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Red Wing Aeroplane Co. v. Society Insurance

Court of Appeals of Arizona, First Division, Department B

October 3, 2013

RED WING AEROPLANE COMPANY, a Wisconsin corporation, Plaintiff/Appellant,
SOCIETY INSURANCE, Defendant/Appellee.

Not for Publication -Rule 28, Arizona Rules of Civil Appellate Procedure

Appeal from the Superior Court in Maricopa County Cause No. CV2010-022414 The Honorable J. Richard Gama, Judge

Gordon & Rees L.L.P. Phoenix By Timothy I. McCulloch and Deanna R. Rader Attorneys for Plaintiff/Appellant

Snell & Wilmer L.L.P. Phoenix By Martha E. Gibbs and Richard G. Erickson Nicole E. Sornsin Attorneys for Defendant/Appellee



¶1 Red Wing Aeroplane Company ("Red Wing") appeals from the trial court's judgment granting a motion to dismiss its complaint against Society Insurance ("Society") for lack of personal jurisdiction. We hold that the record before the trial court demonstrated that Society had sufficient minimum contacts with Arizona for it to be reasonably haled into Arizona's courts in this matter. We therefore reverse the judgment and remand this matter to the trial court for further proceedings consistent with this decision.


¶2 Red Wing, a Wisconsin-based company, operates an airplane-chartering business. According to a declaration that Red Wing submitted to the trial court, Red Wing "sought to expand its operations to Williams Gateway Airport" ("Airport") in Mesa, Arizona. The Airport required operators to "show evidence of worker[s'] compensation insurance effective in Arizona in order to lease space from the Airport." Beginning in late 2006, Red Wing "continually requested" its insurance broker, Lawrence-Bohmbach Agency, Inc. ("Agency"), to ask Society to issue a certificate of insurance to the Airport on its behalf. Red Wing also explained to Agency its Arizona operations. The policy also lists Agency as Society's agent.

¶3 Red Wing had an existing workers' compensation insurance policy with Society, which it renewed in January 2007, for its operations in Wisconsin. That policy covered workplaces in Wisconsin and applied Wisconsin law.

¶4 In February 2007, Society issued a Certificate of Insurance ("Certificate") which it faxed and mailed to Agency on its letterhead. The Certificate, signed by a Society representative, lists the "Producer" as Agency, the "Insured" as Red Wing, the "Companies Affording Coverage" as Society, and the "Type of Insurance" as workers' compensation and employers' liability. The Certificate lists the "Certificate Holder" as the Airport and lists an Arizona address for the Airport in Mesa, Arizona. The Certificate apparently was sent to Red Wing and the Airport because Red Wing became aware of the Certificate and it began operations at the Airport which required the insurance. The Certificate also provides under "Coverages": "This is to certify that the policies of insurance listed below [workers' compensation coverage] have been issued to the insured named above for the policy period indicated notwithstanding any requirement, term or condition of any contract or other document with respect to which this certificate may be issued or may pertain." The Certificate also states: "This certificate is issued as a matter of information only and confers no rights upon the certificate holder. This certificate does not amend, extend or alter the coverage afforded by the policies below."

¶5 After Society issued the Certificate, Red Wing began operating flights from the Airport. By March 2007, Red Wing employed Arizona resident LynMichael Gerber ("Gerber") and his wife to work at the Airport. Within the policy period, Gerber was injured at the Airport in the course of his employment with Red Wing. Gerber filed a workers' compensation claim with Red Wing, which then tendered the claim to Society. Society initially paid benefits to Gerber, but later declined coverage, according to Red Wing, on the basis that it did not know Red Wing was conducting business at the Airport.

¶6 Gerber filed a workers' compensation claim with the Industrial Commission of Arizona's ("ICA") Special Fund, which provides benefits to an injured employee who works for an uninsured employer. Society was joined as a party in that proceeding. Although Society conceded that Gerber's claim was compensable, it argued that it was not required to cover the claim. The ICA found that Gerber's claim was compensable but dismissed Society from the proceedings, holding there was no right to relief against it.

¶7 Red Wing filed a complaint in the superior court against Society alleging breach of contract, insurance bad faith, and unauthorized practice of insurance, all claims arising from Society's denial of the claim for coverage of Gerber's injury.

¶8 Society filed a motion to dismiss alleging lack of personal jurisdiction and improper forum. Society argued that the Certificate did not provide coverage for employees in Arizona, but only certified coverage for Wisconsin employees. Society alleged that it was unaware of Red Wing's correspondence with Agency and that Agency represented to it that "no employees travel out of state." ...

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