Clay v. Sun Insurance Office, Ltd.

No. 470. Argued April 28, 1964.—Decided May 18, 1964. 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 knowl- edge 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. 180-183. 319 F. 2d 505, reversed. Paschal C. Reese argued the cause and filed briefs for petitioner. Bert Cotton argued the cause for respondent. With him on the brief were Maurice Mound and Hortense Mound. James T. Carlisle, Assistant Attorney General of Florida, pro hac vice, by special leave of Court, argued the cause for the State of Florida, as amicus curiae, urging

Mr . Justic e 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 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 Illi- nois 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 major- ity 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,* 2 had construed that statute and resolved another local law question.3 On remand the Court of Appeals certified the two questions to the Flor- ida Supreme Court, which answered both questions in *Fla. Stat. Ann. (1960) §§95.03, 95.11 (3).