Developers Surety and Indemnity Company v. Independent Living Center Building Co., Inc.
ORDER granting in part and denying in part 28 Motion to Dismiss Counterclaim. Count II is dismissed without prejudice. Signed by Chief Judge William H. Steele on 11/14/2016. (tgw)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
DEVELOPERS SURETY AND
INDEMNITY COMPANY, etc.,
INDEPENDENT LIVING CENTER
BUILDING CO., INC., etc.,
) CIVIL ACTION 16-0430-WS-N
This matter is before the Court on the motion of the plaintiff
(“Developers”) to dismiss the counterclaim filed by the defendant (“Center”).
(Doc. 28). Center has filed a response and Developers a reply, (Docs. 34, 36), and
the motion is ripe for resolution. After careful consideration, the Court concludes
that the motion is due to be granted in part and denied in part.
According to the counterclaim, (Doc. 13), Center entered a contract with
counterclaim-defendant Renew & Maintenance Construction, Inc. (“Renew”) to
renovate a former church building purchased by Center. Developers, as surety,
issued a performance bond on behalf of Renew, as principal. Center invoked the
bond after Renew defaulted, but Developers has refused to honor its obligations
under the bond.
The counterclaim presents seven counts. Count I seeks declaratory relief
against Developers, Count II asserts civil conspiracy against both Developers and
Renew, and Count III alleges breach of contract against Developers. Counts IV
through VII assert claims against Renew for fraud, unjust enrichment, breach of
contract and conversion. The instant motion seeks dismissal of the three
counterclaims brought against Developers.
I. Declaratory Relief.
Developers argues that Count I “assert[s] the same factual basis and seek[s]
the same relief sought by” Count III. (Doc. 28 at 1). Developers concludes that
Count I therefore should be dismissed as “improperly duplicative.” (Id. at 5).
The Court cannot accept Developers’ premise. While Count I seeks a
declaration that Center’s claim under the bond is valid (apparently for the same
reasons as underlie the contract claim), it does not seek the same relief as Count
III. Count III seeks damages for lost profits, facilities expenses, loss of use,
financing and funding, as well as costs and attorney’s fees. (Doc. 13 at 31).
Count I, in contrast, seeks a declaration that Developers “must assume its
obligations” under the bond. (Id. at 30).
The bond requires Developers to “take one of the following actions:” (1)
arrange for Renew to perform the contract; (2) perform the contract through its
own contractors; (3) obtain a replacement contractor under contract with Center;
or (4) “determine the amount for which it may be liable to the Owner and … make
payment to the Owner.” (Doc. 13 at 23-24). Developers argues that, since it has
the option to meet its obligations under the bond by making a payment to Center,
performing its obligations under the bond is “the same” relief as the damages
sought for breach of contract. (Doc. 36 at 3, 5).
There are at least two fatal problems with Developers’ argument. First,
Developers has not disavowed all – or any – of the first three options for satisfying
its obligations under the bond but merely pointed out that it could choose the
fourth option. (Doc. 36 at 5). This means that, at least at this point in the
litigation, Center’s success on Count I could result in Developers completing the
Second, Developers has failed to show that the damages sought under
Count III are identical to “the amount for which it may be liable” for purposes of
the fourth option under the bond. Most obviously, the damages sought under
Count III appear not to include the cost of completing the work abandoned by
Renew, while any payment under the bond presumably would have to include
Center’s cost of completing the work. As Center states, relief under Count I
would result in the project being completed, while relief under Count III would
make Center whole for damages suffered because the work has not been
completed. (Doc. 34 at 5). Developers elected in its reply brief not to respond to
this argument, instead dismissing it (inaccurately) as a “red herring.” Developers’
silence leaves Center in possession of the field.
II. Civil Conspiracy.
Center consents to the dismissal of this claim without prejudice. (Doc. 34
at 1). Developers offers no opposition to this resolution.
