Free Case Transferred In - District Transfer - District Court of Delaware - Delaware

Case 1:05-cv-00868-SLR

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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA CASE NO. 05-21918-CIV-LENARD/KLEIN

JAIME JALIFE, Plaintiff, vs. ACE CAPITAL AND OTHERS UNDERWRITING AT LLOYD'S SEVERALLY SUBSCRIBING TO POLICY NO. A5BGLY170, Defendants. ____________________________________________/

DEFENDANTS' MOTION TO DISMISS, OR IN THE ALTERNATIVE, MOTION TO TRANSFER VENUE AND MEMORANDUM OF LAW IN SUPPORT THEREOF Defendants, ACE CAPITAL AND OTHERS UNDERWRITING AT LLOYD'S SEVERALLY SUBSCRIBING TO POLICY NO. A5BGLY170, (hereinafter "UNDERWRITERS"), by and through their undersigned counsel, request this Honorable Court to dismiss this case without prejudice pursuant to Federal Rules of Civil Procedure 12(b)(3) and 12(b)(7), or in the alternative, to transfer this case to the United States District Court for the District of Delaware pursuant to 28 U.S.C. § 1404, which is where the Defendants first filed suit regarding the same contractual dispute presented in this case, and state: INTRODUCTION 1. This case involves a marine insurance coverage dispute regarding the grounding of

the M/Y Mamma Mia at Puerto Aventuras, Mexico on or about June 5, 2005. Defendants, -1-

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UNDERWRITERS, issued a marine insurance policy to Varadam Foundation, a non-party, and Plaintiff, JAIME JALIFE, to cover the Yacht during the period of May 20, 2005 to May 20, 2006. Mr. JALIFE owns Varadam Foundation, which is a Delaware corporation, and therefore he is the beneficial owner of the Yacht. The Policy contained a Navigation Warranty (or Limit) that required the Yacht to be north of the Tropic of Cancer between June 1st and October 31st. The Yacht grounded south of the Tropic of Cancer and violated the navigation warranty. 2. Defendants, UNDERWRITERS, first filed a declaratory judgment action against the

Insureds, Varadam Foundation and JAIME JALIFE, in the Federal District Court for the District of Delaware on June 20, 2005. On July 15, 2005 Varadam Foundation filed an Answer to the Defendants, UNDERWRITERS', Complaint. The same day that Plaintiff, JAIME JALIFE'S, company, Varadam Foundation, filed an Answer in the Federal District Court in Delaware, JALIFE filed a declaratory judgment action for the very same dispute against the Defendants, UNDERWRITERS, in the United States District Court for the Southern District of Florida. Contrary to Local Rules 3.9C and D, Plaintiff, JAIME JALIFE, failed to advise this Honorable Court about the pendency of the Delaware suit. Plaintiff, JALIFE, also failed to advise this Court of the fact that his company had filed a Motion to Transfer Venue in the Delaware action. 3. On October 6, 2005, the United States District Court for the District of Delaware

entered an Order denying Varadam Foundation's Motion to Transfer the first filed case to the United States District Court for the Southern District of Florida. Given the fact that the United States District Court for the District of Delaware refuses to relinquish its jurisdiction over the subject dispute, this Honorable Court is essentially compelled to either dismiss this action without prejudice, or in the alternative, to transfer this case to the Federal District Court in -2-

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Delaware STATEMENT OF MATERIAL FACTS 4. Defendants, UNDERWRITERS, issued Policy of Insurance No. A5BGLY170 to

Varadam Foundation and JAIME JALIFE, which provided hull and machinery and protection and indemnity coverage for their 2001 85' Azimut Motor Yacht named Mama Mia for the period of May 20, 2005 through May 20, 2006. 5. Varadam Foundation is a Delaware corporation with its principle place of business

at 3511 Silverside Road, Suite 105, Wilmington, Delaware 19810. A copy of Varadam's Certificate of Incorporation dated January 30, 2001 and a copy of the Delaware Secretary of State's Division of Corporation Entity Details for Varadam are attached hereto and made a part hereof as Exhibits 1 and 2 respectively. 6. At all times material hereto, Varadam Foundation was and is the legal owner of the

M/Y Mamma Mia. A Copy of the Yacht's Certificate of Registry is attached hereto and made a part hereof as Exhibit 3. 7. Varadam Foundation registered the M/Y Mamma Mia in St. Vincent and the

Grenadines and the Yacht's Certificate of Registry shows that Varadam Foundation is the owner and is based in Wilmington, [Delaware], U.S.A. See Exhibit 3. 8. As the yacht owner and insured under the Policy, Varadam Foundation is an

indispensable party concerning the resolution of the subject coverage dispute between the parties. 9. Varadam Foundation is not a party to the case at bar.

