Pennsylvania Mutual Casualty Insurance Company v. The Retirement Systems of Alabama et al

Filing 17

MEMORANDUM OPINION AND ORDER that the Motion to Dismiss or in the Alternative to Stay is DENIED and the defendants, RSA and AREH must file an answer to plaintiff's complaint by 6/12/2014; as more fully set out in order. Signed by Judge C Lynwood Smith, Jr on 6/5/2014. (AHI)

FILED
2014 Jun-05 AM 10:30
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
NORTHWESTERN DIVISION
PENNSYLVANIA NATIONAL
MUTUAL CASUALTY
INSURANCE COMPANY,
Plaintiff,
vs.
THE RETIREMENT SYSTEMS
OF ALABAMA, ALABAMA
REAL ESTATE HOLDINGS,
INC., QUALITY COATINGS &
DRYWALL, INC., THE OHIO
CASUALTY INSURANCE
COMPANY, and LIBERTY
MUTUAL GROUP, INC.,
Defendants.

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Civil Action No. CV-14-S-248-NW

MEMORANDUM OPINION AND ORDER
Plaintiff, Pennsylvania National Mutual Casualty Insurance Company (“Penn
National”), filed this declaratory judgment action on February 12, 2014.1 The case
currently is before the court on the “Motion to Dismiss or in the Alternative to Stay”
filed by defendants The Retirement Systems of Alabama (“RSA”) and Alabama Real
Estate Holdings (“AREH”).2 Upon consideration of the motion, plaintiff’s response,3
1
2

Doc. no. 1 (Complaint).

Doc. no. 6. Defendants submitted evidence in support of their motion. Federal Rule
of Civil Procedure 12(d) states that,

and defendants’ reply,4 the court concludes the motion is due to be denied.
I. STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b) permits a party to move to dismiss a
complaint for, among other reasons, “failure to state a claim upon which relief can be
granted.” Fed. R. Civ. P. 12(b)(6). This rule must be read together with Rule 8(a),
which requires that a pleading contain only a “short and plain statement of the claim
showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). While that
pleading standard does not require “detailed factual allegations,” Bell Atlantic Corp.
[i]f, on a motion under Rule 12(b)(6) or 12(c), matters outside the
pleadings are presented to and not excluded by the court, the motion must be
treated as one for summary judgment under Rule 56. All parties must be given
a reasonable opportunity to present all the material that is pertinent to the motion.
Fed. R. Civ. P. 12(d) (alteration supplied). Thus, courts usually “do not consider anything
beyond the face of the complaint and documents attached thereto when analyzing a motion to
dismiss.” Financial Security Assurance, Inc. v. Stephens, Inc., 500 F.3d 1276, 1284 (11th Cir.
2007) (citing Brooks v. Blue Cross & Blue Shield of Florida, Inc., 116 F.3d 1364, 1368 (11th
Cir. 1997)). The Eleventh Circuit “recognizes an exception, however, in cases in which a
plaintiff refers to a document in its complaint, the document is central to its claim, its contents
are not in dispute, and the defendant attaches the document to its motion to dismiss.” Financial
Security Assurance, 500 F.3d at 1284 (citing Harris v. Ivax Corp., 182 F.3d 799, 802 n.2 (11th
Cir. 1999); Brooks, 116 F.3d at 1368-69). Documents from prior judicial proceedings also can
be considered without converting the motion to dismiss into one for summary judgment, because
such documents are “public records that [are] ‘not subject to reasonable dispute’ because they
[are] ‘capable of accurate and ready determination by resort to sources whose accuracy could not
reasonably be questioned.’” Horne v. Potter, 392 F. App’x 800, 802 (11th Cir. 2010) (quoting
Fed. R. Evid. 201(b); other citations omitted) (alterations supplied). Here, the documents
attached by defendants are pleadings from the underlying state court action, and a courtesy copy
of an unpublished federal district court opinion. Thus, it is not necessary to convert the motion
to dismiss into one for summary judgment under Federal Rule of Civil Procedure 56.
3

Doc. no. 12.

4

Doc. no. 13.

