Redline Realty LLC v. Colony Insurance Company, et al.

• Court: District Court, D. Arizona
• Decided: October 22, 2025
• Docket: 2:25-cv-01147
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Redline Realty LLC, No. CV-25-01147-PHX-DWL

10 Plaintiff, ORDER

11 v.

12 Colony Insurance Company, et al.,

13 Defendants. 14 15 This is an insurance dispute brought by Plaintiff Redline Realty, LLC (“Redline 16 Realty” or “Plaintiff”)—as the assignee of certain claims held by Macias Construction, 17 LLC (“Macias”)—against Defendants Colony Insurance Company (“Colony”), Gallagher 18 Bassett Services, Inc. (“Gallagher Bassett”), and Cavello Bay Reinsurance Ltd. (“Cavello 19 Bay”) (collectively, “Defendants”).1 20 Pending before the Court is Cavello Bay’s motion to dismiss for lack of personal 21 jurisdiction. (Doc. 19.) Plaintiff opposes the motion and, in the alternative, seeks limited 22 jurisdictional discovery regarding the terms of a loss portfolio transfer agreement between 23 Cavello Bay and Colony (“LPT Agreement”). (Doc. 29 at 4). For the reasons that follow, 24 the Court grants Plaintiff’s request for limited jurisdictional discovery and holds Cavello 25 Bay’s motion to dismiss in abeyance until the limited jurisdictional discovery and 26 supplemental briefing are complete. 27 … 28 1 The remaining defendants have been terminated. (Docs. 30, 34.) 1 BACKGROUND 2 I. Relevant Jurisdictional Facts 3 When ruling on a motion to dismiss for lack of personal jurisdiction, 4 “uncontroverted allegations must be taken as true, and conflicts between parties over 5 statements contained in affidavits must be resolved in the plaintiff’s favor,” but a “plaintiff 6 may not simply rest on the bare allegations of the complaint.” Ranza v. Nike, Inc., 793 7 F.3d 1059, 1068 (9th Cir. 2015) (cleaned up). The Court may also consider “deposition 8 testimony and other evidence” outside of the pleadings to determine whether it has personal 9 jurisdiction. Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 268 (9th Cir. 1995). 10 See also Lee v. Plex, Inc., 773 F. Supp. 3d 775, 769 (N.D. Cal. 2025) (“The court may also 11 consider declarations and other evidence outside the pleadings.”) (cleaned up); 1 Gensler, 12 Federal Rules of Civil Procedure, Rules and Commentary, Rule 12 (2025) (“The plaintiff 13 must supply specific facts in support of personal jurisdiction.”). 14 Cavello Bay provided a declaration from Robert Morgan (“Morgan”), its Chief 15 Executive Officer, in support of its motion to dismiss. (Doc. 19-2.) In response, Plaintiff 16 provided a letter concerning the LPT Agreement (Doc. 29-1) and a declaration from its 17 counsel concerning its unsuccessful attempts to obtain a copy of the LPT Agreement (Doc. 18 29-2). In reply, Cavello Bay provided additional email correspondence concerning 19 Plaintiff’s unsuccessful attempts to obtain a copy of the LPT Agreement. (Doc. 32-1.) 20 Accordingly, the summary of facts below is based on the allegations in the 21 complaint (Doc. 1 at 6-30), where uncontroverted by Cavello Bay; the assertions in 22 Morgan’s declaration, where uncontroverted by Plaintiff’s evidence; and Plaintiff’s 23 evidence. 24 A. The Parties 25 Plaintiff is a Nevada limited liability company “engaged in the business of real 26 estate ownership and development in the State of Arizona.” (Doc. 1 at 6, 7 ¶ 2.) 