EXHIBIT E

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UNITED STATES DISTRICT COURT 

WESTERN DISTRICT OF KENTUCKY 

LOUISVILLE DIVISION 

LEXINGTON INSURANCE COMPANY, Plaintiff, 

v. No. 3:20-cv-00330-BJB-LLK 

 

 THE AMBASSADOR GROUP LLC, et al. Defendants. 

 

 

STATE NATIONAL INSURANCE 

COMPANY, INC., et al. 

Plaintiff–Intervenors, 

v. 

 

 THE AMBASSADOR GROUP LLC, et al. Defendants–Intervenors. 

* * * * * 

OPINION AND ORDER 

This insurance-fraud case implicates a complex cast of plaintiffs, defendants, and 

intervenors affected by “captive insurance” schemes that stretched from Kentucky to the 

Caribbean. All told, approximately 25 individual claims, counterclaims, and cross-claims are at 

issue. The Plaintiffs—Lexington Insurance (an AIG subsidiary) and intervenors “State National” 

(State National Insurance Company and National Specialty Insurance Company)—contend that 

the five defendants and several affiliates committed fraud and a host of other torts and statutory 

violations by issuing counterfeit policies under the Plaintiffs’ names and trademarks. 

The motions to dismiss and stay discovery, now before the Court, concern the connections 

of one defendant—Performance Insurance Company SPC—to the Commonwealth of Kentucky 

and to this litigation. Those ties are too tenuous to support personal jurisdiction, according to the 

motion to dismiss: the only connection between Performance and this litigation is the rental by 

third-party customers of “cells” in Performance’s segregated portfolio. On Performance’s view, 

this falls short of the minimum contacts required to support jurisdiction over a defendant operating 

only in the Cayman Islands that has never owned property, entered into a contract, had a registered 

agent, or maintained an office in Kentucky. 

Performance’s characterization, however, does not capture the full reach of Performance’s 

activity as set forth in the pleadings. The Plaintiffs allege that Performance took part in a 

fraudulent scheme directed at and executed in the Commonwealth. At this stage, the Plaintiffs 

bear the burden of establishing the Court’s personal jurisdiction over each defendant. But that 

burden is not especially heavy when the defendant seeking dismissal relies on pleadings and 

affidavits (which the Court construes in the light most favorable to plaintiffs), rather than on facts 

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established in discovery or an evidentiary hearing. Serras v. First Tenn. Bank Nat’l Ass’n, 

875 F.2d 1212, 1214 (6th Cir. 1989). In a Rule 12(b)(2) motion based on affidavits alone, “the 

plaintiff must make only a prima facie showing that personal jurisdiction exists in order to defeat 

dismissal. Air Prods. & Controls v. Safetech Int’l, 503 F.3d 544, 549 (6th Cir. 2007) (quoting 

Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991)). 

The Plaintiffs muster a persuasive argument that Performance’s alleged Kentucky 

connections, involving co-defendant and agent Brandon White, show that Performance took 

advantage of the Commonwealth’s laws and the benefits of doing business here. If true, that would 

suffice to establish the Court’s jurisdiction over Performance. See, e.g., Burger King Corp. v. 

Rudzewicz, 471 U.S. 462, 472 (1985).

Even more persuasive, and ultimately dispositive, is Plaintiffs’ objection to the motion’s 

timeliness—or lack thereof. Performance failed to object to the Court’s jurisdiction until after it 

entered two general appearances, after it filed an answer that did not assert a personal-jurisdiction 

defense, and after it actively participated in the case for six months. Then it switched counsel, 

advanced this personal-jurisdiction argument, and sought to stay discovery on that basis. The 

short-but-involved history of this case confirms Plaintiffs’ position: Performance forfeited its 

personal-jurisdiction defense. The Court therefore DENIES Performance’s Rule 12(b)(2) motion 

to dismiss [DN 79] and DENIES as moot its stay motion [DN 80]. 

* * * 

Describing Performance’s substantial involvement in this complex litigation—early 

though it may be—makes the basis for forfeiture clear. As explained in Plaintiffs’ Opposition 

[DN 85 at 1985], the lawsuit’s posture reflects “the typical waiver scenario” under Rule 12(b)(2): 

“a defendant waives its personal jurisdiction defense if submissions, appearances and filings give 

the plaintiff a reasonable expectation that the defendant will defend the suit on the merits or cause 

the court to go to some effort that would be wasted if personal jurisdiction is later found lacking.” 

Innovation Ventures, LLC v. Custom Nutrition Labs., LLC, 912 F.3d 316, 332–33 (6th Cir. 2018) 

(quoting Means v. U.S. Conf. of Catholic Bishops, 836 F.3d 643, 648 (6th Cir. 2016)). 

Shortly after Lexington filed the Complaint and sought a temporary restraining order on 

May 11, 2020, Performance “defend[ed] the suit on the merits” and “cause[d] the court to go to 

some effort.” Id. It did so by: 

 Filing a general appearance, without specifically reserving its rights to contest 

jurisdiction, on May 13th. 

