Dean Snyder Constr. Co. v. Travelers Prop. Cas. Co. of Am.

• Decision Date: 23 March 2016
• Docket Number: No. 4:15–cv–00154–JEG,4:15–cv–00154–JEG
• Citation: 173 F.Supp.3d 837
• Parties: Dean Snyder Construction Co., Plaintiff, v. Travelers Property Casualty Company of America, Defendant.
• Court: U.S. District Court — Southern District of Iowa

173 F.Supp.3d 837

Dean Snyder Construction Co., Plaintiff,

v.Travelers Property Casualty Company of America, Defendant.

No. 4:15–cv–00154–JEG

United States District Court, S.D. Iowa, Central Division.

Signed March 23, 2016

Danya Marie Keller, Stephen D. Marso, Whitfield & Eddy PLC, Des Moines, IA, for Plaintiff.

Brian E. Devilling, Michael L. Foran, Foran Glennon Palandech Ponzi & Rudloff PC, Chicago, IL, Clark I. Mitchell, Guy R. Cook, Grefe & Sidney PLC, Des Moines, IA, for Defendant.

ORDER

JAMES E. GRITZNER

, Senior Judge.

This matter comes before the Court on Motion by Defendant Travelers Property Casualty Company of America (Travelers) to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6)

for failure to state a claim. Plaintiff Dean Snyder Construction Co. (Dean Snyder) resists. The Court held a hearing on the motion on November 5, 2015. Attorneys Steve Marso and Danya Keller appeared for the Plaintiff and attorneys Michael Foran and Clark Mitchell appeared for Travelers. The matter is fully submitted and ready for disposition.

I. BACKGROUND

The City of Des Moines hired Dean Snyder as general contractor to build an aircraft maintenance facility at Des Moines International Airport in 2008 (the Project). Atlantic Steel Erectors, Ltd. (Atlantic Steel) was one of Dean Snyder's subcontractors on the Project. Travelers issued a commercial insurance policy (the Policy) for the Project that covered as “insureds” the City, Dean Snyder, Atlantic Steel, and others. Travelers received the required premium payments for issuing the Policy.

On June 26, 2008, a windstorm caused damage to the Project. Both Dean Snyder's and Atlantic Steel's damage and loss claims were covered by the Policy and both parties timely notified Travelers and made timely claims against the Policy for the losses and damages. After investigating Dean Snyder's and Atlantic Steel's claims, Travelers paid some of the claims and rejected other claims. Dean Snyder entered into a second contract with Atlantic Steel to rebuild and finish the structure damaged by the windstorm.

On July 19, 2013, five years after the windstorm, Atlantic Steel filed a lawsuit in Iowa District Court for Polk County asserting claims against Dean Snyder, Travelers, First Whitney Bank & Trust, the U.S. Treasury Department, and the Brown Winnick law firm, to recover, inter alia, unpaid damages and losses Atlantic Steel sustained as a result of the rebuild contract, Atlantic Steel Erectors, Ltd. v. Dean Snyder Constr. Co. et al., Case No. LACL128211 (the Atlantic Steel Lawsuit).

The state district court ordered arbitration of Atlantic Steel's claims against Dean Snyder and stayed the lawsuit pending completion of arbitration. Neither Travelers nor the other defendants were ordered to arbitrate.

On May 8, 2014, the arbitrator issued his decision in favor of Atlantic Steel and against Dean Snyder and awarded Atlantic Steel $144,235. On August 11, 2014, the state district court confirmed the arbitration decision and issued judgment on the award. On February 11, 2015, a satisfaction of judgment was entered and Atlantic Steel filed a dismissal without prejudice of its claims against the defendants. Atlantic Steel did not further pursue its claims against Travelers. Dean Snyder demanded from Travelers a portion of the amount that Dean Snyder paid Atlantic Steel pursuant to the state court judgment. Travelers refused to pay.

Dean Snyder then filed this action against Travelers in Iowa District Court for Polk County on April 8, 2015. Travelers was served on April 20, 2015, and timely removed the case on May 15, 2015.

On June 1, 2015, Dean Snyder filed an amended complaint and attached thereto were: (1) the relevant provisions of the Policy; (2) the arbitrators' decision and award (the arbitration award); (3) the state district court's order confirming the arbitration award; (4) the satisfaction of judgment filed in Atlantic Steel Lawsuit; (5) Atlantic Steel's dismissal without prejudice of the Atlantic Steel Lawsuit; and (6) the original petition in the present case. Dean Snyder asserted claims for breach of contract, indemnity and/or contribution, subrogation, and unjust enrichment

Travelers' filed this motion to dismiss¹ pursuant to Federal Rule of Civil Procedure 12(b)(6)

arguing the plain language of the insurance policy bars the present action; this case involves a property policy, not a third party liability policy; and Dean Snyder's unjust enrichment claim must be dismissed because under Iowa law, where there is an express contract, a different contract will not be implied.

