Housing and Redevelopment Insurance Exchange v. Guy Carpenter & Company, LLC — Entry #15: MEMORANDUM (Order to follow as separate docket entry) re 11 MOTION to Dismiss -Transfer filed by Guy Carpenter & Company, LLC

Case 3:23-cv-00996-JFS Document 15 Filed 03/25/24 Page 1 of 27


                  UNITED STATES DISTRICT COURT
                 MIDDLE DISTRICT OF PENNSYLVANIA

HOUSING AND
REDEVELOPMENT
INSURANCE EXCHANGE,

            Plaintiff,                 CIVIL ACTION NO. 3:23-CV-0996

            v.                         (SAPORITO, C.M.J.)

GUY CARPENTER & COMPANY,
LLC,

            Defendant.

                             MEMORANDUM

      This matter comes before the court on a motion by the defendant to

dismiss or transfer this diversity action pursuant to a contractual forum-

selection clause. Doc. 11. The motion is fully briefed and ripe for decision.

See Doc. 11; Doc. 12; Doc. 14.

 I.   BACKGROUND

      The plaintiff, Housing and Redevelopment Insurance Exchange

(“HARIE”), is a non-profit reciprocal insurance exchange organized under

the laws of Pennsylvania, which maintains its principal place of business

there as well. HARIE provides insurance coverage exclusively to public

housing and redevelopment authorities and other municipal entities in


       Case 3:23-cv-00996-JFS Document 15 Filed 03/25/24 Page 2 of 27


Pennsylvania. In order to safeguard its ability to meet its insureds’ needs

and provide prompt claim payment, HARIE obtains reinsurance for

certain lines of insurance that it underwrites, including property and

casualty, workers compensation, and various other monoline coverage

lines. See generally N. River Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d

1194, 1198–1200 (3d Cir. 1995) (providing an overview of how reinsurance

coverage functions).

     The defendant, Guy Carpenter & Company, LLC (“Guy Carpenter”),

is a single-member limited liability company organized under the laws of

Delaware, which maintains its principal place of business in New York.

Guy Carpenter’s sole member, Marsh U.S.A., Inc., is a Delaware

corporation with its principal place of business in New York as well. Guy

Carpenter is a reinsurance intermediary, responsible for locating,

negotiating, and placing treaty reinsurance contracts on behalf of a

reinsured, and for administering the reinsurance program thereafter, all

in exchange for a brokerage fee, which is paid out of the premium ceded

from reinsured to reinsurer. See generally id.

     In December 2009, HARIE first selected Guy Carpenter to serve as

its reinsurance intermediary and broker of record, entering into a


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Reinsurance Intermediary Authorization contract effective December 10,

2009. 1 This original contract governing the parties’ relationship, however,

was superseded several years later, when HARIE and Guy Carpenter

executed   an   Amended and Restated Reinsurance               Intermediary

Authorization contract effective August 17, 2016 (the “Amended RIA”).2

The Amended RIA expressly provided that it contained “the entire

agreement and understanding of the Parties and supersede[d] all prior

negotiations and oral statements related thereto.” Am. RIA § XII(A). The

Amended RIA further provided that it could only be amended, altered, or

modified by written amendment executed by both parties. Id. § XII(B).

The Amended RIA did not contain a choice of law or forum-selection

clause. The Amended RIA expressly provided that the contract was “at

will,” with an indefinite term, and it permitted either party to terminate

the agreement at any time by written notice. Id. § VIII(A).

     Under the Amended RIA, Guy Carpenter served as a reinsurance

intermediary and broker of record for HARIE, responsible for locating,

negotiating, and placing treaty reinsurance contracts on behalf of


     1 Pl.’s Ex. 1, Doc. 12-2.
     2 Pl.’s Ex. 2, Doc. 12-3; Def.’s Ex. 3, Doc. 11-1, at 38–45.


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HARIE, and for administering HARIE’s reinsurance program, including

handling of the payments of premiums and losses thereunder. In this

latter capacity, the parties expressly agreed that all funds owed or due to

HARIE from its reinsurers would be collected and held by Guy Carpenter

in a fiduciary capacity, deposited in a qualified U.S. financial institution,

and remitted by Guy Carpenter to HARIE within 30 days of receipt. See

id. § IV.

      From the inception of the parties’ contractual relationship in 2009

through the end of 2019, Peter Taubenheim served as HARIE’s principal

contact at Guy Carpenter. In 2019, Taubenheim announced his

retirement from Guy Carpenter, effective at year’s end. In an effort to

entice HARIE to not terminate the Amended RIA, Guy Carpenter agreed

to reduce the brokerage fee it earned for procuring or administering

reinsurance    contracts   over   a    fixed   three-year   term,   with   an

understanding that Taubenheim would continue to serve in a consultant

role, and this reduction in brokerage fees would be used by HARIE to pay

his consulting fees.

