The opinion of the court was delivered by: COHILL
This case is before us on Defendant's Motion to Dismiss the Plaintiffs' Complaint. The basis of the motion is the alleged failure by Plaintiffs to comply with the one-year limitation-of-suit provision contained in the fire insurance policy issued to Plaintiffs by the Defendant, State Farm Fire and Casualty Company ("State Farm"). After careful consideration of the briefs filed and the relevant law, we will grant Defendant's motion.
Facts and Procedural History
This lawsuit arises as a result of a fire which occurred at the Plaintiffs' home in Beaver Falls, Pennsylvania on or about October 19, 1981. At that time, the Plaintiffs were Pennsylvania residents; they now reside in the State of California.
In November 1981, the Plaintiffs filed a fire loss claim with Defendant pursuant to the insurance policy. The policy had been issued in Pennsylvania; Defendant's Pittsburgh office investigated the claim and subsequently denied coverage on August 31, 1982 for various reasons, including the conclusion that the fire was incendiary in origin and caused by the Plaintiffs. See Declaration of Daniel P. Powell in Support of Motion to Remand, at 3-4.
On December 2, 1982, more than one year after the fire, the Plaintiffs filed this suit in Superior Court for Los Angeles County, California, for breach of the insurance contract. The Defendant removed the case to the United States District Court for the Central District of California pursuant to 28 U.S.C. § 1446, and subsequently filed a motion pursuant to 28 U.S.C. § 1404(a) to change venue to this court. The motion to transfer was granted. Defendant then filed in this Court the Motion to Dismiss, asserting a failure to satisfy the limitation-of-suit provision contained in the insurance contract. That provision provides in part:
No action shall be brought unless . . . the action is started within one year after the occurrence causing loss or damage.
See Complaint, Ex. B., p. 8, para. 8.
The Plaintiffs agree that, under Pennsylvania law, the action would have to be dismissed for failure to bring the action within the one-year limitation period. However, Plaintiffs contend that we must apply California law, under which, arguably, the claim would not be barred.
In deciding whether or not the claim is barred for untimeliness, we must first determine which state's law is applicable. That question is controlled by Van Dusen v. Barrack, 376 U.S. 612, 11 L. Ed. 2d 945, 84 S. Ct. 805 (1964) which holds that, following a § 1404(a) transfer, the transferee court must apply the law of the state of the transferor. Thus, we must look to the choice of law rules followed by a court sitting in California to determine which law must be applied. See also Reyno v. Piper Aircraft Co., 630 F.2d 149, 164 (3d Cir. 1980), rev'd on other grounds, 454 U.S. 235, 102 S. Ct. 252, 70 L. Ed. 2d 419 (1981).
A California court, in a diversity action, would apply California's choice of law rules. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S. Ct. 1020, 85 L. Ed. 1477 (1941); Strassberg v. New England Mutual Life Ins. Co., 575 F.2d 1262 (9th Cir. 1978); Browne v. McDonnell Douglas Corp., 504 F. Supp. 514, 515 (N.D. Cal. 1980).
California uses "governmental interest" analysis as its choice of law rule. Reding v. Texaco, Inc., 598 F.2d 513, 517 (9th Cir. 1979). The approach taken by California courts has developed significantly since the original enactment of California Civil Code § 1646, which provided that a contract is to be interpreted according to the law and usage of the place of performance, or if no place of performance is specified, according to the law of the place ...