2

v. Twombly, 550 U.S. 544, 550 (2007), it does demand “more than an unadorned,
the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (citations omitted). As the Supreme Court stated in Iqbal:
A pleading that offers “labels and conclusions” or “a formulaic
recitation of the elements of a cause of action will not do.” [Twombly,
550 U.S., at 555]. Nor does a complaint suffice if it tenders “naked
assertion[s]” devoid of “further factual enhancement.” Id., at 557.
To survive a motion to dismiss founded upon Federal Rule of
Civil Procedure 12(b)(6), [for failure to state a claim upon which relief
can be granted], a complaint must contain sufficient factual matter,
accepted as true, to “state a claim for relief that is plausible on its face.”
Id., at 570. 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. Id., at 556. The
plausibility standard is not akin to a “probability requirement,” but it
asks for more than a sheer possibility that a defendant has acted
unlawfully. Ibid. Where a complaint pleads facts that are “merely
consistent with” a defendant’s liability, it “stops short of the line
between possibility and plausibility of ‘entitlement to relief.’” Id., at
557 (brackets omitted).
Two working principles underlie our decision in Twombly. First,
the tenet that a court must accept as true all of the allegations contained
in a complaint is inapplicable to legal conclusions. Threadbare recitals
of the elements of a cause of action, supported by mere conclusory
statements, do not suffice. Id., at 555 (Although for the purposes of a
motion to dismiss we must take all of the factual allegations in the
complaint as true, we “are not bound to accept as true a legal conclusion
couched as a factual allegation” (internal quotation marks omitted)).
Rule 8 marks a notable and generous departure from the hyper-technical,
code-pleading regime of a prior era, but it does not unlock the doors of
discovery for a plaintiff armed with nothing more than conclusions.
Second, only a complaint that states a plausible claim for relief survives
3

a motion to dismiss. Id., at 556. Determining whether a complaint
states a plausible claim for relief will, as the Court of Appeals observed,
be a context-specific task that requires the reviewing court to draw on
its judicial experience and common sense. 490 F.3d, at 157-158. But
where the well-pleaded facts do not permit the court to infer more than
the mere possibility of misconduct, the complaint has alleged — but it
has not “show[n]” — “that the pleader is entitled to relief.” Fed. Rule
Civ. Proc. 8(a)(2).
In keeping with these principles a court considering a motion to
dismiss can choose to begin by identifying pleadings that, because they
are no more than conclusions, are not entitled to the assumption of truth.
While legal conclusions can provide the framework of a complaint, they
must be supported by factual allegations. When there are well-pleaded
factual allegations, a court should assume their veracity and then
determine whether they plausibly give rise to an entitlement to relief.
Iqbal, 556 U.S. at 678-79 (emphasis added).
II. RELEVANT ALLEGATIONS OF PLAINTIFF’S COMPLAINT
Plaintiff seeks a judgment from this court declaring that it has no duty to
defend or indemnify defendant Quality Coatings & Drywall, Inc. (“Quality
Coatings”), and its sureties, Ohio Casualty Insurance Company (“Ohio Casualty”),
and Liberty Mutual Group, Inc. (“Liberty Mutual”), for claims asserted against
Quality Coatings by defendants RSA and AREH in the case styled The Retirement
Systems of Alabama, et al. v. Quality Coatings and Drywall, Inc., et al., Civil Action
No. CV-2013-900131 in the Circuit Court of Lauderdale County, Alabama (“the

4

underlying litigation”).5 The underlying litigation arose from the construction of the
River Heritage Hotel in Florence, Alabama (“the Hotel”).
Quality Coatings entered into a Construction Trade Contract with AREH in
March of 2004.

Among other work to be performed, Quality Coatings was

responsible for cold formed metal framing, gypsum drywall, and wall installation at
the Hotel.6 AREH and Ohio Casualty later executed a surety bond in the amount of
$2,151.655. Ohio Casualty subsequently was acquired by Liberty Mutual, and both
companies are parties to the underlying litigation, based upon Ohio Casualty’s
agreement to act as a surety for Quality Coatings under the Construction Trade
Contract.7
RSA is a successor-in-interest to AREH on the Construction Trade Contract.
Both RSA and AREH filed the underlying litigation against Quality Coatings and its
bond companies, Ohio Casualty and Liberty Mutual, seeking to recover for the
improper installation of drywall in the Hotel, and remediation of mold that developed
as a result. Specifically, RSA and AREH assert claims for breach of contract, breach
of warranty, negligence, and a declaratory judgment. They allege that Quality
Coatings “constructed the demising walls on [the Hotel] such that there was a
5

Complaint ¶ 11.

6

Id.

7

Id. ¶ 12.