      To memorialize the terms of this agreement, Guy Carpenter drafted

a separate three-page letter agreement entitled “Broker Services


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Agreement,” dated and signed by a representative of Guy Carpenter on

April 14, 2020, and countersigned by a representative of HARIE on June

15, 2020 (the “BSA”).3 The BSA provided that it was effective for a term

of three years, beginning January 1, 2020, and continuing through

December 31, 2022. BSA 1. During this term, the brokerage fees owed to

Guy Carpenter by HARIE were to be reduced by a “BSA Retention” of

twenty percent. Id. HARIE’s entitlement to this BSA Retention, however,

was conditioned upon its continued brokerage relationship with Guy

Carpenter. In the event that HARIE terminated Guy Carpenter as its

broker of record with respect to any given reinsurance treaty while in

force or upon renewal, the BSA provided that the brokerage fees for that

reinsurance treaty would be excluded from the BSA Retention

calculation. Id. at 2. Moreover, if HARIE terminated Guy Carpenter as

broker of record with respect to fifty percent or more of its in-force

reinsurance treaties prior to expiration of the BSA’s three-year term, the

BSA provided that all BSA Retentions accrued over the twelve months

preceding such termination would be forfeited to Guy Carpenter. Id. The

BSA contained a choice of law provision, providing that the BSA “shall be


     3 Def.’s Ex. 1, Doc. 11-1, at 3–10.


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governed by and construed in accordance with the laws of the State of

New York.” Id. at 3. It also contained a forum-selection clause, which

stated: “The parties hereby agree to the exclusive jurisdiction of the

Supreme Court of the State of New York, New York County, or the

Southern District of New York federal district court, for the resolution of

any disputes raising issues regarding the construction, meaning or

enforcement of the terms of this agreement.” Id.

     HARIE continued to use Guy Carpenter as its reinsurance

intermediary and broker of record through the end of calendar year 2022.

As the BSA had contemplated, the BSA Retentions were used to retain

Taubenheim as a consultant.

     In late 2022, HARIE solicited requests for proposals from qualified

reinsurance intermediaries for placing and administering HARIE’s

reinsurance coverage in 2023. Guy Carpenter was one of several

reinsurance intermediaries invited to submit a proposal. Ultimately,

however, HARIE selected a different company—McGill Global Risk

Solutions LLC (“McGill”)—to serve as its reinsurance intermediary and

broker of record with respect to reinsurance coverage beginning January

1, 2023.


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     On November 30, 2022, HARIE provided Guy Carpenter with

written notice that McGill would serve as HARIE’s reinsurance

intermediary and broker of record with respect to reinsurance placed on

or after January 1, 2023. 4 The November 30, 2022, letter, however, also

expressly confirmed that Guy Carpenter would remain broker of record

responsible for servicing reinsurance treaties it had previously procured

for HARIE.

     On December 22, 2022, Guy Carpenter wrote to advise HARIE that

it had deducted $101,646.20 from the fiduciary account it held on behalf

of HARIE, and paid that amount over to itself, contending that the funds

represented BSA Retention for the 2022 calendar year, which had been

forfeited by HARIE upon termination of Guy Carpenter as broker of

record, pursuant to the BSA. In response, HARIE contended that this

deduction was not authorized under either the Amended RIA or the BSA,

and it demanded that the funds be remitted to HARIE. Guy Carpenter

refused.

     After an exchange of written correspondence by the parties and

their lawyers, HARIE commenced this action. In its six-count complaint,


     4 Def.’s Ex. 4, Doc. 11-1, at 46–47.


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HARIE asserts state-law claims for breach of contract, conversion, breach

of fiduciary duty, unjust enrichment, fraudulent inducement, and

misrepresentation. Based on the forum-selection clause in the BSA, Guy

Carpenter has moved to dismiss this action or transfer it to the United

States District Court for the Southern District of New York.

II.   DISMISSAL ON FORUM NON CONVENIENS GROUNDS

      The defendant’s preferred relief is dismissal under the common law

doctrine of forum non conveniens. The Supreme Court of the United

States has identified the common law doctrine of forum non conveniens

as “the appropriate way to enforce a forum-selection clause pointing to a

state or foreign forum.” Atl. Marine Constr. Co. v. U.S. Dist. Ct., 571 U.S.

