequences of lawsuits brought against it anywhere in the world. And it can be

presumed that LFK was able to assess premiums at a higher rate for LFK’s increased

risk in insuring a broad geographic area. LFK has “indicated its willingness” to

litigate in Alabama by contractually obligating itself to defend its insured against

certain claims arising from Texo’s activities in Alabama. Rossman, 832 F.2d at 286. 

In other words, the “expectation of being haled into court in [Alabama] [was] an

express feature of its policy.” Id.

LFK not only included Alabama in the policy’s territory coverage, but also

played a pivotal part in orchestrating the defense in the underlying action. 

Specifically, LFK provided Texo a defense in the underlying action in an Alabama

court, funded the litigation by paying Texo’s attorney’s fees, made strategic decisions

about settlement and trial strategy, asserted defenses under Alabama law, made the

decision to deny indemnity coverage for any part of the $5.25 million Alabama

verdict, and based that denial on Alabama’s statutory classification of damages as

punitive only. 

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LFK seeks to distance itself from the Alabama litigation by hiding behind

Länsförsäkringar AB whom LFK hired to manage the Alabama litigation, but LFK

ignores agency principles that are relevant in the personal jurisdiction analysis. See

Burger King Corp. v. Rudzewicz, 471 U.S. 462, 480 n.22 (1985) (recognizing for

purposes of personal jurisdiction that commercial activities performed on a party’s

behalf “may sometimes be ascribed to the party”); see also Daynard v. Ness, Motley,

Loadholt, Richardson &Poole, P.A., 290 F.3d 42, 55–60 (1st Cir. 2002) (agent’s acts

may be attributed to principal for jurisdictional purposes when, under standard agency

principles, agent is authorized to act on behalf of principal or principal ratifies agent’s

conduct). LFK has not refuted the existence of an agency relationship between it and

Länsförsäkringar AB. LFK has offered no reason at this juncture why

Länsförsäkringar AB’s contacts should not be imputed to LFK based upon an actual

or apparent agency relationship between these two entities; hence, its argument that

its only contacts with Alabama are due to the unilateral activities of a third party (i.e.,

Länsförsäkringar AB) is unavailing. 

 Accordingly, LFK has purposefully availed itself of the privileges of

conducting activities in Alabama. In doing so, LFK “received the benefits and

protection of the laws of the state.” Int’l Shoe, 326 U.S. at 320. 

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c. Reasonable Anticipation ofBeingHaled into anAlabama Court

In McGow, the Eleventh Circuit held that the insurer “reasonably should have

foreseen being haled into court in Georgia because its policy covered the entire

United States” and also observed that the “expectation of being haled into court in a

foreign state [was] an express feature of its policy.” 412 F.3d at 1215 (internal

citation and quotation marks omitted). The court does not question LFK’s assertion

that Texo is the first insured in LFK’s 210-year history to make a claim arising from

activities in the United States. This apparent rarity does not negate, however, the

reasonable foreseeability of suit in Alabama, as McGow’s holding focused on the

insurer’s affirmative act of including the forumstate as a covered territory, see id., not

on the probability that a claim actually would arise from an accident occurring in a

covered forum. Here, because Alabama is within the territory-of-coverage clause in

the policy between LFK and Texo, LFK should have been aware thatTexo’s activities

could have resulted in an accident in Alabama and that LFK may have to litigate

issues arising from its contractual obligations under the policy in an Alabama court. 

2. Traditional Notions of Fair Play and Substantial Justice

The second part of the federal due process analysis requires a court’s exercise

of personal jurisdiction to comport with traditional notions offair play and substantial

justice. In Sloss Industries, the Eleventh Circuit explained that in measuring the

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fairness of the exercise of personal jurisdiction over a foreign defendant, courts

should weigh (1) the burden on the defendant, (2) the forum state’s interest in

adjudicating the dispute, (3) the plaintiff’s interest in obtaining convenient and

effective relief, (4) interests of the judicial systems of the United States and the

foreign country in obtaining the most effective resolution, and (5) shared interests of

the United States and the foreign country in furthering fundamental substantive

policies. See 48 F.3d at 933. 

