Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-arwd-5_06-cv-05132/USCOURTS-arwd-5_06-cv-05132-1/pdf.json

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

---

IN THE UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF ARKANSAS

FAYETTEVILLE DIVISION

NORTHLAND INSURANCE COMPANY PLAINTIFF

v. CASE NO. 06-5132

LEXINGTON INSURANCE COMPANY and DEFENDANTS

AMERICAN HOME ASSURANCE COMPANY

ORDER

This case involves a suit in Georgia for personal injury and

the resulting settlement. 

Before the Court is the Motion of Lexington Insurance Company

to Dismiss for Improper Venue (Doc. 12); Brief in Support of Motion

of Lexington Insurance Company to Dismiss for Improper Venue (Doc.

13); Response to Lexington’s Motion to Dismiss (Doc. 15);

Memorandum of Law in Response to Lexington’s Motion to Dismiss

(Doc. 17); Sur-Reply in Opposition to Lexington’s Motion to Dismiss

(Doc. 19); and Lexington Insurance Company’s Reply to Response to

Motion to Dismiss (Doc. 18).

In 2001 Henry Williams (“Williams”) was driving a semitractor, which was leased by Williams to a company named ProCarriers, and pulling a Wal-Mart trailer. Pro-Carriers and Wal-Mart

entered into a dedicated service agreement for operation of the

trailer, selecting Arkansas law and Arkansas as a forum for any

disputes. The tractor-trailer was involved in a fatal collision

with another vehicle in Georgia. The decedent’s parents and

administrators of his estate sued Pro-Carriers, Williams, and WalCase 5:06-cv-05132-RTD Document 27 Filed 01/31/07 Page 1 of 4 PageID #: <pageID>
Page 2 of 4

Mart in Georgia. The claims arising out of the accident were

settled for $4,524,116. Williams is insured by Plaintiff Northland

Insurance Company (“Northland”). Pro-Carrier is insured by

Defendant Lexington Insurance Company (“Lexington”) and non-party

Underwriters Insurance Company (“Underwriters”). Wal-Mart is

insured by Defendant American Home Assurance Company (“AHAC”).

Plaintiff contends that Defendants did not fully contribute

their respective shares to the Georgia settlement. Plaintiff seeks

a declaratory judgment construing the three independent insurance

contracts and establishing their sequence of coverage. Defendant

Lexington now seeks to dismiss the case for improper venue in the

Western District of Arkansas.

One of the central purposes of statutory venue is to ensure

that a defendant is not haled into a remote district, having no

real relationship to the dispute.” Richards v. Aramark Servs.,

Inc., 108 F.3d 925, 928 (8th Cir.1997) (internal quotation marks

and citations omitted) (also explaining that “[v]enue requirements

exist for the benefit of defendants.”). Title 28 U.S.C. § 1391 is

the general federal venue statute. Relevant Section 1391(a)(2)

provides that in a case based on diversity jurisdiction venue is

proper “in a judicial district in which a substantial part of the

events or omissions giving rise to the claim occurred.” 28 U.S.C.

§ 1391(a)(2). When considering whether venue is proper among two or

more districts, the question is not which district among the

Case 5:06-cv-05132-RTD Document 27 Filed 01/31/07 Page 2 of 4 PageID #: <pageID>
Page 3 of 4

potential forums is the best venue, but rather “whether the

district the plaintiff chose had a substantial connection to the

claim, whether or not other forums had greater contacts.” Setco

Enters. v. Robbins, 19 F.3d 1278, 1281 (8th Cir.1994).

Plaintiff argues venue is proper in the Western District of

Arkansas because a “substantial part of the events and omissions

giving rise to the matter occurred and/or a substantial part of

property that is the subject of the action is situated in

Bentonville, Arkansas,” including allegations that the trailer

involved in the underlying accident was garaged in Arkansas, the

liability policy from AHAC to Wal-Mart occurred in Arkansas, AHAC

had an Arkansas insured, and the dedicated service agreement

between Wal-Mart and Pro-Carriers for operation of the trailer had

a forum selection clause for Arkansas. (Complaint p. 2, ¶ 6).

Defendant Lexington moved for dismissal for lack of venue and

contends venue is improper in the Western District of Arkansas

because none of the Defendants are Arkansas residents; and that the

“events or omissions” giving rise to this lawsuit all occurred

outside the state of Arkansas.

The Court is not persuaded by Plaintiff’s argument that

alleged acts of Defendants had a substantial connection to the

Western District of Arkansas for the purpose of establishing venue.

Section 1391(a)(2) clearly states that venue is proper in a

district “in which a substantial part of the events or omissions

Case 5:06-cv-05132-RTD Document 27 Filed 01/31/07 Page 3 of 4 PageID #: <pageID>
Page 4 of 4

giving rise to the claim occurred.” We are asked to construe

insurance policies entered into in different states, one of which

is Arkansas, to determine liability for a Georgia accident and

Georgia settlement. The connection to Arkansas is too attenuated

and not truly related to the basis of the dispute. 

Although the dedicated service agreement entered into in

Arkansas between Pro-Carrier and Wal-Mart is responsible for

putting the vehicle on the road, which may have been the cause of

the accident, the accident is not the underlying basis of the

lawsuit. The lawsuit was brought due to the actions of the parties

relative to the settlement agreement. Even though one agreement

that must be construed to ultimately decide this case was entered

into in Arkansas, the act of entering into the agreement is not the

“act or omission” at issue. Thus, venue is improper in this court.

Accordingly, the Motion of Lexington Insurance Company to Dismiss

for Improper Venue (Doc. 12) is hereby GRANTED and this case is

DISMISSED without prejudice.

IT IS SO ORDERED.

 /s/ Robert T. Dawson 

Dated: January 31, 2007 Robert T. Dawson

United States District Judge

Case 5:06-cv-05132-RTD Document 27 Filed 01/31/07 Page 4 of 4 PageID #: <pageID>