27 Colony, an insurer, is a Virginia corporation. (Id. at 7 ¶ 3.) Colony is a subsidiary 28 1 of Argo Group International Holdings, Ltd. (“Argo”). (Id.)2 2 Gallagher Bassett is a Delaware corporation and “third party administrator to certain 3 insurance companies.” (Id. at 7 ¶ 4.) Gallagher Bassett “was a third party administrator 4 responsible for the handling and defense of certain of [Colony’s] claims, including the 5 claim at issue in this lawsuit, Colony Claim Number L-099-1040536 and Gallagher Bassett 6 Claim Number 040154-077600-GD01 (the ‘Subject Claim’).” (Id.) 7 Cavello Bay is a Bermuda-based reinsurer. (Id. at 7 ¶ 5.) Cavello Bay is a 8 subsidiary of Enstar Group Ltd. (“Enstar”). (Id.) Morgan’s declaration states—and 9 Plaintiff does not appear to dispute—that Cavello Bay (1) “is not and has never been an 10 Arizona resident”; (2) “does not have any offices in Arizona, has no agents in Arizona, and 11 maintains no employees in Arizona”; (3) “has never maintained a telephone or telefax 12 number or address in Arizona”; (4) “does not pay income tax in Arizona”; and (5) 13 “maintains no bank accounts in Arizona and does not own or rent any real property in 14 Arizona.” (Doc. 19-2 ¶¶ 5-9.) “Cavello Bay has recently been licensed as a reciprocal 15 reinsurer in Arizona.” (Id. ¶ 10.) Although the complaint alleges that Cavello Bay is 16 “doing business in [the] State of Arizona as a reciprocal reinsurer” (Doc. 1 at 7 ¶ 5), 17 Morgan avows that “Cavello Bay . . . does not conduct business in Arizona” (Doc. 19-2 18 ¶ 10). 19 B. The Underlying Lawsuit And Assignment Of Claims 20 In 2017, Plaintiff’s “managing member and predecessor in interest, Dean Slover, 21 engaged defendant Colony’s insured, Macias,” in a remodeling and construction project 22 for residential property located in Scottsdale, Arizona (the “Subject Property”). (Doc. 1 at 23 8 ¶ 16.) 24 Plaintiff later alleged that “Macias’s work on the Subject Property was defective 25 and caused physical damage to property other than its work.” (Id. at 9 ¶ 17.) Plaintiff thus 26 filed suit “against Macias in the Superior Court of the State of Arizona, Maricopa County, 27 2 Morgan’s declaration states that Argonaut Insurance Company (“Argonaut”), rather 28 than Argo, is the parent company of Colony. (Doc. 19-2 ¶ 3.) This distinction is immaterial for present purposes. 1 Case No. CV2022-010268 alleging construction defects and resulting property damage to 2 the Subject Property (the ‘Underlying Lawsuit’).” (Id. at 9 ¶ 20.) 3 Pursuant to two Commercial General Liability insurance policies issued by Colony 4 to Macias (the “CGL Policies”), Macias “tendered the Underlying Lawsuit for defense and 5 indemnity” by Colony. (Id. at 9-10 ¶¶ 23-24, 27-28.) Colony initially “undertook Macias’s 6 defense of the Underlying Lawsuit,” assigning the defense ultimately to Mr. Tappe, an 7 attorney at Righi Fitch Law Group, P.L.L.C. (Id. at 10 ¶ 29.) 8 In a letter dated July 3, 2023 (“the Letter”), “Colony’s parent company, Argo, 9 advised Macias’s defense attorneys that effective on or about July 21, 2023, pursuant to a 10 Loss Portfolio Transfer between Colony and Cavello Bay, claim handling for the Subject 11 Claim and the Underlying Lawsuit was being transferred from Colony to a third party 12 administrator, Gallagher Bassett, with claim oversight to be provided by Cavello Bay.” 13 (Id. at 10 ¶ 32.)3 The Letter, which Plaintiff attaches as an exhibit to its response brief, 14 specifically states as follows: 15 [Colony], a subsidiary of [Argo], is subject to a Loss Portfolio Transfer (LPT) entered into with [Enstar’s] subsidiary [Cavello Bay] concerning 16 various U.S. casualty insurance portfolios. Under the LPT, certain [Colony] 17 claims with loss date between January 1, 2011 and December 31, 2019 were assumed by Cavello Bay. The claim referenced above filed with [Colony] 18 appears to be subject to the LPT. 19 Claims under the LPT previously administered by [Colony] Claims 20 Professionals are now migrating to Third Party Claims Administrator Gallagher Bassett for claims handling, with oversight by Cavello Bay. The 21 claims will transition on or about July 21, 2023. 22 (Doc. 29-1.) 23 Cavello Bay does not appear to dispute that the Letter was sent to Macias’s 24 attorneys; nor does it appear to dispute that the LPT Agreement exists. (Doc. 19-2 ¶ 13 25

