Pennsylvania National Mutual Casualty Insurance Company v. Watts Builders, L.L.C. et al

Filing 26

OPINION AND ORDER granting in part and denying in part the 13 Motion to Dismiss filed by the dft homeowners (Dedric J. Belcher, et al.), as further set out in order; further ORDERED that plf Pennsylvania National Mutual Casualty Insurance Company s how cause, if there be any, by 5/21/2013 as to why the no-duty-to-indemnify claim should not be dismissed without prejudice to the extent the claim is against dfts Watts Builders, L.L.C., Watts Development Company, Inc., and Watts Homes, L.L.C. in addition to the homeowner dfts. Signed by Honorable Judge Myron H. Thompson on 5/7/2013. (Attachments: # 1 Civil Appeals Checklist) (wcl, )

IN THE DISTRICT COURT OF THE UNITED STATES FOR THE
MIDDLE DISTRICT OF ALABAMA, NORTHERN DIVISION

PENNSYLVANIA NATIONAL
MUTUAL CASUALTY INSURANCE
COMPANY,
Plaintiff,
v.
WATTS BUILDERS, L.L.C.;
et al.,
Defendants.

)
)
)
)
)
)
)
)
)
)
)
)

CIVIL ACTION NO.
2:12cv994-MHT
(WO)

OPINION AND ORDER
Plaintiff

Pennsylvania

National

Mutual

Casualty

Insurance Company brought this suit seeking a declaratory
judgment and naming as defendants numerous individual
homeowners (Dedric J. Belcher, et al.) and the following
three

companies:

Watts

Builders,

L.L.C.,

Development Company, Inc., and Watts Homes, L.L.C.

Watts
The

jurisdiction of this court has been invoked pursuant to
28 U.S.C. § 1332 (diversity).

This matter is now before

the court on the homeowners’ motion to dismiss.

In a pending state-court lawsuit, the homeowners sued
the Watts companies (which have insurance policies with
Penn National), claiming that the companies sold them
homes with serious latent defects.
National

asks

this

court

to

In this case, Penn

declare

that

the

Watts

companies are afforded no coverage, in two respects,
under policies with the insurance company as to the
claims that have been brought against the Watts companies
in state court: first, that the insurance company does
not have a duty to defend with regard to the state-court
action; and, second, that the insurance company does not
have a duty to indemnify with regard to the state-court
action.
As for the first matter (Penn National’s claimed noduty to defend in the state-court action), the insurance
company presents a claim ripe for adjudication.

The

homeowners have presented no valid reason for the claim
to be dismissed at this stage.
may pursue it.

2

Therefore, Penn National

However, as for the second matter (Penn National’s
claimed no-duty to indemnify), the insurance company has
brought a claim not yet ripe for adjudication.

The

record does not show that the underlying state-court case
against the Watts companies has resulted in any of them
being held liable.

“[The defendants] could prevail in

the underlying lawsuit.

With this result, the issue of

whether

company]

[the

insurance

must

indemnify

[the

defendants] would be moot, and the court would never have
to reach the issue....
concludes

that

the

For these reasons, the court

issue

of

indemnification

is

not

sufficiently ripe to present a ‘case’ or ‘controversy’
and that, if there were, the court would still, in the
exercise

of

its

discretion,

declaratory relief.”

decline

to

provide

Auto-Owners Ins. Co. v. Toole, 947

F. Supp. 1557, 1566 (M.D. Ala. 1996) (Thompson, J.).

In

short, because the Watts companies have not yet been held
liable and there is no telling whether they will be held
liable,

deciding

whether

the

3

companies

have

a

claim

against their insurance company for speculative liability
is premature.

To the extent that the homeowners’ motion

to dismiss addresses the no-duty-to-indemnify claim, it
should be granted to the extent the claim is against
them.
In addition, for the reasons stated above, the court
will order Penn National to show cause as to why the noduty-to-indemnify claim should not be dismissed to the
extent the claim is against the Watts companies as well.

***
Accordingly, it is ORDERED as follows:
(1) The motion to dismiss (Doc. No. 13) filed by the
defendant

homeowners

(Dedric

J.

Belcher,

et

al.)

is

granted in part and denied in part as follows.
(2)
National

To

the

Mutual

declaration

that

defendants

Watts

extent

that

plaintiff

Casualty

Insurance

it

not

does

Builders,

4

owe

L.L.C.,

Pennsylvania

Company
a

duty

Watts

seeks
to

a

defend

Development

Company, Inc., and Watts Homes, L.L.C. in the underlying
state-court action brought against the companies, the
defendant homeowners’ motion to dismiss is denied to the
extent

the

no-duty-to-defend

defendant homeowners.

claim

is

against

the

Plaintiff Pennsylvania National

Mutual Casualty Insurance Company may pursue this claim.
(The no-duty-defend claim to the extent the claim is
against

defendants

Watts

Builders,

L.L.C.,

Watts

Development Company, Inc., and Watts Homes, L.L.C. is not
before the court and thus is still pending.)
(3)
National

To

the

Mutual

extent

that

Casualty

plaintiff

Insurance

Pennsylvania

Company

seeks

a

declaration that it does not owe a duty to indemnify
defendants

Watts

Builders,

L.L.C.,

Watts

Development

Company, Inc., and Watts Homes, L.L.C. in the event that
the companies are held liable, the motion to dismiss is
granted and the insurance company’s no-duty-to-indemnify
claim is dismissed without prejudice to the extent the
claim is against the homeowner defendants.

5

Should the

claim become ripe at a later date, plaintiff Pennsylvania
National Mutual Casualty Insurance Company may move to
have it reinstated.
It is further ORDERED that plaintiff Pennsylvania
National Mutual Casualty Insurance Company show cause, if
there be any, by May 21, 2013 as to why the no-duty-toindemnify claim should not be dismissed without prejudice
to the extent the claim is against defendants Watts
Builders, L.L.C., Watts Development Company, Inc., and
Watts

Homes,

L.L.C.

in

addition

to

the

homeowner

defendants.
DONE, this the 7th day of May, 2013.

/s/ Myron H. Thompson
UNITED STATES DISTRICT JUDGE