Nat'l Trust Ins. Co. v. Pa. Nat'l Mut. Cas. Ins. Co.

• Decision Date: 09 December 2016
• Docket Number: Case No. 3:16–cv–695–J–34PDB
• Citation: 223 F.Supp.3d 1236
• Parties: NATIONAL TRUST INSURANCE COMPANY, Plaintiff, v. PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Middle District of Florida

223 F.Supp.3d 1236

NATIONAL TRUST INSURANCE COMPANY, Plaintiff,

v.PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY, Defendant.

Case No. 3:16–cv–695–J–34PDB

United States District Court, M.D. Florida, Jacksonville Division .

Signed December 9, 2016

Brett Andrew Smith, Robert M. Darroch, Goodman, McGuffey, Lindsey & Johnson, LLP, Sarasota, FL, for Plaintiff.

Lloyd Johnson Sarber, III, Marks Gray, PA, Jacksonville, FL, for Defendant.

ORDER

MARCIA MORALES HOWARD, United States District Judge

THIS CAUSE is before the Court on Defendant's Motion to Dismiss or, Alternatively, Motion to Transfer Venue and Brief in Support of Defendant's Motion (Doc. No. 7; Motion), filed on July 5, 2016. In the Motion, Defendant requests that the Court dismiss Plaintiff's Complaint pursuant to Rule 12(b)(3), Federal Rules of Civil Procedure, or, alternatively, transfer this case to the Charlotte Division of the United States District Court for the Western District of North Carolina. See Motion at 1–2, 10. On July 10, 2016, Plaintiff filed a response in opposition to the Motion. See Plaintiff National Trust Insurance Company's Response in Opposition to Defendant's Motion to Dismiss or, Alternatively, Motion to Transfer Venue (Doc. No. 12; Response). In addition, on July 20, 2016, Plaintiff filed Plaintiff's Notice of Filing Affidavit and Corrected Exhibit (Doc. No. 13; Notice) in support of its Response. Accordingly, the Motion is ripe for resolution.

I. Factual Background and Procedural History

In the Complaint for Declaratory Judgment (Doc. No. 2; Complaint), Plaintiff National Trust Insurance Company (NTIC) asserts that it issued an insurance policy (the NTIC Policy) to Linear Masonry, Inc. (Linear), providing coverage for the policy period beginning April 14, 2010, and ending April 14, 2011. See Complaint ¶ 7. NTIC suggests that the NTIC Policy is governed by Florida law because it was both "issued and executed in Florida." Id. Subsequently, Defendant Pennsylvania National Mutual Casualty Insurance Company (Penn National) issued a policy (the Penn National Policy) to Linear providing coverage for the policy period beginning April 14, 2011, and ending April 14, 2012. See id. ¶ 8.

According to NTIC, on December 27, 2009, Tapestry Park II Hotel, LLC (Tapestry Park) entered into a contract with general contractor Cox & Schepp, Inc. (Cox), for the construction of a hotel in Duval County, Florida. See id. ¶ 11. NTIC alleges that, on September 6, 2010, Cox hired Linear as a subcontractor to install brick ties, brick veneer, and vapor/moisture barriers throughout the construction project. See id. ¶ 12. The hotel was completed in January of 2011. See id. ¶ 15. On October 12, 2012, Tapestry Park filed suit in Duval County, Florida, against several engineering and construction firms, including Cox (the State Court Action). Id. ¶ 10. In the State Court Action, Tapestry Park alleged that Cox breached its contract by failing to complete work on the hotel according to the contract's plans and specifications, thereby resulting in defects which, in turn, required repair. See id. ¶ 12. Tapestry Park further alleged that Cox violated the Florida Building Code. See id. ¶ 13. Notably, Tapestry Park did not name Linear as a party to this suit, see id. ¶ 14, and according to NTIC, Linear did not learn of the alleged defects until December 14, 2011, eight months after the NTIC Policy expired, see id. ¶ 17.

In response to Tapestry Park's complaint in the State Court Action, on December 6, 2012, Cox filed a third party complaint against numerous subcontractors, including Linear, seeking indemnification pursuant to the terms of the subcontracts. Id. ¶¶ 18, 21. With respect to Linear, Cox alleged that Linear breached its subcontract by failing to defend and indemnify Cox from Tapestry Park's claims and, further, by failing to name Cox as an additional insured in its insurance policy. See id. ¶ 23. Cox further alleged that Linear knowingly violated the Florida Building Code. See id. ¶ 24. According to NTIC, Linear tendered defense and indemnity of Cox's claims to both NTIC and Penn National, and while NTIC denied coverage, Penn National agreed to defend Linear, albeit under a full reservation of rights. See id. ¶¶ 25–26.