26 3 The complaint alleges that the LPT Agreement is a contract between Colony and Cavello Bay. (Doc. 1 at 10 ¶ 32.) Morgan’s declaration seems to indicate that the LPT 27 Agreement is an agreement between Cavello Bay and Argonaut, Colony’s parent company. (Doc. 19-2 ¶ 3.) The Letter, although from Argo, does not clearly specify whether the LPT 28 Agreement is between Cavello Bay and Argo/Argonaut or Cavello Bay and Colony. (Doc. 29-1.) This distinction is immaterial for present purposes. 1 [Morgan: “Cavello Bay’s obligations, if any, under the Argonaut LPT are solely as a 2 reinsurer of Argonaut and its subsidiaries, including Colony.”].) 3 Cavello Bay does, however, appear to dispute some of the contents of the Letter and 4 its description of Cavello Bay’s obligations under the LPT Agreement. Morgan asserts in 5 his declaration that “Cavello Bay is a reinsurance company” that “issues reinsurance 6 contracts that are used to effectuate Loss Portfolio Transfer (‘LPT’) agreements with 7 insurance companies, including . . . the parent company of [Colony].” (Id. ¶ 3.) Morgan 8 further states that “[l]iability, if any, under the Colony Insurance policy at issue in this 9 litigation has not been novated, transferred, or assumed by Cavello Bay, but remains the 10 responsibility of Colony,” and that “[n]o privity of contract exists between Cavello Bay 11 and an insured(s) or claimant(s) under the Colony policy at issue in this litigation.” (Id. 12 ¶¶ 12-13, emphasis added.) However, the italicized portion of this statement appears to 13 conflict with the passage in the Letter that “[u]nder the LPT [Agreement], certain [Colony] 14 claims . . . were assumed by Cavello Bay.” (Doc. 29-1.) To the extent this constitutes a 15 controverted fact, the Court resolves it in Plaintiff’s favor and thus assumes (at least for 16 now) that Cavello Bay “assumed” certain Colony claims under the LPT Agreement. 17 Morgan also avows in his declaration that “Cavello Bay does not handle claims and 18 is not the claim administrator with respect to the . . . LPT [Agreement] or the Colony 19 insurance policy at issue in this litigation.” (Id. ¶ 11.) Plaintiff does not appear to dispute 20 that fact. The complaint alleges that “claim handling . . . was being transferred from 21 Colony to . . . Gallagher Bassett,” while “claim oversight” would be “provided by Cavello 22 Bay.” (Doc. 1 at 10 ¶ 32. See also id. at 16 ¶ 65 [distinguishing between “third party 23 administrators handling claims under the Policies such as Gallagher Basett, [and] those 24 delegated with responsibility to supervise claim handling such as Cavello Bay”].) The 25 same distinction—between Gallagher Bassett’s claim “handling” and Cavello Bay’s claim 26 “oversight”—is discussed in the Letter. (Doc. 29-1.) 27 Cavello Bay’s counsel, in emails sent to Plaintiff’s counsel and attached to Cavello 28 Bay’s reply brief, disputes Cavello Bay’s oversight responsibilities. (Doc. 32-1 at 3 1 [“Cavello Bay did not provide oversight.”].) To the extent this constitutes a controverted 2 fact, the Court resolves it in Plaintiff’s favor and thus assumes (at least for now) that 3 Cavello Bay had claim oversight, but not claim handling, responsibilities under the LPT 4 Agreement. 5 On April 1, 2024, approximately nine months after the Letter was sent, “a mediation 6 was held in the Underlying Lawsuit” in which “a claim representative of Gallagher Bassett, 7 participated . . . [and] abandoned the mediation stating for the first time that Colony was 8 denying coverage for the Subject Claim including the Underlying Lawsuit and that it would 9 be withdrawing its defense of Macias.” (Doc. 1 at 10-11 ¶ 33.) The complaint does not 10 appear to allege that Cavello Bay participated in the April 1, 2024 mediation. 