Ludgate Ins. Co. Ltd. v. Becker

906 F. Supp. 1233, 1995 U.S. Dist. LEXIS 18067, 1995 WL 715869
CourtDistrict Court, N.D. Illinois
DecidedDecember 4, 1995
Docket95 C 4086
StatusPublished
Cited by6 cases

This text of 906 F. Supp. 1233 (Ludgate Ins. Co. Ltd. v. Becker) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ludgate Ins. Co. Ltd. v. Becker, 906 F. Supp. 1233, 1995 U.S. Dist. LEXIS 18067, 1995 WL 715869 (N.D. Ill. 1995).

Opinion

MEMORANDUM AND ORDER

MORAN, Senior District Judge.

Plaintiff Ludgate Insurance Company Limited (Ludgate) brought this action against B. Frederick Becker (Becker) and William E. Lape (Lape), two of Ludgate’s former directors, for breach of fiduciary duty in relation to their approval of a commutation agreement which allegedly deprived Ludgate of assets without adequate compensation. Plaintiff also seeks to impose a constructive trust, or in the alternative to obtain a rescission remedy, against defendant American Continental Insurance Company (ACIC), the other party to the commutation agreement, in order to recover the allegedly lost assets. Although diversity jurisdiction is proper under 28 U.S.C. § 1332, 1 defendants now move to dismiss or otherwise stay the action on the ground of forum non conveniens and the existence of an allegedly related action pending in the courts of the United Kingdom (the English action). We deny the motion.

FACTS

On June 30, 1992, Ludgate and ACIC entered into a commutation agreement in which Ludgate agreed to pay ACIC a sum of money ($24,000,000) in exchange for the complete release of all present and future losses which Ludgate owed or would owe ACIC under various reinsurance contracts between the parties. Ludgate had acted as the reinsurer, and ACIC the reinsured, in each of the contracts commuted in the agreement. The commutation agreement in effect discharged Ludgate’s obligations under these contracts in exchange for its relinquishment of rights to premiums previously paid and to future payments, thus depriving the corporation, according to plaintiff, of significant past and future profits. Lape, the managing director of Ludgate, and Becker, another member of the board, 2 approved the agreement.

Count I of plaintiffs complaint alleges that Becker and Lape violated their fiduciary duties as directors by causing Ludgate to enter into the agreement; Counts II and III seek, respectively, the imposition of a constructive trust and a rescission remedy against ACIC to recover the monies paid to it under the agreement. Defendants assert that English law governs each of plaintiff’s claims for relief. The commutation agreement itself provides that it is subject to English law, and that Ludgate and ACIC “irrevocably submit to the non-exclusive jurisdiction of the English courts.”

*1236 The English action, which defendants allege is related to this one, was brought in January 1995 by Ken Randall Associates Limited (Randall) against MMI for alleged misrepresentations and breach of warranty with regard to the 1992 sale of Ludgate. On or about the same day that Ludgate and ACIC finalized the commutation agreement, MMI sold Ludgate to Randall, and Randall has remained Ludgate’s sole shareholder since that time. Randall claims in the English action that MMI breached various representations and warranties contained in the agreement of sale with respect to Ludgate’s financial condition. Specifically, Randall includes in its writ of summons an allegation that the commutation agreement at issue here — which was finalized just prior to Randall’s purchase of the company — rendered Ludgate’s margin of solvency insufficient to comply with United Kingdom regulations. Furthermore, Randall alleges that MMI knew or should have known that the agreement was going to have such an effect when it entered into it on behalf of Ludgate.

Defendants now move to dismiss this action on the ground of forum non conveniens, arguing that the courts of the United Kingdom provide an adequate and more convenient forum for the resolution of the matter. In the alternative, they move for a stay pending the outcome of the English action.

DISCUSSION

I. Forum Non Conveniens

The Seventh Circuit requires district courts to consider four areas in analyzing a motion based on forum non conveniens: (1) the availability of an adequate alternative forum; (2) the appropriate deference to the plaintiffs choice of forum; (3) “private interest” factors; and (4) “public interest” factors. Macedo v. Boeing Co., 693 F.2d 683, 686-90 (7th Cir.1982).

A. Adequate Alternative Forum

At the outset “we must consider whether an alternative forum exists,” for no forum non conveniens inquiry may proceed if dismissal in the chosen forum would deprive the plaintiff of the only court in which jurisdiction is proper. Alexander Proudfoot, Plc v. Federal Ins. Co., 860 F.Supp. 541, 544 (N.D.Ill.1994) (citing Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255 n. 22, 102 S.Ct. 252, 265 n. 22, 70 L.Ed.2d 419 (1981)). Here, whether or not defendants are within the statutory jurisdiction of the courts of the United Kingdom, they have made themselves, through express representations in the motion and briefs before us, amenable to process in that forum and consented to its jurisdiction. This more than meets defendants’ burden. The requirement that there be an adequate alternative forum “does not require that the defendant be amenable to process in the alternative forum; consent to the forum’s jurisdiction is sufficient.” Roynat, Inc. v. Richmond Transp. Corp., 772 F.Supp. 417, 419 (S.D.Ind.1991) (citing Macedo v. Boeing Co., 693 F.2d at 687). 3 The courts of the United Kingdom thus provide an adequate alternative forum for this action.

B. Deference to Plaintiff’s Choice of Forum

While district courts are instructed to grant due consideration to a plaintiffs choice of forum, less deference is accorded where the plaintiff is not an American citizen. See Piper Aircraft Co. v. Reyno, 454 U.S. at 241, 102 S.Ct. at 258; Macedo v. Boeing Co., 693 F.2d at 688; Alexander Proudfoot, Pic v. Federal Ins. Co., 860 F.Supp. at 544 (foreign plaintiffs choice of forum “will not be entirely discounted” but will be granted “somewhat less consideration”). It is undisputed that Ludgate is an English corporation with its principal place of business in England. As such, Ludgate is a foreign plaintiff. Its choice of this district as forum for its suit *1237 thus weighs against dismissal for forum non conveniens with less force than it would in a case involving a native plaintiff. See Mace-do, 693 F.2d at 688. Indeed, district courts are “entitled to be far less deferential toward [a plaintiffs] choice” whenever “the plaintiff does not reside in his chosen forum.” Interpone Coatings v. Australia & New Zealand Banking Group, Ltd., 732 F.Supp.

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Bluebook (online)
906 F. Supp. 1233, 1995 U.S. Dist. LEXIS 18067, 1995 WL 715869, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ludgate-ins-co-ltd-v-becker-ilnd-1995.