Ultimately, Penn National settled Cox's claims and thereafter sent NTIC a demand letter seeking reimbursement of the full settlement amount as well as all defense costs. See id. ¶¶ 27–28. In so doing, Penn National argued that the NTIC Policy provided coverage for Cox's claims against Linear. See id. ¶ 29. Believing there to be a "real, substantial and justiciable controversy between the parties with respect to insurance coverage," on June 6, 2016, NTIC filed the Complaint in the Fourth Judicial Circuit in and for Duval County, Florida. See Complaint at 1; ¶ 13. In the Complaint, NTIC seeks a declaratory judgment regarding its rights and obligations under the NTIC Policy. See id. ¶¶ 47–52. NTIC served Penn National with the Complaint on or around June 6, 2016, see Defendant's Notice of Removal to Federal Court (Doc. No. 1; Notice of Removal) at 1–2, and Penn National removed the case to this Court on July 5, 2016. Id. That same day, Penn National filed the instant Motion. In addition, on November 11, 2016, Penn National filed a counterclaim against NTIC asserting, as its first and second causes of action, that because NTIC had an obligation to defend and indemnify Linear, pursuant to the "Other Insurance" and "Transfer of Rights" provisions of the Penn National Policy, Penn National is entitled to recover the sum expended on behalf of Linear from NTIC. See Penn National's Answer and Counterclaim (Doc. No. 20) at 11–18.

In the Motion, Penn National seeks to dismiss this action on the basis of improper venue under the provisions of Rule 12(b)(3), Federal Rules of Civil Procedure (Rule(s)). See Motion at 2. In the alternative, Penn National requests that this Court transfer the case to the United States District Court for the Western District of North Carolina. See id. (citing 28 U.S.C. §§ 1404 and 1406 ). For the reasons set forth below, the Court determines that Penn National's Motion is due to be denied.

II. Discussion

A. Motion to Dismiss

Citing Rule 12(b)(3), Penn National seeks dismissal of this action on the basis of improper venue. See Motion at 1. Specifically, Penn National argues that venue is improper in Florida because the NTIC Policy was issued to Linear—by NTIC's agents—in North Carolina, and because the pertinent witnesses are in North Carolina as well.¹ See Motion at 9–10. Although a challenge to a plaintiff's chosen forum is properly brought pursuant to Rule 12(b)(3), the substantive determination of whether venue is proper is governed by the applicable venue statutes. See Tritak v. Metro. Cas. Ins. Co. , No. 3:08–CV–14–J–33JRK, 2008 WL 312675, at *1 (M.D. Fla. Feb. 4, 2008).² Notably, Penn National cites no venue provision or other authority for its contention that venue in Florida is improper or that venue in North Carolina would be proper. More importantly, the Court concludes that Penn National's contention regarding improper venue is without merit.

Pursuant to 28 U.S.C. § 1441(a), "[a]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." NTIC is an Indiana corporation with a principal place of business in Sarasota, Florida. See Affidavit of Thomas A. Koval ¶ 4. (Koval Affidavit; Doc. No. 13–1). Penn National is a Pennsylvania corporation with principal places of business in Harrisburg, Pennsylvania and Greensboro, North Carolina. See Notice ¶ 7 ; Motion at 11. As such, given that the amount in controversy is sufficient, see Complaint ¶ 27, this Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332, and thus, Penn National could properly remove the action to this Court. See 28 U.S.C. § 1441(a). When a case is removed from state court to federal court, venue is proper in the district and division that encompasses the location where the action was originally filed. See id. As NTIC filed the original case in Duval County, Florida, Penn National properly removed the action to the Jacksonville Division of the United States District Court for the Middle District of Florida. See Local Rule 1.02(b)(1), United States District Court, Middle District of Florida (Local Rule(s)) (stating that the Jacksonville Division consists of Bradford, Baker, Clay, Columbia, Duval, Flagler, Hamilton, Nassau, Putnam, St. Johns, Suwannee and Union Counties). Indeed, " 28 U.S.C. § 1441(a), by requiring removal to the district court for the district in which the state action is pending, properly fixes the federal venue in that district." Hollis v. Fla. State Univ. , 259 F.3d 1295, 1299 (11th Cir. 2001). Accordingly, the Court finds that venue is proper in this District and Division. See id. As such, the Motion to Dismiss pursuant to Rule 12(b)(3) will be denied, and the Court will turn to Penn National's alternative request for transfer of this action to another district.

B. Motion to Transfer Venue

Penn National alternatively asserts both that venue is proper in North Carolina and that the Charlotte Division of the Western District of North Carolina is actually a more convenient forum, and therefore requests that the Court transfer this case to that division and district pursuant to 28 U.S.C. §§ 1406(a) or 1404(a). See Motion at 1–2. To the extent Penn National relies on § 1406(a), the Motion is due to be denied. Section 1406(a) provides that "[t]he district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought." 28 U.S.C. § 1406(a). Because...