New Jersey Court Favors New York in Coverage Dispute

In Certain Underwriters At Lloyd’s , London, v. Books for Less, LLC et al, New Jersey’s Appellate Division affirmed the dismissal of this case on the basis of forum non conveniens. Lloyd’s commenced an action in New Jersey seeking a declaratory judgment against defendant Books For Less. One week later, Books For Less commenced an action against Lloyd’s and its insurance broker in New York and sought the dismissal of the New Jersey action based upon forum non conveniens. Books For Less was a New York limited liability company and its broker was a New York Corporation. The Lloyd’s policy insured a Books For Less warehouse in New Jersey and an office space in New York. Lloyd’s sought policy rescission after the warehouse sustained over $270,000 in damages and it learned that the warehouse had previously been damaged in 2009, which was not disclosed on insured’s application for insurance.

The trial court held that the majority of the parties were companies with deep roots in New York. Moreover, in addition to the New Jersey warehouse, the policy also provided coverage to premises in New York and the policy was negotiated in New York. In addition, the broker refused to submit to New Jersey’s jurisdiction and the trial judge reasoned that the broker was a necessary and indispensable party.

The appellate court upheld the lower court’s decision as a reasonable exercise of its discretion. Moreover, it disagreed with Lloyd’s argument that the “first filed rule” favored retention of jurisdiction in New Jersey.

Books for Less provides an excellent examination of doctrine forum non conveniens. Actions will be directed to jurisdiction with the most significant interests and where most of the parties, witnesses, and evidence are located.

Thanks for Alison Weintraub for her contribution to this post. If you have any questions, please email Paul at pclark@wcmlaw.com.