49, 60 (2013) (emphasis added); see also Collins v. Mary Kay, Inc., 874

F.3d 176, 180 (3d Cir. 2017) (“Atlantic Marine clarified that forum non

conveniens is the proper mechanism for enforcing a forum selection

clause that points to a state or foreign forum.”) (emphasis added).

      But the forum-selection clause at issue here specifically provides

that a covered dispute be brought in either the New York state trial court

situated in Manhattan, New York, or the United States District Court for

the Southern District of New York. Dismissal under the doctrine of forum


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non conveniens is not appropriate in federal cases where the alternative

forum is another federal district court; instead, the appropriate remedy

is a transfer under 28 U.S.C. § 1404(a). See Atl. Marine, 571 U.S. at 61

(“[F]ederal courts invoke forum non conveniens in cases where the

alternative forum is abroad, and perhaps in rare instances where a state

or territorial court serves litigational convenience best.”) (internal

quotation marks omitted); Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22,

24, 28–32 (1988) (holding that § 1404(a) governed a similar dispute);

Ravelo Monegro v. Rosa, 211 F.3d 509, 512–13 (9th Cir. 2000) (“Section

1404(a) . . . serves as a statutory substitute for forum non conveniens in

federal court when the alternative forum is within the territory of the

United States.”).

       Accordingly, to the extent it seeks dismissal of this action on forum

non conveniens grounds, the defendant’s motion will be denied.

III.   TRANSFER UNDER SECTION 1404(A)

       In the alternative, the defendant requests that this case be

transferred to the United States District Court for the Southern District

of New York pursuant to 28 U.S.C. § 1404(a). See generally Atl. Marine,

571 U.S. at 59 (“Section 1404(a) . . . provides a mechanism for


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enforcement of forum-selection clauses that point to a particular federal

district.”). The plaintiff opposes transfer, arguing that its claims arise out

of the Amended RIA only and thus fall outside the scope of the BSA

forum-selection clause.

     “Under 28 U.S.C. § 1404(a), a district court may transfer a civil

action to another district where the case might have been brought, or to

which the parties have consented, for the convenience of the parties and

witnesses and in the interest of justice.” In re McGraw-Hill Glob. Educ.

Holdings LLC, 909 F.3d 48, 57 (3d Cir. 2018). In deciding a § 1404(a)

motion to transfer, “the Court may properly consider only those facts

which are undisputed or are a matter of record in the form of affidavits,

depositions, stipulations, or other documents. Mere allegations cannot be

taken as proof of the facts alleged in support of the motion.” Kisko v. Penn

Cent. Transp. Co., 408 F. Supp. 984, 986 (M.D. Pa. 1976) (citation

omitted); see also Plum Tree, Inc. v. Stockment, 488 F.2d 754, 756–57 &

n.2 (3d Cir. 1973); Bombin v. Sw. Airlines Co., 529 F. Supp. 3d 411, 417

(E.D. Pa. 2021). Generally, “[t]he § 1404(a) movant bears the burden of

persuasion.” McGraw-Hill, 909 F.3d at 57; see also Plum Tree, 488 F.2d

at 756; Kisko, 408 F. Supp. at 986. But see Atl. Marine, 571 U.S. at 63,


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67 (holding that, once a valid forum-selection clause is found to apply, it

is the plaintiff, as the party defying the forum-selection clause, who bears

the burden of showing that public-interest factors overwhelmingly

disfavor a transfer).

     “A motion to transfer venue is appropriate where, as here, a party

invokes a forum-selection clause.” Bombin, 529 F. Supp. 3d at 416.

“Ordinarily, in a case not involving a forum selection clause, a court

evaluates a § 1404(a) motion using such factors as the convenience of the

parties and the relevant public interests.” Mathias v. Caterpillar, Inc.,

203 F. Supp. 3d 57, 574 (E.D. Pa. 2016); see also Atl. Marine, 571 U.S. at

62, 63 n.6 (listing private and public interest factors). “In Atlantic

Marine, however, the Supreme Court explained that the presence of a

forum-selection clause alters the traditional analysis in several respects.”

Reading Health Sys. v. Bear Stearns & Co., 900 F.3d 87, 96 (3d Cir. 2018);

McGraw-Hill, 909 F.3d at 57.

         In the face of a valid forum selection clause, a district
         court modifies its analysis in three ways. First, no
         weight is given to the plaintiff ’s choice of forum.
         Second, the court does not consider arguments about
         the parties’ private interests. Instead, “a district court
         may consider arguments about public-interest factors
         only.” Third, “when a party bound by a forum-selection
         clause flouts its contractual obligation and files suit in


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         a different forum, a § 1404(a) transfer of venue will not
         carry with it the original venue’s choice-of-law rules—
         a factor that in some circumstances may affect public-
         interest considerations.

