District Court of Appeal of Florida,

Fourth District.

UNITED STATES FIRE INSURANCE COMPANY, Appellant,

v.

HAYDEN BONDED STORAGE COMPANY, a Florida corporation, Appellee.

No. 4D05-4.

 

April 5, 2006.

 

SWEET, GARY L., Associate Judge.

 

The salient issue in this appeal is whether an insurer/indemnitor, which has no duty to defend its insured, but is alleged to have breached its duty to indemnify, may be bound by a Coblentz [] settlement agreement/consent judgment negotiated by its insured/indemnitee and the claimant. The court below found such a breach and bound the insurer. Because there is no basis to find such a breach, we reverse the trial court. In so doing, we do not reach the larger question of whether, in this context, the duty to indemnify is coterminous with the duty to defend.

 

Facts

The facts of this case are summarized as follows:

 

The Jacobs Litigation

 

The insured, Hayden Bonded Storage Company  [] (Hayden), operated a moving and storage business. On June 30, 1994, Hayden contracted with Gayle Jacobs (Jacobs), agreeing to pick up Jacobs’ furniture and personal property, deliver some of the items to a new residence, and store the remainder at its warehouse. The form language of the storage documents provided Hayden’s liability for any damage to the items arising out of transportation or storage was limited to $0.30 per pound, unless otherwise stated. Jacobs was afforded the option of purchasing additional valuation and, in two of the documents, $35,070 was handwritten in as the valuation. The bill of lading limited Hayden’s liability for damage to the property to $0.30 per pound up to a maximum of $2,000.

 

On August 17, 1994, Jacobs filed a statement of claim with Hayden, claiming some of the items delivered to her home on June 30, 1994, were damaged; the statement of claim placed an actual cash value of $500,000 on the transported property and claimed damages of $15,000.

 

In 1995, Jacobs asked Hayden to deliver the remainder of the items from the storage warehouse. When the items arrived, Jacobs refused to accept them, insisting the property was damaged by water and mold. Thereafter, Jacobs ceased making the monthly storage payments. Subsequently, Hayden sent Jacobs a letter, indicating she was more than $11,000 in arrears and threatening to place a lien upon her property. Jacobs instituted a court action for injunctive relief to prevent the sale of the property. Hayden notified its insurer, United States Fire Insurance Company (USFIC), and requested a defense.

 

Hayden was insured under an inland marine policy issued by USFIC. The policy included a “Furniture Warehouse Policy” form and contained the following relevant provisions:

1. PROPERTY COVERED

This policy covers the legal liability of the insured as a common carrier, bailee (or warehouseman) under bills of lading, shipping receipts, or storage agreements, issued or accepted by the insured, with respect to shipment or storage of lawful goods….

 

 

….

7. VALUATION

All property for which the insured’s legal liability is insured hereunder is by agreement valued at the amount of invoice or if not under invoice then at cash market value on date and at place of shipment, except however, the liability of the company shall not exceed the value as shown in tariff documents, bills of lading or shipping receipts if any, nor shall the company’s liability in any event exceed what it would then cost to repair or replace the cargo lost or damaged with other of like kind and quality.

 

….

11. INDEMNIFICATION

It is the purpose of this insurance to indemnify the insured only to the amount which the insured shall become liable to pay and shall pay in respect of the property. In no event does this policy cover the liability of the insured for the payment of any fines, assessments, damages, attorney’s fees, court costs, or any other penalties which the insured shall be required to pay as a result of the violation of any law or regulation relating to the delay in the payment, denial or settlement of any claim for loss.

12. ADMISSION OF LIABILITY

The insured shall not voluntarily admit any liability nor settle any claims nor incur any expenses without the specific authority of the company…. In event of legal action being brought against the insured in respect to alleged loss or damage which might constitute a claim under this policy, the insured shall give immediate notice to the company, and the company reserves the right at its sole option to defend such action in the name and on behalf of the insured and will pay all legal expenses incurred by the company in connection with any action it undertakes to defend, also any judgment against the insured subject, however, to all the valuations and limitations provided for in this policy.