11 Following the mediation, Macias’s defense attorney, Mr. Tappe, wrote to Gallagher 12 Bassett on two occasions requesting confirmation in writing of Colony’s coverage position 13 and “demand[ing] that the insurers defend and indemnify Macias against the allegations in 14 the Underlying Lawsuit.” (Id. at 11 ¶¶ 35-36.) Plaintiff alleges that “[n]either Colony, 15 Gallagher Bassett, Cavello Bay, . . . nor any other persons acting on their behalf ever 16 provided any written explanation of their refusal to continue the defense or their coverage 17 position.” (Id. at ¶ 35). The complaint does not appear to allege that Mr. Tappe ever 18 contacted Cavello Bay, specifically, following the mediation. 19 Plaintiff then filed an application for default in the Underlying Lawsuit against 20 Macias on July 19, 2024, which Mr. Tappe disclosed to Colony and Gallagher Bassett on 21 July 25, 2024 “and once again demanded that the insurers continue to provide a defense to 22 Macias.” (Id. at 11-12 ¶¶ 37-38.) The complaint does not allege that Mr. Tappe informed 23 Cavello Bay, specifically, of this fact—nor does it allege that Mr. Tappe demanded that 24 Cavello Bay, specifically, continue to defend Macias. 25 That same day, Mr. Tappe and his firm withdrew as counsel in the Underlying 26 Lawsuit. (Id. at 12 ¶ 39.) The complaint alleges that although “they were aware of the 27 motion to withdraw, defendants Colony, Gallagher Bassett, [and] Cavello Bay . . . never 28 instructed Macias’s attorneys to continue with the defense of the Underlying Lawsuit.” (Id. 1 at 12 ¶ 40.) 2 On November 8, 2024, the Arizona state court in the Underlying Lawsuit entered a 3 default judgment for Plaintiff and against Macias for $5,774,405.71, plus post-judgment 4 interest. (Id. at 12-13 ¶¶ 43-44.) 5 On February 14, 2025, Macias entered into an assignment of claims and covenant 6 not to execute (the “Assignment Agreement”) with Plaintiff, which, among other things, 7 assigned to Plaintiff Macias’s claims against Colony, Gallagher Bassett, and Cavello Bay 8 “arising out of or relating to the Lawsuit [and] Policies,” “their obligations to defend and 9 indemnify Macias for the damages alleged in the Lawsuit,” and “their handling of, 10 declination of coverage for, and refusal to defend or settle as to the Lawsuit.” (Id. at 13- 11 14 ¶ 49.) 12 II. Procedural History 13 On March 3, 2025, Plaintiff filed the complaint in Maricopa County Superior Court. 14 (Doc. 1 at 6-30.) 15 On April 7, 2025, Defendants removed the action to this Court. (Doc. 1.) 16 On April 25, 2025, Cavello Bay filed the pending motion to dismiss for lack of 17 personal jurisdiction. (Doc. 19.) The motion is now fully briefed. (Docs. 29, 32.) 18 DISCUSSION 19 I. Personal Jurisdiction 20 A. The Parties’ Arguments 21 Cavello Bay argues that it is not subject to either general or specific personal 22 jurisdiction in Arizona. (Doc. 19.) As for general jurisdiction, Cavello Bay argues that it 23 is “neither incorporated nor maintains its principal place of business in Arizona” and “does 24 not conduct business in Arizona.” (Id. at 4-5.) As for specific jurisdiction, Cavello Bay 25 argues that it has neither “purposefully direct[ed] its activities to Arizona” nor purposefully 26 availed itself of the privilege of conducting business in Arizona. (Id. at 6-7.) Cavello Bay 27 further argues that Plaintiff’s allegations “generally lump [Cavello Bay] in with the other 28 Defendants, making no allegations specifically against it.” (Id. at 8.) Cavello Bay further 1 argues it “had no prior negotiations with Macias for