Little v. XL Insurance Company SE

Background

Peter Little sued XL Insurance Company SE, alleging breach of an insurance contract, breach of the implied covenant of good faith and fair dealing, and seeking declaratory relief. Little sought coverage for legal expenses from a Federal Reserve enforcement action concerning conduct alleged to have occurred while he worked in Barclays’s New York office. XL concluded that Little did not qualify as an insured under the policy and denied coverage.

The policy was negotiated and underwritten in England. It provided that English law governed the policy and that disputes arising under or connected with the policy could be submitted to mediation or binding arbitration, with London, England, as the seat of arbitration. After Little filed this case, an English court issued orders requiring him to challenge XL’s denial of coverage under the policy’s dispute-resolution provision.

XL moved to dismiss for lack of personal jurisdiction and on forum non conveniens grounds. Forum non conveniens allows a court to dismiss when another forum is substantially more appropriate and convenient for resolving the dispute. XL alternatively sought a stay and an order compelling arbitration.

Court’s analysis

The court did not decide the personal-jurisdiction argument. It determined that it could address forum non conveniens first because that issue provided a less burdensome basis for resolving the case.

The court gave Little’s choice of a New York forum less than significant deference. Although Little argued that New York was his home forum, the court found that the policy’s broad dispute-resolution provision undermined his choice. The court reasoned that Little relied on the policy to seek coverage while arguing that its dispute-resolution provision did not apply to him. It concluded that the dispute involved the policy’s validity, interpretation, and coverage obligations and therefore fell within the provision.

The court next found that England was an adequate alternative forum. XL was subject to the policy’s dispute-resolution provision, and the dispute could be resolved through mediation or arbitration in England. The court rejected Little’s argument that the alternative forum was inadequate because it might not provide an identical claim for breach of the implied covenant of good faith and fair dealing or identical remedies. The court also noted that the policy selected English law and that Little’s counsel had reviewed the policy before filing the complaint.

Finally, the court balanced private and public interests. It found that England had greater connections to the dispute because the policy’s negotiations, formation, and much of its performance occurred there, and relevant brokers, underwriters, and executives were in England. The court also found that resolving an English-law dispute through an English arbitral tribunal would be more efficient, less costly, and better suited to the issues. Although Little and some employment-related evidence were in New York, the court concluded that New York had little public interest in the personal coverage dispute.

Disposition

The court granted XL Insurance Company SE’s motion to dismiss on forum non conveniens grounds. The order did not state that the dismissal was with or without prejudice. The Clerk was instructed to terminate the motion and close the case. Judge Vincent L. Briccetti did not reach the personal-jurisdiction argument or the alternative request to stay the case and compel arbitration.