5

separation in the firewall, a separation which renders the firewall non-compliant with
the City of Florence’s ordinances and defective, and caused the growth of mold in
[the Hotel].”8
RSA and AREH seek to recover damages in the amount of $252,073.19 for
expenses incurred in repairing, replacing, and remedying the allegedly defective
drywall installed by Quality Coatings. They also seek to recover $322,380.30 for the
costs of remediating the mold damage caused by the allegedly defective drywall.
RSA and AREH have declared Quality Coatings in default of its contractual
obligations, and demanded that Ohio Casualty and/or Liberty Mutual make payment
under the performance bond. Both of those entities have refused payment. In
addition, RSA and AREH have withheld payment due to Quality Coatings in the
amount of $76,999.76 for work it performed on another project.9
Plaintiff issued Commercial General Liability Policy No. CX9 0675702 (“the
Policy”) to Quality Coatings for the period of September 1, 2011 to January 1, 2014.10
Plaintiff currently is providing a defense to Quality Coatings in the underlying
litigation under a reservation of rights, and Ohio Casualty and Liberty Mutual also
8

Id. ¶ 13 (alterations supplied). The Complaint cites to “Exhibit A,” which purportedly
is a copy of the state court complaint, but the record does not actually contain an Exhibit A to
plaintiff’s complaint.
9

Id. ¶ 15.

10

Id. ¶ 17.

6

have sought a defense and indemnity from plaintiff.11
Plaintiff asks this court to issue a judgment declaring that it does not have a
duty to defend or indemnify Quality Coatings, or either of its sureties. Specifically,
Penn National asserts:
37. Quality Coatings did not employ subcontractors to perform
the subject work. Quality Coatings[’] faulty construction of the firewall
is not an accident and thus not an “occurrence” as defined by the Policy.
Moreover, the firewall was constructed in 2004/2005[,] more than six
years before the Penn National Policy was issued. To the extent that any
“property damage” arising from Quality Coatings’ faulty workmanship
occurred prior to the Penn National Policy[,] there is no “occurrence.”
38. The Fungi or Bacteria Exclusion expressly provides that the
insurance does not apply to the claim in the Underlying Litigation.
Moreover, damages sought in the Underlying Litigation, including . . .
damages for the remediation of Quality Coatings[’] faulty construction,
are expressly excluded under the terms of the Policy, and therefore
would not give rise to an “occurrence.” Thus, there is no “occurrence”
under the Policy, and even if there ware, said “occurrence” would be
excluded from coverage pursuant to the “fungi and bacteria,”
“commercial liability,” and “business risks” exclusions.12
Additionally, plaintiff asserts that the claims asserted in the underlying
litigation fall under a Policy exclusion for “expected” or “intended” injuries.13
Finally, plaintiff asserts that it is not required to indemnify Ohio Casualty or Liberty
Mutual because those entities are not named insureds or additional insureds under the
11

Complaint ¶ 16.

12

Id. ¶¶ 37-38 (alterations supplied).

13

Id. ¶¶ 43-44.

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Policy.14
Quality Coatings, Ohio Casualty, and Liberty Mutual filed an answer and
counterclaims on March 26, 2014.15 All of those defendants asserted a counterclaim
for breach of contract against plaintiff, based on the company’s refusal to defend and
pay the defense costs of Ohio Casualty and Liberty Mutual.16 Quality Coatings
asserted a counterclaim against plaintiff for breach of the enhanced obligation of
good faith, based upon plaintiff’s alleged failure to communicate to Quality Coatings
that it was providing a defense under a reservation of rights.17 Quality Coatings, Ohio
Casualty, and Liberty Mutual also all asserted a counterclaim against plaintiff for bad
faith, based upon plaintiff’s alleged bad faith refusal to provide coverage for Ohio
Casualty and Liberty Mutual.18
III. RELEVANT PROCEDURAL HISTORY OF THE UNDERLYING
LITIGATION
Owners Insurance Company (“Owners”), an entity that also issued a
Commercial General Liability Policy (No. 38028913-11) and a Commercial Umbrella
Policy (No. 4602891300) to Quality Coatings (together, the “Owners’ Policies”), filed

14

Id. ¶¶ 45-57.

15

Doc. no. 9.

16

Id. at 9 (Count One).

17

Id. at 9-10 (Count Two).

18

Id. at 10-11 (Count Three).

