Sabbah et al v. Nationwide Mutual Insurance Company et al
MEMORANDUM OPINION. Signed by Judge Virginia Emerson Hopkins on 4/18/2018. (JLC)
2018 Apr-18 PM 12:42
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
IBRAHIM SABBAH, and SABBAH
BROTHERS ENTERPRISES, INC,
doing business as 14th Street BP,
INSURANCE COMPANY and
NATIONWIDE MUTUAL FIRE
) Case No.: 2:15-CV-1772-VEH
The Plaintiffs in this case, Ibrahim Sabbah (“Sabbah”), and Sabbah Brothers
Enterprises, Inc. d/b/a 14th Street BP (“SBE”), sue Defendants, Nationwide Mutual
Fire Insurance Company (“NMFIC”) and Nationwide Mutual Insurance Company
(“NMIC”). On May 11, 2017, at the end of an extensive Memorandum Opinion and
Order (doc. 60) directed towards the then-pending Motion To Dismiss (doc. 50), this
Court dismissed all claims against the Defendants except the claims for: breach of
contract by NMFIC (Count Twelve); breach of contract by NMIC (Count Thirteen);
declaratory judgment against NMFIC (Count Fourteen); and declaratory judgment
against NMIC (Count Fifteen). These remaining counts arise out of judgments obtained
against Sabbah and SBE in four underlying lawsuits and the instant Defendants’ refusal
to indemnify SBE and Sabbah as to those judgments.
The case is now before the Court on the Defendants’ most recent Motion To
Dismiss, filed pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (Doc.
76). For the reasons stated herein, the motion will be GRANTED.
Generally, the Federal Rules of Civil Procedure require only that the complaint
provide “a short and plain statement of the claim showing that the pleader is entitled
to relief.” Fed. R. Civ. P. 8(a). However, to survive a motion to dismiss brought under
Rule 12(b)(6), a complaint must “state a claim to relief that is plausible on its face.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007) (“Twombly”).
A claim has facial plausibility “when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550
U.S. at 556) (“Iqbal”). That is, the complaint must include enough facts “to raise a right
to relief above the speculative level.” Twombly, 550 U.S. at 555 (citation and footnote
omitted). Pleadings that contain nothing more than “a formulaic recitation of the
elements of a cause of action” do not meet Rule 8 standards, nor do pleadings suffice
that are based merely upon “labels or conclusions” or “naked assertion[s]” without
supporting factual allegations. Id. at 555, 557 (citation omitted).
Once a claim has been stated adequately, however, “it may be supported by
showing any set of facts consistent with the allegations in the complaint.” Id. at 563
(citation omitted). Further, when ruling on a motion to dismiss, a court must “take the
factual allegations in the complaint as true and construe them in the light most favorable
to the plaintiff.” Pielage v. McConnell, 516 F.3d 1282, 1284 (11th Cir. 2008) (citing
Glover v. Liggett Group, Inc., 459 F.3d 1304, 1308 (11th Cir. 2006)).
In the underlying state court actions, judgments totaling $15,150,000.00 were
entered against the instant Plaintiffs. The Plaintiffs claim that the Defendants should
have indemnified them for their loss under the following two insurance policies: a
business owners liability insurance policy (Policy No. 77-BO-762-940-3001)
(hereinafter the “NMIC Policy”) issued by NMIC to SBE; and a commercial general
liability insurance policy with liquor law liability coverage (Policy No. 77 PR
762-940–3007) (hereinafter the “NMFIC Policy”) issued by NMFIC to SBE. The
NMIC Policy listed SABBAH BROTHERS ENTERPRISES INC. as the named
insured and the NMFIC Policy listed SABBAH BROTHERS ENTERPRISES INC.,
d/b/a 14TH STREET BP as the named insured.1 The Defendants claim that the
The facts and claims in this case are set out in much more detail in document 60.
remaining claims in this case are now moot because they have satisfied the judgments
in the underlying cases. (Doc. 76 at 3).2 As they put it:
This is because [the] Plaintiffs’ remaining claims and alleged damages are
premised entirely on [the] Defendants’ failure to indemnify them against
the underlying judgments, judgments which have now been satisfied and
released. Plaintiffs therefore no longer have a compensable loss and
nothing remains for this Court to decide.