 

USFIC indicated it would not provide a defense in the matter, citing the policy language which gave it the “sole option” to defend. Nonetheless, it tendered $35,070–the amount written into the storage contract and the customer protection plan documents as the value for Jacobs’ property. Jacobs rejected the tender and filed suit against Hayden, claiming Hayden was grossly negligent in handling her property and, as a result, some property was damaged during the initial June 1994 delivery and the remainder sustained water and mildew damage during storage. Jacobs’ complaint sought damages in excess of $500,000. In response, the insurer reiterated it was not obligated to provide a defense and was not denying coverage, as it had tendered what it contended was its limit of liability, $35,070.

 

Eventually, Hayden and Jacobs executed a settlement agreement. The settlement agreement provided in relevant part:

1. Defendant, HAYDEN BONDED STORAGE WAREHOUSE, INC., hereby agrees to a final judgment entered against it in favor of Plaintiff, GAYLE JACOBS, in the amount of Four Hundred Seventy-five Thousand Dollars ($475,000.00).

 

….

3. Plaintiff hereby agrees that the “Final Judgment” … shall not be … recorded in any official record book…. The Plaintiff … further agrees to forever forgo and forbear and refrain payment by the Defendant, its heirs, representatives, successors and assigns, of that final judgment … and agrees not to execute or collect or attempt to collect against the Defendant…. If the Plaintiff … is unsuccessful in an attempt to collect said judgment from United States Fire Insurance Company, then the Defendant … shall be in no way obligated to pay said judgment.

 

….

8. It is specifically understood … that … the obligation of the Defendant to pay said judgment shall only be due to the extent that funds are recovered from United States Fire Insurance Company….

9. In the event the Defendant fails to prevail in its action against United States Fire Insurance Company and fails upon appeal, then Defendant shall pay to the Plaintiff the sum of One Hundred Thousand Dollars ($100,000.00)…. In addition, the Defendant agrees to pay over to the Plaintiff any sums determined to be due and owing under the policy issued by United States Fire Insurance Company, including the Thirty-five Thousand Seventy Dollars ($35,070 .00) previously tendered….

As a result of the settlement, a final consent judgment was entered in Jacobs’ favor against Hayden.

 

The Declaratory Judgment Action

 

By the time of the settlement agreement’s execution, Hayden had initiated this litigation, seeking a determination from the court that USFIC had both a duty to defend and a duty to indemnify beyond the $35,070. By the time of trial, all parties agreed the policy did not impose upon USFIC a duty to defend its insured. Thus, the only remaining issues were whether the breach of a duty to indemnify should be treated similar to a breach of a duty to defend for purposes of binding an insurer to a Coblentz settlement, and if so, whether USFIC breached its duty.

 

The Final Judgment

 

The trial court entered final judgment in favor of Hayden, finding USFIC breached its duty by refusing to indemnify Hayden for any amount beyond the $35,070. In reaching this conclusion, the court specifically found that, during the declaratory judgment proceedings, “USFIC conceded that its liability was not limited to $35,070.00 under the subject policy of insurance, and that it had a duty to indemnify HAYDEN for the amount of any judgment entered against it in the Jacobs v. Hayden litigation, up to the policy limit” and that USFIC had failed to convey this to its insured. The court also found that USFIC was bound by the settlement agreement/consent judgment between Hayden and Jacobs, ruling the agreement was the result of arm’s length negotiations and was reasonable. The court directed USFIC to pay to Jacobs the $135,070 Hayden was obligated to pay her under the terms of the settlement agreement/consent judgment and the $57,994.02 in fees and costs Hayden incurred in defending itself in the suit filed by Jacobs.

 

USFIC timely sought rehearing, arguing that (1) the settlement agreement did not require Hayden to pay Jacobs $100,000 plus the $35,070, but, rather, the $100,000 was inclusive of the $35,070 previously tendered; (2) absent a duty to defend, it was improper to require the insurer to bear the cost of Hayden’s fees and costs; and (3) there was inadequate evidence to support the $57,994.02. The court rejected the arguments raised in the motion for rehearing. This timely appeal followed.

 

Analysis

The settlement agreement/consent judgment material to this case was described in the case of Coblentz v. American Surety Co. of New York, 416 F.2d 1059, 1063 (5th Cir.1969), wherein the court held that an insurer which had “refused to handle” its insured’s defense, thereby leaving its insured “to his own resources,” was bound by the terms of a negotiated final consent judgment entered against its insured.