II. DISCUSSION

A. Jurisdiction

Dean Snyder filed this case against Travelers in Iowa District Court for Polk County on April 8, 2015, asserting state law claims. Dean Snyder served Travelers with the petition and original notice on April 20, 2015 Travelers timely removed the case on May 15, 2015, see 28 U.S.C. § 1446(b)

, based upon diversity of citizenship jurisdiction pursuant to 28 U.S.C. § 1332. Dean Snyder is an Iowa Corporation with its principal place of business in Clear Lake, Iowa. Travelers is a Connecticut company with its home office in Hartford, Connecticut. The amount in controversy exceeds $75,000. The requirements of diversity jurisdiction are satisfied as complete diversity exists between the plaintiff and defendant, and the amount in controversy exceeds the jurisdictional minimum. See § 1332.

B. Standard for the Motion

“While a complaint attacked by a Rule 12(b)(6)

motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the ‘grounds' of his ‘entitlement to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Benton v. Merrill Lynch & Co., 524 F.3d 866, 870 (8th Cir.2008) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Raynor v. Nat'l Rural Utilities Co-op. Fin., Corp., 690 F.3d 951, 955 (8th Cir.2012) (internal citation and quotation marks omitted) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Twombly, 550 U.S. at 555, 570, 127 S.Ct. 1955 )).

In reviewing the sufficiency of a complaint, “[the Court] accept[s] the plaintiff's factual allegations as true, but the allegations must supply facts sufficient to state a claim that is plausible on its face.” M.M. Silta, Inc. v. Cleveland Cliffs, Inc., 616 F.3d 872, 876 (8th Cir.2010)

. “Though matters outside the pleading may not be considered in deciding a Rule 12 motion to dismiss, documents necessarily embraced by the complaint are not matters outside the pleading.” Gorog v. Best Buy Co., 760 F.3d 787, 791 (8th Cir.2014) (quoting Ashanti v. City of Golden Valley, 666 F.3d 1148, 1151 (8th Cir.2012) ). “Where, as here, the claims relate to a written contract that is part of the record in the case, [the Court] consider [s] the language of the contract when reviewing the sufficiency of the complaint.” M.M. Silta, 616 F.3d at 876 ; see

Gorog, 760 F.3d at 791 (“[T]he contracts upon which [a] claim rests ... are evidently embraced by the pleadings.” (alterations in original) (quoting Mattes v. ABC Plastics, Inc., 323 F.3d 695, 697 n. 4 (8th Cir.2003) )); Illig v. Union Elec. Co., 652 F.3d 971, 976 (8th Cir.2011) (“In addressing a motion to dismiss, ‘[t]he court may consider the pleadings themselves, materials embraced by the pleadings, exhibits attached to the pleadings, and matters of public record.’ ” (alteration in original) (quoting Mills v. City of Grand Forks, 614 F.3d 495, 498 (8th Cir.2010) ). “A court may dismiss a claim under Rule 12(b)(6) as barred by the statute of limitations if the complaint itself establishes that the claim is time barred.” Illig, 652 F.3d at 976 (citing Jessie v. Potter, 516 F.3d 709, 713 n. 2 (8th Cir.2008) ).

The parties do not dispute that the Court applies the substantive law of the forum state—Iowa—to this diversity action. See E–Shops Corp. v. U.S. Bank Nat. Ass'n, 678 F.3d 659, 663, (8th Cir.2012)

(“We apply ... the forum state's substantive law [ ] because jurisdiction is based on diversity.”).

C. Analysis

1. Policy's Lawsuit Limitations

Travelers first asserts this lawsuit was instituted nearly seven years after the loss resulting from the June 26, 2008 windstorm and it must therefore be dismissed because the plain language of the Travelers' policy bars legal action instituted more than two years after a party has knowledge of its loss. Dean Snyder disputes that it did not comply with the policy's two-year limitation provision and that even if it did not, it is excused from complying with the provision under the circumstances of this case.

Before scrutinizing the [insurance] policy, [the court] must observe the differences between interpretation and construction of an insurance policy. Interpretation requires us to give meaning to contractual words in the policy. Policy interpretation is always an issue for the court, unless we are required to rely upon extrinsic evidence or choose between reasonable inferences from extrinsic evidence. If the policy does not define a term, we give the word its ordinary meaning. The plain meaning of the insurance contract generally prevails.

Construction is the process of giving legal effect to a contract. This is always a matter of law for the court. The cardinal rule of construing insurance policies is that except in cases of ambiguity, the intent of the parties must control, and the court determines the intent of the parties by looking at what the policy itself says. We consider the parties' intent at the time the policy was sold, not in hindsight. We will not strain the words or phrases of the policy in

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