 Proposing an agreed expedited-discovery order, which the Court adopted, on May 

14th. 

 Proposing another agreed order to extend pleading and discovery deadlines. 

 Agreeing to respond to Plaintiffs’ first set of interrogatories and requests for 

production of documents by June 9th. 

 Agreeing to a proposed schedule that called for an answer by June 10th. 

 Jointly asking the Court to enter a new scheduling order, in order to facilitate 

settlement discussions, on June 25th.

 Answering Plaintiff’s complaint on August 3rd. 

 Responding to interrogatories and requests for production on August 4th. 

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 Substituting new counsel, who entered a general appearance, without limitation, on 

October 7th. 

 Asserting cross-claims against co-defendants Ambassador and White in its answer 

to the Amended Intervenor Complaint on October 16th—for the first time objecting 

to personal jurisdiction. 

Not until November 13th did Performance actually file its motion to dismiss Lexington’s 

claims for lack of personal jurisdiction. By then it had spent much of 2020 defending this suit and 

inducing substantial efforts on the part of this Court and the eight other parties litigating this suit. 

Such voluntary, active and extensive participation in the litigation—without entering a special 

appearance or asserting a personal jurisdiction defense—forfeits the defense under the law of the 

Sixth Circuit. 

First, Performance’s counsel entered general appearances without offering any indication 

their client would contest personal jurisdiction. The Sixth Circuit has made clear that a “party 

waives the right to contest personal jurisdiction by failing to raise the issue when making a 

responsive pleading or a general appearance.” Reynolds v. Int’l Amateur Athletic Fed’n, 23 F.3d 

1110, 1120 (6th Cir. 1994). Performance could’ve avoided this predicament by filing a special 

appearance that reserved the right to contest personal jurisdiction. It did not. So its general 

appearance voluntarily accepted the district court’s jurisdiction, which supports forfeiture of this 

defense. See Gerber v. Riordan, 649 F.3d 514, 520 (6th Cir. 2011). 

Second, Performance answered the complaint without asserting its defense. This violates 

the Federal Rules’ requirement that defendants must include a personal jurisdiction defense in their 

first responsive pleading or motion to dismiss. Fed. R. Civ. P. 12(h). The complaint alleged facts 

that, in Lexington’s view, give this Court jurisdiction: Performance transacted business in the 

Commonwealth with two Kentucky residents (Ambassador and White) and maintained an office 

in Louisville. In response, the answer offered only a general denial: “Defendants deny the 

allegations contained in Paragraph 13 of the Complaint.” DN 28 at 708; id. at 709 (same with 

respect to ¶ 19). But the answer did not include the words “personal jurisdiction,” and the relevant 

paragraphs it denied included information other than just the jurisdictional assertion. The 

Plaintiffs, in other words, would not necessarily have had notice that Performance contested 

jurisdiction even if it tried to parse the answer’s every phrase. 

The failure to assert personal jurisdiction as a defense in their “first defensive move” may 

result in forfeiture of that defense—and contributes to the court’s denial of the motion here. Fed. 

R. Civ. P. 12(h)(1)(B); Rauch v. Day & Night Mfg. Corp., 576 F.2d 697, 701 (6th Cir. 1978). 

Courts in this Circuit commonly decide forfeiture arguments on precisely this basis. See, e.g.,

Long v. Huffy Corp., No. 17-cv-13312, 2018 WL 500288, at *2 (E.D. Mich. Jan. 22, 2018) 

(defendant waived objection to personal jurisdiction by filing an answer that did not challenge 

jurisdiction); Mucerino v. Newman, No. 3:14-cv-00028, 2017 WL 387202, at *1 (M.D. Tenn. Jan. 

26, 2017) (personal jurisdiction existed because defendant answered an amended complaint 

without asserting a defense of lack of jurisdiction); Van Sweden Jewelers, Inc. v. 101 VT, Inc., 

No. 1:10-cv-253, 2012 WL 4074620, at *7 (W.D. Mich. June 21, 2012) (holding on summary 

judgment that defendant forfeited personal-jurisdiction challenge by actively litigating despite 

prior objection.). 

Third, even if the answer’s generic denial sufficed to timely assert a jurisdictional defense, 

a defendant “may forfeit the right to seek a ruling on the defense at a later juncture through his 

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conduct during the litigation.” King v. Taylor, 694 F.3d 650, 658 (6th Cir. 2012). Performance’s 

affirmative litigation conduct, outlined above, more than sufficed to give the Plaintiffs (and the 

Court) a reasonable expectation that Performance would defend the suit on the merits. 

