Court Opinion

ID: 9378928
Source: CourtListenerOpinion
Date Created: 2023-03-14 00:00:34.844524+00
Date Added: 2024-06-11T17:16:24.217050
License: Public Domain

Case: 22-30033         Document: 00516675140             Page: 1      Date Filed: 03/13/2023

              United States Court of Appeals
                   for the Fifth Circuit
                                                                                 United States Court of Appeals
                                                                                          Fifth Circuit

                                                                                         FILED
                                                                                      March 13, 2023
                                        No. 22-30033                                  Lyle W. Cayce
                                                                                           Clerk

   Dynamic Industries, Incorporated; Dynamic Industries
   International, L.L.C.; Dynamic Industries Saudi Arabia,
   Limited,

                                                                   Plaintiffs—Appellants,

                                             versus

   Walaa Cooperative Insurance Company; Marsh &
   McLennan Companies, Inc., doing business as Marsh, Inc.;
   Marsh USA, Inc., doing business as Marsh USA Risk Services,

                                                                  Defendants—Appellees.

                      Appeal from the United States District Court
                         for the Eastern District of Louisiana
                                USDC No. 2:21-CV-748

   Before Stewart, Willett, and Oldham, Circuit Judges.
   Per Curiam:*
          The insureds in this diversity suit (together, Dynamic) assert that
   their insurance brokers (together, Marsh) failed to procure adequate
   insurance coverage from the insurer (Walaa), or in the alternative, that Walaa

          *
              This opinion is not designated for publication. See 5th Cir. R. 47.5.
Case: 22-30033      Document: 00516675140          Page: 2   Date Filed: 03/13/2023

                                    No. 22-30033

   breached the insurance policy by declining coverage for an incident involving
   undersea cable-damage in the Arabian Gulf. The district court granted
   Marsh’s motion to dismiss the suit as untimely under Louisiana law. The
   district court also granted Walaa’s motion to dismiss the suit for forum non
   conveniens, reasoning that the insurance policy at issue designates Saudi
   Arabia as the exclusive forum.
          Dynamic appeals both dismissals. We AFFIRM.
          First, as for Marsh, Louisiana law requires insureds who wish to sue
   their insurance broker to do so “within one year from the date that the alleged
   act, omission, or neglect . . . should have been discovered.” La. Rev. Stat.
   § 9:5606 (emphasis added). Here, Dynamic sued Marsh after Walaa denied
   coverage. But Dynamic received a copy of the insurance policy from Walaa
   almost 18 months earlier. When Dynamic received that copy, it also received
   constructive notice of any deficiencies that the policy contained. Dynamic’s
   claims against Marsh are therefore untimely.
          Dynamic rejects constructive notice, arguing that the policy contains
   “absolutely no indication that coverage would be denied.” But the denial was
   Walaa’s choice, not Marsh’s. According to Dynamic, the policy either omits
   coverage that Marsh is liable for failing to procure or offers coverage that
   Walaa must honor. For purposes of asserting its in-the-alternative claims
   against Marsh, then, Dynamic asks us to assume that the policy omitted
   coverage. Yet if we must assume that omission, so must Dynamic. And any
   such omission was present when Dynamic received the policy. Dynamic also
   argues that it was “lulled into complacency” by Marsh’s “assurances”
   regarding the policy’s coverage. This argument against constructive notice
   fails because Dynamic does not allege any factual basis (beyond the policy’s
   mere issuance) that would justify the trust that it claims to have placed in
   Marsh.

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                                    No. 22-30033

          Second, as for Walaa, Dynamic argues that the policy’s choice of
   Saudi Arabian law is unenforceable, under Louisiana law, if the policy was
   “delivered” in Louisiana. La. Rev. Stat. § 22:868. Dynamic says that it
   received delivery in Louisiana from Walaa’s agent—a Marsh affiliate known
   as Marsh KSA. Walaa responds that Marsh KSA was actually Dynamic’s
   agent, and that delivery therefore occurred in Saudi Arabia (where Walaa
   delivered the policy to Marsh KSA). We agree with Walaa.
          “Under Louisiana law, an insurance broker is generally deemed to be
   the agent of the insured rather than the insurer.” Motors Ins. Co. v. Bud’s Boat
   Rental, Inc., 917 F.2d 199, 204 (5th Cir. 1990) “A broker . . . who is asked by
   the client to procure coverage wherever possible at the best price[] is not the
   agent of the insurer[.]” Id. The general rule applies here. Marsh KSA
   “approached” multiple insurers looking for a “competitive price” for
   Dynamic. Marsh KSA was thus Dynamic’s agent.
          Dynamic argues that delivery is a factual question that the district
   court should have resolved for Dynamic. But our cases do not require the
   district court to blindly accept all of Dynamic’s allegations concerning forum.
   See, e.g., Sierra Frac Sand, L.L.C. v. CDE Glob. Ltd., 960 F.3d 200, 204 (5th
   Cir. 2020) (at the dismissal stage, weighing “evidence” whether a forum-
   selection clause was binding). Rather, after conducting an independent
   “assessment of th[e] clause’s enforceability,” the district court properly
   concluded that delivery occurred in Saudi Arabia. See Weber v. PACT XPP
   Techs., AG, 811 F.3d 758, 768 (5th Cir. 2016). We have considered Dynamic’s
   remaining arguments and find them unavailing.
          Separately, the district court concluded that it lacked personal
   jurisdiction over a Marsh affiliate known as Marsh & McLennan Companies,
   Inc. (“Marsh Inc.). Yet the district court’s judgment dismissed Dynamic’s
   claims against Marsh Inc. “with prejudice”—that is, on the merits. “[A]

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                                    No. 22-30033

   federal court generally may not rule on the merits of a case without first
   determining that it has jurisdiction over . . . the parties (personal
   jurisdiction).” Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S.
   422, 430–31 (2007). Because the district court lacked personal jurisdiction, it
   also lacked power to issue a merits judgment regarding Marsh Inc. Likewise,
   the district court dismissed Dynamic’s claims against Walaa “with
   prejudice.” That too was error, because “[a] forum non conveniens
   dismissal” is not a judgment on the merits; it is instead a “determination that
   the merits should be adjudicated elsewhere.” Id. at 432.
          We therefore REVERSE dismissal as to Walaa Cooperative
   Insurance Company and Marsh & McLennan Companies, Inc., and we
   REMAND with instructions for the district court to enter judgment
   dismissing Dynamic’s claims against Walaa Cooperative Insurance Company
   and Marsh & McLennan Companies, Inc. “without prejudice.”
          In all other respects, we AFFIRM.

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