(Doc. 76 at 3).
Very recently, the Eleventh Circuit has reiterated:
Mootness is a question of law[.] See Christian Coal. of Fla., Inc.
v. United States, 662 F.3d 1182, 1188 (11th Cir. 2011).
Article III of the Constitution limits federal court jurisdiction to
cases and controversies. See id. at 1189. Accordingly, federal courts
cannot offer advisory opinions on moot questions or on abstract
propositions. See id. And federal courts cannot declare principles or rules
of law outside those implicated by the matter directly before them. See id.
A live controversy must exist at all stages of review. See id. at 1189-90.
In Re Zalloum, 714 F. App'x 973, 974 (11th Cir. 2018). “[A] case generally becomes
moot and must be dismissed . . . ‘when the issues presented are no longer “live” or the
parties lack a legally cognizable interest in the outcome.’” Flanigan's Enterprises, Inc.
of Georgia v. City of Sandy Springs, Georgia, 868 F.3d 1248, 1255 (11th Cir. 2017),
cert. denied sub nom. Davenport v. City of Sandy Springs, Ga., No. 17-869, 2018 WL
1460786 (U.S. Mar. 26, 2018) (quoting Powell v. McCormack, 395 U.S. 486, 496, 89
It is undisputed that this has occurred.
S. Ct. 1944, 1951, 23 L. Ed. 2d 491 (1969)). “If events that occur subsequent to the
filing of a lawsuit or an appeal deprive the court of the ability to give the plaintiff or
appellant meaningful relief, then the case is moot and must be dismissed.” World Wide
Supply OU v. Quail Cruises Ship Mgmt., 802 F.3d 1255, 1259 (11th Cir. 2015)
(internal quotations and citations omitted).
To the extent that Counts Twelve and Thirteen seek damages relating to the
payment of the underlying judgments themselves, they are moot and due to be
dismissed. However, the Plaintiffs note that, in addition to indemnification, these counts
also seek compensation for Sabbah for the emotional distress caused as a result of the
Defendants’ initial failure to indemnify him on the judgments entered against him.3
“It is settled that the law in [Alabama] does not permit recovery for personal
injury, inconvenience, annoyance or mental anguish and suffering in an action for
breach of a contract of insurance.” Vincent v. Blue Cross-Blue Shield of Alabama, Inc.,
373 So. 2d 1054, 1056 (Ala. 1979). In breach of contract actions, such damages “are
too remote, were not within the contemplation of the parties, and . . . the breach of the
contract is not such as will naturally cause mental anguish.” Prattville Mem'l Chapel
v. Parker, 10 So. 3d 546, 565 (Ala. 2008) (internal quotations and citations omitted).
In their brief in opposition to the Motion To Dismiss, the Plaintiffs admit that only
Sabbah is seeking damages for mental anguish. (Doc. 77 at 3, 8). Accordingly, as to SBE, Counts
Twelve and Thirteen are due to be dismissed in their entirety.
where the contractual duty or obligation is so coupled with matters of
mental concern or solicitude, or with the feelings of the party to whom the
duty is owed, that a breach of that duty will necessarily or reasonably
result in mental anguish or suffering, it is just that damages therefor be
taken into consideration and awarded.
Prattville Mem'l Chapel, 10 So. 3d at 565. However, this is a limited exception. In
Ruiz de Molina v. Merritt & Furman Ins. Agency, Inc., 207 F.3d 1351, 1359 (11th Cir.
2000), the Eleventh Circuit explained:
The majority of the cases in which a plaintiff has been allowed to recover
damages for mental anguish involved actions on “contracts for the repair
or construction of a house or dwelling or the delivery of utilities thereto,
where the breach affected habitability.” See, e.g., [Liberty Homes, Inc. v.
