The opinion of the court was delivered by: Yohn, J.
The plaintiff, Stephen Federico ["Federico"], alleges that, under
a marine protection and indemnity insurance agreement between the
defendant, Charterers Mutual Assurance Association Limited
["Charterers"], and Gulf & Orient Steamship Line ["Gulf &
Orient"], Charterers is required to pay a judgment entered in
favor of Federico and against Gulf & Orient in a prior lawsuit .
Currently pending before the court is Charterers' motion to
dismiss the amended complaint. See Def.'s F.R.C.P. 12(b) Mot. to
Dismiss Pl.'s Compl. ["Mot. to Dismiss"] (Doc. No. 7); Am. Compl.
(Doc. No. 8); Order of Nov. 27, 2000 (Doc. No. 10) (noting that
parties have agreed that defendant's motion to dismiss the
complaint shall be considered as a motion to dismiss the amended
complaint). After considering Charterers' motion, Federico's
response in opposition, Pl.'s Resp. to Def.'s Mot. to Dismiss
Compl. Pursuant to F.R.C.P. 12(b) ["Pl.'s Resp."] (Doc. No. 9),
Charterers' reply, Def.'s Reply Br. to Pl.'s Resp. to Mot. to
Dismiss ["Def.'s Reply"] (Doc. No. 13), and various supplementary
filings, I conclude that Federico is obligated to arbitrate his
claim and that this action will be stayed pending the conclusion
of that arbitration proceeding.
On July 4, 1996, the plaintiff, Federico, sustained an injury
while he was engaged in his duties as a longshoreman aboard the
M/V Xiang Jiang. See Am. Compl ¶ 8. At the time of the injury, the
M/V Xiang Jiang was berthed in Eddystone, Pennsylvania and was
under charter to Gulf & Orient. See id. ¶¶ 7-8. Also at that time,
Charterers, a mutual insurance association with its principal
place of business in London, England, provided Gulf & Orient with
marine protection and indemnity insurance. See id. ¶¶ 5-6.
In September 1996, Federico filed a federal lawsuit against Gulf &
Orient and other defendants in the Eastern District of
Pennsylvania. See id. ¶ 9; Compl. (Docket Number 96-CV-6231) (Doc.
No. 8, Ex. A). Although Charterers was not a defendant in that
case, Charterers participated in the defense of Gulf & Orient "by
engaging counsel, paying counsel fees and costs and directing the
defense of Gulf & Orient , including participation in extensive
discovery, up to June 16, 1997." Am. Compl. ¶ 10. On June 16,
1997, this court allowed counsel engaged by Charterers to withdraw
as counsel for Gulf & Orient. See id. On September 17, 1998, after
a trial, this court entered a judgment in favor of Federico and
against Gulf & Orient in the amount of $540,671.00. See id. ¶ 11;
Order of Sept. 17, 1998 (Docket Number 96-CV-6231) (Doc. No. 8,
Ex. B). At the time the judgment was entered, Gulf & Orient was
insolvent and defunct, and it remains so today. See Am. Compl. ¶
Charterers has filed the instant motion to dismiss under Federal
Rule of Civil Procedure 12(b). See Def.'s F.R.C.P. 12(b) Mot. to
Dismiss Pl.'s Compl. Charterers states five grounds for dismissal:
1) the insurance agreement between Charterers and Gulf & Orient
contained a mandatory arbitration clause; 2) this court does not
have subject matter jurisdiction;*fn1 3) this
court does not have
personal jurisdiction over Charterers; 4) the Eastern District of
Pennsylvania is an improper venue for this case;*fn2 and 5) service
of process was insufficient. See id. at 1; ¶ 23. As the parties
have done, I will treat Charterers' motion as a motion to compel
arbitration and stay proceedings pending arbitration or, in the
alternative, to dismiss based on lack of personal jurisdiction or
improper service of process.
A motion to compel arbitration is treated like a motion for
summary judgment. See, e.g., Wilson v. Darden Rests., Inc., CIV.A.
No. 99-5020, 2000 WL 150872, at *2 (E.D.Pa. Feb. 11, 2000);
Childs v. Meadowlands Basketball Assoc., 954 F. Supp. 994, 998
n. 3 (D.N.J. 1997) (citing Par-Knit Mills, Inc. v. Stockbridge
Fabrics Co., Ltd., 636 F.2d 51, 54 (3d Cir. 1980)). Either party
to a lawsuit may file a motion for summary judgment, and it will
be granted "if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment
as a matter of law." Fed.R.Civ.P. 56(c). The moving party bears
the initial burden of showing that there is no genuine issue of
material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323
(1986). Where the nonmovant bears the burden of persuasion at
trial, the moving party may meet its initial burden and shift the
burden of production to the nonmoving party "by `showing' — that
is, pointing out to the district court — that there is an absence
of evidence to support the nonmoving party's case." Id. at 325.
