Opioid Master Disbursement Trust II, a/k/a Opioid MDT II v. Ace American Insurance

• Court: Missouri Court of Appeals
• Decided: March 5, 2024
• Docket: ED111765
• Status: Published

Opinion

In the Missouri Court of Appeals Eastern District DIVISION FOUR

OPIOID MASTER DISBURSEMENT ) No. ED111765 TRUST II, A/K/A/ OPIOID MDT II, ) ) Appellant, ) Appeal from the Circuit Court of ) St. Louis County vs. ) ) Honorable Richard M. Stewart ACE AMERICAN INSURANCE, ET AL., ) ) Respondents. ) Filed: March 5, 2024

Introduction

Opioid Master Disbursement Trust II (the “Trust”) appeals the trial court’s judgment

granting Respondents’ respective motions to dismiss. The issue before this Court is whether a

provision in the parties’ insurance contracts requires any disputes arising under those contracts to

be litigated in the courts of England or Wales.

We find that the provision in the insurance policy at issue is a clear and unambiguous

statement of the parties’ intent to enter into a valid forum selection clause. Since we find the

provision is a valid forum selection clause and there was no evidence or argument the clause was

unfair or unreasonable, the parties are bound to litigate any disputes arising from these agreements

in England or Wales. As such, we find the trial court did not err in granting Respondents’ motion

to dismiss.

Therefore, we affirm the trial court’s judgment. Factual and Procedural Background

The Trust is a statutory trust created in a bankruptcy proceeding for the benefit of

individuals and entities harmed by Mallinckrodt and its affiliates (“Debtors”)–major producers of

opioid pharmaceutical products. The Debtors were discharged from liability for the opioid mass

tort claims, and their liabilities were transferred to and assumed by the Trust and other related

trusts. Certain assets and rights of the Debtors were also transferred to the Trust, including the

Debtors’ rights to insurance coverage arising out of, relating to, or in connection with any opioid

mass tort claims. Respondents Allianz Global Corporate & Specialty SE, HDI Global SE, Lloyd’s

of London Syndicate #1218 a/k/a Newline Syndicate 1218, and SJ Catlin Syndicate SJC 2003 (the

“UK Insurers”), Respondents Aspen Insurance UK, Ltd (“Aspen”), and Insurers ACE American

Insurance Company and ACE Property & Casualty Insurance Company (“ACE”) (collectively

“Insurers”) are a subset of the various insurers providing such insurance coverage.

On June 16, 2022, the Trust filed a petition for declaratory judgment relief. Subsequently,

the Trust filed its first amended petition on July 28, 2022. Therein, the Trust alleged each insurer

was obligated, under their respective policies, to provide coverage in full for Debtors’ liability for

the opioid mass tort claims, subject only to any applicable limits of liability. The Trust sought a

judgment declaring the rights and obligations of the Trust and the defendant insurers with respect

to the issued insurance policies. Insurers filed their respective motions to dismiss the Trust’s first

amended petition1 arguing the claims against them should be dismissed because their respective

insurance policies contained or “followed form” to the following forum selection clause:

Any dispute concerning the interpretation of the terms, conditions, limitations and/or exclusions contained herein, is understood and agreed by both the Named Insured and the Insurers to be governed by the laws of England and Wales. Each party agrees to submit to the jurisdiction of any court of competent jurisdiction

1 Specifically, UK Insurers filed a motion to dismiss and Aspen and ACE Insurers filed their motions to dismiss by joinder.

2 within England and Wales and to comply with all requirements necessary to give such court jurisdiction. All matters arising hereunder shall be determined in accordance with the law and practice of such court.2

After hearing arguments on the motions, the trial court granted Insurers’ respective motions

to dismiss. The trial court held Missouri law applied in interpreting the forum selection clause, and

the Trust had not met its heavy burden of showing the forum selection clause is unfair or

unreasonable. Upon the motion of the Trust, the trial court amended its orders granting the motions

to dismiss to make such orders final judgments because there was no just reason to delay the

appeal.

This appeal follows.

Standard of Review

This Court reviews the trial court’s grant of a motion to dismiss de novo. Amalaco, LLC v.

