Southern-Owners Insurance Company v. MAC Contractors of Florida, LLC et al

Filing 39

OPINION AND ORDER granting in part and denying in part 32 Defendant MAC Contractors of Florida, LLC's Motion to Dismiss the Duty to Indemnify Issue, or Alternatively, Stay to the extent that Plaintiff's request for a declaration of its indemnity obligations in the underlying state court proceedings are stayed pending further Order of the Court; the Motion is otherwise denied. See Opinion and Order for further details. Signed by Judge John E. Steele on 3/5/2018. (BLW)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
SOUTHERN-OWNERS
INSURANCE
COMPANY,
Plaintiff,
v.

Case No:

2:18-cv-21-FtM-99CM

MAC CONTRACTORS OF FLORIDA,
LLC,
PAUL
S.
DOPPELT,
Trustee of Paul S. Doppelt
Revocable
Trust
dated
12/08/90, and DEBORAH A.
DOPPELT, Trustee of Deborah
A. Doppelt Revocable Trust
dated 12/08/90,
Defendants.
OPINION AND ORDER
This

matter

comes

before

Contractors of Florida, LLC’s

the

Court

on

Defendant

MAC

Motion to Dismiss the Duty to

Indemnify Issue, or Alternatively, Stay (Doc. #32) filed on January
31, 2018.

Southern-Owners Insurance Company filed a Response in

Partial Opposition (Doc. #36) on February 14, 2018.

For the

reasons set forth below, the Motion is granted as to the request
for a stay, but dismissal is denied.
I.
In

this

insurance

coverage

dispute,

plaintiff-insurer

Southern-Owners Insurance Company seeks a declaratory judgment
that it has no duty to defend or indemnify defendant-insured MAC
Contractors of Florida, LLC (d/b/a KJIMS Construction) for claims

asserted in a currently pending state-court lawsuit brought by
Paul and Deborah Doppelt, styled Doppelt et al. v. MAC Contractors
of Florida, LLC d/b/a KJIMS Construction, No. 2016-CA-1530 (the
“Doppelt

action”).

In

particular,

Southern-Owners

seeks

a

declaratory judgment that certain property exclusions apply and
thus, Southern-Owners has no duty to defend or indemnify MAC for
the claims Doppelts asserted against it.

(Doc. #21.)

In support of dismissal of the indemnity issue only, MAC
argues that because there has been no adjudication of liability
against MAC in the Doppelt action, all claims by Southern-Owners
as to the issue of the duty to indemnify should either be dismissed
or stayed until the state court allocates liability.

Until that

time, MAC argues, no actual controversy exists in which the Court
can declare the parties’ rights.

Alternatively, MAC argues that

if there is an actual controversy, the Court should exercise its
discretion

to

Southern-Owners

abstain
opposes

from

considering

dismissal,

but

the
agrees

indemnity
that

issue.

the

issue

should be stayed until this Court determines there is no duty to
defend (and consequently no duty to indemnify) or the Doppelt
action is concluded.
II.
At

issue

in

this

matter

are

claims

arising

out

of

the

construction of a single-family residential property in Marco
Island, Florida, for which MAC was the general contractor.

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As the

work

was

being

construction

completed,

defects

and

the

Doppelts

deficiencies,

allegedly

and

filed

discovered
the

Doppelt

action in the Circuit Court of Collier County, Florida, alleging
breach of contract.

The Doppelts are currently proceeding in

state court on an amended complaint filed on November 17, 2016,
seeking to recover damages from MAC, among others.
Pertinent
insurance

to

here,
MAC:

Southern-Owners

(1)

Policy

no.

issued

two

(Doc. #21-3.)
contracts

094612-20723985,

of

effective

October 8, 2014 through October 8, 2016; and (2) Policy No. 48172-892-00,

effective

October

(collectively, the Policies).

8,

2014

to

October

(Docs. #21-1 – 21-2.)

8,

2016

On September

7, 2016, MAC tendered the underlying action to Southern-Owners,
seeking defense and indemnity.

Southern-Owners initially accepted

the demand for defense and indemnity, but withdrew the acceptance
on May 7, 2017.
III.
The

Declaratory

Judgment

Act

grants

federal

courts

the

discretion to “declare the rights and other legal relations of any
interested party seeking such declaration.”

28 U.S.C. § 2201(a).

Under the Declaratory Judgment Act, this Court has discretion to
rule on an actual controversy but is “under no compulsion to
exercise ... jurisdiction.”
U.S. 491, 494 (1942).

