Forum Non Conveniens Dismissal Is Not A Judgment On The Merits
Barry Zalma
Read the full article at https://lnkd.in/g6Hk37Ui and see the full video at https://lnkd.in/g-zTjbKU and at https://lnkd.in/g87hqpsR and at https://zalma.com/blog plus more than 4450 posts.
The Fifth Circuit Court of Appeals resolved insurance issues concerning cable-damage in the Arabian Gulf by recognizing the difference between a broker and an agent, the place where – and to whom – a policy was delivered, and how to deal with the issue personal jurisdiction the court has over the parties and that a forum non conveniens dismissal is not a judgment on the merits; it is, instead a determination that the merits should be adjudicated elsewhere.
In Dynamic Industries, Incorporated; Dynamic Industries International, L.L.C.; Dynamic Industries Saudi Arabia, Limited v. Walaa Cooperative Insurance Company; Marsh & McLennan Companies, Inc., doing business as Marsh, Inc.; Marsh USA, Inc., doing business as Marsh USA Risk Services, No. 22-30033, United States Court of Appeals, Fifth Circuit (March 13, 2023) the disputes were resolved.
CLAIM OF INSUREDS
The insureds (Dynamic) assert that their insurance brokers (Marsh) failed to procure adequate insurance coverage from the insurer (Walaa), or in the alternative, that Walaa breached the insurance policy by declining coverage for an incident involving undersea cable-damage in the Arabian Gulf. The district court granted Marsh’s motion to dismiss the suit as untimely under Louisiana law. The district court also granted Walaa’s motion to dismiss the suit for forum non conveniens, reasoning that the insurance policy at issue designates Saudi Arabia as the exclusive forum.
DISCUSSION
First, as for Marsh, Louisiana law requires insureds who wish to sue their insurance broker to do so “within one year from the date that the alleged act, omission, or neglect . . . should have been discovered.” [La. Rev. Stat. § 9:5606].
Case Against Broker
Dynamic sued Marsh after Walaa denied coverage. But Dynamic received a copy of the insurance policy from Walaa almost 18 months earlier. When Dynamic received that copy, it also received constructive notice of any deficiencies that the policy contained. Dynamic’s claims against Marsh are therefore untimely.
Dynamic rejects constructive notice, arguing that the policy contains “absolutely no indication that coverage would be denied.” But the denial was Walaa’s choice, not Marsh’s. According to Dynamic, the policy either omits coverage that Marsh is liable for failing to procure or offers coverage that Walaa must honor. For purposes of asserting its in-the-alternative claims against Marsh Dynamic asked the Fifth Circuit to assume that the policy omitted coverage. Any such omission was present when Dynamic received the policy so its suit is time barred.
Choice of Jurisdiction
Dynamic argued that the Walaa policy’s choice of Saudi Arabian law is unenforceable, under Louisiana law, if the policy was “delivered” in Louisiana. Dynamic says that it received delivery in Louisiana from Walaa’s agent – a Marsh affiliate known as Marsh KSA. Walaa responded that Marsh KSA was actually Dynamic’s agent, and that delivery therefore occurred in Saudi Arabia (where Walaa delivered the policy to Marsh KSA). The Fifth Circuit agreed with Walaa since Marsh, as a broker, is an agent of the insured not the insurer.
Under Louisiana law, an insurance broker is generally deemed to be the agent of the insured rather than the insurer. A broker who is asked by the client to procure coverage wherever possible at the best price is not the agent of the insurer. Marsh KSA “approached” multiple insurers looking for a “competitive price” for Dynamic. Marsh KSA was thus Dynamic’s agent.
After conducting an independent assessment of the clause’s enforceability, the district court properly concluded that delivery occurred in Saudi Arabia to the agent of the insured.
LACK OF PERSONAL JURISDICTION
Separately, the district court concluded that it lacked personal jurisdiction over a Marsh affiliate known as Marsh & McLennan Companies, Inc. (“Marsh Inc.). Yet the district court’s judgment dismissed Dynamic’s claims against Marsh Inc. “with prejudice” – that is, on the merits. ” A federal court generally may not rule on the merits of a case without first determining that it has jurisdiction over the parties i.e., personal jurisdiction.
Because the district court lacked personal jurisdiction, it also lacked power to issue a merits judgment regarding Marsh Inc. Likewise, the district court dismissed Dynamic’s claims against Walaa “with prejudice.” That too was an error, because a forum non conveniens dismissal is not a judgment on the merits; it is, instead a determination that the merits should be adjudicated elsewhere.
