Whispering Pines of Royal Palm Beach Homeowners Ass'n, Inc. v. Comcast Cable Commc'ns, LLC

• Decision Date: 19 June 2014
• Docket Number: CASE NO. 13-80142-CIV-MARRA/MATTHEWMAN
• Parties: WHISPERING PINES OF ROYAL PALM BEACH HOMEOWNERS ASSOCIATION, INC., a Florida not for profit corporation, Plaintiff, v. COMCAST CABLE COMMUNICATIONS, LLC, a foreign corporation, Defendant.
• Court: U.S. District Court — Southern District of Florida

WHISPERING PINES OF ROYAL PALM
BEACH HOMEOWNERS ASSOCIATION,
INC., a Florida not for profit corporation, Plaintiff,
v.
COMCAST CABLE COMMUNICATIONS, LLC,
a foreign corporation, Defendant.

CASE NO. 13-80142-CIV-MARRA/MATTHEWMAN

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

DONE AND ORDERED: June 19, 2014

ORDER AND OPINION GRANTING MOTION TO DISMISS

THIS MATTER is before the Court on Defendant Comcast Cable Communications, LLC's Motion to Dismiss Amended Complaint [DE 22]. The motion is fully briefed and ripe for review. The Court has carefully considered the filings, entire Court file, and is otherwise fully advised in the premises.

Introduction

After this Court's dismissal of all counts in Plaintiff's initial Complaint, Plaintiff filed an Amended Complaint, again seeking to avoid renewal of the parties' ten year bulk cable services agreement (the "Contract"). Plaintiff has abandoned its statutory and tort claims, but now asserts three claims for declaratory judgment. In Count I, Plaintiff seeks a declaration that the renewal provision in the Contract is a non-essential term for which time is not of the essence, and that Plaintiff "substantially complied" with the notice provision. In Count II, Plaintiff seeks a declaration that

Page 2

the renewal provisions is an "unenforceable penalty." The Court already rejected this theory, but Plaintiff argues that it is now relying on precedent previously omitted and "cogent argument" to support this claim. Count III, labeled "Declaratory Relief Regarding Whether a Cause of Action for Breach of Contract Exists," asks the Court to declare whether Comcast has a claim for ten years worth of damages if the Association fails to comply with the terms of the renewal clause. DE 21.

Legal Standard

With respect to a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), the Court observes first that Rule 8(a)(2) of the Federal Rules of Civil Procedure requires that a pleading contain a "short and plain statement of the claim showing that the pleader is entitled to relief." The Supreme Court has held that "[w]hile a complaint attacked by a 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. Factual allegations must be enough to raise a right to relief above a speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations omitted).

"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, 129 S. Ct. 1937, 1949 (2009) (quotations and citations omitted). "A claim has facial plausibility when the plaintiff pleads factual content that allows the

Page 3

court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Thus, "only a complaint that states a plausible claim for relief survives a motion to dismiss." Id. at 1950. When considering a motion to dismiss, the Court must accept all of the plaintiff's allegations as true in determining whether a plaintiff has stated a claim for which relief could be granted. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984).

As a general rule, the Court must "limit[] its consideration to the pleadings and exhibits attached thereto" when deciding a Rule 12(b)(6) motion to dismiss. Grossman v. Nationsbank, N.A., 225 F.3d 1228, 1231 (11th Cir. 2000) (internal quotation marks and citation omitted). Fed. R. Civ. P. 12(d) mandates that if matters outside the pleadings are presented to the court and not excluded, the motion must be treated as one for summary judgment under Rule 56. There is an exception to this rule for documents that are (1) central to the plaintiff's claim and (2) undisputed. Horsley v. Feldt, 304 F.3d 1125, 1134 (11th Cir. 2002). Undisputed means that the authenticity of the document is not challenged. Id.

Additionally, a state declaratory judgment claim will be construed as a federal declaratory judgment claim because the Declaratory Judgment Act, 28 U.S.C. § 2201(a), is procedural, not substantive. See GTE Directories Publishing Corp. v. Trimen Am., Inc., 67 F.3d 1563, 1567 (11th Cir. 1995); Nirvana Condominium Ass'n, Inc. v. QBE Ins. Corp., 589 F. Supp. 2d 1336, 1335 n.1 (S.D. Fla. 2008) (construing claim based on Florida Declaratory Judgment Act as arising under 28 U.S.C. § 2201);

Page 4

Chapman v. Clarendon Nat. Ins. Co., 299 F. Supp. 2d 559, 563 (E.D. Va. 2004) (federal court construed state declaratory judgment claim as brought under federal declaratory judgment act); Haagen-Dazs Shoppe Co., Inc. v. Born, 897 F.Supp. 122, 126 n.2 (S.D. N.Y. 1995) (federal declaratory judgment act governs propriety of declaratory relief in diversity cases under Erie); DeFeo v. Proctor & Gamble Co., 831 F.Supp. 776, 779 (N.D. Cal. 1993) (federal declaratory relief action is implicated even in diversity actions).

