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Hoyt v. Phoenix Life Ltd.

United States District Court, D. South Carolina, Charleston Division

April 8, 2019

Amy Joyce Gunn Hoyt, formerly known as Amy Joyce Gunn Gould, individually, and as guardian ad litem and trustee for Simms Augustus Hoyt, formerly known as Simon Augustus Gould, a minor fifteen 15 years of age, and Raphael Augustus Hoyt, formerly known as Raphael Charles Augustus Gould, a minor under the age of fourteen 14 years, Plaintiffs,
Phoenix Life Limited and Scottish Provident Institution, Defendants.



         This matter is before the Court on Defendant's Second Motion to Dismiss (Dkt. No. 18.) For the reasons set forth below, the Court grants the motion.

         I. Background

         Plaintiff Amy Joyce Gunn Hoyt, individually and on behalf of two of her minor children, brought this case against Defendants Scottish Provident Institution ("SPI") and Phoenix Life Limited ("PLL") in the Charleston County Court of Common Pleas on August 14, 2018. (Dkt. No. 1-1.) Plaintiff alleges that the Defendants sold a life insurance policy (the "Policy") to Simon Gould, Plaintiffs ex-husband, in 1999, [1] and brings claims for breach of contract, estoppel and bad faith based on the Defendants' alleged failure to pay benefits after her ex-husband's death. (Id. at ¶¶ 66 - 142.) Plaintiffs ex-husband was a citizen of the United Kingdom, and the Policy provided coverage in the amount of 1.2 million pounds.[2] (Id. at ¶ 7, Dkt. No. 6 at 6.) Plaintiff and her ex-husband moved to South Carolina in 2004. (Dkt. No. 1-1 at ¶ 10.) Plaintiff alleges that she had a vested ownership interest in the Policy no later than 2006 as part of a settlement agreement and a divorce decree from South Carolina family court. The Policy was also allegedly a part of a flexible gift trust, of which Plaintiff was a trustee and her children were beneficiaries. (Id. at ¶¶ 19 - 20.)

         On October 10, 2018, Defendants removed the case to this Court. (Dkt. No. 1.) Shortly after, the Defendants moved to dismiss for lack of personal jurisdiction, arguing that they are both corporations based in the United Kingdom and have never transacted business or marketed services in South Carolina. (Dkt. No. 4 at 3 - 4.) In response, Plaintiff requested that the Court stay ruling on the motion to dismiss and order limited jurisdictional discovery. (Dkt. No. 6 at 6.) The Court granted the requested jurisdictional discovery. (Dkt. No. 14). As jurisdictional discovery is complete, Defendants now renew their Motion to Dismiss, arguing that the Court lacks personal jurisdiction over Defendants due to insufficient contacts with South Carolina and because the parties are bound by a forum selection clause requiring any disputes to be litigated in England. (Dkt. No. 18.) Plaintiff opposes the motion. (Dkt. No. 19).

         II. Legal Standard

         The burden is on the plaintiff to establish personal jurisdiction. Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989). After jurisdictional discovery, a Plaintiff must prove personal jurisdiction by a preponderance of the evidence. See Gourdine v. Karl Storz Endoscopy-Am., Inc., 223 F.Supp.3d 475, 482 (D.S.C. 2016). See also Brown v. Geha-Werke GmbH, 69 F.Supp.2d 770, 774 (D.S.C. 1999) ("Although this court decided the issue of personal jurisdiction without an evidentiary hearing...the parties have engaged in jurisdictional discovery and offered evidence beyond the pleadings and affidavits... [therefore] Plaintiff must establish personal jurisdiction by a preponderance of the evidence.").[3]

         To meet its burden to show personal jurisdiction, a plaintiff must show (1) that South Carolina's long-arm statute authorizes jurisdiction, and (2) that the exercise of personal jurisdiction complies with constitutional due process requirements. See, e.g. Christian Sci. Bd. of Dirs. of First Church of Christ, Scientist v. Nolan, 259 F.3d 209, 215 (4th Cir. 2001). Since South Carolina's long-arm statute extends to the constitutional limits of due process, the only inquiry is whether due process requirements are met. ESAB Group, Inc. v. Centricut, LLC, 34 F.Supp.2d 323, 328 (D.S.C. 1999); S. Plastics Co. v. S. Commerce Bank, 423 S.E.2d 128 (S.C. 1992).

