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By: Catherine Bednar
Plaintiff Capital Crossing Servicing Company, LLC (“Capital Crossing”), a loan servicing company, filed a lawsuit in Massachusetts against its insurer, Mapfre Praico Insurance Company (“Mapfre”). The lawsuit involves a coverage dispute over property damage claims following Hurricane Maria’s devastating impact on Puerto Rico. The parties are contesting whether Mapfre may be sued in Massachusetts, or instead the case belongs in Puerto Rico.
Mapfre moved to dismiss Capital Crossing’s lawsuit on the grounds that Mapfre lacks sufficient contacts with Massachusetts to establish jurisdiction over it. Mapfre argued that it is a Puerto Rico insurance company, it issued the policy in Puerto Rico, it insured real property in Puerto Rico, and it investigated and adjusted the claims in Puerto Rico. Mapfre contended the policy and payments were delivered to Capital Crossing in Puerto Rico to an appointed intermediary. Accordingly, Mapfre argued it never “purposefully availed” itself of the privilege of doing business in Massachusetts.
In response, Capital Crossing argued it is a Massachusetts company, the policy was actually delivered to Massachusetts, and it paid premiums from Massachusetts and received claims payments in Massachusetts. In addition, Capital Crossing pointed out that on more than one occasion, Mapfre representatives had met with Capital Crossing representatives face-to-face in Massachusetts to discuss the Hurricane Maria claims. In its briefing, Capital Crossing relied on Massachusetts legal precedent holding that only minimal contacts with a state are required for jurisdiction over insurers, based in part on the fact that litigation is a routine aspect of an insurance company’s business.
On October 31, 2019, at the request of the parties, the U.S. District Court of Massachusetts deferred any action on Mapfre’s motion to dismiss pending discovery between the parties. Whether the lawsuit remains in Massachusetts remains to be seen. This case is a reminder that jurisdiction is a fact-dependent inquiry; how an insurer conducts its business, both in issuing policies and handling claims, determines where it may be haled into court.
If you have any questions or would like more information, please contact Catherine Bednar at [email protected].