VALASSIS COMMUNICATIONS V AMERICAN HOME ASSUR CO
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STATE OF MICHIGAN
COURT OF APPEALS
VALASSIS COMMUNICATIONS, INC.,
UNPUBLISHED
December 20, 1996
Plaintiff-Appellant,
v
No. 185586
LC No. 94-421906-CK
AMERICAN HOME ASSURANCE COMPANY,
Defendant-Appellee.
Before: Michael J. Kelly, P.J., and Hood and H.D. Soet,* JJ.
PER CURIAM.
Plaintiff appeals as of right the trial court’s dismissal of its suit on the ground of forum non
conveniens. Plaintiff brought this and another action against its liability insurers, seeking indemnification
for a settlement it had reached in a New York litigation. We affirm in part and remand.
Plaintiff was sued in a New York federal court by Sullivan Marketing, Inc. The federal court
action arose from plaintiff’s alleged conduct to prevent Sullivan’s entry into the free-standing insert
market.1 Sullivan alleged various common law theories of recovery against plaintiff, as well as violations
of federal and New York state laws. The parties to the Sullivan action negotiated a settlement, and
plaintiff notified its commercial liability insurers, Royal Insurance Company of America and Royal
Indemnity Company (collectively referred to as “Royal”), requesting approval of the settlement. Royal
declined to approve the settlement and reserved the right to determine whether the settlement was
reasonable. The Sullivan action was settled.
1
Plaintiff is in the business of producing free-standing inserts (FSIs), which are promotional booklets
inserted into newspapers for purposes of distributing coupons, advertising refunds, sweepstakes and
promotions. Plaintiff and its codefendant in the New York action by Sullivan, News America FSI, Inc,
controlled approximately fifty per cent of the $1.3 billion FSI market. Sullivan alleged that its parent
company announced its intention to enter the FSI business in early 1992, and that in response to this
announcement, plaintiff and News America combined and conspired to maintain their “duopoly.”
* Circuit judge, sitting on the Court of Appeals by assignment.
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Following plaintiff’s request for approval of the settlement and its consummation, Royal filed a
declaratory judgment action against plaintiff in New York state court seeking an adjudication that (1)
Royal had no duty to defend or indemnify plaintiff or (2) Royal’s potential liability was limited to a single
occurrence and did not cover punitive damages. Defendant, plaintiff’s excess insurer, did not
participate in that action.
While Royal’s New York action was pending, plaintiff brought separate declaratory judgment
actions in Wayne Circuit Court against Royal and defendant. Plaintiff alleged that defendant and Royal
wrongfully failed to provide coverage and to indemnify plaintiff for the settlement amount and requested
that judgment be entered against them. These actions were consolidated below.
Royal moved to dismiss plaintiff’s Michigan action for forum non conveniens. Defendant did not
specifically join Royal’s motion, but filed a brief in which it argued that the cases remain consolidated
and that if the Royal action was dismissed, the action against defendant should also be dismissed.
Defendant did not advance any arguments in favor of or in opposition to Royal’s motion, other than
requesting that the cases remain consolidated.
Meanwhile, plaintiff moved for dismissal of Royal’s New York action for forum non conveniens.
The New York court granted plaintiff’s motion and dismissed that action. Approximately five weeks
after the New York action was dismissed, the Wayne Circuit Court granted Royal’s motion for
dismissal, finding that the same reasons for dismissing the action against Royal applied to defendant.
Plaintiff appealed the decisions against both Royal and defendant. Eventually, plaintiff and Royal
stipulated a dismissal of that appeal, leaving only the appeal against defendant.
Plaintiff first claims that the trial court erred in granting the dismissal because no other forum was
available. We disagree.
The principle of forum non conveniens provides courts with the right to resist imposition upon
their jurisdiction although such jurisdiction is proper. Manfredi v Johnson Controls, Inc, 194 Mich
App 519, 521; 487 NW2d 475 (1992). The principle “presupposes that there are at least two
possible choices of forum.” Id. at 521-522. Plaintiff argues that in the instant case, there is no forum
other than Michigan because the New York court dismissed the previous action. Whether the doctrine
of forum non conveniens is inapplicable when the other possible forum has already granted a forum non
conveniens dismissal in the same action is a question of law. We review questions of law de novo.
Oakland Hills Development Corp v Lueders Drainage District, 212 Mich App 284, 294; 537
NW2d 258 (1995).
