Pearson Capital Partners LLC v. James River Ins. Co.

• Citation: 151 F.Supp.3d 392
• Decision Date: 28 August 2015
• Docket Number: 14–cv–4664 (VM)
• Parties: Pearson Capital Partners LLC and Congress Builders LLC, Plaintiffs, v. James River Insurance Company, Defendant.
• Court: U.S. District Court — Southern District of New York

151 F.Supp.3d 392

Pearson Capital Partners LLC and Congress Builders LLC, Plaintiffs,

v.James River Insurance Company, Defendant.

14–cv–4664 (VM)

United States District Court, S.D. New York.

Signed August 28, 2015

Agnieszka Anna Wilewicz, Ahmuty, Demers & McManus, Albertson, NY, Timothy Erin Delahunt, Kenney Shelton Liptak & Nowak, LLP, Buffalo, NY, for Plaintiffs.

Helmut Beron, Wilson, Elser, Moskowitz, Edelman & Dicker, New York, NY, for Defendant.

DECISION AND ORDER

VICTOR MARRERO

, United States District Judge

Plaintiffs Pearson Capital Partners LLC (“Pearson”) and Congress Builders LLC (“Congress,” collectively “Plaintiffs”), both New York domestic limited liability companies, brought this suit against James River Insurance Company (“James River”), a foreign corporation that issues insurance policies in New York State. Plaintiffs are defendants in a separate, underlying action captioned Atley Gomes v. Pearson Capital Partners LLC, Congress Builders LLC, Rockledge Scaffold Corp., CRV Construction, CRV Precast Construction LLC individually and d/b/a CRV Construction, and Ro–Sal Plumbing & Heating, Inc. (N.Y. Sup.Ct., Bronx Co., Index No. 301249/2013) (the “Underlying Action”), and now seek defense and indemnity from James River in connection with the Underlying Action.

Plaintiffs filed the complaint (“Complaint”) in the instant action in state court, after which James River filed a Notice of Removal (Dkt. No. 1), removing the action to this Court.¹ James River then filed a Motion to Dismiss (“Motion” or “Mot.,” Dkt. No. 11) pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure

(“Rule 12(b)(6) ”). Plaintiffs opposed (“Opposition” or “Opp'n,” Dkt. No. 18), and James River replied (“Reply,” Dkt. No. 19).

By Order dated March 31, 2015, this Court denied the Motion, finding that the Complaint had adequately stated a claim for relief. (“March 31 Order,” Dkt. No. 20.) This Decision and Order provides the findings, reasoning, and conclusions that form the basis for the March 31 Order.

I. FACTUAL BACKGROUND²

Plaintiffs are defendants in the Underlying Action, which was brought by Atley Gomes (“Gomes”) to recover damages for bodily injury he allegedly sustained on December 7, 2012 (the “December 7 Accident”) and December 24, 2012 (the “December 24 Accident”) while working in the course of his employment for MC & O Contracting, Inc. (“MC & O”) at a construction project at 45–56 Pearson Street, Queens, New York (the “Site”). Pearson is the owner of the Site. Congress was engaged by Pearson as the general contractor for work at the Site.

By written contract in October 2012, Congress retained MC & O as a subcontractor to perform masonry work at the Site. Pursuant to its written contact with Congress, MC & O was obligated to procure additional coverage for Congress and Pearson under MC & O's liability insurance policies.

James River issued a commercial general liability policy (the “Policy”) to MC & O for the period of August 15, 2012 to August 15, 2013. The Policy was in effect at the time of the accidents alleged by the Underlying Action to have occurred during the course of Gomes's employment with MC & O, causing bodily injury to Gomes.

To date, Plaintiffs have been defended in connection with the Underlying Action under an insurance policy issued by Mt. Hawley Insurance Company (“Mt. Hawley”), and Mt. Hawley has engaged in multiple communications with James River on Plaintiffs' behalf. Mt. Hawley sent a letter to James River dated December 28, 2012 (the “December 28 Letter”), concerning the December 24 Accident (Opp'n Ex. 1.), as well as a letter dated January 16 (the “January 16 Letter”) concerning the December 7 Accident (Opp'n Ex. 2).

The December 28 and January 16 Letters provided brief descriptions of the December 24 and December 7 Accidents, respectively. (Opp'n Exs. 1, 2.) Both Letters also described the contract between Congress and MC & O and informed James River that “[the claimant is an employee of [James River's] insured, ... MC & O.” (Id. ) Both letters were titled with the heading “RE: DEMAND FOR DEFENSE AND INDEMNIFICATION” in bold letters. (Id. ) Finally, both letters concluded by stating,

In the event of a claim or lawsuit, demand is made upon James River Insurance Company and its insured to provide contractual indemnity and additional insured status to L & M Development Partners, Congress Builders LLC and the additional listed parties to the contract and to assume the defense and indemnity of any claim or lawsuit that may arise.