McGraw-Hill, 909 F.3d at 57 (quoting Atl. Marine, 571 U.S. at 63–64)

(citations omitted); see also Reading Health, 900 F.3d at 96. “As a result,

when a court is confronted with a valid forum-selection clause that covers

the dispute, it must consider only the public-interest factors and ‘deem

the private-interest factors to weigh entirely in favor of the preselected

forum.’” Reading Health, 900 F.3d at 96–97 (quoting Atl. Marine, 571

U.S. at 64); see also Atl. Marine, 571 U.S. at 64 (“As a consequence, a

district court may consider arguments about public-interest factors

only.”). “[B]ecause the public interest factors—the only factors that

remain to be balanced—‘will rarely defeat a transfer motion, the practical

result is that forum-selection clauses should control except in unusual

cases.’” McGraw-Hill, 909 F.3d at 57–58 (quoting Atl. Marine, 571 U.S. at

64); see also Atl. Marine, 571 U.S. at 63, 67 (holding that, once a valid

forum-selection clause is found to apply, it is the plaintiff, as the party

defying the forum-selection clause, who bears the burden of showing that

public-interest factors overwhelmingly disfavor a transfer).

     Under the Altantic Marine framework, “courts conduct a two-part


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analysis when deciding whether to enforce a forum-selection clause.”

Mathias, 203 F. Supp. 3d at 575 & n.3; see also Silvis v. Ambit Energy,

L.P., 90 F. Supp. 3d 393, 397 & n.3 (E.D. Pa. 2015). “First, a district court

must determine whether the forum-selection clause is valid and

enforceable.” Bombin, 529 F. Supp. 3d at 416; Mathias, 203 F. Supp. 3d

at 575; Silvis, 90 F. Supp. 3d at 397. “Second, a court must consider

whether, pursuant to § 1404(a), ‘extraordinary circumstances’ militate

against enforcing the forum-selection clause.” Bombin, 529 F. Supp. 3d at

416–17; Mathias, 203 F. Supp. 3d at 575; Silvis, 90 F. Supp. 3d at 397.

     Here, the plaintiff ’s opposition is focused on the first step of this

analysis, arguing that its claims fall outside the scope of the BSA forum-

selection clause. Although federal law controls the second step of the

analysis—whether to enforce a forum-selection clause—it is state

contract law that governs interpretation of a forum-selection clause’s

scope. See McGraw-Hill, 909 F.3d at 58; Reading Health, 900 F.3d at 98

& n.48; Collins, 874 F.3d at 180–82; Bombin, 529 F. Supp. 3d at 417. 5


     5 We note that there appears to be a circuit split on this point. While

the Third Circuit has held that the scope of a forum-selection clause is
interpreted using state contract law, the Ninth Circuit has adopted the
opposite position. See, e.g., Sun v. Adv. China Healthcare, Inc., 901 F.3d
                                                  (continued on next page)

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     “Parties are generally free to specify which law governs a contract’s

interpretation, and may agree to modify the choice specified in the

contract.” McGraw-Hill, 909 F.3d at 58. The BSA forum-selection clause

includes a choice of law provision specifying the laws of the State of New

York. BSA 3. Guy Carpenter contends that New York state contract law

controls the interpretation of the forum-selection clause. See Supp. Br.

13–14, Doc. 11; see also Reply Br. 9, 14 n.4 (relying on New York

substantive law), Doc. 14. HARIE does not expressly concede this point,

but merely assumes arguendo that New York state contract law applies.

See Opp’n Br. 19–20, Doc. 12. HARIE does not identify any conflict

between New York state law and Pennsylvania state law that would

affect interpretation of the forum-selection clause at issue here, and

HARIE does not affirmatively argue that New York state law is

inapplicable. 6 To determine which state law governs interpretation of the


1081, 1086 (9th Cir. 2018) (“We apply federal contract law to interpret
the scope of a forum-selection clause even in diversity actions . . . .”).
      6 We note that, in support of its argument regarding interpretation

of the scope of the BSA forum-selection clause, HARIE relies on several
pre-Atlantic Marine cases from various jurisdictions, most of which do
not indicate what substantive body of law was applied in interpreting the
forum-selection clause in each case. See Mozingo v. Trend Pers. Servs., 51
Empl. Benefits Cas. (BL) 2486, 2011 WL 2038716 (D. Kan. May 25, 2011)
                                                 (continued on next page)

