Auto-Owners Ins. Co. v. G&D Constr. Grp., Inc.

• Docket Number: CIVIL ACTION FILE No. 1:21-CV-00739-SCJ
• Decision Date: 18 January 2022
• Citation: 588 F.Supp.3d 1328
• Parties: AUTO-OWNERS INSURANCE COMPANY, Plaintiff, v. G&D CONSTRUCTION GROUP, INC. and Metcon, Inc., Defendants.
• Court: U.S. District Court — Northern District of Georgia

588 F.Supp.3d 1328

AUTO-OWNERS INSURANCE COMPANY, Plaintiff,

v.G&D CONSTRUCTION GROUP, INC. and Metcon, Inc., Defendants.

CIVIL ACTION FILE No. 1:21-CV-00739-SCJ

United States District Court, N.D. Georgia, Atlanta Division.

Signed January 18, 2022

Kim M. Jackson, Bovis, Kyle, Burch & Medlin, LLC, Atlanta, GA, Matthew Allen Lawson Anderson, Pro Hac Vice, Bovis, Kyle, Burch, & Medlin, LLC, Greensboro, NC, for Plaintiff.

Benjamin Harold Sawyer, Eric L. Hurst, Hurst Sawyer & Toler LLC, Atlanta, GA, for DefendantMetcon, Inc.

ORDER

STEVE C. JONES, UNITED STATES DISTRICT JUDGE

This matter appears before the Court on the Motion to Dismiss filed by DefendantMetcon, Inc.("Metcon").¹Doc. No. [17].²PlaintiffAuto-Owners Insurance Company("Auto-Owners") responded.Doc. No. [19].Metcon did not reply.The Court rules as follows.

I.BACKGROUND

Auto-Owners brings this declaratory judgment action against Metcon and G&D to declare whether Auto-Owners owes certain insurance coverage obligations to G&D, including the obligations to defend or indemnify G&D, and any obligations to Metcon in relation to the claims asserted by Metcon in the lawsuit styled Metcon, Inc. v. G&D Construction Group, Inc., in the Superior Court of Gwinnett County, State of Georgia, Civil ActionNo. 21-A-00102-3("Underlying Lawsuit").Doc. No. [1]¶ 1.Auto-Owners is not a party in the Underlying Lawsuit.Doc. No. [17-1], 1–2.The Court draws facts primarily from the Complaint (Doc. No. [1]), accepting all well-pleaded facts as true and viewing them in the light most favorable to Auto-Owners.Am. United Life Ins. Co. v. Martinez, 480 F.3d 1043, 1056(11th Cir.2007).But the Court may ignore legal conclusions in the Complaint and consider matters of which it can take judicial notice.Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322–23, 127 S.Ct. 2499, 168 L.Ed.2d 179(2007).

In December of 2013, Metcon was hired by NP 301, LLC ("NP 301"), a Georgia company, to act as the general contractor for the construction of a hotel in Lumberton, North Carolina (the "Project").Doc. No. [1]¶¶ 14–15.Metcon later retained G&D, a Georgia corporation with a principal place of business in Lawrenceville, Georgia, to perform certain exterior insulation finishing system ("EIFS") construction work on the Project.Id.¶¶ 3, 16.Meanwhile, Auto-Owners had issued certain commercial general liability and umbrella insurance policies to G&D as the named insured (the "Policies").Id.¶¶ 46–53.

In May of 2020, NP 301 sued Metcon in the Superior Court of Fulton County, Georgia, Civil ActionNo. 2020CV336620(the "NP 301 Lawsuit").Id.¶¶ 17–18; Doc. No. [1-1].The NP 301 Lawsuit alleges claims against Metcon related to the construction work performed on the Project, including claims for damages arising from the allegedly improper installation of the EIFS, which allegedly resulted in water intrusion to the building.Doc. No. [1]¶¶ 19–25.The NP 301 Lawsuit was stayed, and the matter submitted to arbitration.Id.¶ 26.

On January 7, 2021, Metcon filed the Underlying Lawsuit.Id.¶¶ 1, 28–38; Doc. No. [1-2].In the Underlying Lawsuit, Metcon seeks damages from G&D related to G&D's work on the Project, asserting claims for breach of contract, breach of warranties, negligence, and indemnity.Doc. Nos. [1]¶¶ 33–38;[1-2].In addition to monetary damages, Metcon's complaint in the Underlying Lawsuit seeks an order requiring G&D to join the arbitration proceedings arising from the NP 301 Lawsuit as a partydefendant.Doc. Nos. [1]¶ 38;[1-2], 12 at ¶ F.

Auto-Owners filed this declaratory judgment action on February 22, 2021, seeking a determination from this Court that it owes no insurance coverage obligations under the Policies to either G&D or Metcon in connection with the claims asserted by Metcon in the Underlying Lawsuit.Doc. No. [1]¶ 1.Auto-Owners states that this Court has diversity jurisdiction over this action because Auto-Owners is a citizen of a different state than Metcon and G&D, and the amount in controversy exceeds $75,000.00.Id.¶¶ 10–12.³Auto-Owners states that the Court also has jurisdiction of this declaratory judgment action pursuant to 28 U.S.C. § 2201. Id.¶ 13.Further, Auto-Owners alleges that Metcon is subject to personal jurisdiction and venue in this Court because Metcon "entered into contracts in Georgia related to this dispute and submitted itself to Georgia jurisdiction by filing the Underlying Lawsuit in this District."Id.¶ 9.

