Bouboulis v. Scottsdale Ins. Co.

• Decision Date: 16 March 2012
• Docket Number: Civil Action No. 1:10–cv–2972–JEC.
• Parties: Nikolaos BOUBOULIS, Plaintiff, v. SCOTTSDALE INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Northern District of Georgia

860 F.Supp.2d 1364

Nikolaos BOUBOULIS, Plaintiff,

v.SCOTTSDALE INSURANCE COMPANY, Defendant.

Civil Action No. 1:10–cv–2972–JEC.

United States District Court,

N.D. Georgia,

Atlanta Division.

March 16, 2012.

John R. Ulmer, Mitchell Douglas Benjamin, Billips & Benjamin, LLP, Atlanta, GA, for Plaintiff.

Peter A. Jacxsens, Jr., William Henry Major, III, Hawkins Parnell Thackston & Young, LLP, Atlanta, GA, for Defendant.

ORDER AND OPINION

JULIE E. CARNES, Chief Judge.

This case is presently before the Court on defendant's Motion for Judgment on the Pleadings [13]. The Court has reviewed the record and the arguments of the parties and, for the reasons set out below, concludes that defendant's Motion for Judgment on the Pleadings [13] should be GRANTED.

BACKGROUND

This case arose from defendant Scottsdale Insurance Company's refusal to pay damages for personal injuries sustained by plaintiff Nikolaos Bouboulis. In 2006, Metro Elevator Service entered into a year-long contract with DeKalb County to service, repair, and maintain the safety of DeKalb County's elevators (the “DeKalb County–Metro Elevator Contract”). (Am. Compl. [5] at ¶¶ 5–7.) Under this contract, Metro was required to provide liability insurance for all work it performed on the elevators, and this coverage had to be in effect before Metro could begin work. ( Id. at ¶¶ 9–11.) To this end, on May 9, 2006, Metro obtained the required liability insurance coverage with a policy issued by defendant (the “Scottsdale Policy”). ( Id. at ¶ 11; Scottsdale Policy, attached to Def.'s Mot. for J. on the Pleadings (“DMJP”) [13] at Common Policy Declarations, Item 2.)

Through the Scottsdale Policy, defendant agreed to insure Metro and DeKalb County, as the named insured and additional insured, respectively, for any damages that the latter were required to pay for bodily injury arising from Metro's work. (Am. Compl. [5] at ¶¶ 15–16, 25–26.) This agreement was supplemented by the incorporation of the DeKalb County–Metro Elevator Contract into the Scottsdale Policy, as an “Insured Contract,” wherein Metro agreed to accept responsibility and hold DeKalb County harmless for injuries to persons resulting from its work. ( Id. at ¶¶ 17, 21.) The Scottsdale Policy period, which ran from May 9, 2006–May 9, 2007, was to last for the entire length of the DeKalb County–Metro Elevator Contract. (Am. Compl. [5] at ¶¶ 6, 11, 14.)

After obtaining the Scottsdale Policy, defendant issued a certificate of insurance to DeKalb County, naming DeKalb County as the Certificate Holder (the “Certificate of Insurance”). ( Id. at ¶¶ 12, 13.) The Certificate of Insurance attested that Metro was covered by liability insurance for work performed during the policy period. ( Id.) DeKalb County relied on the Certificate of Insurance as proof of Metro's liability insurance coverage. ( Id. at ¶ 14.)

To finance the Scottsdale Policy, Metro entered into an agreement with Charleston Premium Finance Company (the “Premium Finance Agreement”). ( Id. at ¶ 38.) Under the Premium Finance Agreement, Charleston Premium Finance Company (“Charleston”) obtained a power-of-attorney that gave it the authority to act on behalf of Metro to cancel the Scottsdale Policy in the event Metro failed to pay its premiums. (Am. Compl. [5] at ¶ 39.)

Metro apparently ceased, early on, making any payments to Charleston, as the latter, through its power of attorney, notified defendant of the cancellation of the Scottsdale Policy on July 1, 2006. ( Id. at ¶ 41.) The notice of cancellation instructed the defendant that, as the insurer, it might be obligated to notify others that Metro was no longer covered by insurance. ( Id. at ¶ 42.) Neither Metro nor the defendant notified DeKalb County of the cancellation of the Scottsdale Policy, however, presumably leaving DeKalb County unaware that Metro was without liability insurance. ( Id. at ¶¶ 49–52.) As the issuer of the now invalid Certificate of Insurance, defendant likewise never attempted to correct DeKalb's reliance on the Certificate as verification of insurance. ( Id. at ¶¶ 53–54, 60–61.)

Metro thus continued to perform elevator work for DeKalb County, despite not carrying any insurance. (Am. Compl. [5] at ¶¶ 55–56.) Had DeKalb County been aware that the Scottsdale Policy and the Certificate of Insurance had been cancelled, it could have either demanded that Metro comply with the DeKalb County–Metro Elevator Contract or discharged Metro and replaced it with an elevator service company that carried insurance. ( Id. at ¶¶ 57–58.)