issuance of . . . the CGL Policies” and 2 “[i]n fact, . . . had no communications with Macias at all.” (Id.) Finally, Cavello Bay 3 argues that “Plaintiff’s claims do not arise out of Cavello Bay’s Arizona activities because 4 it has none.” (Id.) 5 In response, Plaintiff does not argue that the Court has general jurisdiction over 6 Cavello Bay. (Doc. 29.) Rather, Plaintiff argues that “Cavello Bay’s entering into the LPT 7 Agreement constitutes purposeful directing of business activities within Arizona” because 8 “in the LPT [Agreement] Cavello Bay bound itself to oversee or supervise Plaintiff’s 9 Arizona claim, including the” Underlying Lawsuit. (Id. at 3.) Plaintiff further requests 10 “discovery of the terms of the LPT [Agreement] . . . to determine the extent more fully to 11 which Cavello Bay bound itself regarding Arizona based claims.” (Id. at 4.) 12 In reply, Cavello Bay argues that Plaintiff’s reliance on the reference to “oversight” 13 in the Letter “fails to provide actions taken by Cavello Bay that would support a finding of 14 jurisdiction.” (Doc. 32 at 3). Cavello Bay also disputes the relevance and “discoverability” 15 of the LPT Agreement. (Id. at 5.) 16 B. Legal Standard 17 A defendant may move to dismiss for lack of personal jurisdiction. 18 Fed. R. Civ. P. 12(b)(2). “In opposing a defendant’s motion to dismiss for lack of personal 19 jurisdiction, the plaintiff bears the burden of establishing that jurisdiction is proper.” 20 Ranza, 793 F.3d at 1068 (citation omitted). “Where, as here, the defendant’s motion is 21 based on written materials rather than an evidentiary hearing, the plaintiff need only make 22 a prima facie showing of jurisdictional facts to withstand the motion to dismiss.” Id. 23 (citations and internal quotation marks omitted). 24 “Federal courts ordinarily follow state law in determining the bounds of their 25 jurisdiction over persons.” Morrill v. Scott Fin. Corp., 873 F.3d 1136, 1141 (9th Cir. 2017) 26 (quoting Daimler AG v. Bauman, 571 U.S. 117, 125 (2014)). “Arizona law permits the 27 exercise of personal jurisdiction to the extent permitted under the United States 28 Constitution.” Id. (citing Ariz. R. Civ. P. 4.2(a)). Accordingly, whether the Court has 1 personal jurisdiction over Cavello Bay “is subject to the terms of the Due Process Clause 2 of the Fourteenth Amendment.” Id. 3 “Constitutional due process requires that defendants have certain minimum contacts 4 with a forum state such that the maintenance of the suit does not offend traditional notions 5 of fair play and substantial justice.” Id. (cleaned up). Minimum contacts exist “if the 6 defendant has continuous and systematic general business contacts with a forum state 7 (general jurisdiction), or if the defendant has sufficient contacts arising from or related to 8 specific transactions or activities in the forum state (specific jurisdiction).” Id. at 1142 9 (internal quotation marks omitted). 10 Plaintiff does not contend that Cavello Bay is subject to general jurisdiction in 11 Arizona. Thus, the Court must apply the Ninth Circuit’s three-prong test to determine 12 whether Cavello Bay has sufficient contacts with Arizona to be subject to specific 13 jurisdiction: “(1) The non-resident defendant must purposefully direct his activities or 14 consummate some transaction with the forum or resident thereof; or perform some act by 15 which he purposefully avails himself of the privilege of conducting activities in the forum, 16 thereby invoking the benefits and protections of its laws; (2) the claim must be one which 17 arises out of or relates to the defendant’s forum-related activities; and (3) the exercise of 18 jurisdiction must comport with fair play and substantial justice, i.e., it must be reasonable.” 