LFK’s brief devotes less than two pages to discussion of fair play and

substantial justice and focuses only on a single factor: the burden on LFK in

litigating in Alabama. LFK argues that it would be a “great inconvenience” and a

“heavy burden” on LFK to litigate in Alabama. (Doc. # 44, at 27–28.) Undoubtedly,

there will be some burden on LFK, a Swedish company, to defend this action in an

Alabama court. LFK cites no authority, however, establishing that this burden alone

on a foreign defendant is enough to offend traditional notions of fair play and

substantial justice. This is particularly so given that, based upon application of

McGow, LFK has indicated its amenability to suit in thisstate by extending coverage

for Texo for its activities in Alabama. Moreover, in light of the fact that LFK already

has provided a defense to Texo in the underlying action filed in an Alabama court

pursuant to the insurance contract, the additional burden of requiring LFK to come

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to Alabama to litigate claims arising out of LFK’s contractual obligations under the

policy seems reasonable and minimal.

In its reply brief, LFK has attempted to differentiate McGow on the ground that

McGow involved an uninsured motorist insurance policy and this action involves a

general liability policy. (Doc. # 62, at 10.) The emphasis in McGow was on a

territory-of-coverage clause’s inclusion in an “insurer’s policy,” not on the type of

policy. Agreeing with the rationale of foursister circuits that had examined the effect

of an insurance policy’s territory-of-coverage clauses on the personal jurisdiction

analysis, the McGow court did not distinguish the Eighth Circuit decision, for

example, on the ground that it involved a commercial general liability policy. See

McGow, 412 F.3d at 1214–15 (citing Ferrell, 393 F.3d at 791). Based upon McGow,

LFK’s proffered distinction is not convincing. 

As a final matter, LFK relies on OMI Holdings, Inc. v. Royal Ins. Co. of

Canada, 149 F.3d 1086 (10th Cir. 1998), for the proposition that when an insurance

company’s contact with the forum state is based solely on a territory-of-coverage

clause, the contact is “qualitatively low on the due process scale,” if the contact

counts at all. Id. at 1095; (Doc. # 62, at 13.) LFK’s argument ignores McGow’s

unfavorable critique ofthe OMI Holdings decision. McGowdisagreed with the Tenth

Circuit’s “hesitance to extend personal jurisdiction to an insurer based purely on the

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territory-of-coverage clause” and constructively criticizes OMI Holdings’ reasoning. 

See McGow, 412 F.3d at 1216 n.5 (citing OMI Holdings, 149 F.3d at 1093–95). 

LFK’s reliance on OMI Holdings, therefore, is unpersuasive. 

In sum, LFK relies only on one of the five Sloss Industries factors and ignores

the remaining factors. The court will not formulate arguments for LFK that it has

declined to make, and new arguments and a shift in strategy presented for the first

time in a reply brief come too late. See Resolution Trust Corp. v. Dunmar Corp., 43

F.3d 587, 599 (11th Cir.1995) (“There is no burden upon the district court to distill

every potential argument that could be made based upon the materials before it.”). 

LFK further fails to distinguish McGow in a meaningful way, and McGow has

rejected the reasoning of the Tenth Circuit decision upon which LFK relies. On this

record, LFK has not established a “compelling case” that the court’s exercise of

personal jurisdiction offends traditional notions of fair play and substantial justice. 

Burger King, 471 U.S. at 477.

B. Forum Selection Clause

In the Eleventh Circuit, a forum selection clause is “presumptively valid where

the underlying transaction is fundamentally international in character.” Lipcon, 148

F.3d at 1295. Only a “clear showing that the clause[ ] [is] unreasonable under the

circumstances” will overcome this presumption of validity. Id.(citations and internal

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quotation marks omitted). A forum selection clause is unreasonable where “the

chosen law would deprive the plaintiff of a remedy,” Krenkel v. Kerzner Int’l Hotels

Ltd., 579 F.3d 1279, 1281 (11th Cir. 2009), or where “‘enforcement would contravene

a strong public policy of the forum in which suit is brought, whether declared by

statute or by judicial decision.’” Estate of Myhra, 2012 WL 4207303, at *4 (quoting

The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972)). The party resisting

enforcement of a forum selection clause bears the burden of “clearly show[ing] that

enforcement would be unreasonable and unjust . . . .” The Bremen, 407 U.S. at 15. 

