American Cemwood Corp. v. American Home Assurance Co

In American Cemwood Corp. v. American Home Assurance Co. (2001) 87 Cal.App.4th 431, the plaintiff insured filed an action in California against five of its insurers for declaratory relief and damages. The insurers were located in four different states; the plaintiff insured's parent corporation was located in Canada. Two of the defendant-insurers filed an action against the plaintiff in Canada and moved to dismiss or stay the California action on the basis of forum non conveniens. The trial court did not determine whether all five defendants named in the California action were subject to jurisdiction in Canada. Instead, it granted the motion to stay subject only to the condition that the defendants agree to toll the statute of limitations. (Id. at pp. 434-435.) The plaintiff appealed, contending that Canada was not a suitable alternative forum because the defense had failed to establish that all five defendants could be sued in Canada. The appellate court agreed, distinguishing Hansen v. Owens-Corning Fiberglas Corp. (1996) in two important regards. One was that Hansen involved 200 named defendants whereas the case under review involved "but five defendants" so "it would not be unreasonable here to expect the two moving defendants to prove the three other defendants are subject to jurisdiction in a particular alternative forum." (Id. at p. 440.) The second distinction was that the Hansen trial court had stayed the California action pending a determination that all defendants were subject to jurisdiction to Montana whereas the Cemwood trial court had not conditioned its ruling on any subsequent determination about the other defendants' amenability to service in the alternative forum.