Porter et al v. Crumpton and Associates, LLC et al
MEMORANDUM OPINION AND ORDER: it is hereby ORDERED that Dft AmericanGuarantee's 31 Motion to Dismiss the First Amended Complaint is DENIED as MOOT, and its 39 Motion to Dismiss the Second Amended Complaint is DENIED. Signed by Honorable Judge Mark E. Fuller on 9/23/2013. (Attachments: # 1 Civil Appeals Checklist) (wcl, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
CHAVIS PORTER, et al.,
AMERICAN GUARANTEE AND
LIABILITY INSURANCE COMPANY,
CASE NO. 2:12-cv-103-MEF
(WO – Do Not Publish)
MEMORANDUM OPINION AND ORDER
Now before the Court are Defendant American Guarantee and Liability Insurance
Company’s (“American Guarantee”) Motion to Dismiss Plaintiff’s First Amended Complaint
(Doc. #31) and Motion to Dismiss Plaintiff’s Second Amended Complaint (Doc. #39), filed
September 14, 2012 and October 18, 2012, respectively. For the reasons set forth below, the
Court finds that both of American Guarantee’s motions are due to be DENIED.
FACTUAL AND PROCEDURAL BACKGROUND1
This case involves an insurance coverage dispute. On October 26, 2011, Plaintiffs
Chavis and Melissa Porter (the “Porters”) obtained a $250,000 judgment (the “Underlying
Judgment”) against Crumpton & Associates, L.L.C. for legal malpractice. The Porters allege
that American Guarantee has failed to satisfy the Underlying Judgment pursuant to a
professional liability policy that it provided to Crumpton & Associates, L.L.C. as required
This recitation of facts is derived from Plaintiff’s Second Amended Complaint (Doc. #38).
As is required at the motion to dismiss stage, the Court will take as true all factual allegations as pled
in the Complaint.
under Alabama Code § 27-23-2 (1975). The Porters further allege that all requirements
under the relevant policy were met by Crumpton & Associates, L.L.C., including that the
underlying legal malpractice claim (the “Porter Claim”) was made and reported during the
American Guarantee removed this case from the Circuit Court of Montgomery
County, Alabama on February 2, 2012 (Doc. #1) and filed a motion to dismiss (Doc. #6) a
week later. Before the Court could resolve this motion to dismiss, the Porters filed a motion
to remand (Doc. #10), which the Court denied. (Doc. #18.) The Porters then filed their
response to American Guarantee’s motion to dismiss (Doc. #22). Attached to American
Guarantee’s motion and the Porters’ response were various documents presented for the
purpose of definitively showing whether the Porter claim was made and reported during the
applicable policy period. However, before the Court could resolve American Guarantee’s
initial motion to dismiss, the Porters were granted leave to file their First Amended
Complaint (Doc. #29). The First Amended Complaint added a single allegation that the
Porters’ claim was made and reported within the policy period. American Guarantee then
filed a motion to dismiss the First Amended Complaint (Doc. #31), reasserting and adopting
the arguments made previously in its initial motion to dismiss. Yet, before that motion to
dismiss could be resolved, the Porters filed their Second Amended Complaint (Doc. #34).
American Guarantee again filed a motion to dismiss the Second Amended Complaint (Doc.
#39), incorporating by reference all arguments made in its Motion to Dismiss the First
Amended Complaint. The Porters timely filed a response (Doc. #42) to American’s
Guarantee’s motion, and American Guarantee filed a reply. (Doc. #44.) The Court held a
status conference on September 18, 2013. This opinion is consistent with representations
made during the conference.
STANDARD OF REVIEW
In considering a Rule 12(b)(6) motion to dismiss, the district court accepts the
plaintiff’s allegations as true and reads them in the light most favorable to the plaintiff. Duke
v. Cleland, 5 F.3d 1399, 1402 (11th Cir. 1993) (citation omitted). Further, a district court
must favor the plaintiff with “all reasonable inferences from the allegations in the
complaint.” Stephens v. Dep’t of Health and Human Servs., 901 F.2d 1571, 1573 (11th Cir.
To survive a Rule 12(b)(6) 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 (2009) (internal quotations omitted). A complaint states
a facially plausible claim for relief “when the plaintiff pleads factual content that allows the
court to draw a reasonable inference that the defendant is liable for the misconduct alleged.”
Id. A complaint does not state a facially plausible claim for relief if it shows only “a sheer
possibility that the defendant acted unlawfully.” Id. While a complaint need not contain
detailed factual allegations to survive a Rule 12(b)(6) motion, “[a] pleading that offers labels
and conclusions or a formulaic recitation of the elements of a cause of action will not do.”
