Assume a foreign insurance company provides auto insurance cards that specifically cover accidents both in the home country and the United States. If a car accident occurs in Texas, can the insurer avoid personal jurisdiction in the suit by alleging that it did not purposefully avail itself to Texas?
This was the issue before the Dallas Court of Appeals in Assurances Generales Banque Nationale v. Dhalla.
Progressive Insurance sued Dhalla for negligence in causing a car accident. Dhalla, a Canadian National, sought coverage from his auto insurer, Assurances Generales.
Assurances Generales, a Canadian company, refused to cover the accident, which occurred in Texas. When Dhalla asserted a third-party action, Assurances Generales made a special appearance to contest jurisdiction. Dhalla’s argued that Assurances Generales purposefully availed itself to Texas when it issued Dhalla an insurance card with the following statement: "This certificate is valid within Canada and the U.S.A. This card should be carried in the insured vehicle for production as proof of insurance when demanded by police."
Assurances Generales argued the following:
- Incorporated in Canada;
- No registered agent in Texas;
- No place of business in Texas;
- Doesn’t employ any Texans and does not actively recruit Texas for employment;
- No Texas licenses and not qualified to do business in Texas;
- No customers in Texas and doesn’t sell products in Texas;
- Doesn’t pay taxes in Texas;
- Has not advertised in Texas;
- Never submitted to jurisdiction of a Texas Court.
Assurances Generales lost in the trial court and subsequently appealed.
Did Dhalla establish personal jurisdiction?
No. The Court of Appeals held that the general statement on the insurance card was insufficient evidence to show Assurances Generales purposefully directed its activities toward Texas. Yes, the card mentioned the U.S. But the Court held that Dhalla must show that Assurances Generales purposely availed itself of Texas, not just the U.S. Because Dhalla did not purposefully direct its activities toward Texas, the Court found no personal jurisdiction.
Read the opinion here.