 

Such agreements are valid and binding in Florida. An insurer will be bound to a settlement agreement/consent judgment negotiated between its insured and a claimant where (1) the damages are covered by the policy; (2) the insurer wrongfully refuses to defend; and (3) the settlement is reasonable and made in good faith. See Ahern v. Odyssey Re (London) Ltd., 788 So.2d 369, 372 (Fla. 4th DCA 2001).

 

This case is different for two distinct reasons. First, cases such as Ahern involve a policy containing a duty to defend. In this case, the policy is clear, and the parties have stipulated, that the insurer was under no duty to defend. Second, those cases clearly involve a breach of that duty. Because the insurer in this case adamantly asserts there was no breach of its duty to indemnify, we address that issue first, as a finding of no breach would be dispositive and render moot the more general question of whether a Coblentz agreement may be imposed on an insurer for breaching its duty to indemnify.

 

It is clear that an insurer’s duty to defend is broader than its duty to indemnify. See Klaesen Bros., Inc. v. Harbor Ins. Co., 410 So.2d 611, 612-13 (Fla. 4th DCA 1982). In fact, an insurer’s duty to defend rises to the level of a fiduciary duty, requiring an insurer ” ‘to use [on behalf of its insured] the same degree of care and diligence as a person of ordinary care and prudence should exercise in the management of his own business.’ ” Berges v. Infinity Ins. Co., 896 So.2d 665, 668 (Fla.2004) (quoting Boston Old Colony Ins. Co. v. Gutierrez, 386 So.2d 783, 785 (Fla.1980)).

 

Because the duty to defend is so broad and so important to an insured, its existence is determined early on based on only the allegations of the complaint. If the complaint sets forth facts which bring the claim within policy coverage, the duty to defend arises. See Farrer v. United States Fid. & Guar. Co., 809 So.2d 85, 88 (Fla. 4th DCA 2002). By contrast, the duty to indemnify is narrower and is determined by the underlying facts adduced at trial or developed through discovery during the litigation. See Travelers Indem. Co. of Ill. v. Royal Oak Enters., Inc., 344 F.Supp.2d 1358, 1366 (M.D.Fla.2004).

 

Throughout the Jacobs litigation, USFIC steadfastly asserted that its liability was limited to the amount tendered, $35,070. At some point during discovery, a question arose as to when the $35,070 figure was inserted in the storage documents because Mrs. Jacobs contended it was not present when she signed them. USFIC then argued that even if the tendered amount was invalid, it had nonetheless discharged its duty by tendering an amount which exceeded the contractual default valuation of $0.30 per pound up to a maximum of $2,000. Its position was based upon paragraph 7 of the insurance contract and permanent language of the storage and contractual documents. []

 

Hayden raises numerous reasons why the tendered amount was insufficient and why USFIC’s refusal to tender more clearly establishes a breach of its duty to indemnify.

 

First, Hayden relies on testimony adduced at trial and directly referenced in the lower court’s final judgment, which it believed established a concession that the duty to indemnify was breached. The colloquy between counsel and the USFIC representative went as follows:

Q: Okay. My question to you is what if it turns out that after a trial a jury determined that the $35,070 was not binding and, therefore, awarded a judgment against Hayden for substantially more than that amount? If that would have occurred is it your position that the insurance company would have paid the amount of that judgment?

A: Yes.

 

This testimony was given erroneous emphasis. Clearly, if the underlying claim had been fully litigated, and if a jury verdict had established liability in excess of $35,070, then the policy would clearly require indemnification in that amount. This conclusion, however, assumes a full trial and a jury verdict determining the contractual limitations of liability were either invalid or inapplicable.

 

Second, Hayden contends the complaint alleges gross negligence against it, thereby vitiating the limitations of liability. Although gross negligence may very well accomplish such a result, there is nothing “inherent in [the] settlement agreement,” other than bare allegations, indicating the presence of gross negligence. See Travelers Indem. Co., 344 F.Supp.2d at 1366; Hatmaker v. Liberty Mut. Fire Ins. Co., 308 F.Supp.2d 1308, 1313 (M.D.Fla.2004). Allegations alone may establish a duty to defend, but they do not establish a duty to indemnify.