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(relying on general contract principles to interpret forum-selection clause
designating a certain Texas state court as exclusive forum for “any
dispute relating to or arising out of” employment agreement, and finding
under facts presented that a Kansas action asserting ERISA claims and
breach of an employment separation agreement executed upon
termination was outside the scope of that clause); Jayson Co. v. Vertical
Mkt. Software, No. 05-3883, 2006 WL 1374039 (D.N.J. May 18, 2006)
(relying on general contract principles to interpret forum-selection clause
designating certain Florida state or federal courts as exclusive forums for
action “arising from or incident to” a licensing agreement for standard
software, and finding under facts presented that a New Jersey action for
breach of a separate contract to provide custom software modifications
was outside scope of that clause); Nat’l Union Fire Ins. Co. of Pittsburgh
v. United Transp. Union Ins. Ass’n, No. H-05-4159, 2006 WL 456267 (S.D.
Tex. Feb. 23, 2006) (relying on general contract principles to interpret
forum-selection clause designating Ohio state courts as exclusive forum
for claims “in respect of” undertaking agreement between defendant-
insured and a non-party corporate director of the defendant, and finding
under facts presented that a Texas action brought by insurer for
reimbursement of legal fees advanced to the non-party director pursuant
to a separate liability insurance policy issued by plaintiff-insurer to
defendant-insured was outside the scope of that clause); Toner v. Miller,
No. 03-3498, 2003 WL 22358446 (E.D. Pa. Sept. 8, 2003) (relying on
general contract principles to interpret a forum-selection clause
designating Ohio state or federal courts as exclusive forums for action
“arising out of or relating to” a confidentiality agreement, and finding
under facts presented that a Pennsylvania action for breach of a separate
management contract was outside scope of that clause).
      The plaintiff also cites a Third Circuit case, Cottman Transmission
Sys. v. Martino, 36 F.3d 291 (3d Cir. 1994), which did not involve
interpretation of the scope of a forum-selection clause because the
contract at issue in Cottman did not include one—the only mention of a
forum-selection clause was in the opinion’s fact summary, which noted
that this case had been consolidated in the trial court with other similar
cases involving contracts that did include a forum-selection clause.
      The plaintiff cites a case from a federal district court seated within
                                                  (continued on next page)

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scope of the BSA forum-selection clause, we look to the choice of law rules

of Pennsylvania—the state in which this court sits. See Klaxon Co. v.

Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941); Collins, 874 F.3d at 183.

Pennsylvania courts generally give effect to contractual choice of law

provisions. See Gay v. CreditInform, 511 F.3d 369, 389–90 (3d Cir. 2007);

Smith v. Commonwealth Nat’l Bank, 557 A.2d 775, 777 (Pa. Super. Ct.

1989). Thus, in the absence of any argument to the contrary, we will

honor the parties’ choice of law selection in the BSA and apply New York

law to interpret the scope of its forum-selection clause. To the extent we

have found it persuasive and not contrary to controlling New York law,

however, we rely as well on federal case law applying general principles


the Ninth Circuit, Sterling Int’l, Inc. v. Virtools Canada, Inc., No. CV-06-
0059, 2006 WL 2035515 (E.D. Wash. July 18, 2006), which applied federal
contract law to interpret the scope of a forum-selection clause between a
Washington State company and a Canadian company, making it
inapposite here. See supra note 5.
       Finally, the plaintiff cites one post-Atlantic Marine decision by the
Third Circuit, Reading Health, in which the parties to an action brought
in a Pennsylvania federal court were found to have waived any choice-of-
law issue by failing to address it in their briefs and by relying on cases
applying different bodies of law to interpret the scope of a forum-selection
clause designating a certain New York federal district court as the
exclusive forum for an action “arising out of” a broker-dealer agreement.
Notwithstanding the noncommittal resolution of this issue in Reading
Health, we have considered the case as persuasive authority and address
it in our analysis below.

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of contract law to interpret forum-selection clauses. See Martinez v.

Bloomberg LP, 740 F.3d 211, 223 (2d Cir. 2014) (“This Court has . . . at

times cited federal law in interpreting a forum selection clause, even

where the contract at issue also contained a choice-of-law clause.”); Bent

v. Zounds Hearing Franchising, LLC, No. 15 Civ. 6555, 2015 WL 7721838,

at *4 n.3 (S.D.N.Y. Nov. 30, 2015) (“[W]here the parties do not urge the

application of any specific element of the contractually chosen body of law

to govern the interpretation of the forum-selection clause, it is

appropriate for the court not to rely on any distinctive features of the

selected law and instead to apply general contract law principles and

federal precedent to discern the meaning and scope of the forum clause.”)