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a motion to intervene in the underlying litigation on June 11, 2013.19 Owners stated
that it also was defending Quality Coatings in the underlying litigation under a
reservation of rights.20 It sought intervention in order “to gather facts related to the
Plaintiffs’ claim and clarify the legal allegations against its insured in order to
determine whether there is coverage for Quality Coatings under its policy.”21
Specifically, Owners stated the following possible reasons that coverage might be
lacking under the Owners’ Policies:
a.

Owners’ policies cancelled, at the request of the insured Quality
Coatings, on September 1, 2011. Damages alleged by RSA
against Quality Coatings may not fall within Owners’ policy
period.

b.

The damages alleged by RSA against Quality Coatings may not
arise from an “occurrence” as defined by Owners’ policy.

c.

Owners’ policy contains a complete exclusion for damage arising
from mold or mildew.

d.

The complaint against Quality Coatings alleges breach of
contract. Breach of contract is not an “occurrence” as defined by
Owners’ policy and Alabama law. Further, Owners’ policy
contains exclusion b. Exclusion b removes coverage for any
“bodily injury” or “property damage” for which the insured is
obligated to pay damages by reason of the assumption of liability

19

Doc. no. 7 (“Notice of Filing Materials in Support of Defendant’s Motion to Dismiss
or in the Alternative, to Stay”), Exhibit 1 (Motion to Intervene in Case No. 41-CV-2013-900131
in the Circuit Court of Lauderdale County, Alabama) ¶ 1.
20

Id. ¶ 5.

21

Id. ¶ 6.

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in a contract or agreement.
e.

The complaint by RSA against Quality Coatings alleges breach of
warranty. Breach of warranty is a type of breach of contract. See
discussion under letter d. above. Further, the definition of “your
work” includes warranties or representations made at any time
with respect to the fitness, quality, durability, performance or use
of “your work.” Owners’ policy contains exclusion l which
eliminates coverage for damage to “your work.”

f.

The complaint filed by RSA against Quality Coatings alleges
negligence in the performance of the scope of work of the
contract. While couched in terms of negligence, this count is
basically a restatement of the allegations in the count for breach
of contract. See discussion under letter d above. Further, faulty
workmanship, in the form of negligent construction, is not
considered an “occurrence” under Alabama law.

g.

Owners’ policy contains exclusion l which eliminates coverage
for “property damage” to “your work.” Owners’ policy does not
cover replacement of faulty work performed by the insured.

h.

The complaint filed by RSA against Quality Coatings asks the
court for a declaratory judgment. A declaratory judgment asks
the court to declare the rights and obligations of the parties to the
lawsuit. Owners’ policy covers only “bodily injury” or “property
damage.” A declaration of rights and obligations is neither
“bodily injury” nor “property damage.”

i.

Quality Coatings may have violated a condition of the policy
requiring it to provide timely notice of an occurrence to Owners.22

Owners emphasized that it was not asking the state court to “decide any issue of

22

Id. ¶¶ 3(a)-(i).

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coverage,” or to declare the respective parties’ rights.23 Instead, Owners asked to be
allowed to participate in discovery, but not in trial, except to submit “special jury
verdict forms and/or special interrogatories, through the court, to the jury, concerning
any verdict entered against Quality Coatings, Inc. in order to determine whether the
verdict or any portion of the verdict is covered by Owners’ policy.”24
The state court granted Owners’ motion on June 14, 2013.25 On July 3, 2013,
RSA and AREH filed a response to the motion to intervene and a request for the state
court to reconsider its previous order granting that motion. Among other reasons,
RSA and AREH asserted that Owners would have the “right to file a declaratory
judgment action regarding these issues once this case is resolved[,] particularly as the
threshold issues of coverage in a potential declaratory judgment action and the issues
presented in this action are not the same.”26 In the brief filed in this court by RSA and
AREH in support of their motion to dismiss or to stay, those parties represent that the

23

Id. ¶ 7.

24

Id. at 4 (Demand for Relief) ¶ d.

25

Doc. no. 7 (“Notice of Filing Materials in Support of Defendant’s Motion to Dismiss
or in the Alternative, to Stay”), at Exhibit 3 (June 14, 2013 Order of the Circuit Court of
Lauderdale County, Alabama).
26

Doc. no. 7 (“Notice of Filing Materials in Support of Defendant’s Motion to Dismiss
or in the Alternative, to Stay”), Exhibit 2 (Response to Motion to Intervene and Request for
Reconsideration”) ¶ 6 (alteration supplied).

