Sabbah et al v. Nationwide Mutual Insurance Company et al

Filing 16

MEMORANDUM OPINION Signed by Judge William M Acker, Jr on 12/22/15. (SAC )

FILED
2015 Dec-22 PM 03:36
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
IBRAHIM SABBAH, et al.,
Plaintiffs,
v.
NATIONWIDE MUTUAL INSURANCE
COMPANY, et al.,
Defendants.

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CIVIL ACTION NO.
2:15-CV-1772-WMA

MEMORANDUM OPINION
On November 11, 2015, defendants Nationwide Mutual Insurance
Company and Nationwide Mutual Fire Insurance Company filed a joint
motion to dismiss (Doc. 7) and an amended motion on November 12,
2015 (Doc 9).

Plaintiffs Ibrahim Sabbah and Sabbah Brothers

Enterprises Inc. d/b/a 14th Street BP filed a response on November
25, 2015. (Doc. 11). Defendants replied on December 9, 2015. (Doc.
12).

Having

submission.

been

fully

briefed,

the

motion

is

now

under

For the reasons stated below, the motion to dismiss

will be denied.
I.

Proper parties
Under the Federal Rules, a pleading must make “a short and

plaint statement of the claim,” Fed. R. Civ. Proc. 8(a)(2), and
such claims must be “limited as far a practicable to a single set
of circumstances . . . [to] promote clarity,” Fed. R. Civ. Proc.
10(b).

“These rules, working together, require a plaintiff ‘to
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present his claims discretely and succinctly, so that his adversary
can discern what he is claiming and frame a responsive pleading’
and allow the court to determine which facts supported which claims
and whether the plaintiff had stated any claims upon which relief
can be granted.” Washington v. Bauer, 149 F. App'x 867, 869-70
(11th Cir. 2005) (quoting Fikes v. City of Daphne, 79 F.3d 1079,
1082 (11th Cir. 1996)).
In their complaint, plaintiffs improperly conflate Nationwide
Mutual Insurance Company and Nationwide Mutual Fire Insurance
Company into what they call “NMIC”, alleging various facts and
Counts I, II, and III against “NMIC.” (Doc. 1).

Despite their

conflation, plaintiffs admit to “separate policy numbers” and
“separate coverages from separate companies” (Doc. 11 at 6) where
National Mutual Insurance Company issued a businessowners policy
(77 BO 762-940-3001) to Sabbah Brothers Enterprises Inc. (Doc. 1-1
at 2) and National Mutual Fire Insurance Company issued a blanket
policy (77 PR 762-940-3007) to Sabbah Brothers Enterprises Inc.
(Doc. 1-1 at 85).1

Therefore, defendants’ motion to dismiss will

be granted with leave to amend for plaintiffs to separate certain
facts and counts as to make clear what plaintiffs are complaining
about as to each defendant.

1

Plaintiffs also allege in Count II that “NMIC acted
wrongfully and in bad faith when it refused coverage to
Nineteenth [Street]” (Doc. 1 at 19), however there is no party to
this action named “Nineteenth Street.”
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II.

Statute of limitations
"The very basic and long settled rule of construction of

[Alabama] courts is that a statute of limitations begins to run
. . . as soon as the party in whose favor it arises is entitled to
maintain an action thereon." Wheeler v. George, 39 So. 3d 1061,
1084 (Ala. 2009)(italics omitted).

“[A] cause of action arising

out of a failure to settle a third-party claim made against the
insured does not accrue unless and until the claimant obtains a
final judgment in excess of the policy limits.” Evans v. Mut.
Assur., Inc., 727 So. 2d 66, 67 (Ala. 1999).

However, a cause of

action for “a first-party claim wherein . . . the insurer had, in
bad faith, refused to pay a legitimate claim made by the insured on
his own policy . . . accrues the moment the insurer refuses, in bad
faith, to honor the claim, and that the insurer cannot absolve
itself of liability by subsequently tendering payment.” Id. at 68.
Under both tort theories, the applicable statute of limitations is
two years. Ala. Code. § 6-2-38.
In this case, plaintiffs argue2 that their claims contained in
2

A close reading of plaintiffs’ complaint suggests that as
to at least one defendant, Counts I, II, and III do not arise
from refusal to settle with third-party claimants in favor of
going to trial, but rather appear to arise from refusal to settle
because plaintiffs were not covered by the policy. (Doc. 1 at 811); see Fed. Ins. Co. v. Travelers Cas. & Sur. Co., 843 So. 2d
140, 143 (Ala. 2002) (finding third-party liability arises from
the insured relinquishing control of the defense and settlement
of the action to the insurer because “reliance on the abilities
and good faith of the insurer is therefore necessarily at a
maximum”). Specifically, plaintiffs allege defendants refused to
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Counts I, II, and III of their complaint are third-party bad faith
claims where “a liability insurance carrier[] fail[s] to protect
its insured from a third-party claim.” (Doc. 11 at 7). See Chavers
v. Nat'l Sec. Fire & Cas. Co., 405 So. 2d 1, 5 (Ala. 1981) (“third
party actions involv[e] . . . recovery against the insurer in
situations where the insurer wrongfully refuses, either negligently
or intentionally, to settle the third party claim within policy
limits and where, as a result, the insured incurs a judgment
against him in an amount in excess of the policy”).

Therefore,

judgment having been entered against plaintiffs on December 20,
2013 by the Circuit Court of Jefferson County (Doc. 1 at 5-6, 13)
and post-judgment motions having been denied on June 20, 2014 by
the Supreme Court of Alabama (Doc. 1 at 13; Doc. 11 at 5), Counts
I, II, and III were timely filed on October 13, 2015 within the two
year statute of limitations.

ever defend or indemnify Nineteenth Street “[b]ecause it was not
listed as the named insured.” (Doc. 1 at 7). Additionally,
plaintiffs allege defendants initially denied coverage for
plaintiffs while still offering “a ‘courtesy defense’ wherein it
agreed to pay for counsel but expressly refused coverage and
denied any indemnity whatsoever.” (Doc. 1 at 8). Plaintiffs
allege that defendants later replaced this arrangement with “a
defense under a reservation or rights . . . [where plaintiffs]
‘may not be covered under the policies.’” (Doc. 1 at 8). While
plaintiffs contend Counts I, II, and III are third-party
liability claims, the facts contained in their complaint and
attached insurance policy language and communications instead may
support only first-party claims for bad faith refusal to pay by
an insurer; however, plaintiffs’ conflation of both defendants,
and defendants’ limited grounds for its motion to dismiss, make
adjudication of these issues not ripe for review.
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CONCLUSION
For the reasons explained above, by separate order defendants’
motion to dismiss will be granted but with leave to amend on or
before January 8, 2016.

DONE this 22nd day of December, 2015.

_____________________________
WILLIAM M. ACKER, JR.
UNITED STATES DISTRICT JUDGE

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