Butero, 593 S.W.3d 647, 650 (Mo. App. E.D. 2019). The trial court’s judgment will be affirmed

if the dismissal is justified on any ground alleged in the motion. Corel Corp. v. Ferrellgas Partners,

L.P., 633 S.W.3d 849, 853 (Mo. App. E.D. 2021).

Discussion

Certification

Before this Court addresses the merits of the Trust’s appeal, we must first determine, sua

sponte, whether we have jurisdiction to review it. See Energy Mkt. 709, LLC v. City of Chesterfield,

614 S.W.3d 643, 647 (Mo. App. E.D. 2020). “The right to appeal is purely statutory … [and] where

a statute does not give a right to appeal, no right exists.” State ex rel. Koster v. ConocoPhillips

2 We note the record on appeal did not include the pertinent insurance policies containing the forum selection clause at issue. Based on the record filed with this Court, it also appears the insurance policies at issue were not filed with the lower court; the forum selection clause was simply quoted in Insurers’ motions to dismiss and the Trust’s response to those motions. Nevertheless, no party objected to the clause as quoted in the pleadings or briefs on appeal. While it is best practice to file documents at issue with the reviewing court, we exercise our discretion to review this appeal without the insurance policies at issue as their absence does not hinder our ability to review the Trust’s claim of error. See Washington-Bey v. State, 568 S.W.3d 909, 912 n.2 (Mo. App. W.D. 2019).

3 Co., 493 S.W.3d 397, 399 (Mo. banc 2016) (quoting Farinella v. Croft, 922 S.W.2d 755, 756 (Mo.

banc 1996)). The statutory authority to bring an appeal is found in § 512.020, which provides the

judgment entered by the trial court and appealed by the parties must be a “final judgment.” 3 Wilson

v. City of St. Louis, 600 S.W.3d 763, 767 (Mo. banc 2020).

For purposes of appeal under § 512.020(5), a final judgment must: (1) be a “judgment” that

resolves at least one claim in a lawsuit and establishes the rights and liabilities of the parties with

respect to that claim; and (2) be “final” in that it either disposes of all claims (or the last claim) in

a lawsuit or has been certified for immediate appeal pursuant to Rule 74.01(b). Energy Mkt. 709,

LLC, 614 S.W.3d at 648. “[A] judgment is eligible for certification under Rule 74.01(b) for

purposes of § 512.020(5)—and thereby satisfies the second criterion in that way—only if it

disposes of a ‘judicial unit’ of claims” by either: (a) disposing of all claims by or against at least

one party, or (b) it disposes of one or more claims that are sufficiently distinct from the claims that

remain pending in the trial court. Id.

In the present case, the trial court entered an order and judgment granting each of the

Insurers’ motions to dismiss and there is no dispute the trial court’s orders are a judgment. In

regard to the second criterion (whether the judgment was “final”), the trial court certified the orders

under Rule 74.01(b). Thus, at issue is whether the trial court’s judgment was “final” and eligible

for certification under Rule 74.01(b).

Here, the order and judgment granting UK Insurers’ motion to dismiss was properly

certified because it disposed of all the Trust’s claims against the UK Insurers. In other words, the

judgment granting its motion to dismiss effectively dismissed all claims against this subset of

insurers. See id. Additionally, the orders and judgments granting ACE’s and Aspen’s motions to

3 All references are to Mo. Rev. Stat. Cum. Supp. (2022).

4 dismiss were also eligible for certification because, even though the trial court did not dismiss all

of ACE’s and Aspen’s policies from the case, those orders were final with respect to the dismissed

claims arising from their respective insurance policies containing forum selection clauses. Thus,

the judgment dismissing those claims disposes of a “judicial unit” of claims and concludes

litigation with respect to those policies. Id. at 649 (“[A] judgment resolves a ‘distinct’ judicial unit

if it resolves claims that do not arise ‘from the same set of facts, and the same transactions and

occurrences, as the counts’ yet to be disposed of in the circuit court.”) (quoting Wilson, 600 S.W.3d

at 770).

Lastly, the claims related to the Insurers and their respective policies are not so intertwined

with the claims remaining against the other defendant insurers that any ruling on the issue of forum

would affect the remaining insurers whose policies do not contain a forum selection clause. See

id. (“[R]esolved and unresolved claims may still be distinct even if they share some facts or

circumstances.”).

