Professional Negligence Law Reporter

A federal district court held that a Utah-based wholesale insurance broker was not entitled to dismissal in a lawsuit in which the broker was named as a third-party defendant for failing to procure appropriate insurance coverage for a Michigan ziplining business.

Here, Experiential Systems, Inc., the operator of a ropes and ziplining course, was named in a Michigan personal injury lawsuit. Experiential asserted that Mid-Continent Excess & Surplus Insurance Co. owed coverage in the lawsuit and, if not, wholesale insurance broker Veracity Insurance Solutions, LLC, was liable for failing to procure adequate coverage. Veracity Insurance Solutions moved to dismiss for lack of personal jurisdiction.

Denying the motion, the district court said that to find personal jurisdiction, a party must make a prima facie showing that a defendant purposefully availed itself of the privilege of acting in the forum state, the cause of action must have arisen from the defendant’s activities there, and there is sufficient connection to the forum state to make exercising jurisdiction reasonable. Applying these elements, the court found that Veracity purposefully availed itself of the privilege of acting or causing a consequence in Michigan, including holding a license to sell insurance there and generating business income in the state. The cause of action also arises out of Veracity’s contacts with Michigan, specifically its brokering of an insurance policy for Experiential, a Michigan business. That Veracity knowingly undertook to place an insurance policy there justifies the conclusion that exercising jurisdiction in the state would not be unreasonable, the court added. Thus, the court denied Veracity’s motion to dismiss, finding that the third-party defendant would retain the ability to further assert its defense after the parties conducted discovery.

Citation: Mid-Continent Excess & Surplus Ins. Co. v. Maher, 2020 WL 1933226 (W.D. Mich. Apr. 16, 2020).

Third-party plaintiff counsel: Nick Vogel, Chicago.