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THE INSURED, SPACE NEEDLE, LLC, IS LOCATED IN WASHINGTON STATE; ALTHOUGH THE INSURANCE POLICY NAMED NEW YORK AS THE FORUM AND REQUIRED THE APPLICATION OF NEW YORK LAW FOR ANY LAWSUITS, THE WASHINGTON INSURANCE CODE RENDERED SUCH PROVISIONS VOID; THEREFORE THE INSURER WAS NOT ENTITLED TO AN ANTI-SUIT PRELIMINARY INJUNCTION IN NEW YORK (FIRST DEPT).

he First Department determined plaintiff Elite Insurance Company did not demonstrate a likelihood of success or a balancing of the equities in its favor in its attempt to have a preliminary injunction issued in New York to prevent a suit by the insured, Space Needle of Seattle, Washington, after the COVID-related business-loss claim was denied: Although the insurance contract indicated New York would be the forum and New York law would apply, the Washington Insurance Code rendered such provisions void. The decision includes extensive discussions of the leading cases in these areas:

… [P]laintiff did not demonstrate either a likelihood of success on the merits of its claim for an anti-suit injunction based on the contractual choice-of-law and forum selection clauses of the parties’ insurance contract, or a balancing of the equities in its favor. As an insurance company authorized to sell insurance in Washington, plaintiff was required to comply with the Washington Insurance Code’s prohibition against choice-of-law and forum selection clauses in insurance policies sold in Washington (Wash Rev Code Chapter 48). The Code (RCW) expressly provides that no insurance contract delivered or issued for delivery in this state (Washington) . . . “shall contain any condition, stipulation or agreement (a) requiring it to be construed according to the laws of any other state or country. . .; or (b) depriving the courts of this state of the jurisdiction of action against the insurer . . .” (RCW 48.18.200 [1]). RCW further specifies that any such agreement violating this prohibition “shall be void, but such voiding shall not affect the validity of the other provisions of the contract” (RCW 48.18.200 [2]). Thus, plaintiff has not demonstrated that the equities tip in its favor where it is attempting, as Supreme Court stated, “a blatant end run around” Washington’s prohibition against choice-of-law and forum selection clauses. North Am. Elite Ins. Co. v Space Needle, LLC, 2021 NY Slip Op 06769, First Dept 12-2-21

 

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