Maritza Riascos-Mazo, Individually And, LLC v. Certain Underwriters At Lloyd's of London Subscribing to Certificate No. Sa 01329-R4-14581, & First Flight Ins. Grp., Inc.

• Decision Date: 05 September 2018
• Docket Number: CASE NO. 17-23988-CIV-KING/SIMONTON
• Citation: Riascos-Mazo v. Certain Underwriters At Lloyd's, CASE NO. 17-23988-CIV-KING/SIMONTON (S.D. Fla. Sep 05, 2018)
• Parties: MARITZA RIASCOS-MAZO, Individually and as assignee of Blue Reef Watersports Center, LLC, and Carnival Corporation d/b/a Carnival Cruise Lines, Plaintiff, v. CERTAIN UNDERWRITERS AT LLOYD'S OF LONDON subscribing to Certificate No. SA 01329-R4-14581, and FIRST FLIGHT INSURANCE GROUP, INC., a North Carolina corporation, Defendants.
• Court: U.S. District Court — Southern District of Florida

MARITZA RIASCOS-MAZO, Individually and as assignee of Blue Reef Watersports Center, LLC,and Carnival Corporation d/b/a Carnival Cruise Lines, Plaintiff, v. CERTAIN UNDERWRITERS AT LLOYD'S OF LONDON subscribing to Certificate No. SA 01329-R4-14581,and FIRST FLIGHT INSURANCE GROUP, INC., a North Carolina corporation, Defendants.

CASE NO. 17-23988-CIV-KING/SIMONTON

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

September 5, 2018

REPORT AND RECOMMENDATION TO GRANT DEFENDANT UNDERWRITERS' MOTION TO DISMISS OR ABATE COUNT II AND ORDER DENYING MOTION TO STRIKE CERTAIN ALLEGATIONS IN COUNT I¹

This matter is before the Court pursuant to Defendant Underwriters' Motion to Dismiss or Abate Count II and Motion to Strike Certain Allegations in Count I of Plaintiff's Complaint for Damages and Demand for Jury Trial, ECF No. [14] (the "Motion"). The Motion has been fully briefed, ECF Nos. [15], [17]. The Honorable James Lawrence King, United States District Judge, has referred the matter to the undersigned Magistrate Judge to take all necessary and proper action as required by law, ECF No. [19]. For the reasons stated herein, it is RECOMMENDED that Defendant Underwriters' Motion to Dismiss or Abate Count II be GRANTED; and Defendant Underwriters' Motion to Strike Certain Allegations in Count I of Plaintiff's Complaint is DENIED.

I. Background

This case arises from an insurance coverage dispute related to alleged injuries suffered by the Plaintiff while on a shore excursion during the course of a cruise with Carnival Corporation ("Carnival"), ECF No. [1] at ¶¶ 1, 11. An action for damages related to those injuries was filed in this District on October 22, 2015: Maritza Riascos-Mazo vs. Carnival Corporation, a Panamanian corporation d/b/a Carnival Cruise Lines, and Blue Reef Watersports Center, LLC, a Florida limited liability company, No. 15-cv-23970-JAL (the "Underlying Tort Action"), ECF No. [1] at ¶ 12. The allegations therein included that a watersports company known as Blue Reef, which had entered into a Tour Operator Agreement with Carnival for Blue Reef to provide parasail shore excursions for Carnival passengers in St. Thomas, U.S. Virgin Islands, negligently operated the vessel in which the Plaintiff was a passenger, resulting in the Plaintiff being slammed into the vessel gunwale and suffering severe, grievous, and debilitating injuries (the "Incident"), ECF No. [1] at ¶ 13. The allegations in that action additionally included that Carnival was negligent in its selection and procurement of a responsible parasail shore excursion operator, ECF No. [1] at ¶ 14. The Tour Operator Agreement required Blue Reef to maintain insurance coverage which Blue Reef attempted to procure through the Defendants herein, ECF No. [1] at ¶ 10.

Blue Reef initially applied for insurance coverage for its watersports operations with Defendant Underwriters in 2014, and was issued a policy that provided Blue Reef with Commercial General Liability Coverage for bodily injury in the amount of $1,000,000.00 and an increased liability limit for claims involving Carnival, as an additional insured, in the amount of $5,000,000.00 (the "Policy"), ECF No. [1] at 17. The Plaintiff alleges, upon information and belief, that the High Hopes, the vessel upon which the Incident occurred, was added to the Policy under an endorsement of December 18, 2014, ECF No. [1] at ¶ 18.