(brackets and internal quotation marks omitted); see also Reyes v. City

of New York, No. 23-CV-6369, 2023 WL 7212192, at *4 (S.D.N.Y. Nov. 2,

2023), appeal filed, No. 23-7640 (2d Cir. Nov. 3, 2023); Cox v. Microsoft

Corp., 737 N.Y.S.2d 1, 2 (N.Y. App. Div. 2002); Lenox Hill Radiology v.

N.Y. Cent. Mut. Fire Ins. Co., 863 N.Y.S.2d 332, 337 (N.Y. Dist. Ct. 2008).

     “A court considering the interpretation of a forum selection clause

applies principles of contract law to determine the scope of the clause. In

other words, it decides whether the claims and parties involved in the


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suit are subject to the clause.” Collins, 874 F.3d at 180 (citation and

internal quotation marks omitted). “We interpret a forum selection clause

in accordance with its plain meaning.” McGraw-Hill, 909 F.3d at 67; see

also Couvertier ex rel. Couvertier v. Concourse Rehab. & Nursing, Inc.,

985 N.Y.S.2d 683, 684 (N.Y. App. Div. 2014) (“[I]t is the language of the

forum selection clause itself that determines which claims fall within its

scope.”).

      The gist of HARIE’s complaint is that Guy Carpenter deducted

$101,646.20 from the fiduciary account it held on behalf of HARIE

pursuant to the Amended RIA and paid that amount over to itself,

without authorization. HARIE asserts various contract, tort, and

equitable causes of action arising out of this conduct by Guy Carpenter.

In response, Guy Carpenter contends that it was authorized to deduct

this amount and pay it over to itself under the terms of the BSA, which

provided that some portion of the BSA Retention would be forfeited to

Guy Carpenter in the event that HARIE terminated Guy Carpenter as

its broker of record with respect to reinsurance treaties in force or upon

renewal. Guy Carpenter contends that this civil action falls within the

scope of the BSA forum-selection clause because this defense “rais[es]


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issues regarding the construction, meaning or enforcement of the terms

of” the BSA. On the other hand, HARIE contends that the action falls

outside the scope of the BSA forum-selection clause because its claims are

based solely on the Amended RIA, not the BSA.

     “The answer to the question whether a ‘defense’ based on a contract

that contains a forum selection clause implicates that clause depends on

the language of that clause.” John Wyeth & Bro. Ltd. v. CIGNA Int’l

Corp., 119 F.3d 1070, 1076 (3d Cir. 1997); Reading Health, 900 F.3d at

100 (quoting Wyeth, 119 F.3d at 1076). The forum-selection clause in the

BSA provides that “any disputes raising issues regarding the

construction, meaning or enforcement of the terms of” the BSA must be

litigated in the New York state trial court situated in Manhattan, New

York, or the United States District Court for the Southern District of New

York. The term “dispute” has been construed as being broader than the

term “claim.” McGraw-Hill, 909 F.3d at 67; Wyeth, 119 F.3d at 1074; see

also Stein v. United Wind, Inc., No. 602032-20, 2021 WL 479878, at *2

(N.Y. Sup. Ct. Feb. 8, 2021) (broadly construing scope of forum-selection

clause using phrase “any dispute in connection with” written instrument

to include “all actions regarding [the parties’] relationship”). Indeed, the


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Third Circuit has expressly held that “the word ‘disputes’ allows the

contract to be implicated by way of an affirmative defense.” McGraw-Hill,

909 F.3d at 67 (considering transfer of a case from Pennsylvania federal

court to New York federal court pursuant to forum-selection clause); see

also CleanSpark, Inc. v. Discover Growth Fund, LLC, 485 F. Supp. 3d 494,

502 (S.D.N.Y. 2020) (applying New York law and noting that “broad

forum selection clauses can apply to claims where the contract is relevant

as a defense” and finding that forum-selection clause providing that “any

dispute . . . in connection” with a contract was such a clause). Moreover,

the term “regarding” has been construed as being broader than the

phrases “arising under,” “arising out of,” or “arising in relation to.”

McGraw-Hill, 909 F.3d at 68; see also Flanagan v. Prudential-Bache Sec.,

Inc., 495 N.E.2d 345, 350 (N.Y. 1986) (holding that “respecting,”

“regarding,” or “concerning” have broader connotation than “arising out

of”). The term “regarding” has been found to “be equated with ‘relates to,’

a phrase . . . define[d] as having some ‘logical or causal connection.’”

