Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_04-cv-04537/USCOURTS-cand-3_04-cv-04537-2/pdf.json

Parties Involved:
Alpina Insurance Company
Defendant
Radian International, LLC
Plaintiff

Document Text:

United States District Court

For the Northern District of California

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

RADIAN INTERNATIONAL, LLC,

Plaintiff,

 v.

ALPINA INSURANCE COMPANY,

Defendant. 

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No. C-04-4537 SC

ORDER RE: PLAINTIFF'S

MOTION TO ALTER OR

AMEND JUDGEMENT

PURSUANT TO 

FRCP 59(e) 

Plaintiff Radian International, LLC ("Plaintiff") brought

this action against Defendant Alpina Insurance Company

("Defendant") to obtain declaratory relief and damages for an

alleged breach of contract. On July 14, 2005, this Court granted

Defendant's Motion to Dismiss based on improper venue. The Court

held that dismissal was appropriate given that both parties had

agreed in the insurance contract to a mandatory forum selection

clause designating Beirut, Lebanon the venue for resolution of all

disputes. Plaintiff has now moved under Fed. R. Civ. P. 59(e) for

this Court to alter or amend its earlier judgment.

"There are four grounds upon which a Rule 59(e) motion may be

granted: 1) the motion is necessary to correct manifest errors of

law or fact upon which the judgment is based; 2) the moving party

presents newly discovered or previously unavailable evidence;

3) the motion is necessary to prevent manifest injustice; or

Case 3:04-cv-04537-SC Document 54 Filed 09/02/05 Page 1 of 5
United States District Court

For the Northern District of California

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4) there is an intervening change in controlling law." Turner v.

Burlington N. Santa Fe R.R., 338 F.3d 1058, 1063 (9th Cir. 2003)

(internal quotations omitted). In the instant matter, Plaintiff

has moved pursuant to the third ground, asserting that alteration

or amendment is necessary "to prevent a manifest injustice." 

Plaintiff's Motion ("Motion") at 3.

Plaintiff's basis for this assertion is that it was denied an

opportunity to pursue limited discovery with respect to

Defendant's Motion to Dismiss. Id. at 4. Plaintiff relies on

Hayashi v. Red Wing Peat Corp., 396 F.2d 13, 14 (9th Cir.

1968), to support the proposition that "trial courts should permit

plaintiffs to take limited discovery regarding issues of fact

raised by a dispositive motion to dismiss for lack of proper

venue." Motion at 3. In Hayashi, the Ninth Circuit stated that

"the trial court may permit discovery on such a motion, and indeed

should do so where discovery may be useful in resolving issues of

fact presented by the motion ..." Hayashi, 396 F.2d at 14. The

Court agrees with Plaintiff that Hayashi is controlling case law. 

However, interpretation of a contract is a question of law. 

E.M.M.I., Inc. v. Zurich Am. Ins. Co., 84 P.3d 385, 389 (Cal.

2004). Therefore, under Hayashi, the Court finds that limited

discovery is unnecessary in the instant matter because the

interpretation of the forum selection clause did not involve an

"issue of fact." For this reason, the Court denies the Motion.

Notwithstanding the above conclusion, even if limited

discovery was appropriate in this matter, Plaintiff has not put

forth any non-frivolous reasons demonstrating that discovery would

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United States District Court

For the Northern District of California

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be meaningful. Plaintiff asserts that limited discovery might

1) show the existence of an additional insurance policy, or

2) show potential ambiguities in Clause G of the insurance

contract, which contained the forum selection clause. Motion at

4-7. To support its theory of a mysterious additional insurance

policy, Plaintiff relies on innuendo suggesting that because there

may have been different insurance policy numbers for the contract

in question, then there must have been multiple policies. Id. at

4. However, the Court fails to understand why Plaintiff would

need to carry out discovery to find an additional insurance

contract. Plaintiff is a Delaware limited liability company with

its principal offices in California and engages in civil

engineering contract work both in the United States and abroad. 

Amended Complaint at 2. Presumably, if such a sophisticated

entity was a party to an insurance contract, it would have

evidence of the contract in its own records and, furthermore,

would have at least mentioned this mystery contract in its

Complaint or in its earlier opposition to Defendant's successful

motion to dismiss. However, Plaintiff has instead chosen to wait

until this late stage to mention this alleged factual discrepancy. 

Plaintiff's arguments simply lack credibility. Similarly,

Plaintiff attempts to raise an aura of unanswered questions by

referring to the binder for the actual insurance policy that was

presented to the Court. With respect to the binder, Plaintiff

states that "the original binder issued to Radian makes no

reference to any type of choice of law, or forum selection

clause." Motion at 4. However, "an insurance binder is only a

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temporary contract which automatically terminates when the policy

is issued." H/C Co. v. Zurich Am. Ins. Co., No. C-94-1106, 1995

U.S. Dist. LEXIS 14699, at *6 (N.D. Cal. Oct. 6, 1995). By

definition, an insurance binder does not include all the terms of

the insurance contract to which the binder is issued; otherwise,

the binder would become the insurance contract itself. In sum,

with regards to the issue of whether there were other agreements

between the parties which would be illuminated by discovery, the

Court finds that Plaintiff has presented no credible theories

which would suggest that there are issues of fact necessary to

determine the validity of the forum selection clause.

To support its theory that discovery could show ambiguities

in the forum selection clause itself, found in Clause G of the

insurance contract, Plaintiff states:

Clause G does not unambiguously direct the parties to

initiate litigation involving all disputes arising

under the Alpina policy in the Lebanese courts. The

Clause merely recites that "any resolution to a

dispute, interpretation or operation of any terms,

condition, definition or provision shall be held in

Beirut, Lebanon." In light of the vague and ambiguous

wording of the Alpina policy ...

Motion at 7. The Court fails to see how Plaintiff can credibly

assert that "any resolution ... shall be held" is an ambiguous

phrasing. As explained in the July 14, 2005 Order, case law

emphatically supports the Court's holding that "the clause here is

unambiguously a mandatory clause." The Court does not see any

non-frivolous basis for the Plaintiff to continue to maintain that

this clause is "vague and ambiguous."

In sum, two sophisticated parties agreed to an insurance

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For the Northern District of California

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contract which contained a forum selection clause. If Plaintiff

did not want to pursue dispute resolution procedures in Beirut,

Lebanon, it should not have agreed to the forum selection clause

at the time of contract. The Court held in its July 14, 2005

Order that the clause was a valid and enforceable forum selection

clause. The Court holds now that denying Plaintiff an opportunity

to conduct limited discovery on this matter does not constitute a

manifest injustice. Therefore, Defendant's Motion to Alter or

Amend Judgment Pursuant to Fed. R. Civ. P. 59(e) is DENIED in its

entirety.

IT IS SO ORDERED.

Dated: September 2 , 2005

 

UNITED STATES DISTRICT JUDGE

Case 3:04-cv-04537-SC Document 54 Filed 09/02/05 Page 5 of 5