Steadfast Ins. Co. v. Progressive Cas. Ins. Co.

• Decision Date: 19 July 2017
• Docket Number: Case No. 3:16-cv-1574-J-34JBT
• Parties: STEADFAST INSURANCE COMPANY, a foreign corporation, a/s/o ACME BARRICADES, L.C., Plaintiff, v. PROGRESSIVE CASUALTY INSURANCE COMPANY, a foreign corporation, Defendant.
• Court: U.S. District Court — Middle District of Florida

STEADFAST INSURANCE COMPANY, a foreign corporation,a/s/o ACME BARRICADES, L.C., Plaintiff, v. PROGRESSIVE CASUALTY INSURANCE COMPANY,

a foreign corporation, Defendant.

Case No. 3:16-cv-1574-J-34JBT

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA JACKSONVILLE DIVISION

July 19, 2017

ORDER

THIS CAUSE is before the Court on Defendant Progressive Casualty Insurance Company's Motion to Dismiss for Failure to State a Claim Upon Which Relief Can be Granted and Incorporated Memorandum of Law in Support (Doc. 6; Motion), filed on January 2, 2017. Plaintiff Steadfast Insurance Company (Steadfast), as subrogee of Acme Barricades, L.C. (ACME), filed a response in opposition to the Motion on January 17, 2017. See Plaintiff's Response and Memorandum of Law in Opposition to Defendant's Motion to Dismiss for Failure to State a Claim Upon Which Relief Can be Granted (the "MTD") [D.E. 6]) (Doc. 10; Response). Accordingly, this matter is ripe for review.

I. Background¹

In the Complaint, Plaintiff alleged that in May of 2015 Shawnta Brathwaite was involved in a car accident in her 2007 Acura. See Complaint (Doc. 2; Complaint) ¶ 7. She and a number of individuals in her vehicle were injured. Id. After the accident, Progressive Casualty Insurance Company (Progressive), which insured the 2007 Acura, id. ¶ 6, took possession of the vehicle, id. ¶ 8. Additionally, Ms. Brathwaite commenced a lawsuit against ACME due to its negligent roadwork. Id. ¶ 7. A "number of the parties in [that] litigation sent written notice to Progressive to insure that the Acura was preserved [sic.]" Id. ¶ 8. Nevertheless, at some point after the accident, Progressive discarded the vehicle. Id. ¶ 10. As such, ACME and its insurer, Steadfast, were unable to complete their "investigation as to the cause of [Ms. Brathwaite's] loss." Id. ¶ 11. This "ultimately led to greater exposure for ACME and in turn a larger settlement payout." Id.

Based on these facts, Steadfast filed suit in state court asserting a spoliation of evidence claim against Progressive. Id. ¶¶ 13-16. Specifically, Steadfast alleged that Progressive breached its "legal and contractual duty to ACME and . . . Steadfast, to preserve its insured's 2007 Acura while the [Brathwaite versus ACME] litigation was ongoing so that all parties had an opportunity to inspect the vehicle." Id. ¶ 14. On December 23, 2016, Steadfast removed this action from the Circuit Court of the Fourth Judicial Circuit in and for Duval County, Florida to this Court. See Notice of Removal (Doc. 1; Notice). Shortly after, Progressive filed the Motion in which it seeks to dismiss theComplaint for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6), Federal Rules of Civil Procedure (Rule(s)). See generally Motion.

II. Standard of Review

In ruling on a motion to dismiss, brought pursuant to Rule 12(b)(6), the Court must accept the factual allegations set forth in the complaint as true. See Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 1949, 173 L. Ed.2d 868 (2009); Swierkiewicz v. Sorema N.A., 534 U.S. 506, 508 n.1, 122 S. Ct. 992, 995 n.1, 152 L. Ed.2d 1 (2002); see also Lotierzo v. Woman's World Med. Ctr., Inc., 278 F.3d 1180, 1182 (11th Cir. 2002). In addition, all reasonable inferences should be drawn in favor of the plaintiff. See Omar ex. rel. Cannon v. Lindsey, 334 F.3d 1246, 1247 (11th Cir. 2003) (per curiam). Nonetheless, the plaintiff must still meet some minimal pleading requirements. Jackson v. Bellsouth Telecomm., 372 F.3d 1250, 1262-63 (11th Cir. 2004) (citations omitted). Indeed, while "[s]pecific facts are not necessary[,]" the complaint should "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Erickson v. Pardus, 551 U.S. 89, 93, 127 S. Ct. 2197, 2200, 167 L. Ed.2d 1081 (2007) (per curiam) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 1964, 167 L. Ed.2d 929 (2007)). Further, the plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570, 127 S. Ct. at 1974. "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." Iqbal, 556 U.S. at 678, 129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 556, 127 S. Ct. at 1949).

