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International Life Insurance Co. v. McGee

Supreme Court of the United States · Civil Procedure

Civil ProcedurePersonal JurisdictionDue ProcessFull Faith and Creditpersonal jurisdictionspecific jurisdictionminimum contactsdue process

Facts

A California resident, Lowell Franklin, originally bought a life insurance policy from an Arizona company. Respondent, a Texas insurer, later assumed that obligation and mailed Franklin in California a reinsurance certificate offering to insure him under the policy terms; Franklin accepted and paid premiums by mail from California to Texas until his death. After Franklin died in California, petitioner-beneficiary submitted proof of death, but respondent refused to pay, claiming suicide. Respondent had no office or agent in California and, so far as the record showed, had done no California insurance business apart from this policy.

Issue

Whether due process permitted California courts to exercise jurisdiction over a Texas insurer, served by registered mail outside the state, in a suit on an insurance contract with a California resident where the insurer's only shown California connection was that contract. The case also presented whether applying the California statute to this preexisting contract improperly impaired the contract's obligation.

Rule

Due process does not preclude a state from exercising in personam jurisdiction over a nonresident insurer when the suit is based on a contract that has a substantial connection with the forum state. Consistent with International Shoe, jurisdiction is proper where the defendant has minimum contacts such that maintaining the suit does not offend traditional notions of fair play and substantial justice; a remedial statute providing a forum for enforcement does not impair contract obligations when it does not alter substantive rights and gives reasonable notice and opportunity to defend.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Maple Crest Assurance, incorporated and headquartered in Utah, assumed a disability policy originally issued by another company to Nina Alvarez, a resident of New Mexico. Maple Crest mailed the assumption certificate to Nina in Santa Fe, accepted monthly premium payments mailed from Santa Fe, and denied coverage after Nina became disabled there. It has no office, agent, or other business in New Mexico.

If Nina sues Maple Crest in New Mexico state court and the company is served by registered mail in Utah under a state statute authorizing suit on insurance contracts with New Mexico residents, is the exercise of personal jurisdiction most likely consistent with due process?

Explanation. Due process permits jurisdiction when the suit is based on a contract having a substantial connection with the forum. Here, the insurer mailed the certificate to New Mexico, received premiums from there, and the claim concerns a New Mexico resident. Under the majority's reasoning, those forum-linked facts make the contract sufficiently connected to the state, even though the insurer has no office or agent there and was served by mail outside the state. (Derived from International Life Insurance Co. v. McGee (n.d.).)