In a diversity action based upon breach of a facultative reinsurance certificate, a New Hampshire federal court recently held that England’s six-year statute of limitations governed a cedent’s contract claim, rejecting the foreign reinsurer’s argument that the claim was time-barred under the shorter period afforded by New Hampshire law.

The lawsuit arose from a loss paid by the cedent in 2009 under a property insurance policy. The reinsurer rejected the cedent’s billing on, among other grounds, that the reinsurer’s share had not been allocated properly. After the cedent brought suit, the reinsurer moved for judgment on the pleadings, arguing that New Hampshire’s three-year statute of limitations for breach of contract claims barred the cedent’s recovery. The cedent opposed the motion on the basis that England’s limitations period governed. Applying New Hampshire choice of law rules, the court first found that the statute of limitations issue was substantive, and not procedural, because neither party is a “resident” of the state as defined by New Hampshire law, and the cause of action arose outside the forum. Thus, instead of simply applying New Hampshire’s limitations period for contract claims – which occurs when statute of limitations is deemed procedural in nature – the court found it was required to address the substantive conflict between English and New Hampshire law. Applying factors articulated by the New Hampshire Supreme Court, the court held that England’s six-year statute of limitations controlled because the certificate was negotiated and entered into in London, governed by English law, and the application of England’s statute of limitations would not complicate the dispute or extinguish a statutory cause of action under New Hampshire law. As both parties conceded that the subject claim would be timely under English law, the court ruled in the cedent’s favor, denying the reinsurer’s motion for judgment on the pleadings or, in the alternative, summary judgment. TIG Insurance Company v. EIFlow Insurance Limited, No. 1:14-cv-00459 (USDC D.N.H. Sept. 29, 2015).