On February 19, 2015, Blue Reef applied for renewal of the existing policy through Defendant First Flight, ECF No. [1] at ¶ 20. According to the Complaint, Defendant First Flight was the insurance broker representing Blue Reef and Carnival, ECF No. [1] at ¶¶ 6, 49. The renewal application identified the High Hopes and the parasail operation in St. Thomas, Virgin Islands and included Carnival as an additional insured, ECF No. [1] at ¶ 20. On March 23, 2015, at approximately 4:45 p.m., the incident in which the Plaintiff was injured while parasailing aboard the High Hopes occurred, ECF No. [1] at ¶¶ 11, 24. On March 24, 2015, Defendant Underwriters, through Defendant First Flight, issued a renewal (the "Renewal Policy") which did not include the High Hopes as a covered vessel and with coverage thereunder backdated to commence on March 23, 2015, at 12:01 AM, ECF No. [1] at ¶¶ 21,² 24. At no time between the addition of the High Hopes to the endorsement on December 18, 2014, and the issuance of the renewal policy was the High Hopes excluded or removed from coverage by Defendant Underwriters, ECF No. [1] at ¶ 19. Upon information and belief, neither of the Defendants notified Blue Reef or Carnival that the High Hopes would be deleted from the renewal policy, nor did either issue a notice of deletion or cancellation informing Blue Reef or Carnival that the High Hopes would be deleted from the new policy, ECF No. [1] at ¶ 23.

In the Underlying Tort Action, Defendant Underwriters initially provided a defense, but subsequently withdrew and refused to either defend or indemnify its insureds, denying coverage on the sole basis that the alleged incident did not occur on a scheduled watercraft under the Renewal Policy, ECF No. [1] at ¶ 15-16. Based on the exclusion of the High Hopes from the renewal policy, the Defendants maintained that the Plaintiff's Incident was not a covered event, ECF No. [1] at ¶ 25.

Carnival defended the Underlying Tort Action as to itself only and entered into a confidential settlement with the Plaintiff, in which Carnival assigned all of its rights as an additional insured under the Renewal Policy to the Plaintiff, ECF No. [1] at ¶ 26. Blue Reef also defended the Underlying Tort Action as to itself and entered into a Coblentz Agreement and Assignment with the Plaintiff, ECF No. [1] at ¶ [27]. That agreement required Blue Reef to assign its rights as an insured under the Renewal Policy to the Plaintiff, ECF No. [1] at Exhibit F, and additionally required the parties to submit the claim to a neutral arbiter to obtain an advisory opinion as to the value of the Plaintiff's claim, ECF No. [1] at ¶ [27]. Upon consideration of the documentation submitted by the parties, the arbiter valued the Plaintiff's claim at $8,167,946.14, ECF No. [1] at ¶ [27. Blue Reef and Plaintiff agreed to entry of a consent judgment in favor of the Plaintiff in the amount of $5,717,562.30, ECF No. [1] at ¶ 28.

The Plaintiff has filed the instant action as an assignee of both Blue Reef and Carnival, ECF No. [1] at ¶ 29. The Plaintiff has brought claims against Defendant Certain Underwriters for Breach of Contract and Breach of Fiduciary Duty, ECF No. [1] at ¶ 30-42. The Plaintiff seeks to have the Coblentz Agreement entered into with Blue Reef enforced and seeks judgment of $5,717,562.30 in accordance with the Coblentz agreement in addition to other damages, including medical payment benefits due under the policy, costs, interest and attorney's fees as allowable by law, ECF No. [1] at ¶ 30-42; Wherefore clause following ¶¶ 38, 42. The Plaintiff has also brought a claim against Defendant First Flight for Negligent Procurement of Coverage, by which the Plaintiff seeks damages, including the expenses and attorney's fees incurred by the Plaintiff, Blue Reef, and Carnival in litigating the Underlying Tort Action, as well as payment of the Consent Judgement entered against Blue Reef in the Underlying Tort Action in the amount of $5,717,562.30, together with attorney's fees, costs, and prejudgment and post-judgment interest, ECF No. [1] at ¶ 43-52 (as to First Flight); Wherefore clause following ¶ 52.

II. Analysis³

A. Defendant's Motion to Dismiss or Abate Count II

Defendant Underwriters moves for dismissal of Count II of the Complaint on the basis that it is a premature bad faith claim and should be dismissed or abated pending determination of the coverage issues. The Plaintiff responds that the legal standard for dismissal of a claim pursuant to Rule 12(b)(6) is identical to the standard for judgment on the pleadings pursuant to Rule 12(c) and that Defendant Underwriters' motion should be denied as premature, ECF No. [15].⁴

1. Standard of Review

In order to state a claim for relief, Federal Rule of Civil Procedure Rule 8(a) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). When considering a motion to dismiss, the Court must accept all of the plaintiff's allegations as true. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984). However, the Court need not accept legal conclusions as true. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Further, "a court's duty to liberally construe a plaintiff'scomplaint in the face of a motion to dismiss is not the equivalent of a duty to re-write it for [him]." Peterson v. Atlanta Hous. Auth., 998 F.2d 904, 912 (11th Cir. 1993).

"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.' " Iqbal, 556 U.S. at 678. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. "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." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations omitted). "Factual allegations must be enough to raise a right to relief above the speculative level." Id.

When ruling on a 12(b)(6) motion to dismiss, the court may only consider the complaint, documents attached to the complaint as exhibits or incorporated by reference, and matters about which a court may take judicial notice. Hodge v. Orlando Utilities Comm'n, No. 6:09-cv-1059-Orl-19DAB, 2009 WL 4042930, at *3 (M.D....