Patton Boggs Reinsurance Newsletter- March 2013: Ohio Federal Court Transfers Reinsurance Dispute to Florida

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Certain Underwriters at Lloyd's, London v. Stonebridge Cas. Ins. Co., No. 2:12-cv-160 (S.D. Ohio Dec. 17, 2012).

An Ohio federal court has transferred a reinsurance dispute to Florida, where another related action was pending. The cedent, commencing with its predecessor, underwrote an automobile dealership awards program. Reinsurance for the awards program was obtained via a broker allegedly from a Lloyd's coverholder in 2004. This process was repeated in 2006 with another Lloyd's coverholder. The cedent sought to recover under both reinsurance programs.

The reinsurers and their agent for the 2006 program commenced an action in Florida for a declaration that they had no liability to the cedent for failure to comply with certain conditions and requirements. The cedent moved to compel arbitration under the 2004 agreement, which was granted by the Florida court.

Subsequently, the 2004 reinsurers filed suit in Ohio claiming that they never entered into and had no knowledge of the 2004 agreement. The cedent moved to transfer the Ohio action to Florida where the 2006 action was pending.

In granting the motion to transfer, the court found Florida federal court to be convenient because it could have been brought in Florida, neither party had yet requested arbitration as the reinsurers were contesting the contract's validity, that a substantial part of the events leading up to the litigation took place in Florida, the main witness resided in Florida, and that in the interest of justice transfer to Florida was appropriate. 

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