 

Third, Hayden argues the limitations of liability, as described in paragraph 7 of the policy, i.e., tariff documents, bills of lading or shipping receipts, pertain only to shipping documents, not storage documents. Close scrutiny of the bill of lading reveals it contains all the terms set forth in the storage contract, with the only difference being that the storage contract includes a paragraph addressing “minimum period for storage.” The bill of lading also sets forth the monthly charge for storage. Obviously, the bill of lading addressed and governed both the transportation and storage of Jacobs’ property. This argument does not nullify the limitations of liability.

 

Fourth, in a related argument, Hayden argues the warehouse receipt or storage agreement is not valid because it fails to include an item enumerated in Florida Statutes section 677.202, i.e., the location of the warehouse where the goods were to be stored. Assuming Hayden’s argument to be factually correct, it does not produce the desired result. A missing term in a warehouse receipt does not invalidate or nullify the entire document. It merely subjects the warehouseman to any liability for damage caused by the omission of the term. In this case, the alleged omission bears no connection to the relevant damage and therefore has no affect on the limitation of liability.

 

[10] Fifth, and finally, the limitation of liability may be avoided if there was credible evidence adduced at trial or “inherent in the settlement” that Jacobs was not given a full or fair opportunity to declare full value. Jacobs did not testify at trial, and there was no evidence to establish any hindrance to her ability to fully and fairly declare value. Absent any evidence that she was induced not to read the documents, or was prevented from exercising her right to declare value and choose alternative insurance amounts, she is bound to the documents signed. See Allied Van Lines, Inc. v. Bratton, 351 So.2d 344 (Fla.1977).

 

The policy in this case clearly provided the insured property was to be valued in an amount that would not exceed “the value as shown in tariff documents, bills of lading or shipping receipts if any.” The warehouse receipt and storage contract indicated a declared value of $35,070. Although some question was raised as to the validity of that declaration of value, there has been asserted no supportable reason to invalidate the $0.30 per pound limitation with a ceiling of $2,000. Accordingly, there was no legal basis to impose liability on USFIC in excess of $35,070, and it clearly fulfilled its duty to indemnify by tendering such amount.

 

As there was no breach of duty, the final judgment and order correcting final judgment entered below are reversed. The case is remanded with instructions to enter judgment in favor of USFIC.

 

Reversed and Remanded.

 

WARNER and MAY, JJ., concur.

United States District Court,

S.D. Texas,

Houston Division.

BBC CHARTERING & LOGISTIC GMBH & CO., KG, et al, Plaintiffs,

v.

SUZLON WIND ENERGY CORPORATION, et al, Defendants.

Civil Action No. H-05-04128.

 

April 18, 2006.

 

MEMORANDUM AND ORDER

 

KEITH P. ELLISON, District Judge.

 

Pending before the Court are Defendants’ Motion to Dismiss (Docket # 9) and Motion to Dismiss Coastal Cargo’s Complaint-in-Intervention (Docket # 20). For the following reasons, both motions are DENIED.

 

I. Background

 

This case arises from alleged cargo damage that occurred on board the BBC Canada during discharge operations in Houston. Plaintiff BBC Chartering & Logistic GmbH & Co. K.G. (“BBC”) and Defendants Suzlon Wind Energy Corporation and Suzlon Energy Ltd. (“Suzlon”) entered into a contract of carriage for the ocean transportation of Suzlon’s wind-operated electric generators aboard the BBC Canada, from Mumbai, India, to Houston, Texas. The contract of carriage was memorialized in three bills of lading. BBC employed Intervenor Coastal Cargo of Texas, Inc. (“Coastal”) to unload the BBC Canada’s cargo, including Suzlon’s generators, upon arrival in Houston. On October 26, 2005, a welder from Coastal was cutting metal securing bands off of one of Suzlon’s units when a fire started, which allegedly damaged Suzlon’s cargo. Suzlon notified BBC of its claim for the cargo damage on October 28, 2005.