Accordingly, the trial court’s certification was proper, and, thus, we review the Trust’s

point on appeal.

Point I

We now turn to the dispositive issue before us: whether the provision in the insurance

policies is a valid forum selection clause requiring the parties to litigate their disputes in England

or Wales. We find the provision in question is a clear, unambiguous forum selection clause freely

agreed upon by the parties.4

4 It is undisputed Debtors entered into these insurance contracts. This Court understands and sympathizes with the Trust that it was not an original party to the contracts, however, the Bankruptcy Court appointed the Trust to stand in the shoes of those who assented to the contracts. Accordingly, the Trust is now bound by these agreements. See Stavrides v. Zerjav, 848 S.W.2d 523, 528 (Mo. App. E.D. 1993); Bonner v. Auto. Club Inter–Insurance Exchange, 899 S.W.2d 925, 928 (Mo. App. E.D.1995).

5 A. Whether the provision in the insurance policies is a forum selection clause

As to the first part of the issue, the Trust rests on the argument that the forum selection

clause is permissive, and absent mandatory language, the parties are not mandated to litigate their

disputes exclusively in England or Wales courts. We understand the Trust’s permissive/mandatory

argument to be nothing more than an assertion under the first part of the analysis that the language

of the clause at issue does not bind the parties to litigate their dispute in England or Wales. Simply

put, we find the provision at issue is a binding forum selection clause designating England or

Wales as the forum to litigate “all matters” concerning the insurance policies.

The Trust cites to Missouri caselaw to support the application of its permissive/mandatory

test and invites this Court to look at the language of the provision to interpret and determine the

intent of a forum selection clause. We agree with the Trust that those cases are applicable in so far

as the Court’s responsibility to interpret the language and intent of the parties. However, we

disagree with the proposition that the language and intent of the forum selection clause in this

matter is permissive and, effectively, not binding on the parties.5 To clarify, when a provision in a

contract designates the appropriate venue for a claim to be brought, Missouri’s analysis looks at

the language of the provision to determine: (1) does the clause in question mandate a specific

outbound venue and (2) if so, would it be unfair or unreasonable to enforce that agreement. See

High Life Sales Co. v. Brown-Forman Corp., 823 S.W.2d 493, 496–97 (Mo. banc 1992) (holding

that, although outbound forum selection clauses were previously voided as per se violations of

public policy, outbound forum selection clauses should be enforced unless it is unfair or

5 The Trust also argues Insurers knew how to include exclusive language in their forum selection clause, but decided to use permissive language nearly identical to their standard service of suit clause. We do not address this argument because any discussion comparing the forum selection clause and the service of suit clause would serve no purpose and have no bearing on this decision.

6 unreasonable to do so). Therefore, we first interpret the language of the provision and determine

the parties’ intent.

“In interpreting an insurance contract, we must keep in mind that insurance policies are

contracts; thus, the rules of contract construction apply.” Nooter Corp. v. Allianz Underwriters Ins.

Co., 536 S.W.3d 251, 263 (Mo. App. E.D. 2017) (quoting Doe Run Res. Corp. v. Certain

Underwriters at Lloyd’s London, 400 S.W.3d 463, 474 (Mo. App. E.D. 2013)). The cardinal rule

of contract interpretation is determining the parties’ intent and give effect to it. Id. “When a

contract is unambiguous on its face, we ascertain the intent of the parties based on the contract

language alone.” Id. “Language is ambiguous if it is reasonably open to different constructions.”

Id. at 264. “[W]e will only resort to canons of construction if the policy language is ambiguous.

However, clear and unambiguous language will be enforced as written.” Id. at 263–64.

“Additionally, we aim to give a reasonable meaning to every provision and to avoid an

interpretation that renders some provisions trivial or superfluous.” Id. at 264.

