Bhasin & Sons v. Amco Insur.

Insurance Law

, New York Law Journal


Judge Arthur Spatt

Nationwide's commercial general liability policy covered plaintiff's premises in Pennsylvania. On Oct. 28, 2010, plaintiff sustained damages as a result of theft at its premises. In addition to failing to pay for or indemnify plaintiff's damages, insurer Nationwide and its Iowa-incorporated subsidiary Amco—not authorized to do business in New York—disclaimed coverage on May 7, 2011, on the ground that the insured premises in Pennsylvania were vacant for over eight months before the theft. Denying plaintiff remand—and leave to file a second amended complaint—district court granted defendant insurers dismissal of plaintiff's lawsuit. Applying the "nerve center" test the court found Nationwide's principal place of business to be in Ohio, so that diversity jurisdiction was proper in light of plaintiffs' request for $95,006 in damages. Further, plaintiff did not meet its burden of proof so as to hold corporate parent Nationwide liable for the actions of subsidiary Amco under Iowa and Ohio law. The court further determined that service of process on Nationwide did not constitute service on Amco. Thus, service on Amco was deficient and there was no justification for application of New York's long-arm statute with respect to Amco.

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