Petitioner, a few months after purchasing from respondent
insurance company in the State where he then resided a personal
property floater insurance policy, which barred a claim thereunder
twelve months after discovery of loss, moved to and became a
resident of the forum State, which permitted claims up to five
years after loss notwithstanding contract provisions requiring
earlier legal action. Invoking diversity jurisdiction, petitioner
brought this action in the Federal District Court of the forum
State to recover damages under the policy more than a year after
discovery of the loss which occurred in that State. After
certification to and resolution by the State Supreme Court of
certain local law questions following remand by this Court, the
Court of Appeals held that application to the contract of the
five-year statute of limitations would violate due process.
Held: Application of the statute of limitations of the
forum State is consistent with due process and full faith and
credit requirements where the activities of the parties to an
ambulatory personal property insurance contract were ample within
the forum State; the policy made no provision that the law of the
state of contract would govern; respondent insurance company had
knowledge when it sold the policy that the petitioner might move
his property anywhere; and it knew that he had moved to the forum
State, where respondent was also licensed to do business and must
have known that it could be sued. Pp.
377 U. S.
180-183.
319 F.2d 505, reversed.
Page 377 U. S. 180
MR. JUSTICE DOUGLAS delivered the opinion of the Court.
This case, which invoked the diversity jurisdiction of the
Federal District Court in a suit to recover damages under an
insurance policy, was here before.
363 U.
S. 207. The initial question, then as now, is whether
the 12-month-suit clause in the policy governs, in which event the
claim is barred, or whether Florida's statutes [
Footnote 1] nullifying such clauses if they
require suit to be filed in less than five years are applicable and
valid, in which event the suit is timely. The policy was purchased
by petitioner in Illinois while he was a citizen and resident of
that State. Respondent, a British company, is licensed to do
business in Illinois, Florida, and several other States.
A few months after purchasing the policy, petitioner moved to
Florida and became a citizen and resident of that State; and it was
in Florida that the loss occurred two years later. When the case
reached here, the majority view was that the underlying
constitutional question -- whether, consistently with due process,
Florida could apply its five-year statute to this Illinois contract
-- should not be reached until the Florida Supreme Court, through
its certificate procedure, [
Footnote 2] had construed that statute and resolved
another local law question. [
Footnote 3] On remand, the Court of Appeals certified the
two questions to the Florida Supreme Court, which answered both
questions in
Page 377 U. S. 181
petitioner's favor.
133 So. 2d
735. Thereafter, the Court of Appeals held that it was not
compatible with due process for Florida to apply its five-year
statute to this contract, and that judgment should be entered for
respondent. 319 F.2d 505. We again granted certiorari. 375 U.S.
929.
While there are Illinois cases indicating that parties may
contract -- as here -- for a shorter period of limitations than is
provided by the Illinois statute, [
Footnote 4] we are referred to no Illinois decision
extending that rule into other States whenever claims on Illinois
contracts are sought to be enforced there. We see no difficulty
whatever under either the Full Faith and Credit Clause or the Due
Process Clause. We deal with an ambulatory contract on which suit
might be brought in any one of several States. Normally, as the
Court held in
Pacific Employers Ins. Co. v. Industrial Accident
Comm'n, 306 U. S. 493,
306 U. S. 502,
a State having jurisdiction over a claim deriving from an
out-of-state employment contract need not substitute the
conflicting statute of the other State (workmen's compensation) for
its own statute (workmen's compensation) -- where the employee was
injured in the course of his employment while temporarily in the
latter State. We followed the same route in
Watson v. Employers
Liability Assurance Corp., 348 U. S. 66, where
we upheld a state statute allowing direct actions against liability
insurance companies in the State of the forum, even though a clause
in the contract, binding in the State where it was made, prohibited
direct action against the insurer until final determination of the
obligation of the insured.
The Court of Appeals relied in the main on
Hartford Accident
& Indemnity Co. v. Delta & Pine Land Co., 292 U.
S. 143, and
Home Ins. Co. v. Dick, 281 U.
S. 397. Those were cases where the activities in the
State of the
Page 377 U. S. 182
forum were thought to be too slight and too casual, as in the
Delta & Pine Land Co. case (292 U.S. at
292 U. S.
150), to make the application of local law consistent
with due process, or wholly lacking, as in the
Dick case.
[
Footnote 5] No deficiency of
that order is present here. As MR. JUSTICE BLACK, dissenting, said
when this case was here before:
"Insurance companies, like other contractors, do not confine
their contractual activities and obligations within state
boundaries. They sell to customers who are promised protection in
States far away from the place where the contract is made. In this
very case, the policy was sold to Clay with knowledge that he could
take his property anywhere in the world he saw fit without losing
the protection of his insurance. In fact, his contract was
described on its face as a 'Personal Property Floater Policy (World
Wide).' The contract did not even attempt to provide that the law
of Illinois would govern when suits were filed anywhere else in the
country. Shortly after the contract was made, Clay moved to
Florida, and there he lived for several years. His insured property
was there all that time. The company knew this fact. Particularly
since the company was licensed to do business in Florida, it must
have known it might be sued there. . . ."
363 U.S. at
363 U. S.
221.
Page 377 U. S. 183
Order of United Commercial Travelers of America v.
Wolfe, 331 U. S. 586,
involved a "six month suit" clause, but it is a highly specialized
decision dealing with unique facts -- a suit on an insurance policy
issued by an Ohio fraternal society, incorporating its constitution
and by-laws, and involving what the Court called the "indivisible
unity" of the fraternal society.
Id. at
331 U. S. 606.
In that case, the additional time afforded by the statute of
limitations of South Dakota, where the case was tried, was not
allowed to be applied to the contract. We do not extend that rule
nor apply it here, for Florida has ample contacts with the present
transaction and the parties to satisfy any conceivable requirement
of full faith and credit or of due process.
Reversed. [
Footnote
6]
[
Footnote 1]
Fla.Stat.Ann. (1960) §§ 95.03, 95.11(3).
[
Footnote 2]
Fla.Stat.Ann. (1957) § 25.031; Fla.App. Rule 4.61.
See Sun
Ins. Office, Ltd. v. Clay, 133 So. 2d
735. For other instances of our use of that certificate
procedure,
see Dresner v. Tallahassee, 375 U.
S. 136, and
Aldrich v. Aldrich, 375 U. S.
75,
375 U. S. 249.
[
Footnote 3]
The meaning of an "all risks" clause.
[
Footnote 4]
See cases cited in 363 U.S. at
363 U. S. 217,
note 12.
[
Footnote 5]
". . . [N]othing in any way relating to the policy sued on, or
to the contracts of reinsurance, was ever done or required to be
done in Texas. All acts relating to the making of the policy were
done in Mexico. All in relation to the making of the contracts of
reinsurance were done there or in New York. And likewise all things
in regard to performance were to be done outside of Texas. Neither
the Texas laws nor the Texas courts were invoked for any purpose,
except by Dick in the bringing of this suit. The fact that Dick's
permanent residence was in Texas is without significance. At all
times here material, he was physically present and acting in
Mexico."
281 U.S. at
281 U. S.
408.
[
Footnote 6]
A motion to strike a brief
amicus filed by Florida is
denied.