AmTrust Financial Services, Inc. v. Lacchini

260 F. Supp. 3d 316
CourtDistrict Court, S.D. New York
DecidedFebruary 23, 2017
Docket16 Civ. 2575 (PAE)
StatusPublished
Cited by8 cases

This text of 260 F. Supp. 3d 316 (AmTrust Financial Services, Inc. v. Lacchini) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
AmTrust Financial Services, Inc. v. Lacchini, 260 F. Supp. 3d 316 (S.D.N.Y. 2017).

Opinion

OPINION & ORDER

PAUL A. ENGELMAYER, District Judge:

This lawsuit, brought in federal court in New York, alleges that an Italian citizen who presided over an arbitration in Italy did so corruptly. Plaintiff AmTrust Financial Services, Inc. (“AmTrust”) brings claims under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962, et seq. (“RICO”), and under New York law for tortious interference with contract. AmTrust claims that defendant Marco Lacchini presided over a rigged arbitration in Italy, in which, in exchange for a bribe from AmTrust’s adversary, he rendered outcomes adverse to AmTrust, costing it hundreds of millions of dollars.

Lacchini now moves to dismiss. He argues, under Federal Rule of Civil Procedure 12(b), that this Court lacks personal jurisdiction over him ■ and that the complaint fails to state a claim. He separately seeks dismissal based on the doctrine of forum non conveniens.

For the following reasons, the Court grants the motion to dismiss for lack of personal jurisdiction. The Court therefore does not reach Lacchini’s other arguments for dismissal.

I. Background1

AmTrust and its subsidiaries operate as a multi-national property and casualty insurance business. Complaint ¶ 13. Its claims here arise from a complex series of events, in which, as alleged, AmTrust attempted to enter the medical malpractice insurance market in Italy but came into conflict with an Italian businessman named Antonio Somma. AmTrust alleges that Somma — a former defendant in this case, with whom AmTrust has settled — bribed Lacchini, an arbitrator presiding over a proceeding involving Somma’s affiliates and AmTrust, to favor Somma’s interests. [322]*322The Court recounts here the central allegations in that dispute and the facts most relevant to the issue of whether the Court possesses personal jurisdiction over Lac-chini.

A. Factual Background

1. The Dispute Between AmTrust/ATEL and Somma

Around December 2009, AmTrust began to underwrite medical malpractice insurance in Italy through its London-based subsidiary, AmTrust Europe Limited (“ATEL”). Id. ¶ 3, 14. ATEL later entered into an arrangement with a company established by Somma, Trust Risk Group, S.p.a. (“TRG”), under which TRG would act as an insurance broker for ATEL on a nonexclusive basis in the medical malpractice insurance market in Italy. Id. ¶ 15. Under this arrangement, TRG would collect and remit premiums on policies underwritten by ATEL and would receive a commission on those premiums. Id. ¶ 16.

The relationship between ATEL and TRG was initially successful. By the end of 2010, AmTrust, ATEL, and TRG were in discussions about forming an exclusive relationship in the medical malpractice market. Id. ¶ 17. AmTrust’s CEO, ATEL’s CEO, and Somma, TRG’s CEO, met in New York and London during January and February 2011; these meetings resulted in a Framework Agreement among Am-Trust, ATEL, and TRG. Id. ¶ 18. Under it, AmTrust and ATEL would have an exclusive relationship with TRG for medical malpractice insurance in the Italian market, in that AmTrust and ATEL would insure only the risks in that market that TRG presented to them. Id. ¶ 19. In 2012, ATEL established a branch in Italy, and, in May 2013, as anticipated by the parties’ agreement, ATEL entered into an Agency Agreement with a TRG subsidiary called Trust Risk Italia SRL (“TRI”), under which TRI would be ATEL’s agent and remit premiums and taxes monthly to ATEL’s Italian branch account. Id. ¶20. At least seven times between early 2011 and July 2014, Somma traveled between Italy and New York City to meet with AmTrust and ATEL executives, traveling on an AmTrust corporate aircraft at least six times, typically with AmTrust or ATEL executives. Id. ¶22. Around April 2012, Somma moved from Naples, Italy into an apartment in Manhattan owned by TRG and lived there for four or five months. Id. ¶ 23.

The relationship between AmTrust and Somma later disintegrated. During summer 2014, AmTrust discovered that Som-ma was planning to compete against Am-Trust and ATEL and to use information misappropriated from ATEL to do so. Id. ¶ 25. Specifically, AmTrust learned that Somma planned to transfer TRG’s existing business to a new brokerage company that he would form, and to acquire a majority stake in an insurance company. Id. ¶ 26. AmTrust also discovered that an associate of Somma’s — his daughter’s fiancee or boyfriend, who worked in ATEL’s London office — had downloaded from an ATEL computer to a personal account, without permission and in violation of policy, proprietary information about ATEL’s claims and policies. Id. ¶ 29-40. After detecting the unauthorized downloads, ATEL asked the associate to leave and, on September 2, 2014, escorted him out of its offices. Id. ¶ 42. On October 5, 2014, believing that TRG was poised to compete against them, AmTrust and ATEL notified Somma that they intended to terminate the relationship with TRG, to effect an orderly separation. Id. ¶ 43. Somma then claimed ATEL owed him €96,963,055 in “advance commissions” on business that he anticipated would be paid on existing policies, and notified ATEL that he would withhold €50,000,000 [323]*323in premiums from ATEL to reflect those commissions. Id. ¶ 44. AmTrust and ATEL, however, rejected Somma’s claim of entitlement to “advance commissions” and terminated the arrangements with TRG and TRI. Id. ¶¶ 45-46, 48.

ATEL then initiated legal proceedings in London under the contract with TRG. It sought to freeze, the withheld premiums. With AmTrust, ATEL also initiated proceedings against TRG and TRI in the Italian Criminal Court, and sought an injunction from the Commercial Court in Milan. Id. ¶ 47. ATEL prevailed initially. In late November 2014, the Italian Criminal Court froze most of TRG’s and TRI’s bank accounts, based on its finding that Somma had misappropriated premiums belonging to ATEL; on February 12, 2015, this order was upheld on appeal. Id. ¶ 49. Courts in London and Italy also froze various funds of TRG and TRI. Id. ¶¶ 50-51. And, on June 16, 2015, the Italian insurance regulator, IVASS, following disciplinary proceedings against Somma and others, expelled Somma as a regulated insurance broker on the grounds that TRG and TRI had violated Italian insurance law regarding the segregation of accounts in which brokers and agents hold premiums to be paid to an insurer. Id. ¶ 52. Somma, IVASS found, was liable for these violations as TRG and TGI’s sole decision maker. Id.

2. Somma’s Alleged Scheme Involving the Arbitration and Lacchini

AmTrust alleges that Somma, with Lac-chini, then devised a scheme to drag Am-Trust and ATEL into arbitrations that Somma, through Lacchini, would corruptly control.

Under the agreements among AmTrust, ATEL, and TRG and TRI, specified disputes were to be settled through an arbitration in Milan conducted by a three-arbitrator panel, of which one arbitrator was to be appointed by each party and the third selected by the other two arbitrators, or, if the two arbitrators could not agree, by the President of the Court of Milan. Id. ¶ 55.

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Bluebook (online)
260 F. Supp. 3d 316, Counsel Stack Legal Research, https://law.counselstack.com/opinion/amtrust-financial-services-inc-v-lacchini-nysd-2017.