According to plaintiff, this Court is bound by the New York court’s determination that New
York is an inconvenient forum through the full faith and credit clause of the federal constitution, US
Const, art IV, § 1. The full faith and credit clause mandates that judicial proceedings be given the same
faith and credit in every court within the United States as they have by law or usage in the court of the
state from which they are taken. McMath v McMath, 174 Mich App 576, 583; 436 NW2d 425
(1989). Thus, this Court must give effect to the New York court’s dismissal of the action by Royal
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against plaintiff to the same extent that the New York courts would. We note that defendant was not a
party to the New York action. However, under the doctrine of collateral estoppel, if the New York
courts would extend the result of the dismissal to defendant, our courts must do the same.
Collateral estoppel bars relitigation of issues that were actually decided. Hofmann v Auto
Club Ins Ass’n, 211 Mich App 55, 92; 535 NW2d 529 (1995). For collateral estoppel to apply,
however, the parties must either be the same as or in privity with those in the prior action. Husted v
Auto-Owners Ins Co, 213 Mich App 547, 556; 540 NW2d 743 (1995). A party is in privity with
another if, after the judgment, the party “has an interest in the matter affected by the judgment through
one of the parties, such as by inheritance, succession, or purchase.” Id. Defendant was not a party to
the action between Royal and plaintiff, and we find no evidence that defendant was in privity with the
primary insurer. Therefore, collateral estoppel would not apply to defendant and we are not required to
give the New York decision full faith and credit as applied to defendant.
We note that if plaintiff refiles this action in New York, defendant will be precluded from filing
its own motion for forum non conveniens in that state. Michigan and New York recognize the doctrine
of judicial estoppel, which holds that a party who successfully and unequivocally asserts a position in a
prior proceeding is estopped from asserting an inconsistent position in a subsequent proceeding.
Paschke v Retool Industries, 445 Mich 502, 509; 519 NW2d 441 (1994); Moore v Co of Clinton,
219 AD2d 131; 640 NYS2d 927, 929 (1996). Because defendant has unequivocally conceded that
New York is a more convenient forum, defendant will not be permitted to argue otherwise in a New
York court, if, as directed below, the trial court determines that this matter should not be litigated in
Michigan.
Plaintiff next claims that the trial court abused its discretion in granting defendant’s
motion for dismissal on the ground of forum non conveniens. A trial court’s decision whether to decline
jurisdiction is a discretionary matter which will not be reversed on appeal absent an abuse of discretion.
Hacienda Mexican Restaurants of Kalamazoo v Hacienda Franchise Group, Inc, 195 Mich App
35, 38; 489 NW2d 108 (1992).
The principle of forum non conveniens establishes the right of a court to resist imposition upon
its jurisdiction although such jurisdiction could properly be invoked. Id., quoting Cray v General
Motors Corp, 389 Mich 382, 395; 207 NW2d 393 (1973). Courts ordinarily give deference to a
plaintiff’s forum choice. Manfredi, supra at 523. Our Supreme Court has enumerated the factors
which a trial court should consider in deciding a forum non conveniens motion:
1.
The private interest of the litigant.
a.
Availability of compulsory process for attendance of unwilling and the cost of
obtaining attendance of willing witnesses;
b.
Ease of access to sources of proof;
c.
Distance from the situs of the accident or incident which gave rise to the
litigation;
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d.
Enforcibility of any judgment obtained;
e.
Possible harassment of either party;
f.
Other practical problems which contribute to the ease, expense and expedition
of the trial;
g.
Possibility of viewing the premises.
2.
Matters of public interest.
a.
Administrative difficulties which may arise in an area which may not be present
in the area of origin;
b.
Consideration of the law of the state which must govern the case;
c.
People who are concerned by the proceeding.
3.
Reasonable promptness in raising the plea of forum non conveniens. [Cray,
supra at 395-396.]
The trial court in the instant case carefully reviewed the applicable factors as they related to plaintiff and
Royal. Absent from the court’s consideration, however, is reference to application of the factors as to
defendant. While we appreciate that the analysis to a large extent involves common issues regarding the
Sullivan action, there must be consideration of matters relating to plaintiff’s policies with defendant in
order to properly determine whether the matter should be dismissed for forum non conveniens.
Moreover, there were conclusions made by the trial court on matters applicable only to Royal and not
to defendant. These matters should not be considered in determining whether the action against
defendant should be litigated in another forum. We simply can not review the trial court’s decision when
it merely concluded that “[t]he same consideration also dictates granting the same relief to American.”
We therefore find it necessary for the trial court to revisit defendant’s motion and consider each of the
relevant Cray factors as they relate to defendant. The trial court should then make a determination as to
whether forum non conveniens applies as to this defendant.
We affirm the trial court’s determination that another possible forum exists and remand for
proceedings consistent with this opinion. We retain jurisdiction.
/s/ Harold Hood
/s/ H. David Soet
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