Zurich Am. Ins. Co. v. Amerisure Ins. Co.
| Decision Date | 19 January 2017 |
| Docket Number | Case No. 9:16-CV-81393-MIDDLEBROOKS |
| Parties | ZURICH AMERICAN INSURANCE COMPANY, Plaintiff, v. AMERISURE INSURANCE COMPANY, AMERISURE MUTUAL INSURANCE COMPANY, HARTFORD FIRE INSURANCE COMPANY, HARTFORD CASUALTY INSURANCE COMPANY, and HARTFORD UNDERWRITERS INSURANCE COMPANY, Defendants. |
| Court | U.S. District Court — Southern District of Florida |
THIS CAUSE comes before the Court on Defendants Amerisure Insurance Company and Amerisure Mutual Insurance Company's (together, "Amerisure") Motion to Dismiss the Second Amended Complaint ("Motion"), filed on December 8, 2016. (DE 43). Plaintiff Zurich American Insurance Company ("Zurich") filed a Response in opposition on December 21, 2016 (DE 51), to which Amerisure replied on December 28, 2016 (DE 54). For the reasons stated below, the Motion is granted.
This declaratory judgment action concerns a dispute between insurance providers over an alleged obligation to defend an insured in an underlying lawsuit. (Second Amended Complaint (DE 39), hereinafter "Complaint" or "Compl.," at ¶ 15). It is argued that Defendants'1 alleged failure to comply with their duty to defend has led Zurich to shoulder the financial burden, thereby incurring attorney's fees, costs, and expenses and entitling it to reimbursement with interest from the nonresponsive insurers. (Id. at ¶¶ 32, 46, 60, 74).
The underlying action stems from a construction project in Palm Beach County, Florida known as "Fiore at the Gardens" (the "project" or "Fiore"). (Id. at ¶ 17). The general contractor for the project was WP South Builders, (Florida S), LLC ("WP South"). (Id. at ¶¶ 17, 19). The Complaint suggests, but studiously avoids stating, that WP South held an insurance policy with Maryland Casualty Company ("Maryland Casualty") (id. at ¶¶ 6, 17, 32), an entity for which Zurich is successor in interest (id. at ¶ 7).2 To complete the project, WP South retained "a number" of subcontractors (id. at ¶ 19), three of which are relevant to this action: Cobra Construction, Inc. ("Cobra"), KD Construction of Florida, Inc. ("KD Construction"), and Glass Engineering & Installation, Inc. ("Glass Engineering") (collectively, the "subcontractors"). (Id. at ¶ 20). In its agreements with the subcontractors, WP South required each to "place WP South on [its] own commercial general liability insurance policy(ies) as an Additional Insured," which the subcontractors did. (Id. at ¶¶ 25, 27). Two of the subcontractors, KD Construction and Glass Engineering, were issued policies by Amerisure (id. at ¶ 26 & Exs. 5 & 6), an insurance provider (id. at ¶¶ 8-9). The Amerisure policies contained "Additional Insured endorsements" (the "endorsements"), which granted WP South the Additional Insured status required by the subcontractor agreements (id. at ¶ 27) and imposed a duty on Amerisure to defend the additional insured in lawsuits covered by the policy terms (id. at ¶ 30). These endorsements are components of policies that Zurich incorporated by reference into the Complaint in their "entirety." (Id. at ¶ 27). They include "other insurance" clauses, which read:
Any coverage provided in this endorsement is excess over any other valid and collectible insurance available to the additional insured whether primary, excess, contingent, or on any other basis unless the written contract, agreement, or certificate of insurance requires that this insurance be primary, in which case this insurance will be primary without contribution from such other insurance available to the additional insured.
(Id. Ex. 5 at 2 & Ex. 6 at 2).
In 2009, the Fiore at the Gardens Condominium Association, Inc. (the "condo association") filed a lawsuit (the "underlying suit") alleging defects in the project's construction. (Id. at ¶ 21 & Ex. 1).3 The condo association's second and third amended complaints named WP South as a defendant. (Id. at ¶ 21 and Exs. 2-3). After it received the lawsuit, WP South "tendered the claims to the Defendants and demanded a defense as well as indemnification under the terms and condition of the policy(ies)." (Id. at ¶ 28). However, Defendants denied that the policies imposed such obligations. (Id. at ¶ 29). As a result, WP South defended the claims against it on its own and also asserted third-party claims against the subcontractors. (Id. at ¶ 22).4
At some undisclosed point, WP South and Maryland Casualty executed an otherwise confidential "Settlement Agreement and Release." (Id. at ¶ 16). The settlement contains an assignment of rights ("assignment") from WP South to Maryland Casualty (id.), which purports to grant the latter the power to stand in the former's shoes and enforce any of WP South's rights against insurers of its subcontractors on the basis of the Additional Insured policy provisions (id. at ¶ 17). It is unclear from the face of the Complaint whether it was through the settlement agreement or some other instrument that Maryland Casualty compensated WP South for the attorney's fees and costs that the latter expended defending itself against the underlying suit.