 

BBC filed this action on December 7, 2005, seeking a declaratory judgment of no liability for damage to Suzlon’s cargo or, in the alternative, of limited liability. Suzlon subsequently filed suit in Hamburg, Germany on December 29, 2005, seeking compensation for the damage to its generators. Coastal filed an intervening complaint in this action, seeking a declaratory judgment of limited liability, on January 10, 2006. Suzlon has now moved to dismiss both BBC’s complaint and Coastal’s intervening complaint. Suzlon alleges that the action in this Court is improper under the forum selection clause contained within the bills of lading, and that the legal standards governing declaratory judgments counsel in favor of dismissing the case. Following a hearing on Suzlon’s motions, and after considering the parties’ briefings, the Court concludes that BBC’s and Coastal’s actions for declaratory relief should not be dismissed.

 

II. Forum Selection Clause

 

Forum selection clauses contained within bills of lading are presumed to be valid, even when they provide for disputes to be adjudicated in a foreign jurisdiction. See Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528, 541 (1995); Mitsui & Co. (USA), Inc. v. Mira M/V, 111 F.3d 33, 35 (5th Cir.1997). Here, the bill of lading terms governing BBC’s carriage of Suzlon’s cargo contain a jurisdiction clause, which provides that:

All claims against the Carrier arising from or in connection with this Bill of Lading or underlying contract of carriage shall be brought in the court of relevant jurisdiction in Hamburg, Germany with German law to apply. Nothing in the clause shall be construed to prevent the Carrier from filing suit in any jurisdiction for claims arising under or in connection with this Bill of Lading or the underlying contract of carriage.

Defs.’ Mot. to Dismiss, Ex. 1, Terms ¶  4. BBC is designated as the carrier. Id. BBC and Suzlon agree that this forum selection clause is valid and governs their choice of a forum.

 

Suzlon argues that, under the jurisdiction clause, this Court is not a proper forum for BBC’s complaint. Suzlon urges the Court to construe BBC’s declaratory judgment action not as a “claim” on BBC’s own behalf, but rather, as a defensive action arising from Suzlon’s claims for cargo damage against BBC. Accordingly, Suzlon argues that no “claims” exist in favor of BBC in this case, and that jurisdiction is therefore improper in any court other than one located in Hamburg, Germany. Suzlon further points out that, because BBC drafted the terms and conditions of the bills of lading, the Court should strictly construe these terms against BBC. See West India Indus., Inc. v. Tradex, Tradex Petroleum Servs., 664 F.2d 946, 951 n. 9 (5th Cir.1981).

 

While the Court must construe the jurisdiction clause against BBC, however, Suzlon’s reading of the clause, and of the term “claim,” is far too narrow. Although BBC’s declaratory judgment action is not a claim for damages, it is a claim for declaratory relief that BBC is either shielded from liability for damage to Suzlon’s cargo, or that its liability is limited. Such a claim for declaratory relief is just as much a “claim” as is a claim for damages, and its defensive nature is of no import. Neither common usage nor the language of the jurisdiction clause draws any distinction between these types of claims. Here, BBC’s claim for declaratory relief arises in connection with the bills of lading and the underlying contract of carriage. The jurisdiction clause reserves to BBC the right to bring such a claim in any forum of its choosing. The Court therefore finds that BBC properly brought its declaratory judgment action before this Court, under the jurisdiction clause set forth in the bill of lading terms.

 

Unlike BBC’s complaint, the parties disagree as to whether or not Coastal’s intervening complaint is bound by the jurisdiction clause and other bill of lading terms that govern the contract of carriage entered into by Suzlon and BBC. Suzlon argues that the jurisdiction clause applies to Coastal through the “Himalaya Clause” that is also included in the bills of lading, and which provides that “every exemption, limitation, condition and liberty herein contained and every right, exemption from liability and limitation of liability applicable to the Carrier or which the Carrier is entitled hereunder shall also be available and shall extend to protect every such servant, agent or manager of the Carrier….” Defs.’ Mot. to Dismiss, Ex. 1, Terms ¶  20(a). Suzlon argues that, because Coastal has availed itself of the bills of lading’s limitation of liability under the Carriage of Goods by Sea Act (COGSA), Coastal should also be subject to the jurisdiction clause. Conversely, Coastal asserts that it was not a party to the contract of carriage or to the bills of lading under which BBC transported Suzlon’s cargo to the United States, but rather, a third party beneficiary. According to Coastal, it has not invoked the bill of lading terms, but rather has claimed the benefit of only a single section. Coastal argues that, therefore, a German court does not have jurisdiction over it, and that this Court is instead the proper forum for its claims.