Metro's inability to make its insurance premium payments was only the beginning of what appears to have been irresponsible conduct on its part. On November 17, 2006, a negligently maintained elevator in the Callaway Building malfunctioned, seriously injuring its passenger, DeKalb County employee, and plaintiff, Nikolaos Bouboulis. ( Id. at ¶ 20.)

Plaintiff brought suit for these injuries against Metro and its president and chief executive officer, Clifford Ward, in the State Court of DeKalb County, Georgia. ( Id. at ¶ 27.) Clifford Ward vanished and all attempts to serve him with process have failed. ( Id. at ¶ 28.) With Ward's disappearance, Metro mounted no defense to plaintiff's lawsuit. Although given notice of the suit as the insurer, defendant declined to respond or provide representation on Metro's behalf, and a trial on damages resulted in a judgment of $680,000 against Metro. (Am. Compl. [5] at ¶¶ 30–34.)

Plaintiff thereafter submitted a demand to defendant Scottsdale Insurance Company for payment of the damages award. ( Id. at ¶ 35.) Defendant denied coverage and refused to pay plaintiff any portion of the damages awarded. ( Id. at ¶ 36.) Plaintiff then brought suit against defendant in the Superior Court of DeKalb County on August 20, 2010. (Compl.[1].) On September 17, 2010, the action was removed to this Court on the basis of diversity jurisdiction. (Notice of Removal [1].)

After removal, plaintiff submitted an Amended Complaint [5] asserting claims for breach of contract, promissory estoppel, negligence, and attorneys' fees. Defendant filed its Motion for Judgment on the Pleadings [13], seeking dismissal of plaintiff's complaint on all counts.

DISCUSSION

I. STANDARD FOR JUDGMENT ON THE PLEADINGS UNDER FEDERAL RULE OF CIVIL PROCEDURE 12(c)

After the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings. Fed. R. Civ. P. 12(c). “Judgment on the pleadings is appropriate when there are no material facts in dispute, and judgment may be rendered by considering the substance of the pleadings and any judicially noticed facts.” See Hawthorne v. Mac Adjustment, Inc., 140 F.3d 1367, 1370 (11th Cir.1998); Cunningham v. Dist. Att'ys Office for Escambia Cnty., 592 F.3d 1237, 1255 (11th Cir.2010). If matters outside the pleadings are “presented to and not excluded by the court, the motion must be treated as one for summary judgment under Federal Rule of Civil Procedure 56.” Fed. R. Civ. P. 12(d). Nonetheless, the Court may consider documents attached to a 12(c) motion without converting into a summary judgment motion if the documents are “(1) central to the plaintiff's claim; and (2) undisputed.” Horsley v. Feldt, 304 F.3d 1125, 1134 (11th Cir.2002).

A Rule 12(c) motion for judgment on the pleadings is governed by the same standards as a Rule 12(b)(6) motion to dismiss. Roma Outdoor Creations, Inc. v. City of Cumming, 558 F.Supp.2d 1283, 1284 (N.D.Ga.2008); Gentilello v. Rege, 627 F.3d 540, 543–44 (5th Cir.2010). Thus, a complaint must contain sufficient factual matter to state a claim for relief that is “plausible on its face.” Wooten v. Quicken Loans, Inc., 626 F.3d 1187, 1196 (11th Cir.2010) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009)). In applying this standard, factual allegations are accepted as true, but the same benefit is not afforded to bare “legal conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). When the plaintiff provides enough “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged,” the complaint is “plausible on its face.” Id. “Labels and conclusions” and a “formulaic recitation of the elements of a cause of action” are insufficient to raise a right to belief above the “speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).¹

II. BREACH OF CONTRACT CLAIM: STANDING TO SUE AS A THIRD–PARTY BENEFICIARY

Plaintiff brings his breach of contract claim as a purported third-party beneficiary under O.C.G.A. § 9–2–20(b). (Am. Compl. [5] at ¶ 67.) He alleges that defendant unlawfully failed to pay insurance benefits owed under the Scottsdale Policy because defendant's cancellation of the Scottsdale Policy was not effective as to DeKalb County, which was an “additional insured,” or as to plaintiff, as a purported third-party beneficiary of the Scottsdale Policy. ( Id. at ¶¶ 68–69.) Defendant's failure to cover plaintiff's damages award, as well as its failure to notify DeKalb County about the cancellation of Metro's policy, also breached the duty of good faith and fair dealing. ( Id. at ¶ 70.) Defendant challenges plaintiff's purported status as a third-party beneficiary and therefore his standing to assert this claim.

Standing is a jurisdictional threshold that requires the plaintiff to demonstrate, among other things, the invasion of some legally protected interest. AT & T Mobility, LLC v. NASCAR, Inc., 494 F.3d 1356, 1359–60 (11th Cir.2007). “The question of whether, for standing purposes, a non-party to a contract has a legally enforceable right is a matter of state law.” Id. at 1360.²

O.C.G.A. § 9–2–20(a) provides that, as a general rule, an action on a contract may be brought only by “the party in whom the legal interest in the contract is vested.” The statute does recognize,...