10. At all times material hereto, Plaintiff, JAIME JALIFE, was and is the sole or majority stock holder of Varadam Foundation and is the beneficial owner of the Mamma Mia. -3-

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11. At all times material hereto, Plaintiff, JAIME JALIFE, is a citizen of Mexico and conducts business in the State of Delaware. 12. Policy No. A5BGLY170 contained a Navigation Warranty that restricted the navigational limits of the Mamma Mia as follows: Inland and coastal waters of the east and gulf coast USA between Eastport, Maine and Brownsville, Texas, including Bermuda, the Bahamas, and the Caribbean Sea, including Venezuela, but excluding Cuba, Columbia and Haiti. Warranted not south of the Tropic of Cancer between 1st June and 31st October inclusive. 13. On June 5, 2005, the M/Y Mamma Mia grounded at Puerto Aventuras, Mexico, which is south of the Tropic of Cancer. 14. On June 10, 2005, Defendants, UNDERWRITERS', sent a Reservation of Rights Letter to the Insureds, Varadam Foundation and JAIME JALIFE, which advised them that the UNDERWRITERS were reserving their rights to decline coverage for the grounding incident for violation of the Navigation Warranty and that they should take prudent steps to protect their interests under the circumstances. A copy of Defendants, UNDERWRITERS,' Reservation of Rights Letter dated June 10, 2005, is attached hereto and made a part hereof as Exhibit 4. 15. On June 20, 2005, Defendants, UNDERWRITERS, filed a Complaint for Declaratory Judgment regarding coverage under the Policy for the subject grounding incident in the United States District Court for the District of Delaware. A copy of the UNDERWRITERS' Complaint for Declaratory Judgment is attached hereto and made a part hereof as Exhibit 5. 16. On July 15, 2005, Varadam Foundation filed an Answer to the UNDERWRITERS' Complaint for Declaratory Judgment. A copy of Varadam Foundation's Answer is attached

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hereto and made a part hereof as Exhibit 6. 17. On July 15, 2005, Plaintiff, JAIME JALIFE, filed a Complaint for Declaratory Relief against Defendant, UNDERWRITERS, in the United States District Court for the Southern District of Florida. Plaintiff, JALIFE, however, failed to advise the Honorable Court of the pendency of the first filed action in the United States District Court for the District of Delaware as required by Local Rule 3.9C and D. 18. On July 21, 2005, Plaintiff, JAIME JALIFE, filed an Amended Complaint for Declaratory Relief but again failed to advise the Court about the pendency of the first filed action in the United States District Court for the District of Delaware. 19. On July 20, 2005, Varadam Foundation filed a Motion to Transfer Venue with the United States District Court for the District of Delaware pursuant to 28 U.S.C. § 1404. Again, Plaintiff, JAIME JALIFE, did not advise this Honorable Court about his company's Motion to Transfer Venue that was filed with the United States District Court for the District of Delaware. 20. On October 6, 2005, the United States District Court for the District of Delaware entered an Order denying Varadam Foundation's Motion to Transfer Venue. Additionally, the United States District Court for the District of Delaware entered a Memorandum Opinion that thoroughly discussed the issues surrounding the first filed rule and held that the District Court in Delaware was going to retain jurisdiction of the case. A copy of the United States District Court for the District of Delaware's Memorandum Opinion and Order dated October 6, 2005, are attached hereto as Exhibits 7 and 8, respectively. MEMORANDUM OF LAW 21. Defendants, UNDERWRITERS, base their Motion to Dismiss/Motion to Transfer -5-

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Venue on the "first-filed" rule. The "first-filed" rule holds that when parties have instituted competing or parallel litigation in separate federal courts, the court initially having jurisdiction should hear the case. Northwest Airlines, Inc. v. American Airlines, Inc., 989 F.2d 1002 (8th Cir. 1993); Supreme International Corp. v. Anheuser-Busch, Inc., 972 F. Supp. 604 (S. D. Fla. 1997). 22. The "first-filed" rule is said to have originated with Chief Justice Marshall's

decision in Smith v. M'Iver, 22 U.S. 532 (1824). In Smith v. M'Iver, the Supreme Court said: "In all cases of concurrent jurisdiction, the Court which first has possession of the subject must decide it." 23. It is now fundamental law that "in the absence of compelling circumstances, the

court initially seized of a controversy should be the one to decide the case." Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Haydu, 675 F.2d 1169 (11th Cir. 1982); Supreme International Corp. v. Anheuser-Busch, Inc., 972 F. Supp. 604 (S. D. Fla. 1997). 24. Moreover, where two or more competing cases have been filed in different federal

district courts, the federal court that has the first-filed case (i.e. "first-filed court") is the appropriate forum in which to determine whether the first-filed case should proceed or whether it should be dismissed or transferred to a more appropriate forum. Supreme International Corp. v. Anheuser-Busch, Inc., 972 F. Supp. 604 (S. D. Fla. 1997). 25. In the case at bar, the Federal District Court for the District of Delaware has

already reviewed this matter and has determined that it will not transfer the case to the Federal District Court for the Southern District of Florida. See Exhibits 7 and 8. As a consequence, the Honorable Court is essentially required to dismiss this case without prejudice, or in the alternative, to transfer venue of this matter up to the District Court in Delaware. Merrill -6-