McGraw-Hill, 909 F.3d at 68.7


     7 The plaintiff has relied heavily on the Third Circuit’s decision in

Reading Health, which also involved consideration of a transfer from
                                            (continued on next page)

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      Case 3:23-cv-00996-JFS Document 15 Filed 03/25/24 Page 21 of 27


     Here, the dispute between HARIE and Guy Carpenter have a clear

logical and causal connection to the BSA. The core of the parties’ dispute

is whether Guy Carpenter’s deduction and retention of funds from

HARIE’s fiduciary account was authorized. HARIE argues that it was not

authorized to do so under the Amended RIA or the BSA. Guy Carpenter

argues that it was authorized to do so under the terms of the BSA

concerning forfeiture of the BSA Retention, a provision it claims was

triggered by Guy Carpenter’s termination as broker of record with

respect to renewal of reinsurance treaties for the 2023 calendar year.

Although the plaintiff ’s claims are not themselves based on the terms of

the BSA, to ultimately determine Guy Carpenter’s liability, the court

would have to consider the construction and meaning of the BSA with


Pennsylvania federal court to New York federal court pursuant to a
forum-selection clause. In Reading Health, the Third Circuit “rejected the
argument that a contractual defense alone is sufficient to bring the
dispute within the scope of” a forum-selection clause that “encompasses
only disputes ‘arising out of ’ the contract.” Reading Health, 900 F.3d at
100. But Reading Health is inapposite on this point, because the
language of the forum-selection clause at issue in Reading Health was
substantially narrower than the language of the forum-selection clause
at issue in this case. See Wyeth, 119 F.3d at 1075 (“Drawing analogy to
other cases is useful only to the extent those other cases address contract
language that is the same or substantially similar to that at issue.”); see
also Reading Health, 900 F.3d at 98 (quoting Wyeth, 119 F.3d at 1075).
McGraw-Hill provides the better analogue.

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      Case 3:23-cv-00996-JFS Document 15 Filed 03/25/24 Page 22 of 27


respect to the BSA Retention. Thus, it is clear that the “dispute” between

the parties indeed “rais[es] issues regarding the construction, meaning

or enforcement of the terms of” the BSA.

     Accordingly, we find that this diversity action is a “dispute[] raising

issues regarding the construction, meaning or enforcement of the terms

of” the BSA, and thus, this action falls within the scope of the BSA’s

forum-selection clause. In the absence of any other challenge to the

validity or enforceability of the forum-selection clause, we proceed then

to the second step of the Atlantic Marine analysis.

     Having found that a valid forum-selection clause covers this

dispute, we deem the § 1404(a) private-interest factors to weigh entirely

in favor of transfer to the Southern District of New York. See Atl. Marine,

571 U.S. at 64; McGraw-Hill, 909 F.3d at 57–58; Reading Health, 900

F.3d at 96–97. We turn then to consider the public-interest factors. See

Atl. Marine, 571 U.S. at 62 n.6 (“Public interest factors may include the

administrative difficulties flowing from court congestion; the local

interest in having localized controversies decided at home; and the

interest in having the trial of a diversity case in a forum that is at home

with the law.”) (brackets and internal quotation marks omitted). As the


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      Case 3:23-cv-00996-JFS Document 15 Filed 03/25/24 Page 23 of 27


Supreme Court has underscored, “a valid forum-selection clause should

be given controlling weight in all but the most exceptional cases.” Id. at

63 (brackets omitted). Thus, “as the party defying the forum-selection

clause, the plaintiff bears the burden of establishing that transfer to the

forum for which the parties bargained is unwarranted.” Id. at 63; see also

id. at 67 (holding that district court had improperly placed the burden on

the defendant to prove that transfer to the parties’ contractually

preselected forum was appropriate).

     The defendant points to statistics indicating that civil cases in the

Southern District of New York have a somewhat shorter median time

from filing to disposition than in the Middle District of Pennsylvania—

about six months’ difference—but we find little difference in the overall

caseloads of the two courts. See Supp. Br. 11 & n.8; Def.’s Ex. 5, Doc. 11-

1. The plaintiff has not addressed this factor in its brief. We find that

court congestion is not a significant concern in either forum, so this factor

is neutral.

     The plaintiff argues that the local interest factor favors a

Pennsylvania forum, noting that HARIE exclusively insures municipal

entities within Pennsylvania. See Opp’n Br. 21 (citing City of


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         Case 3:23-cv-00996-JFS Document 15 Filed 03/25/24 Page 24 of 27


Philadelphia v. U.S. Gypsum Co., No. 3240, 1991 WL 1011059, at *25

(Philadelphia Cnty. (Pa.) C.C.P. Aug. 22, 1991) (noting that Pennsylvania

public policy favors bringing an action against a political subdivision in

the county where it is located)). But HARIE itself is not a municipality;

its customer-members are municipalities. Moreover, as the defendant

argues in its supporting brief, see Supp. Br. 19–20, the central facts of

this case occurred in New York: Guy Carpenter’s offices are located there;

the fiduciary account was maintained there; the allegedly improper

withdrawal from that account occurred there; and the account itself is

governed by New York reinsurance intermediary regulations. 8 See Dariz

v. Republic Airline Inc., 377 F. Supp. 3d 499, 505 (E.D. Pa. 2019). We find

that, on balance, the local interest factor slightly favors transfer to a New

York forum.

