Claimants who have sued insurance companies for wrongful denial of their claims –including health insurance claims – occasionally find themselves faced with a defendant’s motion to dismiss or transfer their case to a different court. This request to transfer the case could be based on a number of factors, but typically the defendant insurance company argues that it would be more convenient to litigate the case in the alternative forum. In California, the doctrine of forum non conveniens permits a court to dismiss an action when it believes the case may be more appropriately and justly tried elsewhere. Stangvik v. Shiley Inc., 54 Cal.3d 744, 751 (1991). The doctrine of forum non conveniens is codified in Code of Civil Procedure Section 410.30(a), which provides, “When a court upon a motion of a party . . . finds that in the interest of substantial justice an action should be heard in a forum outside this state, the court shall stay or dismiss the action in whole or in part on any conditions that may be just.” In determining whether to grant a motion based on forum non conveniens, a court first decides whether the alternative forum is a “suitable place for trial” and, if so, the court then balances the private interests of the litigants and the interests of the public to decide whether the action should remain in California or be prosecuted in the alternative forum. Stangvik, supra, 54 Cal.3d at 751.
In the matter of Miriam Abu Sharkh, et al. v. Continentale Krankenversicherung A.G., et al., (May 17, 2021, B303219), the McKennon Law Group PC secured a reversal of the trial court’s decision granting such a motion and dismissing our clients’ case in favor of a German forum. The lawsuit arose from the defendant health insurance company’s wrongful and egregious termination of our clients’ health insurance coverage without sufficient explanation or reasoning at the time of the family’s greatest need – when our client’s son was hospitalized due to complications from a rare, terminal illness. Our clients were living in California at the time of the wrongful conduct but, due to the termination of their health coverage, were forced to leave the state to seek affordable healthcare abroad. The health insurance company filed a motion to transfer the case to Germany and dismiss the case, arguing that California was an inconvenient forum and that the case should be filed in Germany, where the insurance company was based. The trial court, focusing primarily on the residence of the parties, granted the motion. On appeal, the McKennon Law Group PC argued that the private and public factors weighed heavily in favor of a California forum and that the trial court had abused its discretion in dismissing the case based on forum non conveniens.
The Court of Appeal agreed that California had a substantial interest in this case, finding that “where Continentale issued insurance policies to three California residents, evaluated claims arising in California, paid claims to California providers and terminated coverage while the insureds resided in California, the ‘substantial interest of California in these transactions is obvious.’” (Citing People v. United National Life Ins. Co., 66 Cal.2d 577, 593 (1967)). The Court of Appeal also agreed that the lower court had placed too much emphasis on the parties’ residence. The Court recognized that while location of the parties at the time of the litigation is relevant to the court’s analysis, it cannot be the exclusive factor on which a court relies. See Stangvik, supra, 54 Cal.3d at 753, fn. 4 (“An undue emphasis on a single factor is especially threatening to a balanced analysis because some of the matters to be weighed will by their nature point to a grant or denial of the motion.”). Lastly, the Court of Appeal agreed that the lower court’s finding that California had no interest in the dispute was unreasonable given the facts of the case. After extensive briefing and oral argument, the Court of Appeal ruled that the Superior Court abused its discretion when it granted the defendant health insurance company’s motion to transfer the case to Germany and dismiss our clients’ bad faith health insurance lawsuit on the basis of forum non conveniens. The Court of Appeal remanded the case and ordered the trial court to weigh the interests of both forums, as well as all pertinent public and private factors.
This was a significant victory for our clients because they will now be able to again pursue their bad faith case against the German insurer and its third-party administrator in a California court. In situations such as this, it is imperative that claimants have retained experienced bad faith insurance attorneys such as the McKennon Law Group PC to ensure access to their chosen forum and pursue insurance bad faith remedies in a local court concerning their wrongly-denied health insurance benefits.