Epperson, 581 So. 2d 449, 454 (Ala. 1991), as modified on denial of
reh'g (May 24, 1991)]; Orkin Exterminating Co. v. Donavan, 519 So.2d
1330 (Ala.1988); Lawler Mobile Homes, Inc. v. Tarver, 492 So.2d 297
(Ala.1986); Alabama Power Co. v. Harmon, 483 So.2d 386 (Ala.1986).
Because a person’s home is said to be his “castle” and the “largest single
individual investment the average American family will make,” these
contracts are “so coupled with matters of mental concern or solicitude or
with the feelings of the party to whom the duty is owed, that a breach of
that duty will necessarily or reasonably result in mental anguish or
suffering.” B & M Homes, Inc. v. Hogan, 376 So.2d 667, 671–72
(Ala.1979). Where such a contractual duty breached, the Alabama
Supreme Court has said that “it is just that damages therefor be taken into
consideration and awarded.” Id. at 671.
A smaller number of cases has permitted such recovery in actions
involving the burial of loved ones, suits based on a physician's promises
to deliver a child, and claims based on the breach of a new car warranty
where the owner suffers significant fear, anxiety, and embarrassment. See
Taylor v. Baptist Medical Center, Inc., 400 So.2d 369 (Ala.1981);
Volkswagen of America, Inc. v. Dillard, 579 So.2d 1301 (Ala.1991).
The Alabama Supreme Court has made very clear, however, that
all these cases represent an exception to the general rule prohibiting
mental anguish damages for breach of contract. These cases deserve
special treatment because it is highly foreseeable that egregious breaches
of certain contracts—involving one's home or deceased loved one, for
example—will result in significant emotional distress. See Sexton v. St.
Clair Federal Sav. Bank, 653 So.2d 959, 962 (Ala.1995). The contractual
duties imposed by these contracts are so sensitive that a breach will
necessarily and foreseeably result in mental anguish. Orkin
Exterminating, 519 So.2d at 1333.
Ruiz, 207 F.3d at 1359–60.
The facts of the instant case do not fall within one of the already recognized
circumstances where Alabama courts have allowed mental anguish damages for breach
of contract–i.e. those concerning the plaintiff’s home, the burial of loved ones, a
physician's promises to deliver a child, or a new car warranty. The Plaintiff has cited
no authority, and this Court is aware of none4, where an Alabama Court has allowed
mental anguish damages for the breach of such policies. That makes sense, because
such contracts are not “coupled with matters of mental concern or solicitude or with the
feelings of the party to whom the duty is owed, that a breach of that duty will
necessarily or reasonably result in mental anguish or suffering.” It is not foreseeable
that the breach of such contracts, which insured SBE, not Sabbah, would result in
The Defendants state that they too have found no Alabama case which allows such a
recovery under these circumstances. (Doc. 80 at 4).
significant emotional distress to Sabbah.5 See, Bashir's Inc. v. Sharif, No.
The following discussion from Ruiz, where the Eleventh Circuit refused to accept the
Plaintiff’s argument that Alabama law recognized mental anguish damages for breach of all
contracts of insurance, is helpful:
[The plaintiff] contends that “property insurance policies are one of the
types of contracts that are ‘coupled with matters of mental solicitude’.” He finds
support for this theory in Independent Fire Ins. Co. v. Lunsford, 621 So.2d 977
(Ala.1993), in which the Alabama Supreme [C]ourt approved an award of mental
anguish damages to the Lunsfords when their insurer failed to pay them for
damage on their mobile home. The court allowed the award to stand despite the
fact that the mobile home was not the Lunsford's primary residence. Ruiz de
Molina argues that this case established that Alabama law permits a plaintiff to
recover mental anguish damages for the breach of any insurance policy.
We disagree. The Alabama Supreme Court in Lunsford did no more than
to affirm an award of mental anguish damages for breach of an insurance contract
on a mobile home. The court specifically noted that even though the mobile home
was not the primary residence of the Lunsfords, it was, nonetheless, used by their
relatives. 621 So.2d at 977.
We do not think that the Lunsford court intended their decision to broaden
the narrow exception permitting mental anguish damages for breach of especially
sensitive duties. On the contrary, the Alabama Supreme Court has made clear that
it is not eager to “widen the breach in the general rule [prohibiting such damages].”