Here, the language of the provision at issue provides: “[e]ach party agrees to submit to the

jurisdiction of any court of competent jurisdiction within England and Wales and to comply with

all requirements necessary to give such court jurisdiction. All matters arising hereunder shall be

determined in accordance with the law and practice of such court.” The language is clear and

unambiguous that the parties “agree to submit,” to an England or Wales court, and “all matters”

arising out of the insurance policies “shall” be litigated in that forum. As such, the provision

reflects the parties’ mutual consent to designate England or Wales as the forum in which to litigate

their dispute and the word “shall” indicates a mandatory duty to abide by that agreement. See State

ex rel. Moore v. Brewster, 116 S.W.3d 630, 638 (Mo. App. E.D. 2003) (“Generally, the word

‘shall’ means a mandatory duty.”). The provision in question is not reasonably open to different

7 constructions; the provision is unambiguously an outbound forum selection clause as it is a

contractual agreement designating the appropriate venue for a claim to be brought. See Nooter

Corp., 536 S.W.3d at 264; Corel Corp., 633 S.W.3d at 853. Giving the provision another

interpretation would render the provision superfluous. Therefore, the “clear and unambiguous

language will be enforced as written.” Nooter Corp., 536 S.W.3d at 264.

Accordingly, we find that the provision at issue is an unambiguous, valid forum selection

clause and we reject the Trust’s argument that the clause is permissive.

B. Enforceability of the outbound forum selection clause

Having found that the provision at issue is a valid forum selection clause, we now turn to

the second part of the issue: its enforceability. Once the existence of a valid forum selection clause

was established, the Trust bore the heavy burden of showing the clause was unfair or unreasonable.

Because the trust failed to satisfy their heavy burden, we find the trial court did not err in granting

Insurers’ motions to dismiss.

As referenced above, “forum selection clauses are contractual agreements designating the

appropriate venue for a claim to be brought.” Corel Corp., 633 S.W.3d at 853. “Under Missouri

law, forum selection clauses are prima facie valid.” Id. It is well-established that “freely negotiated

forum selection agreements are enforceable ‘so long as doing so is neither unfair nor

unreasonable.’” GP&W Inc. v. Daibes Oil, LLC, 497 S.W.3d 866, 869 (Mo. App. E.D. 2016)

(quoting High Life Sales Co., 823 S.W.2d at 497). Once a party seeking to dismiss shows the

existence of a forum selection clause, the non-moving party bears the heavy burden of convincing

the court he or she should not be held to the bargain because it is unfair or unreasonable. Id.;

Thieret Fam., LLC v. Delta Plains Servs., LLC, 637 S.W.3d 595, 606 (Mo. App. E.D. 2021).

8 In the underlying case, Insurers injected the issue of forum by showing the existence of a

forum selection clause in the policies at issue. Consequently, the Trust bore the heavy burden–as

the party resisting enforcement of the forum selection clause–to show the clause is either unfair or

unreasonable. See Thieret Fam., LLC, 637 S.W.3d at 606. The Trust, however, failed to put forth

any argument or point to any evidence in the record to support that the forum selection clause is

unfair or unreasonable. Specifically, the Trust failed to show the clause was unfair in that it was

not neutral and reciprocal in nature or show the contract was adhesive. See Burke v. Goodman,

114 S.W.3d 276, 280 (Mo. App. E.D. 2003) (stating that, in determining fairness, Missouri courts

consider whether or not the forum selection clause is neutral and reciprocal in nature and whether

or not the contract was adhesive). It also did not claim the clause was unreasonable by showing

that enforcing it would result in undue hardship. See id. at 281 (“[A] forum selection clause may

be unreasonable if it results in undue hardship, such as a necessity to travel or transport witnesses

such a distance that expenses would render access to the courts impractical”).

Because the Trust did not put forth any argument, much less any evidence to meet its heavy

burden of showing the forum selection clause was either unfair or unreasonable, we therefore find

the trial court did not err in granting Insurers’ motions to dismiss. See State ex rel. J.C. Penney

Corp. v. Schroeder, 108 S.W.3d 112, 114 (Mo. App. E.D. 2003) (finding delivery company did

not meet burden of showing that enforcement of forum selection clause in its contract with retailer

was unfair or unreasonable, and thus the clause would be enforced); see also Burke, 114 S.W.3d

at 280–82 (discussing whether the enforcement of the outbound selection clause is unfair and

unreasonable and finding appellant failed to meet his heavy burden of showing that he should not

be held to his bargain).

The Trust’s sole point on appeal is denied.

9 Conclusion

The judgment of the trial court is affirmed.

_______________________________ Michael S. Wright, Judge

John P. Torbitzky, P.J. and James M. Dowd, J. concur.