• A "Service of Suit Endorsement" Which does not clearly designate an Exclusive Forum Does not Amount to a Forum Selection Clause
  • March 17, 2010
  • Law Firm: McCormick, Barstow, Sheppard, Wayte & Carruth LLP - Fresno Office
  • Skylark Investment Properties v. Navigators Ins. Co., 2009 U.S. DIST LEXIS 82258 (S.D.Cal. 2009).

    BACKGROUND FACTS
    Skylark initiated an action against Navigators in California Superior Court, asserting claims as an additional insured under a Navigators insurance policy.  Navigators removed the case to Federal Court and Skylark moved for remand, asserting that a Service of Suit Endorsement within the policy acted as a mandatory forum selection clause.  Under the endorsement, the parties agreed that “service of process in suit may be made upon [named agent] and that in any suit instituted against any one of them upon this contract, the Company will abide by the final decision of such Court or of any Appellate Court in the event of an appeal.”  Skylark contended that the endorsement effectively waived Navigators’ right to removal.

    THE COURT’S RULING
    In refusing to remand the case, the court noted that the Service of Suit Endorsement did not clearly designate an exclusive forum but, instead, merely identified an agent to receive service of process.  Since there was no clear designation of an exclusive forum, the endorsement did not operate as a mandatory forum selection clause.

    THE EFFECT OF THE COURT’S RULING
    A specific forum must be clearly designated in a Service of Suit Endorsement in order for the endorsement to operate as an effective forum selection clause.