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Lynch, Pierce, Fenner & Smith, Inc. v. Haydu, 675 F.2d 1169 (11th Cir. 1982); Northwest Airlines, Inc. v. American Airlines, Inc., 989 F.2d 1002 (8th Cir. 1993); Supreme International Corp. v. Anheuser-Busch, Inc., 972 F. Supp. 604 (S. D. Fla. 1997). 26. In addition to the "first-filed" rule, the Court should dismiss this case because

Plaintiff, JAIME JALIFE, has failed to name the yacht owner, Varadam Foundation, as a party to this suit, which party is obviously necessary for the just adjudication of this dispute. There is no question that Varadam Foundation is subject to personal jurisdiction before the Federal District Court in Delaware and therefore this Court should dismiss this action in favor of the Delaware action so that all of the interested parties are present in one suit and the UNDERWRITERS are not subject to liability for two separate judgments for the same alleged damages. WHEREFORE, Defendants, ACE CAPITAL AND OTHERS UNDERWRITING AT LLOYD'S SEVERALLY SUBSCRIBING TO POLICY NO. A5BGLY170, request the Honorable Court to dismiss this case without prejudice pursuant to the "first-filed" rule and Federal Rules of Civil Procedure 12(b)(3) and 12(b)(7). In the alternative, Defendants request the Honorable Court to transfer venue of this case to the Federal District Court for the District of Delaware pursuant to 28 U.S.C. § 1404. CERTIFICATE OF SERVICE WE HEREBY CERTIFY that the foregoing has been electronically filed with this Honorable Court and that a true and correct copy of the foregoing has been furnished via telefax and U.S. Mail on this 7th day of October, 2005, to: Michael T. Moore, Esq., Moore & Co., P.A., Attorneys for JAIME JALIFE, 355 Alhambra Circle, Suite 1100, Coral Gables, Florida 33134; and Daniel K. Astin, Esq., The Bayard Firm, Attorneys for Varadam Foundation, 222 Delaware -7-

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Avenue, Suite 900, P.O. Box 25130, Wilmington, Delaware 19899.

STROUP & MARTIN, P.A. Attorneys for Defendants, ACE CAPITAL AND OTHERS UNDERWRITING AT LLOYDS, etc., et al. 119 S.E. 12th Street (Davie Blvd.) Fort Lauderdale, FL 33316 Phone: (954) 462-8808 Fax: (954) 462-0278

By:_Farris J. Martin, III /s/__ FARRIS J. MARTIN, III Florida Bar No. 0879916

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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA CASE NO. 05-21918-CIV-LENARD/KLEIN JAIME JALIFE, Plaintiff, vs. ACE CAPITAL AND OTHERS UNDERWRITING AT LLOYD'S SEVERALLY SUBSCRIBING TO POLICY NO. A5BGLY170 Defendants. ____________________________________________/ ORDER GRANTING DEFENDANTS' MOTION TO DISMISS OR, IN THE ALTERNATIVE, MOTION TO TRANSFER VENUE THIS MATTER is before this Honorable Court upon the Defendants' Motion to Dismiss or Change Venue, and the Court having considered said Motion, and having reviewed the Court file and being otherwise duly advised in the premises, it is ORDERED AND ADJUDGED that Defendants' Motion to Dismiss is hereby GRANTED without prejudice, and it is further ORDERED AND ADJUDGED that Plaintiff, JAIME JALIFE, may file a Counterclaim in the action currently pending before the United States District Court for the District of Delaware. DONE AND ORDERED in Chambers at Miami, Dade County, Florida this ______ day of October, 2005. ________________________________ HONORABLE JOAN A. LENARD U.S. District Court Judge -1-

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Copies Furnished: Farris J. Martin, III, Esq., Stroup & Martin, P.A., Attorneys for Defendants, 119 S.E. 12th Street, Fort Lauderdale, FL 33316; and Michael T. Moore, Esq., Moore & Co., P.A., Attorneys for JAIME JALIFE, 355 Alhambra Circle, Suite 1100, Coral Gables, Florida 33134; and Daniel K. Astin, Esq., The Bayard Firm, Attorneys for Varadam Foundation, 222 Delaware Avenue, Suite 900, P.O. Box 25130, Wilmington, Delaware 19899

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