         Due process requires that a defendant have sufficient "minimum contacts with [the forum] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" Ml Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (citations omitted). This can be met by showing either general or specific personal jurisdiction. ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707, 711-12 (4th Cir. 2002) (citations omitted). To assert general jurisdiction, a defendant's contacts must be "so 'continuous and systematic' as to render them essentially at home in the forum State." Daimler AG v. Bauman, 571 U.S. 117, 127, 134 S.Ct. 746, 754 (2014) (citations omitted). For a corporation, that traditionally renders them subject to general jurisdiction in its state of incorporation or principal place of business. Id. at 137.

         To determine whether specific jurisdiction exists, the Court considers "(1) the extent to which the defendant has purposefully availed itself of the privilege of conducting activities in the state; (2) whether the plaintiffs claims arise out of those activities directed at the state; and (3) whether the exercise of personal jurisdiction would be constitutionally 'reasonable.'" Carefirst of Maryland, Inc. v. Carefirst Pregnancy Centers, Inc., 334 F.3d 390, 397 (4th Cir. 2003) (citations omitted). In other words, the defendant must have "minimum contacts" with the forum, the cause of action must arise from those contacts, and the exercise of personal jurisdiction must be reasonable. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 - 476 (1985). Courts evaluate the reasonableness of personal jurisdiction by considering "(a) the burden on the defendant, (b) the interests of the forum state, (c) the plaintiffs interest in obtaining relief, (d) the efficient resolution of controversies as between states, and (e) the shared interests of the several states in furthering substantive social policies." Lesnick v. Hollingsworth & Vose Co., 35 F.3d 939, 946 (4th Cir. 1994). "Minimum contacts" and "reasonableness" are not independent requirements; rather, they are both aspects of due process, and thus "considerations sometimes serve to establish the reasonableness of jurisdiction upon a lesser showing of minimum contacts than would otherwise be required." Burger King, 471 U.S. at 477.

         III. Discussion

         Plaintiff cannot show that personal jurisdiction exists here.[4] It is undisputed that Defendants are not based in the United States, are not registered or licensed to conduct business in the United States, have no officers or employees in South Carolina, and have never marketed their services in the United States. (Dkt. No. 1-4 at ¶¶ 8, 10, 26 - 40.) Defendant SPI was a Scottish Corporation with its principal place of business in Edinburgh, Scotland. (Id. at ¶ 37.) In 2009, Defendant Phoenix acquired the Life and Pension policies of Defendant Scottish (including the Policy at issue here). (Id. at ¶ 9.) Defendant Phoenix is an English corporation with its principal place of business in Birmingham, England. (Id. at ¶ 2.) Instead of pointing to any business activities in South Carolina, Plaintiff argues the Court has jurisdiction based on the actions that occurred after the issuance of the Policy.[5]

         The life insurance Policy here was issued in January 1999 to Simon Gould when he was living in Monaco but domiciled in the United Kingdom. (Dkt. No. 1-5.) Nowhere did the Policy reference the United States or South Carolina. Instead, Mr. Gould's residence is listed as Monaco, he lists his doctor as living in Beausoleil, France, and identifies an individual from Manchester, England, as his representative. (Dkt. No. 1-5 at 4 - 8, 11.) In August 2004, Plaintiff and Mr. Gould purchased a home on Sullivan's Island in South Carolina. (Dkt. No. 1-6.) No. evidence has been submitted indicating that Defendants were notified at that time that Plaintiff and Mr. Gould had purchased a home in South Carolina. Plaintiff was not a party to the Policy.

         In 2006, Plaintiff and Mr. Gould were divorced in South Carolina. The Family Court in Charleston County allegedly required Mr. Gould to continue paying the life insurance premiums and designate Plaintiff as a beneficiary of 50% of the death benefit as a trustee for their children. (Dkt. No. 19 at 3.) In order to comply with this Family Court order, Mr. Gould requested and received from Defendant SPI a company-branded form for creating a flexible gift trust ("FGT"). (Dkt. No. 19 at 4.) Using the FGT document, Mr. Gould set up a trust with himself as the settlor, listed as living in Monaco, and Plaintiff (for their children) as a trustee, listed as living in South Carolina. (Dkt. No. 19-2 at 1 - 8.) Two of their children, identified on the form as living in South ...

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