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Oregon Mutual Insurance Co. v. Barkley

United States District Court, W.D. Washington, Seattle

August 19, 2019

OREGON MUTUAL INSURANCE COMPANY Plaintiff,
v.
BREANNE BARKLEY Defendant.

          ORDER DENYING DEFENDANT'S MOTION TO DISMISS

          THE HONORABLE RICHARD A. JONES UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on Defendant's Motion to Dismiss for Lack of Personal Jurisdiction and Improper Venue (Dkt. # 9). Having considered the submissions of the parties, the relevant portions of the record, and the applicable law, the Court finds that oral argument is unnecessary. For the reasons stated below, Defendant's Motion is DENIED. Dkt. # 9.

         I. BACKGROUND

         The following is taken from Plaintiff's Complaint (Dkt. # 1), which is assumed to be true for the purposes of this motion to dismiss, along with any declarations filed by the parties.[1] Sanders v. Brown, 504 F.3d 903, 910 (9th Cir. 2007). Plaintiff Oregon Mutual Insurance Company (“Oregon Mutual” or “Plaintiff”) is an Oregon-based insurance company that issued an automobile insurance policy (the “Policy”) to Bruce Barkley, father of Defendant Breanna Barkley (“Defendant” or “Ms. Barkley”). Dkt. # 1 at 2, ¶ 1. The policy was negotiated and signed in Washington, where Ms. Barkley and her parents lived. Dkt. # 1 at 2, ¶ 4. In 2010, Ms. Barkley “temporarily” moved to Georgia to seek medical treatment. Dkt. # 12, Ex. C. Due to an earlier car accident in 2006, Ms. Barkley is disabled and unable to drive. Dkt. # 12, Ex. C.

         In February 2011, Ms. Barkley was injured in a car accident when the car she was in was rear-ended by another vehicle, driven by Timothy McTyre. Dkt. # 1 at 3, ¶ 4. Shortly after the accident, Cynthia Barkley (Ms. Barkley's mother), called Oregon Mutual to notify them of the accident and make a claim on Ms. Barkley's behalf. Dkt. #1 at 3, ¶ 8; Dkt. # 12, Ex. B. In 2013, Ms. Barkley sued Mr. McTyre in Georgia state court (Breanne Lee Barkley et al. v. Timothy Allen McTyre, State Court of Cobb County, State of Georgia, Case No. 2013A335-4 (the “McTyre suit”)). Dkt. # 9 at 2. Ms. Barkley later settled with Mr. McTyre and other insurance carriers in connection with the McTyre suit. Dkt. # 9 at 2. Oregon Mutual alleges that Ms. Barkley failed to notify it of the settlement, impairing its ability to recover through subrogation against third parties. Dkt. # 1 at 3, ¶ 6.

         Oregon Mutual now sues, requesting a declaratory judgment that it has no duty to defend, indemnify, or pay insurance benefits with respect to any injuries suffered by Ms. Barkley in the underlying McTyre suit. Dkt. # 1. Ms. Barkley moves to dismiss Oregon Mutual's complaint for lack of personal jurisdiction and improper venue. Dkt. # 9.

         II. DISCUSSION

         A. Personal Jurisdiction

         In a case like this one, where no federal statute governs personal jurisdiction, the court's jurisdictional analysis starts with the “long-arm” statute of the state in which the court sits. Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain Co., 284 F.3d 1114, 1123 (9th Cir. 2002). Washington's long-arm statute (RCW § 4.28.185) extends personal jurisdiction to the broadest reach that the Due Process Clause of the federal Constitution permits. Shute v. Carnival Cruise Lines, 113 Wash.2d 763, 771 (1989). Plaintiff has the burden of establishing personal jurisdiction. Ziegler v. Indian River County, 64 F.3d 470, 473 (9th Cir. 1995). “It is well established that where the district court relies solely on affidavits and discovery materials, the plaintiff need only establish a prima facie case of jurisdiction.” Rano v. Sipa Press, Inc., 987 F.2d 580, 587 n.3 (9th Cir. 1993). In determining whether Plaintiff has met this burden, any “uncontroverted allegations” in Plaintiff's complaint must be taken as true, and “conflicts between the facts contained in the parties' affidavits must be resolved in [Plaintiff's] favor for purposes of deciding whether a prima facie case for personal jurisdiction exists.” AT&T v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 1996), supplemented, 95 F.3d 1156 (9th Cir. 1996) (internal citations omitted).

         There are two types of personal jurisdiction: general and specific. Bancroft & Masters, Inc. v. Augusta Nat'l Inc., 223 F.3d 1082, 1086 (9th Cir. 2000). A defendant with “substantial” or “continuous and systematic” contacts with the forum state is subject to general jurisdiction, and can be haled into court on any action, even one unrelated to its contacts in the state. Bancroft & Masters, 223 F.3d at 1086. A defendant not subject to general jurisdiction may be subject to specific jurisdiction if the suit against it arises from its contacts with the forum state. Id. Plaintiff does not assert that Defendant is subject to general jurisdiction, so the Court will only consider whether the Defendant is subject to specific jurisdiction.

         The Court applies a three-part test to determine whether the exercise of specific jurisdiction over a non-resident defendant is appropriate: (1) the defendant has either purposefully directed his activities toward the forum or purposely availed himself of the privileges of conducting activities in the forum, (2) the plaintiff's claims arise out of the defendant's forum-related activities, and (3) the exercise of jurisdiction is reasonable. Axiom Foods, Inc. v. Acerchem Int'l, Inc., 874 F.3d 1064, 1068 (9th Cir. 2017). Plaintiff bears the burden of satisfying the first two prongs. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004). The burden then shifts to defendant to make a “compelling case” that the exercise of jurisdiction would not be reasonable. Id.

         1. Purposeful Availment

         Purposeful availment and purposeful direction are “two distinct concepts.” Schwarzenegger, 374 F.3d at 802. In the Ninth Circuit, tort cases typically require a purposeful direction analysis, while contract cases typically require a purposeful availment analysis. Washington Shoe Co. v. A-Z Sporting Goods, Inc., 704 F.3d 668, 672-73 (9th Cir. 2012). Here, Plaintiff's claims are based in contract, so the Court will apply the purposeful availment test. “A showing that a defendant purposefully availed himself of the privilege of doing business in a forum state typically consists of evidence of the defendant's actions in the forum, such as executing or performing a contract there.” Schwarzenegger, 374 F.3d at 802. By taking such actions, a defendant “purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.” Id. (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)). However, in return for the “benefits and protections” of the forum state, the defendant must “submit to the burdens of litigation in that forum.” Schwarzenegger, 374 F.3d at 802 (quoting Burger King, 471 U.S. at 476). The court must look to “prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing” to determine if the defendant's contacts are “substantial” and not merely “random, fortuitous, or attenuated.” Sher v. Johnson, 911 F.2d 1357, 1362 (quoting Burger King, 471 U.S. at 478 (internal quotations omitted)).

         Ms. Barkley contends that she does not have sufficient minimum contacts with Washington because she is currently a resident of Georgia and the accident giving rise to her claim under the Policy occurred in Georgia. Dkt. # 9 at 4. Ms. Barkley also notes that she is not a signatory to the Policy and thus ...


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