 

The Court need not decide at this time whether or not Coastal is bound by, or may avail itself of, the bill of lading terms. In either circumstance, this Court is a proper forum for Coastal’s intervening complaint. If Coastal is subject to the jurisdiction clause, it would then be subject to the same forum selection limitations as is BBC. Because the jurisdiction clause allows BBC to file suit in any jurisdiction for claims arising from the contract of carriage, which, as discussed above, includes claims for declaratory judgment, Coastal would similarly be permitted to file its claim for declaratory relief in any jurisdiction. Coastal’s claim before this Court would therefore be in accordance with the jurisdiction clause. If, on the other hand, Coastal is not subject to the jurisdiction clause, it would then be free of any contractual restrictions on forum selection. In this case, Coastal could choose to file its action in any forum with jurisdiction to hear it, including this Court. Because Coastal’s selection of this Court as the forum for its declaratory relief action is appropriate under either set of circumstances, the Court concludes that Coastal’s intervening complaint, like BBC’s complaint, is properly before this Court.

 

III. Declaratory Judgment Considerations

 

Suzlon additionally urges the Court to refrain from hearing BBC’s and Coastal’s claims for declaratory relief based upon the legal standards and polices underlying the Declaratory Judgment Act, 28 U.S.C. §  2201(a). As BBC correctly notes, this case does not involve a parallel state court proceeding, as do many cases in which actions for declaratory relief are challenged, but rather, it involves a subsequent proceeding brought in a foreign jurisdiction. Despite the fact that Suzlon’s claim for damages is pending in a foreign jurisdiction, rather than in a U.S. state court, however, the concerns of fairness, practicality, and judicial economy that underlie the Declaratory Judgment Act are applicable to this case.

 

The Fifth Circuit has found that, in analyzing whether to decide or dismiss a declaratory judgment action, a district court should determine: (1) whether the action is justiciable; (2) whether the court has the authority to grant declaratory relief; and (3) whether the court should exercise its discretion to decide or dismiss the action. Sherwin-Williams Co. v. Holmes County, 343 F.3d 383, 387 (5th Cir.2003). Here, there exists an actual and immediate controversy among the parties, as Suzlon seeks to hold BBC and Coastal liable for damage to its cargo, and BBC and Coastal seek a declaration shielding them from such liability. The declaratory judgment claims brought by BBC and Coastal are therefore justiciable. See Orix Credit Alliance, Inc. v. Wolfe, 212 F.3d 891, 895-96 (5th Cir.2000) (noting that whether a declaratory action is justiciable is typically a question of “whether an actual controversy exists between the parties”) (internal quotation omitted). Similarly, the Court has the authority to grant declaratory relief in this case, as there is no previously-filed state suit, and the Anti-Injunction Act, 28 U.S.C. §  2283, is not implicated. See Travelers Ins. Co. v. Louisiana Farm Bureau Fed’n, Inc., 996 F.2d 774, 776 (5th Cir.1993) (finding that a district court lacks the authority to grant declaratory relief where: (1) a declaratory defendant previously filed a cause of action in state court; (2) the state suit involved the same issues as those before the federal court; and (3) the Anti-Injunction Act prohibits the district court from enjoining the state proceedings). The Court must therefore proceed to the final step of the analysis, and determine whether it should exercise its discretion and dismiss the case.

 

A district court has substantial discretion in deciding whether to retain jurisdiction over a declaratory action, yet this discretion should be guided by “considerations of practicality and wise judicial administration.” Sherwin-Williams, 343 F.3d at 389 (citing Wilton v. Seven Falls Co., 515 U.S. 277, 288 (1995)). The Fifth Circuit has identified a number of nonexclusive factors that a district court should consider in deciding whether to dismiss a declaratory judgment action, including:

(1) whether there is a pending state action in which all of the matters in controversy may be fully litigated;

(2) whether the plaintiff filed suit in anticipation of a lawsuit filed by the defendant;

(3) whether the plaintiff engaged in forum shopping in bringing the suit;

(4) whether possible inequities in allowing the declaratory plaintiff to gain precedence in time or to change forums exist;

(5) whether the federal court is a convenient forum for the parties and witnesses; and

(6) whether retaining the lawsuit would serve the purposes of judicial economy.