"The purpose behind the Declaratory Judgment Act is to afford a[ ] form of relief from uncertainty and insecurity with respect to rights, status, and other legal relations." Casualty Indem. Exch. v. High Croft Enter., 714 F.Supp. 1190, 1193 n.5 (S.D. Fla. 1989). "The Declaratory Judgment Act 'permits actual controversies to be settled before they ripen into violations of law or a breach of contractual duty.'" Sierra Equity Group, Inc. v. White Oak Equity Partners, LLC, 650 F. Supp. 2d 1213, 1230 (S.D. Fla. 2009) (citing 10B C. Wright & A. Miller, Federal Practice & Procedure, Civil 3d § 2751 (2004)); Constr. Consulting & Mgmt. Corp. v. Mid-Continent Cas. Co., 10-81220- CIV-MARRA, 2011 WL 59151 (S.D. Fla. Jan. 7, 2011).

A court always has discretion as to whether to entertain an action for a declaratory judgment. See Brillhart v. Excess Insurance Company of America, 316 U.S. 491 (1942); Public Affairs Associates, Inc. v. Rickover, 369 U.S. 111 (1962). "In exercising this discretion, a court must balance the plaintiff's needs for and the consequences of declaratory relief in the context of the purposes of the declaratory

Page 5

judgment remedy." Cas. Indem. Exch. v. High Croft Enterprises, Inc., 714 F. Supp. at 1193.

Discussion

Automatic renewal provisions allow contracting parties the opportunity to continue under their contract for an additional period pursuant to the terms of their original agreement. Such provisions also typically set out the time frame during which the parties may decide to terminate the contract rather than to renew it for an additional term. The purpose of such automatic renewal provisions is to give the contracting parties the security of knowing that after a certain date the contract will be renewed automatically under the original terms. Lisa Cecily Sherman, Contract Law - the Third Circuit Places Automatic Renewal Provisions in Line With Other Contract Principles Under Pennsylvania Law - Otis Elevator Co. v. George Washington Hotel Corp., 27 F.3d 903 (3d Cir. 1994), 68 Temp. L. Rev. 891 (1995). The renewal provision at the heart of this litigation reads as follows:

ARTICLE 2. TERM OF AGREEMENT

2.01 Term and Renewals. The Effective Date of this Agreement shall commence on October 1, 2001 and shall continue for a term of ten (10) years. Upon expiration of the initial Term, this Agreement shall be renewed automatically unless either party elects not to renew the Term by delivering written notice thereof to the other party at least ninety (90) days prior to the expiration of the initial Term or any renewal term.

Page 6

Amended Complaint, DE 21 at 15 of 22.

Count III

Taking the counts in reverse order, Count III asks the Court to declare

[a]ssuming arguendo that this Court determines that (i) the Renewal Clause was an essential term of the Agreement where time was of the essence, and (ii) the Renewal Clause is not an unenforceable penalty, and (iii) the Association breached the Agreement by failing to give timely notice under the Renewal Clause, then the question to be answered by this Court is whether the Association's failure to comply with the terms of the Renewal Clause, coupled with its concomitant termination of the Agreement sixty (60) days prior to the end of the contract, gives rise to Comcast's claim for ten years worth of damages.

DE 21, ¶ 59. The Court finds that this hypothetical question fails to present an Article III case or controversy for a federal court to have jurisdiction over a declaratory judgment claim. GTE Directories Publishing Corp. v. Trimen America, Inc., 67 F.3d 1563, 1568 (11th Cir. 1995). Section 2201's "requirement of [an] actual controversy encompasses concepts such as ripeness, standing, and the prohibition against advisory judicial rulings." Sheikh v. City of Deltona, 6:13-CV-1526-ORL-36, 2014 WL 186124 (M.D. Fla. Jan. 16, 2014). To have Article III standing, "a plaintiff must adequately establish: (1) an injury in fact (i.e., a 'concrete and...