Metcon moved to dismiss under Rules 12(b)(2)and12(b)(6).Doc. No. [17].Plaintiff responded in opposition (Doc. No. [21]), and Metcon did not reply.The Court will discuss the parties’ arguments in greater depth below.This matter is now ripe for review, and the Court rules as follows.

II.LEGAL STANDARDS

A.Federal Rule of Civil Procedure 12(b)(2)

"A plaintiff's complaint is subject to dismissal if there is a lack of personal jurisdiction over the defendant."Rothschild & Co. Continuation Holdings A.G. v. Sklarov, 440 F. Supp. 3d 1385, 1389(N.D. Ga.2020)(citingFed. R. Civ. P. 12(b)(2) ).A plaintiff bears the initial burden of pleading sufficient facts to state a prima facie case of personal jurisdiction over a nonresident defendant.Diamond Crystal Brands, Inc. v. Food Movers Int'l, Inc., 593 F.3d 1249, 1274(11th Cir.2010).

A federal court sitting in diversity typically undertakes a two-step inquiry in determining whether personal jurisdiction exists: The exercise of jurisdiction must (1) be appropriate under the state long-arm statute and (2) not violate the Due Process Clause of the Fourteenth Amendment.United Techs. Corp. v. Mazer, 556 F.3d 1260, 1274(11th Cir.2009).However, "where neither the forum state's long-arm statute nor the due process minimum contacts analysis is satisfied, a court may exercise personal jurisdiction over a party if the party consents."Waite v. All Acquisition Corp., 901 F.3d 1307, 1312(11th Cir.2018).A litigant may give express or implied consent to the personal jurisdiction of a court.Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473 n.14, 105 S.Ct. 2174, 85 L.Ed.2d 528(1985);cf.Collett v. Olympus Med. Sys. Corp., 437 F. Supp. 3d 1272, 1279(M.D. Ga.2020)(discussing how a court should undertake a Due Process analysis when "an out-of-state defendant ... has not consented to suit there "(emphasis added)).

While a personal jurisdiction analysis under Georgia law generally requires application of Georgia's long-arm statute, Georgia courts have held that litigants can consent to personal jurisdiction and thereby waive the requirements of the state's long-arm statute.See, e.g., YP, LLC v. Ristich, 341 Ga. App. 381, 382, 801 S.E.2d 80, 81(2017)(stating that personal jurisdiction in that case was based not on Georgia's long-arm statute but instead on the defendant's waiver of personal jurisdiction);see alsoOFC Cap. v. Colonial Distribs., Inc., 285 Ga. App. 815, 818–19, 648 S.E.2d 140, 143(2007)(stating that "waivers of personal jurisdiction are expressly permitted" in Georgia).

A district court should rule on a motion to dismiss for lack of personal jurisdiction before ruling on a motion to dismiss for failure to state a claim.SeePosner v. Essex Ins. Co., 178 F.3d 1209, 1214 & n.6(11th Cir.1999)(considering a jurisdictional argument first because "[a]court without personal jurisdiction is powerless to take further action").

B.Federal Rule of Civil Procedure 12(b)(6)

A defendant may move to dismiss a complaint for failure to state a claim upon which relief may be granted.Fed. R. Civ. P. 12(b)(6).A complaint has failed to state a claim if the facts as pled, accepted as true, do not state a claim for relief that is plausible on its face.Ashcroft v. Iqbal, 556 U.S. 662, 687, 129 S.Ct. 1937, 173 L.Ed.2d 868(2009);Twombly, 550 U.S. at 561–62, 570, 127 S.Ct. 1955.Labels, conclusions, and formulaic recitations of the elements of the cause of action "will not do."Twombly, 550 U.S. at 555, 127 S.Ct. 1955.To state a plausible claim, a plaintiff need only plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."Iqbal, 556 U.S. at 678, 129 S.Ct. 1937."[W]hile notice pleading may not require that the pleader allege a specific fact to cover every element or allege with precision each element of a claim, it is still necessary that a complaint contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory."Fin. Sec. Assurance, Inc. v. Stephens, Inc., 500 F.3d 1276, 1282–83(11th Cir.2007)(quotations omitted).

III.ANALYSIS

The Court will first address Metcon's arguments that this case should be dismissed for lack of personal jurisdiction.

The Court will then turn to Metcon's arguments that the case should be dismissed for failure to state a claim.

A.This Court Has Personal Jurisdiction Over Metcon

Metcon contends that the Court does not have personal jurisdiction over Metcon because it: (1) does not have a principal place of business in Georgia and there is no other basis for general jurisdiction; (2) did not enter any contracts in Georgia, and thus there is no related basis for specific jurisdiction; and (3) did not consent to personal jurisdiction in this Court by filing the Underlying Lawsuit.See Doc. No. [17-1].Because the Court finds Metcon's filing of the Underlying Lawsuit disposes of this question, the Court focuses on that issue.⁴

Metcon argues that there is no specific jurisdiction here because this case does not arise out of or relate to any relevant conduct in or contact with Georgia.Seeid. at 4–5.For example, Metcon argues that because Auto-Owners is not a party in the Underlying Lawsuit, the Court should not find that this action filed by Auto-Owners arose out of or relates to the Underlying Lawsuit.Seeid. at 4–5, 10.Similarly, Metcon argues that consent to jurisdiction in...