19 Morrill, 873 F.3d at 1142 (citation omitted). “The plaintiff bears the burden of satisfying 20 the first two prongs of the test.” Id. (internal quotation marks omitted, citation omitted). 21 “If the plaintiff succeeds in satisfying both of the first two prongs, the burden then shifts to 22 the defendant to ‘present a compelling case’ that the exercise of jurisdiction would not be 23 reasonable.” Id. (citation omitted). 24 C. Analysis 25 1. Agency Relationship And Joint Venture 26 In its response brief, Plaintiff asserts in conclusory fashion that “Cavello Bay was 27 an agent and/or joint venturer with Colony regarding the underlying liability claim against 28 Macias.” (Doc. 29 at 2.) In support, Plaintiff cites paragraph 7 of the complaint, which 1 alleges that “[u]pon information and belief, Colony, Gallagher Bassett, [and] Cavallo Bay 2 . . . were each actual, apparent or ostensible agents of each other and joint venturers with 3 respect to the management, handling, and defense of the Subject Claim.” (Doc. 1 at 7 ¶ 7.) 4 Paragraph 7 is alone insufficient to support the assertion of personal jurisdiction under an 5 agency or joint venture theory. See, e.g., Williams v. Yamaha Motor Co., 851 F.3d 1015, 6 1025 n.5 (9th Cir. 2017) (concluding that the “conclusory legal statement unsupported by 7 any factual assertion” that “‘Defendants . . . were the agents or employees of each other 8 and were acting at all times within the course and scope of such agency and employment 9 . . . and are legally responsible because of their relationship with their co-Defendants’” was 10 insufficient to establish specific jurisdiction under agency theory because there were no 11 factual allegations of “control” as required to establish an agency relationship) (alterations 12 in original); Swartz v. KPMG LLP, 476 F.3d 756, 766 (9th Cir. 2007) (“[M]ere ‘bare bones’ 13 assertions of minimum contacts with the forum or legal conclusions unsupported by 14 specific factual allegations will not satisfy a plaintiff's pleading burden.”). 15 Nor does Plaintiff identify any other facts or law that would support the exercise of 16 personal jurisdiction over Cavello Bay under an agency or joint venture theory—although 17 Plaintiff cites two Arizona state cases involving joint ventures in the insurance context, 18 they do not address personal jurisdiction. 19 2. Purposeful Availment And Purposeful Direction 20 The first prong of the test for specific jurisdiction requires an assessment of whether 21 Cavello Bay purposefully directed its activities toward the forum state or purposefully 22 availed itself of the privilege of conducting activities there. Morrill, 873 F.3d at 1142. 23 Courts “generally apply the purposeful availment test when the underlying claims arise 24 from a contract, and the purposeful direction test when they arise from alleged tortious 25 conduct.” Id. However, “our cases do not impose a rigid dividing line between these two 26 types of claims,” and “the first prong may be satisfied by purposeful availment, by 27 purposeful direction, or by some combination thereof.” Davis v. Cranfield Aerospace 28 Sols., Ltd., 71 F.4th 1154, 1162 (9th Cir. 2023) (cleaned up). 1 Count One of the complaint is a breach-of-contract claim, which implicates the 2 purposeful-availment test. Count Two is a claim for breach of the implied covenant of 3 good faith and fair dealing.4 Such a claim generally sounds in contract, but the Arizona 4 Supreme Court has “concluded that there is a legal duty implied in an insurance contract 5 that the insurance company must act in good faith in dealing with its insured on a claim, 6 and a violation of that duty of good faith is a tort.” Deese v. State Farm Mut. Auto. Ins. 7 Co., 838 P.2d 1265, 1267 (Ariz. 1992) (cleaned up). Accordingly, the determination of 8 personal jurisdiction will ultimately require consideration of both the purposeful-availment 9 and purposeful-direction tests. Davis, 71 F.4th at 1162. 