Once the movant has carried its initial burden, the nonmoving
party must come forward with specific facts showing that there is
a genuine issue for trial. The nonmovant must present concrete
evidence supporting each essential element of its claim. See Ideal
Dairy Farms, Inc. v. John Labatt, Ltd., 90 F.3d 737, 743 (3d Cir.
1996). Thus, summary judgment will be entered "against a party who
fails to make a showing sufficient to establish the existence of
an element essential to that party's case, and on which that party
will bear the burden of proof at trial." Celotex Corp., 477 U.S.
When a court evaluates a motion for summary judgment, "[t]he
evidence of the non-movant is to be believed." Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 255 (1986). Additionally, "all
justifiable inferences are to be drawn in [the nonmovant's]
favor." Id. At the same time, "an inference based upon a
speculation or conjecture does not create a material factual
dispute sufficient to defeat entry of summary judgment." Robertson
v. Allied Signal, Inc., 914 F.2d 360, 382 n. 12 (3d Cir. 1990). The
nonmovant must show more than "[t]he mere existence of a scintilla
of evidence" for elements on which he bears the burden of
production. Anderson, 477 U.S. at 252. Thus, "[w]here the record
taken as a whole could not lead a rational trier of fact to find
for the non-moving party, there is no `genuine issue for trial.'"
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
587 (1986) (citations omitted).
In the alternative to compelling arbitration, Charterers states
two grounds for dismissal. First, Charterers argues that this case
should be dismissed for lack of personal jurisdiction. See
Fed.R.Civ.P. 12(b)(2). Once a defendant has raised a jurisdictional
defense, the burden shifts to the plaintiff to demonstrate that
the relevant jurisdictional requirements are met. See Mellon Bank
(East) PSFS, Nat'l Ass'n v. Farino, 960 F.2d 1217, 1223 (3d Cir.
1992). The plaintiff must support this burden through "sworn
affidavits or other competent evidence." North Penn Gas Co. v.
Corning Natural Gas Corp., 897 F.2d 687, 689 (3d Cir. 1990)
(quotation omitted). If the plaintiff relies on the complaint and
affidavits to satisfy its burden, then the plaintiff meets its
burden by making a prima facie showing that jurisdiction exists.
See Farino, 960 F.2d at 1223; Friedman v. Israel Labour Party,
957 F. Supp. 701, 706 (E.D.Pa. 1997).
Second, Charterers claims that Federico's service of process was
insufficient. See Fed.R.Civ.P. 12(b)(5). If process is not
served within 120 days of the filing of the complaint, the court
shall dismiss the complaint. See Fed. R .Civ. P. 4(m). However, a
court should not dismiss a complaint for failure to effect service
properly if the plaintiff shows "good cause" for the failure. See
id. The plaintiff bears the burden of establishing that he
properly served the defendant. See Grand Entm't Group, Ltd. v.
Star Media Sales, Inc., 988 F.2d 476, 488 (3d Cir. 1993).
Federico alleges that, under a marine protection and indemnity
insurance agreement between Charterers and Gulf & Orient,
Charterers is required to pay a judgment entered in a prior
lawsuit in favor of Federico and against Gulf & Orient. See Am.
Compl. ¶ 13. Federico also claims that Charterers is obligated
under the laws of the Commonwealth of Pennsylvania to pay the
judgment entered in favor of Federico and against Gulf & Orient.
See id. ¶ 14.
As noted above, I will treat Charterers' motion as a motion to
compel arbitration and stay proceedings pending arbitration or, in
the alternative, to dismiss. Therefore, before assessing the
motion to dismiss, I will determine whether the arbitration clause
contained in the marine protection and indemnity insurance
agreement is applicable to the current proceedings.
Another court faced with a similar maritime insurance case ably
explained the nature of maritime insurance:
[T]he insurer is an association of shipowners who engage in
providing insurance. The association is referred to as the club,
and the insured is the member. To obtain coverage, the member
enrolls a vessel with the club. The rules of the club and the
quotation are the contract of insurance. The member's fee for
obtaining the coverage is the fee plus assessments (calls) that
the club makes if the claims exceed the pool accumulated through
the annual assessments. A member's assessment is based on the size
and nature of its fleet. Because a call is possible, the wealth of
the members is of crucial importance to the club and its members.
Triton Lines, Inc. v. Steamship Mut. Underwriting Ass'n,
707 F. Supp. 277, 278 (S.D.Tex. 1989).
Rule 43 of the 1996 Rules is a mandatory arbitration provision.
Rule 43 reads as follows:
(A) Any claim by the Association against a Member in respect of
Contributions due to the Association shall be referred to the
arbitration in London of a sole Legal Arbitrator in ...