Pennsylvania National Mutual Casualty Insurance Company v. St. Catherine of Siena Parish et al

Filing 45

ORDER DENYING Penn National's 41 Partial Motion to Dismiss for Failure to Plead Fraud Claims with Particularity as set out. Signed by Judge Callie V. S. Granade on 7/30/2013. (tot)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
PENNSYLVANIA NATIONAL
MUTUAL CASUALTY
INSURANCE COMPANY,
Plaintiff,
vs.
ST. CATHERINE OF SIENA
PARISH, et. al.

)
)
)
)
)
)
)
)
)
)

Civil Action No. 13-066-CG-M

Defendants.
ORDER
This matter is before the court on the partial motion to dismiss for
failure to plead fraud claims with particularity (Doc. 41) filed by the plaintiff
and counter-defendant, Pennsylvania National Mutual Casualty Insurance
Company (“Penn National”).
Penn National seeks to dismiss Count Four of defendant Kiker
Corporation’s (“Kiker’s”) counterclaim, in which Kiker alleges claims of
misrepresentation, suppression, and fraud. Doc. 37 at 8-9. Penn National
argues that Kiker has not met the particularity requirements of Fed.R.Civ.P.
9(b) because Kiker failed to state how, when, and by whom the alleged
misrepresentations were made and the content of the misrepresentations.
Doc. 41 at 3.
For the reasons stated below, Penn National’s motion is due to be
denied.

I. RULE 9(b) SPECIFICITY REQUIREMENT
Rule 9(b) of the Federal Rules of Civil Procedure requires that “[i]n
alleging fraud or mistake, a party must state with particularity the
circumstances constituting fraud or mistake.” This particularity requirement
is met when a complaint or counterclaim sets forth the following facts: “(1)
precisely what statements were made in what documents or oral
representations or what omissions were made, and (2) the time and place of
each such statement and the person responsible for making (or, in the case of
omissions, not making) same, and (3) the content of such statements and the
manner in which they misled the plaintiff, and (4) what the defendants
obtained as a consequence of the fraud.” Ziemba v. Cascade Int’l Inc., 256
F.3d 1194, 1202 (11th Cir. 2001) (citing Brooks v. Blue Cross and Blue Shield
of Florida, Inc., 116 F.3d 1364, 1371 (11th Cir. 1997)).
The particularity rule serves an important purpose in fraud actions by
alerting defendants to the “precise misconduct with which they are charged”
and protecting defendants “against spurious charges of immoral and
fraudulent behavior.” Durham v. Business Mgmt. Assoc., 847 F.2d 1505,
1511 (11th Cir. 1988). The application of the rule, however, must not
abrogate the concept of notice pleading. Id.
II. ANALYSIS
Penn National only cites paragraph 22 of the counterclaim in its
motion. Doc. 41 at 2-3. However, Count Four incorporates by reference the

2

previous 20 paragraphs contained in the counterclaim, and includes the
following factual allegations: Kiker purchased a Commercial General
Liability policy from Penn National in May 2003. Doc. 37 at 5. On March 10,
2010, the St. Catherine of Siena Parish (“St. Catherine’s”) filed suit against
Kiker in the Circuit Court of Mobile County for damages resulting from leaks
in the roof of its church, which Kiker had replaced several years earlier. Id.
Penn National sent Kiker a reservation of rights letter shortly thereafter, on
March 23, 2010, and subsequently hired an attorney named Bert Taylor
(“Taylor”) to represent Kiker in the litigation. Id. at 6.
During the course of the litigation, sometime between October 29 and
November 1, 2012, Kiker alleges that Taylor filed motions seeking to dismiss
all of St. Catherine’s claims with the exception of a single breach of contract
claim. Id. The dismissal of these claims would allegedly have jeopardized
Kiker’s coverage under the policy and left Kiker liable for a judgment on the
remaining breach of contract claim. Id. at 6-7. Kiker further alleges that
Penn National not only failed to inform Kiker of this potential adverse
consequence until after the trial court granted the motions filed by Taylor,
but that Penn National and Taylor undertook this litigation strategy in bad
faith in order to avoid paying a judgment under the policy and suppressed
this fact from Kiker. Id. at 6-9.
Although most of the factual allegations above are recited in Counts
Two and Three, they also pertain to the allegations of suppression in Count

3

Four and are specifically adopted and realleged in Count Four. Thus, the
court finds that Kiker’s counterclaim contains sufficient detail to alert Penn
National to the precise misconduct which was alleged in Count Four, and
comports with the particularity requirement contained in Ziemba and
Brooks. Accordingly, Penn National’s partial motion to dismiss for failure to
plead claims with particularity is DENIED.
DONE and ORDERED this 30th day of July 2013.
/s/ Callie V.S. Granade
UNITED STATES DISTRICT JUDGE

4