The forum selection clause, which includes a choice-of-law provision,

provides: “Disputes regarding the interpretation or application of this insurance

policy of issues related to contractual relationship shall be determined according to

Swedish law in Swedish courts.” (Ex. B to Doc. # 45.) Plaintiff argues that

enforcement of the forum selection clause would limit LFK’s liability in a manner

(1) that would deprive Plaintiff of a remedy for his claims in this action, given the

unique remedial scheme under the Alabama Wrongful Death Act, and (2) that would

violate Alabama’s public policy against enforcing insurance contracts that exclude

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the recovery of punitive damagesin actionsimplicating the Alabama Wrongful Death

Act. (Doc. # 59, at 17.) For the reasons to follow, the court agrees.

9

The Alabama Wrongful Death Act “‘allow[s] the recovery of punitive damages

only.’” Hill v. Campbell, 804 So. 2d 1107, 1109 (Ala. Civ. App. 2001) (quoting

Campbell v. Williams, 638 So. 2d 804 (Ala. 1994)). For that reason, the Hill court

recognized that “[a] standard liability policy that excluded coverage for punitive

damages in a wrongful-death case would contravene Alabama law.” Id.; see also

Alabama Attorney General Opinion 2 (Feb. 1, 1978) (“[A]ny administrative ruling

which allowed insurance companiesto exclude coverage for punitive damages under

standard liability policies would be in direct contravention of wrongful death case law

on the subject, and would therefore be void as against public policy of [the State of

Alabama] as well.”). Based upon this authority, Alabama has a strong public policy

interest in preventing insurance companies from enforcing a policy’s punitive

damages exclusion for claims brought under the Alabama Wrongful Death Act.

Here, in the underlying action, Plaintiff (wearing his first litigation hat)

recovered a judgment against Texo for $5.25 million in punitive damages under the

Alabama Wrongful Death Act. The Act’s classification of damages as punitive

 Because these issues are dispositive, it is unnecessary to address Plaintiffs’ other

9

arguments for invalidating the forum selection clause.

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appears to be the sole reason why LFK declined settlement, proceeded to trial, and

refused to indemnify its insured, Texo, for any portion of the underlying judgment. 

To enforce the forumselection clause would permit a Swedish court to apply Swedish

law to decide whether LFK, which has provided coverage to its insured for activities

occurring in Alabama, can rely on a punitive damages exclusion to avoid indemnity

coverage for a punitive damages judgment entered against its insured under the

Alabama Wrongful Death Act. 

Enforcement of the foreign forum selection clause will result in a Swedish

court deciding this case based upon application of Swedish law (by operation of the

choice-of-law provision), not based upon application of Alabama law. This choiceof-law provision distinguishes this case from Rucker v. Oasis Legal Finance L.L.C.,

upon which LFK relies. See 632 F.3d 1231, 1237 (11th Cir. 2011). In Rucker, it is

true that forum selection clause was enforced; however, the Eleventh Circuit deemed

it significant that the contractually chosen forum “would apply Alabama law” and,

thus, “would give proper deference to . . . Alabama precedent.” Id.; see also id.

at 1234 (Choice of law provision provided that the purchase agreement would be

governed by the Alabama law). No indication has been given that Alabama’s law or

policies will play any role in the decision in the Swedish courts. Indeed, not even

Professor Michael Bogan ventures to comment on this topic. (See, e.g., Prof. 

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Bogan’s Legal Op. 2 (“This opinion . . . does not address . . . whether [under Swedish

law] the insurance policy’s exclusion of punitive damages shall be interpreted to

include the present claim for punitive damages.” (Doc. # 59)).) On this record,

Plaintiff has made the required showing that enforcement of the forum selection

clause would deprive Plaintiff of a remedy and would contravene Alabama’s strong

public policy interest against enforcing insurance contracts that exclude the recovery

of punitive damages in actions implicating the Alabama Wrongful Death Act.

V. CONCLUSION

For the foregoing reasons, the court previously denied Defendant LF

Kronoberg’s Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction and

Rule 12(b)(3) motion to dismiss for improper venue. This court properly exercises

personal jurisdiction over LFK, and the forum selection clause is not enforceable. 

DONE this 23rd day of October, 2012.

 /s/ W. Keith Watkins 

CHIEF UNITED STATES DISTRICT JUDGE

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