by John Darer® CLU ChFC MSSC RSP CLTC
A Massachusetts judge has soundly rejected an effort by CGU International Insurance plc to get out of a class action lawsuit, arising out its alleged conduct with respect to the so-called Capital Maintenance Agreement (CMA) it "silently" terminated when it sold Aviva USA in 2013, on the ground that, because they’re in England, they’re beyond the reach of an American court.
According to the decision" CGU is a London based corporation , a wholly owned subsidiary of Aviva plc, a holding company organized under the laws of England and Wales. CGU has no offices or employees in Massachusetts, pays no Massachusetts taxes and maintains no bank accounts in Massachusetts, CGU had no involvement in the marketing, selling, paying or setting of rates of the annuities at issue and its involvement in the case and in Massachusetts is confined to its role and guarantor of structured settlement annuities sold by Aviva".
In finding that the Massachusetts Court had Specific Personal Jurisdictio,n the Court used a tripartile analysis, citing from Sawtelle, 70 F.3d at 1389, 1391.
- Whether the plaintiffs’ claim arises out of, or relates to, defendants’ in-forum activities;
- Whether defendant’s contacts with the forum state represent a purposeful availment by defendants of the privilege of conducting business in that State;
- Whether the exercise of jurisdiction is reasonable under the circumstances.
Plaintiff alleged only one interaction between defendant and the forum state: the CMA. The CMA’s connection to Massachusetts, however, is neither “attenuated” nor “indirect.” Harlow, 432 F.3d at 61. In the CMA, CGU agreed to guarantee all of Aviva’s annuities, which were sold from, and in, Massachusetts. The CMA, and specifically its termination, is at the heart of plaintiff’s claim. The CMA is the “very document that represents [defendant’s] forum-related activity” and is, therefore, undoubtedly related. This single, meaningful contact with Massachusetts is sufficient to meet the diminutive burden of showing relatedness
B. Purposeful Availment
The court found that CGU does not guarantee just one debt but instead guarantees all of the annuities sold by Aviva in Massachusetts. Those guarantees form a “nexus between a plaintiff’s claims and a defendant’s forum-based activities. Further, CGU’s guarantee created a right that was enforceable. That enforceable right, packaged with an annuity, was sold throughout the United States and Massachusetts by a Massachusetts company. The annuities were sold based on the quality and consistency of CGU’s guarantee, and that guarantee doubtlessly added to the annuity’s value. This relationship to Massachusetts is not “random, isolated, or fortuitous. To the contrary, it is enough to show that CGU has availed itself of doing business in Massachusetts and has done so purposefully.
The Court reasoned that the that its Gestalt factors do not point so clearly in one direction or another as to merit placing the thumb on the scale for either party
Read the Massachusetts Court decision Download Opinion denying CGU Motion to Dismiss
JOHN GRIFFITHS, Plaintiff, v. AVIVA LONDON ASSIGNMENT CORPORATION, AVIVA LIFE INSURANCE COMPANY,CGU INTERNATIONAL INSURANCE, PLC, ATHENE HOLDING, LTD, ATHENE LONDON ASSIGNMENT CORPORATION AND ATHENE ANNUITY AND LIFE COMPANY United States District Court District of Massachusetts Civil Action No. 15-13022-NMG
In very basis terms an insurance contract is a promise to pay in exchange for consideration. There are hundreds of credible witnesses, licensed agents/brokers and former employees, who were appointed by Aviva during the time Aviva sold policies in the United States, who bore witness about how Aviva marketed the CMA. Here is copy of a May 20, 2004 letter from Richard J Kypta, then Senior Vice President of Aviva which appears self explanatory. Read the second paragraph and draw your own conclusions. Download Aviva Kypta letter 5-20-2004 re CMA and guarantees.