State Farm Fire and Casualty Company v. Ezzell et al

Filing 35

MEMORANDUM OPINION AND ORDER that this court hereby GRANTS State Farm's essentially unopposed motion to amend the complaint; DENIES WITHOUT PREJUDICE State Farm's motion for summary judgment; DENIES WITHOUT PREJUDICE Mynamo's motion to stay or dismiss the case or, in the alternative, for leave to conduct full discovery and extend the standard briefing schedule; and DENIES WITHOUT PREJUDICE State Farms motion to strike the Ariinejad affidavit; as more fully set out in order. Signed by Judge C Lynwood Smith, Jr on 9/17/2012. (AHI)

FILED
2012 Sep-17 PM 12:49
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
NORTHEASTERN DIVISION
STATE FARM FIRE AND
CASUALTY CO.,
Plaintiff,
vs.
MELANIE EZZELL; SEAN
FUNGAFAT; MYNAMO, INC.,
Defendants.

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

Civil Action No. 5:11-CV-01084-CLS

MEMORANDUM OPINION AND ORDER
State Farm Fire and Casualty Company (“State Farm”) seeks a declaratory
judgment determining its duty to defend or indemnify Mynamo, Incorporated
(“Mynamo”) under the terms of a liability insurance policy in connection with the
claims alleged in a state court action styled Melanie Ezzell and Sean Fungafat v.
Mynamo, Inc., CV-2010-901445 (Cir. Ct. Madison County, Ala.).1 The state plaintiffs
alleged that Mynamo’s previous tenants had used a townhouse owned by Mynamo to
manufacture methamphetamine, and that Mynamo failed to decontaminate that
townhouse before re-renting the premises to Ezzell and Fungafat.2

1

Doc. no. 1 (Complaint filed March 25, 2011) ¶ 13.

2

Id. ¶ 10-11.

On May 26, 2011, State Farm filed a summary judgment motion.3 Instead of
filing an opposition to the motion, Mynamo filed a motion to stay or dismiss the case
or, in the alternative, for leave to conduct full discovery and extend the standard
briefing schedule.4 In response, State Farm filed a motion to strike the supporting
affidavit of Mynamo President Mohammed Ariinejad,5 which described the discovery
that Myanmo would need.6 Meanwhile, Ezzell and Fungafat amended their state
complaint to incorporate additional parties and claims.7 As a result, State Farm also
filed a motion to amend its complaint to reflect those changes.8 This court is ready to
rule on all four motions.
I. DISCUSSION
Federal Rule of Civil Procedure 15(a) requires a court to freely grant leave to
amend a complaint “when justice so requires.” The United States Supreme Court has
interpreted this rule to mean that,

3

Doc. no. 12 (Plaintiff’s Motion for Summary Judgment).

4

Doc. no. 15 (Defendant’s Motion to Stay or Dismiss or, in the Alternative, Motion for
Relief Pursuant to Fed. R. Civ. P. 56(e)). Later, Mynamo stated that defendant erroneously
captioned that motion as one for relief under Rule 56(e) and instead sought relief under Rule 56(d).
Doc. no. 20 (Defendant’s Response in Opposition to Plaintiff’s Motion to Strike Affidavit of
Mohammed Ariinejad), at 1 n.1.
5

Doc. no. 17 (Plaintiff’s Motion to Strike Affidavit of Mohammed Ariinejad).

6

Doc. no. 15-1 (Affidavit of Mohammed Ariinejad).

7

Doc. no. 28 (Plaintiff’s Motion for Leave to File First Amended Complaint) ¶ 7-8.

8

Id.

2

[i]n the absence of any apparent or declared reason — such as undue
delay, bad faith or dilatory motive on the part of the movant, repeated
failure to cure deficiencies by amendments previously allowed, undue
prejudice to the opposing party by virtue of allowance of the amendment,
futility of amendment, etc. — the leave sought should, as the rules
require, be “freely given.”
Rosen v. TRW, Inc., 979 F.2d 191, 194 (11th Cir. 1992) (citing Foman v. Davis, 371
U.S. 178, 230 (1962)) (alteration supplied).
As State Farm seeks to determine its duties under a policy in connection with
the claims alleged in a state action, the complaint in this action should reflect the
complaint in the underlying action in order to avoid piecemeal litigation and allow this
court to adjudicate the issues for all parties and claims at once. Indeed, Mynamo’s
so-called “Response . . . in Limited Opposition” admits that Mynamo “has no
substantive opposition to State Farm submitting an amended complaint.”9 Because
there is no evidence of undue delay, bad faith, or other grounds for denying leave to
amend, this court sees no reason not to grant the motion.
Once State Farm amends its complaint to add new parties and claims, it will
moot the remaining three motions. As a result, this court will deny without prejudice
(1) State Farm’s motion for summary judgment; (2) Mynamo’s motion to stay or
dismiss the case or, in the alternative, for leave to conduct full discovery and extend
9

Doc. no. 29 (Defendant’s Response in Limited Opposition to Plaintiff’s Motion to Amend)

¶ 5.

3

the standard briefing schedule; and (3) State Farm’s motion to strike the Ariinejad
affidavit. This will allow State Farm to re-file its summary judgment motion to reflect
its first amended complaint, and Mynamo to re-file its motion requesting a stay and
various other forms of relief in response to State Farm’s motion.
In the event that the parties do decide to re-file their motions, this court would
like to note that “[a]n insurance company’s duty to defend its insured from suit is
determined by the language of the insurance policy and by the allegations in the
complaint filed against the insured.” Allstate Indem. Co. v. Lewis, 985 F. Supp. 1341,
1344 (M.D. Ala. 1997) (citing ALFA Mut. Ins. Co. v. Morrison, 613 So. 2d 381, 382
(Ala. 1993); Ladner & Co. v. Southern Guaranty Ins. Co., 347 So. 2d 100, 102 (Ala.
1977)) (alteration and emphasis supplied).
In contrast, “the duty to indemnify is not ripe for adjudication until the insured
is in fact held liable in the underlying suit.” Nationwide Insurance v. Zavalis, 52 F.3d
689, 693 (7th Cir. 1995) (citing Heffernan & Co. v. Hartford Ins. Co., 614 A.2d 295,
298 (Pa. Super. 1992); United Services Auto. Asso. v. Elitzky, 517 A.2d 982, 992 (Pa.
Super. 1986)) (emphasis supplied).
II. CONCLUSION
This court hereby GRANTS State Farm’s essentially unopposed motion to
amend the complaint; DENIES WITHOUT PREJUDICE State Farm’s motion for
4

summary judgment; DENIES WITHOUT PREJUDICE Mynamo’s motion to stay or
dismiss the case or, in the alternative, for leave to conduct full discovery and extend
the standard briefing schedule; and DENIES WITHOUT PREJUDICE State Farm’s
motion to strike the Ariinejad affidavit.
DONE and ORDERED this 17th day of September, 2012.

_________________________
United States District Judge

5