The Fifth Circuit, therefore, reversed dismissal as to Walaa Cooperative Insurance Company and Marsh & McLennan Companies, Inc., and remanded with instructions for the district court to enter judgment dismissing Dynamic’s claims against Walaa Cooperative Insurance Company and Marsh &McLennan Companies, Inc. without prejudice.” In all other respects, the District Court’s decision was affirmed.
ZALMA OPINION
The parties won some arguments and lost others. The case established the fact that an insurance broker is not an agent of the insurer but is the agent of the insured who, on the insured’s behalf, transacts insurance. The District Court exceeded its authority and the Fifth Circuit set it straight affirmed part of the decision and reversed others.
(c) 2023 Barry Zalma & ClaimSchool, Inc.
Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe.
Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and [email protected]
Follow me on LinkedIn: http://www.linkedin.com/comm/mynetwork/discovery-see-all...
Write to Mr. Zalma at [email protected]; http://www.zalma.com; http://zalma.com/blog; daily articles are published at https://zalma.substack.com.
Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.
Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://lnkd.in/gfFKUaTf.
Consider subscribing to my publications at substack at https://lnkd.in/gcZKhG6g
Barry Zalma, Esq., CFE is available at http://www.zalma.com and [email protected]
Follow me on LinkedIn: https://lnkd.in/guWk7gfM
Go to the Insurance Claims Library – https://lnkd.in/gWVSBde.
ZIFL – Volume 29, Issue 21
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
Post 5220
Read the full article at https://lnkd.in/gRMJpi4s, see the video at https://lnkd.in/gwGSd6ZA & at https://lnkd.in/gbDiuFJy, and at https://zalma.com/blog plus more than 5200 posts.
See the video at & at https://rumble.com/v711hr0-zalmas-insurance-fraud-letter-november-1-2025.html
See the full 18 page issue of ZIFL at ZIFL-11-01-2025
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/
Conviction for Health Insurance Fraud Upheld
Physician Conspired with Bonavilla to Effect Health Insurance Fraud
Dennis Davin Bonavilla was involved in an insurance fraud scheme as an executive of Free Choice Healthcare. The scheme targeted indigent patients, often on ...
The Professional Claims Handler
Post 5218
Read the full article at https://www.linkedin.com/pulse/zalma-philosophy-claims-handling-part-8-barry-zalma-esq-cfe-zdwsc, see the full video at https://rumble.com/v70zl4s-the-zalma-philosophy-of-claims-handling-part-8.html and at https://youtu.be/MIYcF71ffRQ, and at https://zalma.com/blog plus more than 5200 posts.
Claims Commandment X – Thou Shall Not Pretend to be a Lawyer
Some experienced and professional claims people know the law in their area of expertise better than most lawyers.
Adjusters should be adjusters and leave lawyering to lawyers. Similarly, lawyers should be lawyers and never try to be adjusters.
Claims Commandment XI – Thou Shall Empathize With the Claimant
Everyone presenting a claim is unhappy, disturbed, shocked, injured and needs help.
Empathy is identification with and understanding of another’s situation, feelings, and motives. It is the ability to understand another person’s circumstances, point of view, thoughts, and feelings....
HOW TO CREATE AN EXCELLENCE IN CLAIMS HANDLING PROGRAM
See the full video at https://rumble.com/v70wb2i-the-zalma-philosophy-of-claims-handling-part-6.html and at https://youtu.be/tL5nDKPEs40 and at https://zalma.com/blog plus more than 5200 posts.
Post 5217
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry.
An Excellence in Claims Handling program begins with a statement in the insurer’s claims manual or statement of professionalism that it is dedicated to providing excellence in claims handling to every insured who presents a claim.
The excellence in claims handling program should include, at a minimum:
A series of lectures supported by text materials explaining:
A definition of insurance.
How to read and understand an insurance policy.
How to interview an insured, witness, or claimant.
How to assist an insured in the insured’s obligation to ...
The Professional Claims Handler
Post 5219
Posted on October 31, 2025 by Barry Zalma
An Insurance claims professionals should be a person who:
Can read and understand the insurance policies issued by the insurer.
Understands the promises made by the policy.
Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
Are competent investigators.
Have empathy and recognize the difference between empathy and sympathy.
Understand medicine relating to traumatic injuries and are sufficiently versed in tort law to deal with lawyers as equals.
Understand how to repair damage to real and personal property and the value of the repairs or the property.
Understand how to negotiate a fair and reasonable settlement with the insured that is fair and reasonable to both the insured and the insurer.
How to Create Claims Professionals
To avoid fraudulent claims, claims of breach of contract, bad faith, punitive damages, unresolved losses, and to make a profit, insurers ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...