(Id. at 2.)

On January 18, James River sent a letter (the “Acknowledgement Letter”) to Mt. Hawley, acknowledging receipt of the December 28 and January 16 Letters. (Opp'n Ex. 3.) The Acknowledgment Letter noted, “We understand ... that Mr. Gomes is allegedly an employee of MC & O.” (Id. at 1.) The Acknowledgement Letter further stated,

We are unaware of any liability claim or suit being pursued by Mr. Gomes. If you have information to the contrary, please provide any documentation of the same. At this time, we are unable to accept or deny your tender of this claim. However, we will be conducting an investigation into this matter, both from a liability and coverage aspect.

(Id. at 2.)

Having received no further communications from James River regarding coverage for the December 7 and December 24 Accidents, Plaintiffs then filed the Complaint in the instant action, seeking defense and indemnity from James River in connection with the Underlying Action.³

II. STANDARD OF REVIEW

A. RULE 12(b)(6)

MOTION TO DISMISS

The Motion argues that the Complaint should be dismissed because it fails to state a claim for which relief can be granted under Rule 12(b)(6) of the Federal Rules of Civil Procedure

.

“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.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)

(quoting

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). This standard is met “when the plaintiff pleads 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. A court should not dismiss a complaint for failure to state a claim if the factual allegations sufficiently “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955.

The task of a court in ruling on a motion to dismiss is to “assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof.” In re Initial Pub. Offering Sec. Litig., 383 F.Supp.2d 566, 574 (S.D.N.Y.2005)

(internal quotation marks omitted). The court must accept all well-pleaded factual allegations in the complaint as true, and draw all reasonable inferences in the plaintiff's favor. See

Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir.2002).

III. CONSIDERATION OF EXHIBITS

As a threshold matter, the Court must determine which of the materials in the record it may consider in adjudicating the Motion. In the case at hand, both Plaintiffs and James River (collectively, the “Parties”) made submissions related to the Motion that included additional materials in the form of exhibits for the Court's review.

A. RULE 12(d)

CONVERSION INTO MOTION FOR SUMMARY JUDGMENT

When material “outside the complaint” is presented for consideration in adjudicating a 12(b)(6) motion to dismiss, a court is “afforded two options” by Rule 12(d) of the Federal Rules of Civil Procedure

: the court may either (1) exclude the extrinsic documents from review, or (2) “convert the motion to one for summary judgment and give the parties an opportunity to conduct appropriate discovery and submit the additional supporting material contemplated by Rule 56” of the Federal Rules of Civil Procedure (“Rule 56”). Chambers v. Time Warner, Inc., 282 F.3d 147, 154 (2d Cir.2002). However, “[a]ny written instrument attached to [the complaint] as an exhibit or any statements or documents incorporated in it by reference,” as well as any matters of which judicial notice may be taken, are deemed included in the complaint and may be considered without converting the motion to dismiss into a motion for summary judgment. Id. at 152 (quoting

Int'l Audiotext Network, Inc. v. Am. Tel. & Tel. Co., 62 F.3d 69, 72 (2d Cir.1995) (per curiam)); see

Chambers, 282 F.3d at 153.

Additionally, “[e]ven where a document is not incorporated by reference, the court may nevertheless consider it where the complaint ‘relies heavily upon its terms and effect,’ which renders the document ‘integral’ to the complaint.” Chambers, 282 F.3d at 153

(quoting

Int'l Audiotext, 62 F.3d at 72 ). “A plaintiff's reliance on the terms and effect of a document in drafting the complaint is a necessary prerequisite to the court's consideration of the document on a dismissal motion; mere notice or possession is not enough.” Chambers, 282 F.3d at 153 (emphasis in original) (citing

Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 47–48 (2d Cir.1991) ).

B. THE EXHIBITS

Both Parties have submitted exhibits for the Court's review. First, James River Submitted a Declaration in Support of its Motion to Dismiss (“Decl. Supp.,” Dkt. 10) and attached:

Exhibit A—The Complaint in the case at hand;

Exhibit B—The Complaint in the Underlying Action;

Exhibit C—The Amended Complaint in the Underlying Action;

Exhibit D—The James River Commercial Liability Policy No. 00054538–0 issued by James River to MC & O Contracting, Inc. for the period [sic] August 15, 2012 to August 15, 2013 (the “Policy”); and

Exhibit E—“[T]he letter dated June 30, 2014 which was sent by e-mail and first class mail by [defense counsel] to [plaintiff counsel], pursuant to the Individual Practices of U.S.D.J. Victor Marrero at II.A.” (Decl.Supp.1–2.)

(See Decl. Supp. at 1–2; Decl. Supp. Exs. A–E.)

Plaintiffs have attached...