Plaintiff filed a lawsuit against her automobile insurance carrier, Granite Insurance Company (“Granite”), for breach of contract and bad faith in investigating her insurance claim. Plaintiff also named as a Defendant American International Group (“AIG”), the holding company for Granite. Granite is one of AIG’s subsidiaries. There was no question in this case that the Oklahoma court had jurisdiction to hear the case against Granite. However, AIG filed a motion to dismiss, asserting that the Oklahoma court could not exercise personal jurisdiction over it because it lacked the necessary minimum contacts with Oklahoma to satisfy due process.
AIG presented evidence that it: 1) is a Delaware corporation having its principal place of business in New York; 2) is not licensed to do business in Oklahoma; 3) does not maintain an office or property in Oklahoma; and 4) does not sell, write, or issue insurance policies in the state of Oklahoma. Plaintiff did not dispute the facts submitted by AIG. Instead, Plaintiff argued that, since Granite was a subsidiary of AIG and Granite had sufficient contacts with Oklahoma, those contacts should be imputed to AIG. The Plaintiff argued that AIG exercised control over Granite and therefore, Granite’s contact with Oklahoma should be sufficient to establish jurisdiction over AIG.
The United States District Court for the Western District of Oklahoma granted AIG’s motion to dismiss, holding: 1) companies conducting business through their subsidiaries can qualify as transacting business in a state; however, to do so, the parent must exercise sufficient control over the subsidiary; 2) the evidence before the court in this case did not demonstrate the pervasive level of control required to permit the exercise of personal jurisdiction over AIG in Oklahoma.
The obvious advantage to AIG in the court’s ruling is that it was not forced to defend an insurance coverage dispute. Competent Oklahoma insurance attorneys attempt to eliminate the expense involved in litigation of insurance policies and allegations of “bad faith”.