10 On the current record, it is unclear whether either test is satisfied. When all disputes 11 are resolved in Plaintiff’s favor, Plaintiff’s evidence and allegations establish that Cavello 12 Bay (based in Bermuda) entered into a contract (the LPT Agreement) with Colony (a 13 Virginia corporation) under which Cavello Bay agreed to do two things: (1) “assume[]” 14 certain Colony claims; and (2) provide “oversight” over Gallagher Bassett (a Delaware 15 corporation) regarding the third-party claim handling being performed by Gallagher 16 Bassett for Colony. The only connection to Arizona is that one of Colony’s insureds 17 (Macias) is based in Arizona, such that when Macias got sued, Cavello Bay may have 18 “assumed” the claim pursuant to the LPT Agreement and/or been obligated under the LPT 19 Agreement to provide “oversight” of Gallagher Bassett’s handling of Macias’s claim 20 against Colony. 21 More information is necessary to determine whether Cavello Bay’s apparent 22 agreement, under the LPT Agreement, to “assume[]” certain Colony claims and provide 23 “oversight” over Gallagher Bassett amounts to purposeful direction or purposeful 24 availment. In large part, this is because the LPT Agreement is not part of the record and 25 4 Count One is entitled “Breach of Contract Against Colony, Cavello Bay, and 26 National Union” and Count Two is entitled “Insurance Bad Faith Against Defendants Colony, Gallagher Bassett, Cavello Bay, and National Union.” (Doc. 1 at 14-15.) It thus 27 appears that Cavello Bay is named as a defendant in each count. However, Plaintiff’s response brief appears only to contend “that Cavello Bay was liable for breach of the duty 28 of good faith and fair dealing implied in the Colony insurance policy at issue.” (Doc. 29 at 2 [citing only paragraphs of the complaint under Count Two].) 1 the parties offer conflicting descriptions of what, if anything, Cavello Bay was obligated 2 to do under the LPT Agreement. The record is also silent on the circumstances under which 3 the LPT was negotiated, including when and where it was negotiated. As discussed in 4 more detail below, the best path forward is thus to authorize limited jurisdictional 5 discovery. 6 3. Arise Out Of Or Relate To Forum Activities And Fair Play And Substantial Justice 7 8 Because jurisdictional discovery is warranted to determine whether Cavello Bay has 9 purposefully availed itself of the privilege of doing business in Arizona or purposefully 10 directed its activities toward Arizona, the Court need not address the other two factors at 11 this time. 12 II. Jurisdictional Discovery 13 A. The Parties’ Arguments 14 Plaintiff seeks a copy of the LPT Agreement because it is “relevant to the issue of 15 whether and how Cavello Bay has obligated itself to oversee Arizona claims, and which 16 likely includes other terms and conditions relating to its responsibilities for Arizona based 17 insurance claims.” (Doc. 29 at 4). Plaintiff also notes that, to the extent Cavello Bay’s 18 objections are based “on confidentiality or proprietary information grounds,” Plaintiff 19 offered to agree to a protective order to address such concerns. (Id.) Plaintiff asks the 20 Court to deny Cavello Bay’s motion to dismiss and allow “discovery of the terms of the 21 LPT [Agreement] . . . to determine the extent more fully to which Cavello Bay bound itself 22 regarding Arizona based claims.” (Id.) The Court construes this as a request for limited 23 jurisdictional discovery. 