Texas Is Not The Place For Virus Coverage Fight, Gartner Says

By Daphne Zhang
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Law360 (July 27, 2020, 5:05 PM EDT) -- Research firm Gartner Inc. urged a Texas federal judge Friday to ax U.S. Specialty Insurance Co.'s suit seeking to stop Gartner from getting additional coverage over its $150 million limit for canceled events amid the COVID-19 pandemic, saying its policy is issued in Massachusetts and governed by New York law, not Texas law.

Gartner, based in Stamford, Connecticut, said in its motion to dismiss that it is not "at home" and cannot be subject to general personal jurisdiction in Texas. The company said the suit does not involve any contacts between Gartner and Texas, and it did not authorize anyone to either obtain or negotiate its policy in Texas.

"The only connection the policy has to Texas is that the USSIC happens to be based there," Gartner said. "Gartner did not remit its premium payments to Texas ... there is nothing about the Gartner Policy that could in any way reasonably be described as 'distinctively Texan.'''

The company said it is "not fair or reasonable for Texas to be the forum for an action" for a policy that is governed by New York law. Gartner said the policy was obtained by its New York broker from HCC Specialty Underwriters Inc. in Massachusetts, and its premiums were paid to HCC, not to USSIC in Texas.

USSIC sued Gartner in late May seeking a declaration that it is not obligated to pay beyond Gartner's $150 million yearly coverage limit. Gartner, which organizes over 300 conferences globally, had to cancel or postpone its events because of COVID-19.

In Friday's motion, Gartner stressed that the only connection between its policy and Texas was that the insurance was issued under USSIC's name and the insurer is based in Houston. Gartner maintained that it had no control over HCC's decision to issue its policy with USSIC, and it was HCC, not USSIC, that issued the policy in Massachusetts and delivered it to Gartner in New York.

"Before the policy took effect, there were no communications between Gartner and USSIC (or any of its affiliates) in Texas," Gartner said. After COVID-19 Hit, USSIC was not involved in the discussions over Gartner's claims, it said, adding that it was only communicating back and forth with HCC.

USSIC previously alleged that Gartner is "at home" in Texas, because the company has three offices in Texas employing about 1,260 people. Gartner called the insurer's arguments "conclusory" and misleading. It said that only 4% of its revenue came from Texas last year and that Texas employees make up less than 8% of its workforce.

"Gartner does not deny that it does business and has operations in Texas. But none of Gartner's employees in Texas were involved in the negotiation or purchase of the policy, in decisions regarding the cancellation of insured events, or in the pursuit of coverage from USSIC," it said.

Gartner separately sued USSIC and HCC claiming coverage in New York federal court in late June, saying that the issuer agreed that Gartner can increase its policies' coverage limit by $170 million for a potential total of $340 million, including $20 million for a subsidiary's policy, in 2020.

Representatives for USSIC and Gartner could not immediately be reached for comment.

USSIC is represented by Gerard G. Pecht, Sumera Khan, and Daniel McNeel Lane Jr. of Norton Rose Fulbright US LLP.

Gartner is represented by Steven L Schreckinger, Scott P Lewis, and Tamara S Wolfson of Anderson Kreiger LLP, and Nicole S Soussan and Julie A Hardin of Reed Smith LLP

The case is U.S. Specialty Insurance Co. v. Gartner Group Inc., case number 4:20-cv-01850, in the U.S. District Court for the Southern District of Texas.

--Editing by Amy Rowe.

Correction: An earlier version of this story did not include attorneys from Anderson Kreiger LLP as representing Gartner. The error has been corrected.

For a reprint of this article, please contact reprints@law360.com.

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Case Information

Case Title

U.S. Specialty Insurance Company v. Gartner Group, Inc.


Case Number

4:20-cv-01850

Court

Texas Southern

Nature of Suit

110(Insurance)

Judge

Judge Lynn N Hughes

Date Filed

May 27, 2020

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