American Cemwood Corp. v. American Home Assurance Corp

In American Cemwood Corp. v. American Home Assurance Corp. (2001) 87 Cal. App. 4th 431, the Court followed federal law in determining that the moving defendant must show that all defendants are subject to jurisdiction in the alternative forum, reasoning that plaintiffs should not be forced "to pursue separate actions in multiple states or countries to obtain complete relief." (Id. at p. 439.) The Court cited with approval the Sixth Circuit's holding in Watson v. Merrell Dow Pharmaceuticals, Inc. (1985) 769 F.2d 354, 357, that " even if the major, or 'primary,' defendants can be sued in the proposed alternative forum . . . the moving party must show that all other defendants, whether or not as central to the litigation, are subject to its jurisdiction as well. " (American Cemwood, supra, 87 Cal. App. 4th at p. 438.) In American Cemwood, the Court held that a moving defendant has the burden to show that all defendants are amenable to jurisdiction in the alternative forum. (87 Cal. App. 4th at pp. 438-440.) In American Cemwood Corp. v. American Home Assurance Corp. (2001) the appellate court "considered whether a defendant seeking to stay or dismiss an action on the basis of forum non conveniens must show that all defendants are subject to jurisdiction in the proposed alternate forum." (87 Cal.App.4th at p. 433.) The insured plaintiff in American Cemwood, an Oregon corporation, filed suit in California against five insurers, seeking a declaration of the insurers' obligations with respect to roofing tile claims brought against the insured and, from certain defendants, damages for breach of duties to defend and indemnify and of the implied covenant of good faith and fair dealing. Two of the five insurers (American Home and C&I) filed suit against the insured in British Columbia, seeking declaratory relief concerning their indemnity and defense obligations. American Home and C&I moved to dismiss or stay the insured's California action in favor of the British Columbia action on a theory of forum non conveniens. The court stayed the action subject to the defendants' agreement to toll the statute of limitations. The insured appealed. On appeal in American Cemwood, the insured contended "that forum non conveniens is not available unless all defendants in the California action can be compelled to litigate in British Columbia." (87 Cal.App.4th at p. 437.) The appellate court agreed, stating that American Home and C&I had failed to establish below that all of the defendants in the California action were subject to jurisdiction in British Columbia. (Ibid.) "Their only evidence on this point was a declaration by counsel on information and belief that Travelers, North Pacific and Reliance 'are either subject to or may consent to' jurisdiction in British Columbia." (Id. at fn.5.) The rule that the forum non conveniens doctrine is available only when all of the defendants are subject to (or consent to) jurisdiction in the alternate forum "makes sense. The court's discretion to decline to exercise its authorized jurisdiction over an action for considerations of convenience is limited by the proviso that another forum must be available for the plaintiff's action. A rule permitting a stay or dismissal of an action over which no single alternative court could exercise jurisdiction would force the plaintiff to pursue separate actions in multiple states or countries to obtain complete relief. Such a rule, by encouraging piecemeal litigation and blossoming numbers of actions in multiple jurisdictions, would threaten precisely those considerations of convenience, economy and justice the doctrine was designed to bolster. " (American Cemwood, supra, 87 Cal.App.4th at pp. 438-439.)