     The defendant notes that the BSA is governed by New York law, as

we have found above as well. See Supp. Br. 19. The plaintiff has not

addressed this factor in its brief. We find that the interest in having trial


     8   See, e.g., N.Y. Comp. Codes R. & Regs. tit. 11, § 32.3(3) (providing
that a reinsurance intermediary, serving as a fiduciary, is permitted to
withdraw the intermediary’s commissions from the premium and loss
account of the reinsured).

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      Case 3:23-cv-00996-JFS Document 15 Filed 03/25/24 Page 25 of 27


of a diversity case in a forum that matches the law that governs the case

clearly favors transfer to a New York forum.

      The plaintiff has failed to establish that these public-interest

factors overwhelmingly disfavor a transfer.

      Accordingly, under the circumstances presented, we find that,

pursuant to the BSA forum-selection clause, a transfer of this action to

the United States District Court for the Southern District of New York is

warranted. Therefore, to the extent it seeks the transfer of this action

under 28 U.S.C. § 1404(a), the defendant’s motion will be granted.

IV.   REQUEST FOR AWARD OF ATTORNEY FEES

      In its motion papers, the defendant has also requested that it be

awarded reasonable attorney fees as damages for breach of the BSA

forum-selection clause. See Supp. Br. 20–21. The plaintiff opposes this

request. See Opp’n Br. 21.

      Guy Carpenter’s claim for attorney fees is not a request for

sanctions under the federal rules. See, e.g., Fed. R. Civ. P. 37(a)(5). Nor is

it a claim for fees as a component of costs awarded under a federal cost-

shifting statute. See, e.g., 42 U.S.C. § 1988(b). Rather, Guy Carpenter’s

claim is a substantive state-law damages claim for breach of contract


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         Case 3:23-cv-00996-JFS Document 15 Filed 03/25/24 Page 26 of 27


based on a forum-selection clause, in which attorney fees are an element

of damages. See Fed. R. Civ. P. 54(d)(2)(A) (“A claim for attorney’s fees

and related nontaxable expenses must be made by motion unless the

substantive law requires those fees to be proved at trial as an element of

damages.”); Grand Union Co. v. Cord Meyer Dev. Co., 761 F.2d 141, 147

(2d Cir. 1985) (“The awarding of attorneys’ fees in diversity cases such as

this is governed by state law . . . .”). Such a claim must be brought by

counterclaim or by separate action for breach of contract. See, e.g.,

Wormser Corp. v. L’Oréal USA, Inc., 205 A.D.3d 496, 497 (N.Y. App. Div.

2022) (reversing dismissal of civil complaint that asserted breach of

contract based on forum-selection clause); Indosuez Int’l Fin., B.V. v. Nat’l

Rsrv. Bank, 758 N.Y.S.2d 308, 311 (N.Y. App. Div. 2003) (affirming denial

of motion to dismiss civil complaint that asserted breach of contract based

on forum-selection clause); see also John Wiley & Sons, Inc. v. Book Dog

Books, LLC, No. 13 Civ. 816, 2015 WL 4154112, at *10 (S.D.N.Y. July 10,

2015) (recognizing “a split in case law as to whether a party can recover

attorney’s fees for breach of a forum selection clause under New York

law”).

     Accordingly, to the extent it requests an award of attorney fees as


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      Case 3:23-cv-00996-JFS Document 15 Filed 03/25/24 Page 27 of 27


damages for breach of the BSA forum-selection clause, the defendant’s

motion will be denied.

V.   CONCLUSION

     For the foregoing reasons, the defendant’s motion to dismiss or

transfer this diversity action pursuant to a contractual forum-selection

clause (Doc. 11) will be granted in part and denied in part. The motion

will be granted with respect to the defendant’s request that this action be

transferred to the United States District Court for the Southern District

of New York pursuant to 28 U.S.C. § 1404(a). The motion will be denied

with respect to the defendant’s requests that this action be dismissed on

forum non conveniens grounds and that the defendant be awarded

attorney fees as damages for the plaintiff ’s breach of the BSA forum-

selection clause.

     An appropriate order follows.


Dated: March 25, 2024               s/Joseph F. Saporito, Jr.
                                    JOSEPH F. SAPORITO, JR.
                                    Chief United States Magistrate Judge


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