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The Texas Court rejects the assured's bid to judge coverage against Mexican insurers and brokers in the United States



On August 22, 2017, a Texas State Appellate Court panel dismissed a Mexican candy and peanut producer's cover action against its Mexican insurer and insurance broker for lack of personal jurisdiction. See Seguros Afirme, S. A. de C.V. v. Elamex, S.A., C.V., et al., no. 05-16-01465-CV (Tex. App. Filed Aug. 22, 2017); Cooper Gay Martinez Del Rio and Asociados Intermediarios de Reaseguro S.A. the C.V. v. Elamex, S.A., C.V., et al., no. 05-16-01436-CV (Tex. App. Filed Aug. 22, 2017).

Food producer Elamex S.A. the C.V. ("Elamex") filed a coverage activity in Texas against its Mexican insurer, Seguros Afirme, S.A. the C.V. ("Seguros Afirme") and Broker Cooper Gay Martinez del Rio and Asociados Intermediarios de Reaseguro S.A. the C.V. ("CGM"), after Seguros Afirme denied the coverage for business interruptions caused by a fire that caused significant damage to one of Elamex's factories in Mexico. Elamex argued that Texas court had special personal jurisdiction over the case because the insurance policy was acquired, negotiated, and investigated in Texas, and CGM and Seguros Afirme suffered financially from the issuance of the policy by collecting premiums for other reasons. [1

9659003] The court declared that a "unit has minimal contacts with a forum state if it deliberately exploits the privilege of operating within the state, thereby invoking the benefits and protection of its laws". Three principles governed the Court's benchmark analysis: (1) only the respondents' forum contacts are relevant, not the one-sided activities of a third party; (2) The defendant's contacts must be effective rather than random, isolated or unhappy. and (3) the defendant must seek any advantage, advantage or profit by using the forum so that it implicitly agrees to fit there.

Rejection of Elamex's reasoning, the court held there, was no particular personal jurisdiction because CGM and Seguros Afirme lacked the necessary minimum contacts required by the Texas long-term charter. The court found that Seguros Afirme and CGM did not take advantage of any government advantage because there was no evidence that they were asking a Texas insured or attempting to develop operations in Texas. The court discounted claims that the policy included two of Elamex's properties in Texas and that two meetings occurred in Texas to investigate the claim by finding that there was no evidence to substantiate that Seguros Afirme or CGM invoked the benefits and protection of Texas Law. Furthermore, the court pointed to the policy's choice of law that claimed the policy was governed by Mexican law, which suggested the parties "cautiously avoided Texas".

This view follows another new example of US courts refusing to exercise jurisdiction over coverage disputes with foreign insurance companies. However, as these latest opinions acknowledge, an insured person with a policy that contains a foreign spouse's or forum-selective clause may still be able to avoid trying his or her cover action in a foreign country if it is possible to establish personal jurisdiction in a US court. by personal authority a policyholder and its advice to determine the actual predicate that supports the smallest contacts. Insured people who try to avoid disputes in a foreign forum or foreign law should ensure that their policies are governed by US law and do not include foreign forum selection selections. Working with experienced cross-border insurance advisors who help to prepare insurance regulations during the investment or renewal phase can help to minimize the risk of forcing a dispute settlement in a foreign country. If an insured is faced with a policy that contains a foreign conflict of law or forum choice clause, retention of such advice may help overcome jurisdiction barriers in US courts.


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