Performance acknowledges participation in initial, expedited discovery, DN 79-1 at 1934, 

which included responses to Lexington’s interrogatories and document requests, DN 94 at 2199–

200. Its activity went beyond that, however. The passage of time and Performance’s involvement 

in even non-dispositive, non-discovery litigation are both relevant to the forfeiture analysis in the 

Sixth Circuit. See, e.g., Johnson v. Soal, Inc., 2019 U.S. Dist. LEXIS 12030, *4–5 (E.D. Ky. 2019) 

(accounting for multiple communications with plaintiff, court filings, and court appearances, along 

with the passage of time and conduct of discovery, in assessing the timeliness of the jurisdictional 

defense). 

The touchstone is the reasonable expectations and efforts spurred by a defendant’s conduct. 

Innovation, 912 F.3d at 332–33. Performance’s substantial involvement in this case created both. 

As the Plaintiffs note, between May and November of 2020, Performance actively engaged in this 

litigation by entering into agreed orders and joint reports, communicating with the parties and the 

Court, and asserting crossclaims against Ambassador and White before moving to dismiss. DN 85 

at 1976–77. Even when Performance objected to jurisdiction in its answer to the intervenor 

complaint, it failed to move for dismissal on that basis for a month, allowing the litigation to 

continue still further before addressing this threshold issue. All the while, this case, which 

Performance acknowledges is “extremely complex,” DN 79-1 at 1930, carried on. The Plaintiffs 

and the Court undertook efforts that would be wasted if it turned out now that the Court lacked 

personal jurisdiction. As the Sixth Circuit recognized in Parchman v. SLM Corporation,

“conduct” including “appearances and filings” may “waive [a defendant’s] personal jurisdiction 

defense” by “constitut[ing] legal submission to the jurisdiction of the court” and “constructive 

consent” to jurisdiction. 896 F.3d 728, 734 (6th Cir 2018). 

This litigation conduct therefore represents another way in which Performance forfeited its 

defense. Other trial courts have reached similar conclusions. Music City Metals v. Jinchang Cai

offers an instructive analog. See No. 3:17-cv-766, 2017 WL 4641866, at *4 (M.D. Tenn. Oct. 17, 

2017). The district court, applying Gerber and King, concluded that defendants forfeited a 

personal-jurisdiction defense because they (like Performance) filed a notice of appearance without 

reserving any rights, and because they (like Performance) made a number of substantive filings, 

all before challenging the Court’s jurisdiction. See id.; see also Asmar v. Benchmark Literacy 

Grp., Inc., No. 04-70711, 2005 WL 2562965, at *6 (E.D. Mich. Oct. 11, 2015) (despite raising 

personal jurisdiction as an affirmative defense, defendant’s participation in the litigation on the 

merits waived its objection); HTC Sweden AB v. Innovatech Prods. & Equip. Co., No. 3:07-cv232, 2010 WL 2163122, at *7 (E.D. Tenn. 2010) (despite one-word denial in responsive pleading, 

defendant forfeited jurisdictional defense based on conduct and delay in the litigation). 

Performance’s contrary arguments are unavailing. 

It relies heavily on the Sixth Circuit’s no-forfeiture decision in Parchman, but that decision 

is readily distinguishable. Though the defendant there made submissions, appearances, and filings, 

it promptly and consistently maintained that the court lacked personal jurisdiction with respect to 

one claim in the amended complaint. And the Parchman defendant initially made a special 

appearance in order to contest personal jurisdiction. See, e.g., 896 F.3d at 734 (defendant objected 

to interrogatories and requests for production on personal-jurisdiction grounds). As a result, the 

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trial court and the Sixth Circuit concluded the plaintiff had no reasonable expectation that the 

defendant would willingly defend the suit in that forum. Id. at 734. In each of these respects, 

Performance’s litigation conduct between the filing of the complaint and filing of its motion 

differed from that in Parchman.

Nor may Performance disavow that conduct as the acts of prior counsel. The law does not 

recognize any such distinction: until their withdrawal on September 25th, Performance’s initial 

counsel could represent and bind Performance to the same degree that its current counsel can today. 

“Since the client voluntarily chose counsel as his representative in the action,” it “cannot later 

avoid the consequences of the acts or omissions of the party’s freely selected agent.” State Auto 

Ins. Co. v. Thomas Landscaping & Constr. Inc., 494 F. App’x 550, 554 (6th Cir. 2012). 

Performance’s position “would be wholly inconsistent with our system of representative litigation, 

in which each party is deemed bound by the acts of his lawyer–agent and is considered to have 

‘notice of all facts.’” Id. (citation omitted). In State Auto, as here, the district court based its ruling 

on the answer and responses of initial counsel that indicated personal jurisdiction was not a 

defense. In any event, the break between prior and current counsel is not as clean as Performance 

suggests: even the second appearance of counsel was general and unqualified. See DN 58. 

ORDER

 Because Performance’s two general appearances, answer, and extensive litigation conduct 

all support the conclusion that it forfeited its right to object to personal jurisdiction, the Court 

DENIES the motion to dismiss [DN 79] and DENIES as moot the motion to stay discovery 

[DN 80] pending the Court’s resolution of the jurisdictional motion. 

Copies to: All Counsel 

February 16, 2021

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