Zurich, as Maryland Casualty's successor in interest, filed an amended complaint on July 26, 2016 in Florida state court in order to pursue the assigned rights. (DE 1-2).5 On August 8, 2016, Amerisure removed the case to this Court, alleging federal subject matter jurisdiction based on the Parties' complete diversity of citizenship and an amount in controversy over $75,000.00. (DE 1). Zurich filed a Second Amended Complaint on December 5, 2016, which was materially identical to its First Amended Complaint but for the joinder of another Amerisure entity as a Defendant. (DE 39). The Complaint lists three counts corresponding to the policies for each of the three subcontractors - the last two of which are against Amerisure. (Compl. at ¶¶ 47-60 & 61-74). The only remedy Zurich seeks is declaratory relief under Fla. Stat. § 86.011 (). (Id. at ¶¶ 34, 48, 62). Specifically, it requests that the Court determine that the subcontractors' policies required Amerisure to defend WP South in the underlying suit (id. at ¶¶ 60.c., d., e., f., g., 74.c., d., e., f., g.); that Zurich is entitled to be reimbursed by Amerisure for the attorney's fees and costs paid to WP South for its defense against the underlying suit and for those expended in the present case (id. at ¶¶ 60.h., i., 74.h., i.); and that Zurich may also recover pre- and post-judgment interest (id. at ¶¶ 60.j., k., 74.j., k.). Amerisure moves for dismissal of Zurich's claims against it pursuant to Fed. R. Civ. P. 12(b)(6). (DE 43 at 1).
A motion to dismiss under Rule 12(b)(6) challenges the legal sufficiency of a complaint. See Fed. R. Civ. P. 12(b)(6). In assessing the legal sufficiency of a complaint's allegations, the Court is bound to apply the pleading standard articulated in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). That is, the complaint "must . . . contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1289 (11th Cir. 2010) (quoting Twombly, 550 U.S. at 570). "Dismissal is therefore permitted when on the basis of a dispositive issue of law, no construction of the factual allegations will support the cause of action." Glover v. Liggett Grp., Inc., 459 F.3d 1304, 1308 (11th Cir. 2006) (internal quotations omitted) (citing Marshall Cty. Bd. of Educ. v. Marshall Cty. Gas Dist., 992 F. 2d 1171, 1174 (11th Cir. 1993)).
When reviewing a motion to dismiss, a court must construe plaintiff's complaint in the light most favorable to plaintiff and take the factual allegations stated therein as true. See Erickson v. Pardus, 551 U.S. 89, 93-94 (2007); Christopher v. Harbury, 536 U.S. 403, 406 (2002); Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1369 (11th Cir. 1997). However, pleadings that Iqbal, 556 U.S. at 678; see also Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252, 1260 (11th Cir. 2009) ().
Generally, a plaintiff is not required to detail all the facts upon which he bases his claim. Fed. R. Civ. P. 8(a)(2). Rather, Rule 8(a)(2) requires a short and plain statement of the claim that fairly notifies the defendant of both the claim and the supporting grounds. Twombly, 550 U.S. at 555-56. However, "Rule 8(a)(2) still requires a 'showing,' rather than a blanket assertion, of entitlement to relief." Id. at 556 n.3. 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." Id. at 555 (citation omitted). "Factual allegations must be enough to raise [plaintiff's] right to relief above the speculative level, on the assumption that all of the allegations in the complaint are true." Id.
As a threshold matter, Zurich argues that Amerisure has raised merits-based arguments that are inappropriate on a motion to dismiss a declaratory judgment action. However, Zurich's premise misconstrues the nature of declaratory judgments. First, Zurich refers to the operation of, and standard of review for, Florida's Declaratory Judgment Act. See Fla. Stat. §§ 86.011, 86.021. But Florida law is not controlling here. It is a fundamental rule that when federal jurisdiction arises through the parties' diversity of citizenship, substantive...
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