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 ofaction will not do." Twombly, 550 U.S. at 555, 127 S. Ct. at 1965-66 (internal quotations omitted); see also Jackson, 372 F.3d at 1262 (explaining that "[c]onclusory allegations, unwarranted deductions of facts or legal conclusions masquerading as facts will not prevent dismissal") (internal citation and quotations omitted). Indeed, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions," which simply "are not entitled to [an] assumption of truth." See Iqbal, 556 U.S. at 678, 680-81, 129 S. Ct. at 1941. Thus, in ruling on a motion to dismiss, the Court must determine whether the complaint contains "sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Id. at 678, S. Ct. at 1949 (quoting Twombly, 550 U.S. at 570, 127 S. Ct at 1955).

III. Discussion

"'Spoliation of evidence . . . is a cause of action which holds someone liable for negligently or intentionally destroying material which is needed as evidence in litigation.'" Silhan v. Allstate Ins. Co., 236 F. Supp.2d 1303, 1307 (N.D. Fla. 2002) (citation omitted). In the Motion, Progressive contends that Steadfast has not properly stated a claim for negligent spoliation of evidence.² Specifically, Progressive argues that the Complaint is insufficient because Plaintiff failed to allege facts supporting a finding that Progressive owed a duty to Steadfast to preserve the 2007 Acura, see Motion at 4-7, and that Steadfast failed to allege facts showing that it suffered an injury because of the vehicle's destruction, id. at 7-8. In response, Steadfast argues that Progressive had a duty to preserve the 2007Acura because Progressive received notices requesting that it preserve the vehicle and could reasonably have foreseen that the vehicle was necessary to prove Steadfast's comparative fault defense. See Response at 5-8. Steadfast also contends that it sufficiently pled causation because in the Complaint it asserts that the destruction of the vehicle prevented it from completing its investigation, and "ultimately led to greater exposure for ACME and in turn a larger settlement payout." Id. at 8; see also Complaint ¶ 11. Upon consideration of the record and the arguments of the parties, the Court concludes that the Motion is due to be granted because Steadfast has not pled sufficient facts to state a claim for negligent spoliation of evidence.

Under Florida law,³ to prevail on a negligent spoliation of evidence claim, a party must establish the following:

(1) the existence of a potential civil action; (2) a legal or contractual duty to preserve evidence relevant to the potential civil action; (3) destruction of that evidence; (4) significant impairment in the ability to prove the lawsuit; (5) a causal relationship between the evidence destruction and the inability to prove the lawsuit; and (6) damages.

Am. Integrity Ins. Co. v. Ford Motor Co., No. 12-CV-24165, 2013 WL 12121495, at *3 (S.D. Fla. Feb. 20, 2013) (citations omitted). In Florida, a "duty to preserve evidence can arise by contract, by statute, or by properly served discovery request.'" Id. (quoting Royal & Sunalliance v. Lauderdale Marine Ctr., 877 So.2d 843, 845 (Fla. 4th DCA 2004)). Also, "a third party does not have a common law duty to preserve evidence absent a formal noticeof intent to sue."⁴ Am. Integrity, 2013 WL 12121495 at *3 (citing Penn. Lumberman's Mut. Ins. Co. v. Fla. Power & Light, 724 So.2d 629, 630 (Fla. 3d DCA 1998) (noting that notice could have created a duty to preserve if the alleged spoliator received it) and James v. U.S. Airways, Inc., 375 F. Supp. 2d 1352, 1353, 1355 (M.D. Fla. 2005) (finding that the alleged spoliator did not have a duty to preserve because it did not receive "formal notice prior to the destruction" of the evidence)).

Although Steadfast contends that Progressive had a duty to preserve the 2007 Acura, the Complaint is devoid of factual allegations sufficient to establish this duty. Steadfast failed to allege that Steadfast or ACME notified Progressive, either in writing or orally, that it sought the preservation of the 2007 Acura, or otherwise advised Progressive of Steadfast or ACME's need for the evidence. In the Complaint, Steadfast alleged that "a number of parties in the [Brathwaite versus ACME] litigation sent written notice to Progressive to insure that the Acura was preserved [sic]." See Complaint ¶ 8. However, to properly allege that Progressive owed a duty to Steadfast, Steadfast would have needed to plead that Steadfast, or its subrogee, ACME, notified Progressive of its need to preserve the 2007 Acura. See Silhan, 236 F. Supp.2d at 1312 ("Allstate's interest in pursuing a claim for itself d[id] not give rise to a duty to the Plaintiffs. If Plaintiffs would have given Allstate notice, then such notice would have created a duty for Allstate to preserve the causation evidence in anticipation of litigation."); cf. Nelson v. Amica Mut. Ins. Co., No. 6:15-cv-160-Orl-41TBS, 2015 WL 4507609 (M.D Fla. Jul. 24, 2015), at *3 n.1 (finding aduty to preserve where the plaintiff sent the defendant a request to preserve evidence for a future lawsuit prior to its destruction). As such, the Court finds that Steadfast failed to allege that it provided Progressive with notice sufficiently specific to give rise to the duty to preserve.

Additionally, Steadfast argues that...