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Indemnity Insurance Corporation v. Jade Presents, LLC

United States District Court, Fourth Circuit

September 24, 2013

INDEMNITY INSURANCE CORPORATION
v.
JADE PRESENTS, LLC, ET AL.

MEMORANDUM

J. FREDERICK MOTZ, District Judge.

Indemnity Insurance Corporation has instituted this action against Jade Presents, LLC and Jade R. Nielsen for breach of contract, fraud, and a declaratory judgment action. All of the claims are premised upon a settlement agreement entered into between Indemnity Insurance and Jade Presents. Defendants have moved to dismiss the action for lack of personal jurisdiction. The motion will be granted.[1]

According to an affidavit filed by Jade Nielsen, Jade Presents is legally organized in North Dakota and has never done any business (including concert promotion, its line of business) in Maryland. Likewise, according to Mr. Nielsen's affidavit, he has never been in Maryland or done any business in Maryland.

Indemnity Insurance has not presented any affidavit or other evidence to the contrary. Rather, it relies upon the fact that the settlement agreement between the parties calls for the application of Maryland law. Indemnity Insurance has not, however, cited any authority to support the proposition that a choice of law provision contained in a contract reflects an intention of a party to the contract to submit itself to personal jurisdiction in the state whose law governs interpretation of the contract. Burger King v. Rudzewicz, 471 U.S. 462 (1985), upon which Indemnity Insurance relies, is not to the contrary. Although in Burger King the parties' contract did include a provision calling for the application of the law of Florida (the state in which jurisdiction was sustained), what was at issue in Burger King was a franchise agreement between the franchisee and a national franchisor, located in Florida. The Supreme Court recognized that in such a relationship, it was "an inescapable fact of modern commercial life that a substantial amount of business is transacted solely by mail and wire communications across state lines." 471 U.S. at 476.

In further support of its position, Indemnity Insurance cites Judge Luttig's opinion in Diamond HealthCare of Ohio, Inc. v. Humility of Mary Health Partners, 229 F.3d 448 (4th Cir. 2000). Indemnity Insurance fails to note, however, that Judge Lutting was writing in dissent. Moreover, to the extent the Indemnity Insurance contends that the mere fact that Jade Presents entered a contract with a party in Maryland subjects Jade Presents to personal jurisdiction in Maryland, that proposition is defeated by Burger King itself. 471 U.S. at 478.[2]

A separate order granting defendant's motion and dismissing this action for lack of personal jurisdiction is being entered herewith.


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