11

state court has not yet ruled on the motion for reconsideration.27 They also represent
that plaintiff Penn National never filed a motion to intervene in the underlying
litigation.28
III. DISCUSSION
RSA and AREH argue that the complaint for declaratory judgment filed by
plaintiff, Penn National, in this court should be dismissed pursuant to the Supreme
Court’s decision in Wilton v. Seven Falls Co., 515 U.S. 277 (1995). There, the
Supreme Court confirmed that district courts have broad discretion in deciding
whether to dismiss or stay a federal declaratory judgment action during the pendency
of parallel state court proceedings, explaining:
There is nothing automatic or obligatory about the assumption of
jurisdiction by a federal court to hear a declaratory judgment action. By
the Declaratory Judgment Act, Congress sought to place a remedial
arrow in the district court’s quiver; it created an opportunity, rather than
a duty, to grant a new form of relief to qualifying litigants. Consistent
with the nonobligatory nature of the remedy, a district court is
authorized, in the sound exercise of its discretion, to stay or to dismiss
an action seeking a declaratory judgment before trial or after all
arguments have drawn to a close. In the declaratory judgment context,
the normal principle that federal courts should adjudicate claims within
27

Doc. no. 8 (“Memorandum in Support of Defendants’ Motion to Dismiss or in the
Alternative to Stay”), at 3, ¶ 6.
28

Id. at 3, ¶ 7. Plaintiff appears to agree with this representation. See doc. no. 12
(Plaintiff’s “Response and Memorandum of Law in Opposition to the Retirement Systems of
Alabama’s and Alabama Real Estate Holdings, Inc.’s Motion to Dismiss or in the Alternative
to Stay Proceedings”), at 4, ¶ 6 (“RSA has filed a Response to Motion to Intervene and Request
for Reconsideration which remains pending in the Underlying Litigation.”).

12

their jurisdiction yields to considerations of practicality and wise
judicial administration.
Id. at 288 (citations and footnote omitted). The Court also noted that, “where the
basis for declining to proceed is the pendency of a state proceeding, a stay will often
be the preferable course, because it assures that the federal action can proceed without
risk of a time bar if the state case, for any reason, fails to resolve the matter in
controversy.” Id. at 288 n.2.
The Eleventh Circuit, speaking through the panel decision in Ameritas Variable
Life Insurance Co. v. Roach, 411 F.3d 1328 (11th Cir. 2005), specifically addressed
a “federal court’s discretionary decision whether to abstain from exercising
jurisdiction over state-law claims in the face of parallel litigation in the state courts.”
Id. at 1331 (emphasis supplied). In Ameritas, the court held that district courts have
“‘substantial latitude in deciding whether to stay or dismiss a declaratory judgment
suit in light of pending state proceedings.’” Id. at 1332 (quoting Wilton, 515 U.S. at
286). The Eleventh Circuit also provided a list of factors to aid district courts in
balancing state and federal interests. Id. at 1331. The court specifically noted,
however, that the “list is neither absolute nor is any one factor controlling”; instead,
it serves as “merely [a] guidepost.” Id. (alteration supplied). Those guideposts
include:

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(1) the strength of the state’s interest in having the issues raised in the
federal declaratory action decided in the state courts;
(2) whether the judgment in the federal declaratory action would settle
the controversy;
(3) whether the federal declaratory action would serve a useful purpose
in clarifying the legal relations at issue;
(4) whether the declaratory remedy is being used merely for the purpose
of “procedural fencing” — that is, to provide an arena for a race for res
judicata or to achieve a federal hearing in a case otherwise not
removable;
(5) whether the use of a declaratory action would increase the friction
between our federal and state courts and improperly encroach on state
jurisdiction;
(6) whether there is an alternative remedy that is better or more
effective;
(7) whether the underlying factual issues are important to an informed
resolution of the case;
(8) whether the state trial court is in a better position to evaluate those
factual issues than is the federal court; and
(9) whether there is a close nexus between the underlying factual and
legal issues and state law and/or public policy, or whether federal
common or statutory law dictates a resolution of the declaratory
judgment action.
Id.
As an initial matter, RSA and AREH contend that this case and the underlying
litigation are “parallel litigation,” as contemplated by the Eleventh Circuit in
14