III. Shotgun Pleading.
The counterclaim begins with approximately 90 factual paragraphs. Counts
I-III then each begin by “re-alleg[ing] all of the allegations contained in the
preceding paragraphs as if fully re-stated herein.” Based on this language,
Developers characterizes the counterclaim as a shotgun pleading and concludes
that this nomenclature compels dismissal with leave to amend. (Doc. 28 at 7-9).
“The typical shotgun complaint contains several counts, each one
incorporating by reference the allegations of its predecessors, leading to a situation
where most of the counts (i.e., all but the first) contain irrelevant factual
allegations and legal conclusions.” Strategic Income Fund, L.L.C. v. Spear, Leeds
& Kellogg Corp., 305 F.3d 1293, 1295 (11th Cir. 2002). The counterclaim
employs incorporation by reference and hence meets this technical definition of a
But repleader is not required simply because a pleading’s counts
incorporate earlier paragraphs; instead, the pleading must be “so vague or
ambiguous that the party cannot reasonably prepare a response.” Fed. R. Civ. P.
12(e). Certainly a shotgun complaint can sometimes trigger relief under Rule
12(e), but Developers has not shown that remedy to be justified here. On the
contrary, Developers acknowledges that incorporation by reference is
objectionable only when the practice renders it “virtually impossible to know
which allegations of fact are intended to support which claim(s) for relief.” (Doc.
28 at 8 (internal quotes omitted)). Accord Anderson v. District Board of Trustees,
77 F.3d 364, 366 (11th Cir. 1996); FNB Bank v. Park National Corp., 2013 WL
1748796 at *6 (S.D. Ala. 2013). As discussed below, that standard is not remotely
The specific problems Developers identifies are that Counts I-III
incorporate by reference material relevant only to Center’s claims against Renew
and that allegations relevant to the earlier counts are not relevant to the later
counts. (Doc. 28 at 7). The Court can find no actual or even possible confusion.
Developers admits that the factual allegations of fraud by Renew are carefully
confined to specific numbered paragraphs (which are grouped under specific
headings explicitly identifying their subject matter as Renew’s fraud), and
Developers further admits its awareness that these allegations “relate solely to
[Center’s] counts directly against [Renew].” (Doc. 36 at 6). The factual
allegations regarding Renew’s failure to perform are patently relevant to Counts I
and III, because the activation of Developers’ obligations under the bond, and its
breach of those obligations, depend on Renew’s breach of its contract with Center.
The Eleventh Circuit recognizes at least four types of shotgun complaints.
Weiland v. Palm Beach County Sheriff’s Office, 792 F.3d 1313, 1321 (11th Cir. 2015).
Developers invokes only the first of these varieties.
Likewise, because Counts I and III both depend on a breach of Developers’
obligations triggered by a breach of Renew’s obligations, the factual allegations of
Count I are relevant to Count III. Developers identifies not a single factual
allegation that is not. Nor does Developers identify any uncertainty as to which
factual allegations are relevant to Count II.2
In its reply brief, Developers suggests that Center’s voluntary dismissal of
Count II renders the counterclaim a shotgun complaint because allegations
relevant only to civil conspiracy remain even though the claim itself does not.
(Doc. 36 at 6-7). An acceptably clear pleading does not become an unacceptably
vague shotgun pleading simply because counts are dismissed, and repleader is not
required to eliminate allegations that have become irrelevant due to post-filing
events. Developers identifies no authority to the contrary.
For the reasons set forth above, Developers’ motion to dismiss is granted
with respect to Count II and is in all other respects denied. Count II is dismissed
DONE and ORDERED this 14th day of November, 2016.
s/ WILLIAM H. STEELE
CHIEF UNITED STATES DISTRICT JUDGE
This is presumably for the very good reason that those allegations are collected
under the heading, “DSIC Conspiracy & the Amended Rinkus Report.” (Doc. 13 at 25).
Developers requests an award of attorney’s fees and costs “incurred in
connection with its defense of the Counterclaim.” (Doc. 28 at 9). Developers offers no
legal theory supporting such a remarkable request. Even if the Court had discretion to
provide such relief, it would decline to do so. The request, construed as a motion for
such relief, is denied.
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