Volkswagen of America, Inc. v. Dillard, 579 So.2d 1301, 1304 (Ala.1991). The
court has permitted recovery of mental anguish damages only in those cases
involving breaches of contracts involving emotionally-freighted duties, such as the
contract to insure a home. The insurer of homes assumes “contractual duties ... so
coupled with matters of mental solicitude as to the duty that is owed, that a breach
of that duty will necessarily or reasonably result in mental anguish.” See Orkin,
519 So.2d at 1330.
We conclude, therefore, that Lunsford did not . . . abrogate the general rule
against recovery for mental anguish associated with the breach of a contract.
Absent clearer evidence to the contrary than we find in Lunsford, we believe that
Alabama law does not presume that the parties to a contract meant to “insure each
other’s emotional tranquility.” See Douglas J. Whaley, Paying for the Agony: The
Recovery of Emotional Distress Damages in Contract Actions, 26 Suffolk
U.L.Rev. 935, 951 (1992). The breach of any contract which the parties consider
important will always lead to some emotional distress. Id. The rule in Alabama
remains, however, that recovery of mental anguish damages is permitted for breach
2:09-CV-536-RDP, 2012 WL 3637582, at *4, n. 3 (N.D. Ala. Aug. 22, 2012) (Proctor,
J.), amended, No. 2:09-CV-536-RDP, 2012 WL 12895644 (N.D. Ala. Oct. 30, 2012)
(“[T]he court concludes that, due to the absence of any exceptional circumstances
suggesting that the breach of the insurance contract would result in highly foreseeable
and significant mental anguish, recovery for mental anguish damages for the breach of
contract claims is not permitted here.”) (citing Ruiz, 207 F.3d at 1359–1360); Holmes
v. Behr Process Corp., No. 2:15-CV-00454-LSC, 2016 WL 7210400, at *3 (N.D. Ala.
Dec. 13, 2016) (Coogler, J.) (No mental anguish damages for breach of warranty
regarding investment property) (citing Ruiz, 207 F.3d at 1359–1360).6 Counts Twelve
and Thirteen are due to be dismissed.7
of contract only in a narrow range of cases involving contracts which create
especially sensitive duties, the breach of which cause highly foreseeable and
significant mental anguish.
Ruiz, 207 F.3d at 1360–61.
Sabbah in also incorrect in his argument that whether mental anguish damages are
recoverable is a question of fact. (See doc. 77 at 8). The case he cites for this proposition, B & M
Homes, Inc. v. Hogan, 376 So. 2d 667, 673 (Ala. 1979), stated that “the question of damages for
mental anguish then became a question of fact for the jury to decide.” However, the Court made
that pronouncement only after the plaintiffs presented evidence of such damages and the court had
found such damages were allowed as a matter of law. See B & M Homes, 376 So. 2d at 672
(“This case clearly falls within the first exception[.] It was reasonably foreseeable by appellants
that faulty construction of appellees' house would cause them severe mental anguish.”).
Counts Twelve and Thirteen also seek
associated consequential damages including attorneys' fees in a sum in excess of
the jurisdictional limits of this court, to be determined by a jury, which will fairly
and adequately compensate the Plaintiff for injuries and damages sustained,
The Plaintiff agrees that the Court’s ruling that the Plaintiff cannot recover
mental anguish damages in Counts Twelve and Thirteen is “case dispositive.”8
Accordingly, Counts Fourteen and Fifteen are also due to be dismissed.
Based on the foregoing, the Court will enter a Final Order dismissing all
remaining claims against the Defendants.
DONE and ORDERED this 18th day of April, 2018.
VIRGINIA EMERSON HOPKINS
United States District Judge
together with interest and the cost of this proceeding.
(Doc. 47 at 89-90; 93). The Plaintiff has abandoned these claims for damages, conceding that if
this Court finds that mental anguish damages are not recoverable, such a ruling would be “case
dispositive.” (Doc. 77 at 2).
See note 7.
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