Brillhart v. Excess Ins. Co., 316

The Court has “unique and substantial

discretion in deciding whether to declare the rights of litigants,”

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as the Act “confers a discretion on the courts rather than an
absolute right on the litigants.”

Wilton v. Seven Falls Co., 515

U.S. 277, 286–87 (1995).
A district court “has broad discretion to stay proceedings as
an incident to its power to control its own docket.”
Jones, 520 U.S. 681, 706 (1997).

Clinton v.

In cases seeking a declaratory

judgment, a district court may exercise its discretion to stay
proceedings “in the face of parallel litigation in the state
courts.”

Ameritas Variable Life Ins. Co. v. Roach, 411 F.3d 1328,

1331 (11th Cir. 2005). “The party moving for a stay bears the
burden of demonstrating that it is appropriate.”

Harris Corp. v.

Rembrandt Technologies, LP, No. 07-CV-796, 2007 WL 2757372, at *1
(M.D. Fla. Sept. 20, 2007).

In considering whether a stay is

warranted, courts in this district have considered a number of
factors, including: “(1) whether a stay will simplify the issues
and streamline the trial; (2) whether a stay will reduce the burden
of litigation on the parties and the court; and (3) whether the
stay will unduly prejudice the non-moving party.”

Shire Dev. LLC

v. Mylan Pharm. Inc., No. 8:12-CV-1190-T-36AEP, 2014 WL 12621213,
at *1 (M.D. Fla. July 25, 2014) (citing Lifewatch Servs., Inc. v.
Medicomp, Inc., No. 6:09–cv–1909–Orl–31DAB, 2010 WL 963202, at *1
(M.D. Fla. Mar. 16, 2010)).
Here, MAC asserts that if both cases proceed simultaneously
it may be forced to take inconsistent positions, compromising its

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defense in the state court case.

Plaintiff agrees that the

indemnity issue should be stayed and proceed on the duty to defend
issue only.
Under Florida law, “[i]t is well settled that an insurer’s
duty to defend its insured against a legal action arises when the
complaint alleges facts that fairly and potentially bring the suit
within policy coverage.

The duty to defend must be determined

from the allegations in the complaint.”

Jones v. Florida Ins.

Guar. Ass’n, Inc., 908 So. 2d 435, 442–43 (Fla. 2005) (citations
omitted).

This duty to defend exists “even if the allegations in

the complaint are factually incorrect or meritless.”

Id. at 443.

“[T]he duty to indemnify is measured by the facts as they unfold
at trial or are inherent in the settlement agreement.”

Northland

Cas. Co. v. HBE Corp., 160 F. Supp. 2d 1348, 1360 (M.D. Fla. 2001).
“If it is determined that [an insurer] has no duty to defend its
insured, then there would be no corresponding duty to indemnify.”
Northern Assur. Co. of Am. V. Custom Docks by Seamaster, Inc., No.
8:10-cv-1869-T-27MAP, 2011 WL 117046, *2 (M.D. Fla. 2011) (citing
WellCare of Fla., Inc. v. Am. Int’l Specialty Lines Ins. Co., 16
So. 3d 904, 907 (Fla. 2d DCA 2009)).
Because the Court’s determination of the duty to defend is
ripe and can be disposed of by this Court on cross-motions for
summary judgment, and the parties are otherwise in agreement that
a stay would not result in prejudice to any party, the Court will

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grant the stay.

This case will proceed on the remaining claim

concerning plaintiff’s duty to defend, as well as the duty to
defend raised in the counterclaim (Doc. #31).
Accordingly, it is hereby
ORDERED AND ADJUDGED:
1.

Defendant MAC Contractors of Florida, LLC’s Motion to

Dismiss the Duty to Indemnify Issue, or Alternatively, Stay (Doc.
#32) is GRANTED IN PART AND DENIED IN PART to the extent that
plaintiff’s request for a declaration of its indemnity obligations
in the underlying state court proceedings are stayed; the Motion
is otherwise denied.
2.

All

proceedings

relating

solely

to

the

question

of

whether Plaintiff Southern-Owners Insurance Company has a duty to
indemnify MAC Contractors of Florida, LLC, are STAYED pending
further Order of the Court.
3.

Plaintiff shall immediately inform the Court if the

underlying proceeding resolves the indemnity issue.
DONE and ORDERED at Fort Myers, Florida, this __5th__ day of
March, 2018.

Copies: Counsel of Record

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