Id. (internal quotation and citations omitted). Absent the necessary factual allegations,
“unadorned, the-defendant-unlawfully-harmed-me accusation[s]” will not suffice. Id.
Courts are also not “bound to accept as true a legal conclusion couched as a factual
allegation.” Papasan v. Allain, 478 U.S. 265, 286 (1986).
American Guarantee’s Motion to Dismiss the First Amended Complaint is moot.
After American Guarantee filed this motion, the Porters filed their Second Amended
Complaint. The filing of the Second Amended Complaint supercedes the First Amended
Complaint and renders it a nullity. See Fritz v. Standard Sec. Life Ins. Co. of New York, 676
F.2d 1356, 1358 (11th Cir. 1982); Jefferson v. H.K. Porter Co., 485 F. Supp. 356, 359–60
(N.D. Ala. 1980). Thus, because the First Amended Complaint no longer has any legal
effect, American Guarantee’s Motion to Dismiss the First Amended Complaint is due to be
DENIED as MOOT.
That leaves pending before the Court American Guarantee’s Motion to Dismiss the
Second Amended Complaint. The Porters bring their single claim under Alabama Code §
27-23-2 (1975), which provides:
Upon the recovery of a final judgment against any person, firm, or corporation
by any person . . . for loss or damage . . . if the defendant in such action was
insured against the loss or damage at the time when the right of action arose,
the judgment creditor shall be entitled to have the insurance money provided
for in the contract of insurance between the insurer and the defendant applied
to the satisfaction of the judgment, and if the judgment is not satisfied within
30 days after the date when it is entered, the judgment creditor may proceed
against the defendant and the insurer to reach and apply the insurance money
to the satisfaction of the judgment.
Put simply, this statute allows the Porters to “reach and apply” insurance proceeds to satisfy
their judgment against Crumpton & Associates, L.L.C. by bringing a direct action claim
against their insurer, American Guarantee.
American Guarantee argues that the Porters did not, and cannot, state a claim under
this statute because no insurance policy exists for them to “reach and apply” toward the
satisfaction of the judgment they have against Crumpton & Associates, L.L.C. However, the
contested issues in this case–whether or not a policy exists, whether the Porter claim was
timely made and reported, and whether a policy actually covered the Underlying Judgment–
are not issues that can be resolved at the motion to dismiss stage. While both parties have
submitted a labyrinth of documents outside the pleadings in connection with their respective
briefs in support of and against American Guarantee’s motions to dismiss, the Court will not
consider these documents, as doing so would require it to transform the remaining motion
to dismiss into one for summary judgment.
Rather, the Court will accept as true the factual allegations stated in the Second
Amended Complaint and decide whether they are sufficient to state a plausible claim for
relief under the relevant statute. See Ashcroft, 556 U.S. at 678. The Court believes that they
are. The Porters allege that: (1) American Guarantee insured Crumpton & Associates, L.L.C.
for legal malpractice at the time of the malpractice giving rising to the Underlying Judgment;
(2) American Guarantee was obligated to satisfy the Underlying Judgment against Crumpton
& Associates, L.L.C. under this insurance policy; (3) all terms and conditions of this policy
were met; and (4) American Guarantee has breached the insurance policy contract by failing
to pay as required. These facts, in the Court’s opinion, present a sufficient basis from which
the Court can reasonably infer that the Underlying Judgment against Crumpton & Associates,
L.L.C. was covered by some policy of insurance issued to Crumpton & Associates, L.L.C.
by American Guarantee and that the Porter Claim was made and reported within the coverage
period of this policy. This is sufficient to state a plausible claim for relief under Alabama
Code § 27-23-2.
The questions of what policy, if any, covered Crumpton & Associates, L.L.C., and
whether this policy in fact covers the dispute at issue here, cannot be resolved without
discovery and, therefore, are best left for summary judgment. Thus, despite American
Guarantee’s arguments to the contrary, the Porter’s allegations rise above the level of a
“formulaic recitation” of the elements of a cause of action under Alabama Code § 27-23-2.
Therefore, American Guarantee’s Motion to Dismiss the Second Amended Complaint is due
to be DENIED.
For the foregoing reasons, it is hereby ORDERED that Defendant American
Guarantee’s Motion to Dismiss the First Amended Complaint (Doc. #31) is DENIED as
MOOT, and its Motion to Dismiss the Second Amended Complaint (Doc. #39) is DENIED.
DONE this the 23rd day of September, 2013.
/s/ Mark E. Fuller
UNITED STATES DISTRICT JUDGE
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