24 In reply, Cavello Bay disputes the relevance and “discoverability” of the LPT 25 Agreement. (Doc. 32 at 5). Cavello Bay also notes that it previously offered to make the 26 LPT Agreement available for in camera review, only for Plaintiff to refuse the offer. (Id., 27 citing Doc. 32-1.) Notably, Cavello Bay does not develop any argument that the LPT 28 Agreement is somehow privileged or overly sensitive—Cavello Bay’s “discoverability” 1 objection to disclosure of the LPT Agreement seems to be based solely on its belief that 2 the document is irrelevant. (Id.) 3 B. Legal Standard 4 Jurisdictional discovery “may be appropriately granted where pertinent facts 5 bearing on the question of jurisdiction are controverted or where a more satisfactory 6 showing of the facts is necessary.” Boschetto v. Hansing, 539 F.3d 1011, 1020 (9th Cir. 7 2008) (citation omitted). “A district court has broad discretion to ‘permit discovery to aid 8 in determining whether it has in personam jurisdiction.’” Bus. Buyer Directory, LLC v. 9 Nw. Cap. Appreciation, Inc., 2008 WL 5082264, *2 (D. Ariz. 2008) (quoting Data Disc, 10 Inc. v. Sys. Tech. Assocs., Inc., 557 F.2d 1280, 1285 n.1 (9th Cir. 1977)). If “[f]urther 11 discovery on [an] issue might well demonstrate facts sufficient to constitute a basis for 12 jurisdiction,” a district court should grant jurisdictional discovery. Harris Rutsky & Co. 13 Ins. Servs., Inc. v. Bell & Clements Ltd., 328 F.3d 1122, 1135 (9th Cir. 2003) (citation 14 omitted), abrogated on other grounds as recognized in Williams, 851 F.3d at 1024. 15 C. Analysis 16 As discussed in earlier portions of this order, the Court views the questions of 17 whether Cavello Bay “assumed” certain Colony claims and had “oversight” responsibilities 18 over Gallagher Bassett as “controverted,” “pertinent facts bearing on the question of 19 jurisdiction” and concludes that “a more satisfactory showing of the facts is necessary” to 20 understand Cavello Bay’s obligations under the LPT Agreement. Boschetto, 539 F.3d at 21 1020. Although “bare allegations in the face of specific denials” are not grounds for 22 obtaining jurisdictional discovery, LNS Enters. LLC v. Cont’l Motors, Inc., 22 F.4th 852, 23 865 (9th Cir. 2022) (citation omitted), Plaintiff’s position is not based solely on bare 24 allegations in the complaint—instead, Plaintiff relies on the Letter as its basis for 25 suspecting that Cavello Bay purposefully availed itself of the privilege of doing business 26 in Arizona and/or purposefully directed its activities toward Arizona. Limited 27 jurisdictional discovery related to the LPT Agreement is thus warranted because it is based 28 on more than a “mere hunch” and may “yield jurisdictionally relevant facts.” Id. at 864- 1 || 65 (citation and internal quotation marks omitted). Moreover, Plaintiff's request to seek || limited jurisdictional discovery into the terms of an identifiable agreement is neither 3|| “broad” nor lacks “precision [as to] how such discovery could be helpful” to the Court’s jurisdictional analysis. /d. at 865 (citation omitted). 5 Accordingly, 6 IT IS ORDERED that: 7 1. Within seven days of the issuance of this order, Cavello Bay shall produce 8 || the LPT Agreement to Plaintiff. 9 2. Within 14 days of the production of the LPT Agreement, Plaintiff shall file 10 || a supplemental memorandum, not to exceed seven pages, addressing whether, and if so, || why, the LPT Agreement provides a sufficient basis for the Court to exercise personal jurisdiction over Cavello Bay under the applicable Ninth Circuit standards. 13 3. Within 14 days of when Plaintiff files its supplemental memorandum, || Cavello Bay shall file a response, not to exceed seven pages. 15 Dated this 21st day of October, 2025. 16 17 Lm ee” Dominic W. Lanza 19 United States District Judge 20 21 22 23 24 25 26 27 28

-14-