Id. at 388 (citing St. Paul Ins. Co. v. Trejo, 39 F.3d 585, 590-91 (5th Cir.1994)). These factors address concerns of the proper allocation of decision-making between state and federal courts, fairness, and efficiency. Sherwin-Williams, 343 F.3d at 390-91.

 

Here, there is no pending state action. Although Suzlon’s subsequent action for damages is pending in Germany, Coastal is not a party to that case, and it is doubtful whether the German court could exercise jurisdiction over Coastal. Accordingly, not all of the matters in controversy, namely those pertaining to Coastal’s claims of limited liability and BBC’s and Suzlon’s claims against Coastal, will be litigated in the German action. In contrast, all of the parties and matters at issue are before this Court in the case at bar.

 

With respect to the second factor, it does appear that BBC filed this action in anticipation of Suzlon’s action for damages. That BBC’s action was anticipatory does not mandate dismissal, however, as a proper purpose of the Declaratory Judgment Act is to allow parties to resolve disputes without having to wait to be sued. Sherwin-Williams, 343 F.3d at 397. Similarly, as set forth in the third factor, BBC engaged in forum selection by choosing this Court as the forum for its declaratory judgment action. Suzlon has not, however, shown that BBC chose this forum for improper or abusive reasons. Rather, the legitimacy of BBC’s choice of this forum is supported by the fact that the fire that allegedly damaged Suzlon’s cargo took place here in Houston, as well as that Coastal is located in Houston. As the Fifth Circuit has noted, “[m]erely filing a declaratory judgment action in a federal court with jurisdiction to hear it, in anticipation of state court litigation, is not in itself improper anticipatory litigation or otherwise abusive ‘forum shopping.’ ” Id. at 391. There is no indication that BBC’s choice of this forum was improper or abusive.

 

Suzlon argues that inequities will occur if BBC’s action before this Court proceeds, as contemplated by the fourth factor, because the bills of lading contain conflicting choice of law clauses, one applying German law, and the other applying the U.S. COGSA. Suzlon fails to explain, however, why a German court is any better equipped than this Court to decide which contractual choice of law provision to apply. Additionally, the choice of law clause providing for the application of German law is the jurisdiction clause discussed above, which states that “all claims against the Carrier arising from or in connection with this Bill of Lading or underlying contract of carriage shall be brought in the court of relevant jurisdiction in Hamburg, Germany with German law to apply.” Defs.’ Mot. to Dismiss, Ex. 1, Terms ¶  4 (emphasis added). As previously discussed, this part of the jurisdiction clause does not apply to claims brought by BBC, such as the declaratory judgment action currently before this Court. Thus, Suzlon’s argument that this action is governed by two conflicting choice of law provisions appears to be incorrect. There is no need for the Court to presently decide what law applies to the parties’ claims, however, because regardless of what law applies, Suzlon has not demonstrated that any inequities or unfairness will result from allowing this case to proceed.

 

Under the fifth factor, the Court finds that this is a convenient forum for the parties and witnesses. BBC and Coastal both have offices located in Houston, and Suzlon, with offices in Chicago, Illinois, and India, has not shown that Germany is any more convenient a forum for it than Houston. Additionally, witnesses and documents pertaining to the fire that took place when the BBC Canada was docked in Houston are most likely located in this jurisdiction, including BBC’s port captain, BBC’s marine surveyor, and Coastal’s stevedoring crew. Aside from BBC’s corporate offices, Suzlon has failed to identify any parties, witnesses, or evidence located in Germany. Finally, with respect to the sixth factor, Coastal is not a party to Suzlon’s suit in Germany, and the action before this Court is the only case to which all involved parties are subject. Thus, this case is the only one in which all claims between the parties can be resolved, and retaining this action will thereby further judicial economy and efficiency.

 

 

Having considered the factors laid out by the Fifth Circuit, the Court concludes that the concerns of fairness, practicality, and judicial economy underlying the Declaratory Judgment Act counsel in favor of retaining BBC’s declaratory judgment action and Coastal’s intervening action.

 

IV. Conclusion

 

Suzlon’s motion to dismiss BBC’s declaratory judgment action and motion to dismiss Coastal’s intervening complaint are DENIED.

 

IT IS SO ORDERED.