Ameritas, because “[t]he Circuit Court of Lauderdale County, Alabama, by its order
granting Owners’ Motion to Intervene[,] has already assumed jurisdiction over many
of the same issues that are raised by Penn National’s Complaint for Declaratory
Judgment[ in this action].29 Specifically, according to RSA and AREH,
Owners’ Intervention and Penn National’s Complaint for
Declaratory Judgment involve many of the same issues:
(A)

whether the damages alleged by RSA against Quality
Coatings fall within the subject policy periods . . . .;

(B)

whether the damages alleged by RSA against Quality
Coatings arise from an “occurrence” as defined by the
policies. . . .;

(C)

whether RSA’s damages are excluded by certain mold,
mildew, fungi and bacteria exclusions. . . .;

(D)

whether the policies cover contractual claims. . . .;

(E)

whether RSA’s breach of warranty claims are excluded
pursuant to policy exclusions dealing with contractual
liability. . . .;

(F)

whether the claims for negligent construction are excluded
by contractual liability language in the policies. . . .;

(G)

whether the subject policies cover damages to “your work.”
. . .30

This court disagrees. This case and the underlying litigation are not “parallel
29

Doc. no. 8, at 5 (alterations supplied).

30

Id. at 6-7 (citations to the record omitted).

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proceedings.” Penn National is not a party to the underlying litigation, by intervention
or otherwise. The central issue in the underlying litigation is Quality Coatings’
liability to RSA and AREH for faulty work performed, whereas the central issue in the
present case is Penn National’s obligation to defend and indemnify Quality Coatings.
See, e.g., State Farm Fire and Casualty Co. v. Knight, No. 09-0783-WS-B, 2010 WL
551262, *3 n.9 (S.D. Ala. Feb. 11, 2010) (“Where the declaratory judgment action is
brought by an insurer against an insured, there are no parallel proceedings if ‘(1) the
insurer was not a party to the suit pending in state court; and (2) the state court actions
involved issues regarding the insured’s liability, whereas the federal suit involved
matters of insurance coverage.’”) (quoting Continental Casualty Co. v. Advance
Terrazzo & Tile Co., 462 F.3d 1002, 1006 (8th Cir. 2006)).
Owners’ intervention in the underlying litigation does not alter that conclusion.
Owners specifically stated that it was not seeking a declaration regarding its obligation
to provide a defense or indemnity coverage to any party in the underlying litigation.
Moreover, to the extent that the special jury verdict forms and special interrogatories
Owners asked to submit to the jury in the underlying litigation will concern issues of
coverage, it will be coverage under the policy Owners issued to Quality Coatings, not
coverage under the policy Penn National issued to Quality Coatings. Even though
Quality Coatings’ two policies may bear some similarities, they are not identical.
16

Accordingly, a finding of coverage under the Owners’ policies will not necessarily
dictate a finding of coverage under the Penn National policy. Only the Penn National
policy is at issue in this suit.
Additionally, the Ameritas factors, considered as a whole, do not weigh in favor
of dismissing or staying this case.31 This declaratory judgment action would settle the
question of coverage under Quality Coatings’ policy with Penn National — a question
that has not been raised in the underlying litigation. There is no concern about friction
between, or inconsistent rulings from, the state court and this court, because the same
issues are not being decided in both fora. Specifically, the factual underpinnings of
the underlying litigation — i.e., Quality Coatings’ liability to RSA and AREH for
allegedly faulty workmanship — will not be relevant to the issue of coverage that
forms the basis of this lawsuit. The same is true for any findings regarding coverage
for RSA and AREH’s claims under an entirely separate policy issued by an entirely
separate insurer, Owners.
IV. CONCLUSION AND ORDER

31

Because this case and the underlying litigation are not “parallel litigation,” it is not
even necessary to consider the Ameritas factors. See Atlantic Casualty Insurance Co. v. GMC
Concrete Co., Inc., No. 07-0563-WS-B, 2007 WL 4335499, *3 (S.D. Ala. Dec. 7, 2007) (“A
number of courts have either held or suggested that the absence of parallel proceedings
undermines the premise of a Wilton discretion analysis, rendering it inappropriate or
inapplicable.”) (citations omitted). Even so, the court will discuss the Ameritas factors here for
the sake of completeness.

17

In accordance with the foregoing, the “Motion to Dismiss or in the Alternative
to Stay” filed by defendants RSA and AREH is DENIED. Those defendants must file
an answer to plaintiff’s complaint on or before June 12, 2014.
DONE this 5th day of June, 2014.
______________________________
United States District Judge

18