CMR Construction & Roofing LLC v. The Orchards Condominium Association, Inc.

Filing 37

ORDER denying 14 Motion to Dismiss. Signed by Judge John E. Steele on 11/18/2020. (FWH)

Case 2:20-cv-00422-JES-MRM Document 37 Filed 11/18/20 Page 1 of 9 PageID 863

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
CMR CONSTRUCTION & ROOFING
LLC,
Plaintiff,
v.

Case No:

2:20-cv-422-FtM-29MRM

Case No:

2:20-cv-564-FtM-29MRM

THE
ORCHARDS
CONDOMINIUM
ASSOCIATION, INC.,
Defendant.

THE
ORCHARDS
CONDOMINIUM
ASSOCIATION, INC.,
Plaintiff,
v.
EMPIRE INDEMNITY INSURANCE
COMPANY and CMR CONSTRUCTION
& ROOFING LLC,
Defendants.
OPINION AND ORDER
This matter comes before the Court on review of the Motion to
Dismiss The Orchards’ Complaint or in the alternative to Abate or
Stay Count II of the Complaint Until Count I is Resolved (Doc.
#14), filed on September 1, 2020, by defendant Empire Indemnity
Insurance Company (Empire).

Plaintiff The Orchards Condominium

Association, Inc. (The Orchards) filed a Response In Opposition
(Doc. #21) on September 15, 2020, to which Empire filed a Reply

Case 2:20-cv-00422-JES-MRM Document 37 Filed 11/18/20 Page 2 of 9 PageID 864

(Doc. #29) on October 7, 2020.

For the reasons set forth below,

the motion denied.
I.
The Court recently described the factual history between the
parties as follows:
[T]he Orchards Condominium Association, Inc. (The
Orchards) is a residential condominium association in
Naples, Florida. The Orchards was issued an insurance
policy by Empire Indemnity Insurance Company (Empire)
providing
insurance
on
thirty-one
buildings.
In
September 2017, The Orchards sustained significant roof
and exterior damage caused by wind and rain from
Hurricane Irma, which loss was timely reported to
Empire. In April 2018, The Orchards entered into a
Contract for Services with . . . CMR Construction and
Roofing, LLC (CMR) to provide roofing repairs. The
Orchards also provided CMR with an Assignment of
Benefits (the Assignment) which assigned to CMR all of
its rights to the Empire insurance benefits relating to
the roof repair. Both the Services Agreement and the
Assignment were signed by The Orchards’ president, Mark
Johnson (Johnson).
CMR, pursuant to its rights under the Assignment,
advised Empire of a replacement cost value estimate, but
Empire failed to acknowledge coverage for all the
damages sustained by The Orchards. In September 2018,
CMR filed a one-count breach of contract complaint
against Empire in the Circuit Court for the Twentieth
Judicial Circuit in and for Collier County. The case was
removed to federal court, and Empire was granted summary
judgment in April 2020. CMR timely filed a notice of
appeal, and the appeal remains pending in the Eleventh
Circuit Court of Appeals.
In May 2020, over two years after assigning the
pertinent rights and benefits of the Empire insurance
policy to CMR, The Orchards notified CMR that it was
revoking the Assignment and ordered CMR to cease all
negotiations and work on the property. The Orchards
asserted that the Assignment was invalid because The

2

Case 2:20-cv-00422-JES-MRM Document 37 Filed 11/18/20 Page 3 of 9 PageID 865

Orchards’ Declaration of Condominium prohibited such an
assignment.
CMR Constr. & Roofing LLC v. Orchards Condo. Ass’n, Inc., 2020 WL
6273740, *1 (M.D. Fla. Oct. 26, 2020) (citations omitted).
In July 2020, The Orchards filed a two-count Complaint against
Empire and CMR in state court, which has now been removed to
federal court.

In Count I The Orchards seeks a declaratory

judgment against CMR determining that The Orchards has standing to
bring the breach of contract action in Count II against Empire
because its prior Assignment to CMR is “either properly revoked or
not valid.”

(Doc. #3, p. 7.)

for

of

breach

contract

insurance policy.

for

In Count II The Orchards sues Empire
refusing

to

fully

pay

under

the

(Id. pp. 7-9.)

Empire seeks to dismiss Count II, the only claim against it,
because The Orchards lacks standing to enforce the insurance
contract in light of its prior Assignment to CMR.

Alternatively,

Empire

claim

seeks

to

stay

the

breach

of

contract

pending

resolution of the declaratory relief claim in Count I and the
Eleventh Circuit appeal of the summary judgment in its favor in
the prior case.

(Doc. #14.)
II.

A. Dismissal of Count I
Empire argues that The Orchards must have standing to sue it
on Count II, and to obtain such standing it must first prevail on

3

Case 2:20-cv-00422-JES-MRM Document 37 Filed 11/18/20 Page 4 of 9 PageID 866

Count I.

Empire relies upon the well-established principle that

“[o]nce an assignment has been made, the assignor no longer has a
right to enforce the interest because the assignee has obtained
all rights to the thing assigned.”

One Call Prop. Servs. Inc. v.

Sec. First Ins. Co., 165 So. 3d 749, 752 (Fla. 4th DCA 2015) (marks
and citation omitted)).

If not dismissed, Empire argues that at

the very least Count II should be stayed until Count I is resolved
(as well as the pending appeal in the prior case.)
Empire is certainly correct that The Orchards must have
standing as to Count II in order to proceed in federal court
against Empire.
Article

III

The Court must decide whether a plaintiff has

standing

before

reaching

the

merits

of

a

claim.

Trichell v. Midland Credit Mgmt., Inc., 964 F.3d 990, 996 (11th
Cir. 2020) (citations omitted.)

To have Article III standing, a

plaintiff must show that it “(1) suffered an injury-in-fact (2)
that is fairly traceable to the defendant’s conduct and (3) is
redressable by a favorable judicial decision.”

MSPA Claims 1, LLC

v. Tenet Fla., Inc., 918 F.3d 1312, 1317 (11th Cir. 2019); see
also Gill v. Whitford, 138 S. Ct. 1916, 1929 (2018); Spokeo, Inc.
v. Robins, 136 S. Ct. 1540, 1547 (2016).

“Article III standing

must be determined as of the time that the plaintiff’s complaint
is filed.”

A&M Gerber Chiropractic LLC v. GEICO Gen. Ins. Co.,

925 F.3d 1205, 1212 (11th Cir. 2019) (on rehearing).

4

Case 2:20-cv-00422-JES-MRM Document 37 Filed 11/18/20 Page 5 of 9 PageID 867

It is also certainly true that an assignee may assert an
injury in fact which was actually suffered by the assignor. Tenet,
918 F.3d at 1317; Sprint Commc’ns Co., L.P. v. APCC Servs., Inc.,
554 U.S. 269, 286 (2008) (“[T]he assignee of a claim has standing
to assert the injury in fact suffered by the assignor.” (citation
omitted)); MSP Recovery Claims, Series LLC v. QBE Holdings, Inc.,
965 F.3d 1210, 1217 (11th Cir. 2020).

To determine whether an

assignee has standing, the Court determines if (1) the assignor
(here

The

Orchards)

suffered

an

injury-in-fact,

and

(2)

the

assignor’s claim arising from that injury was validly assigned to
the assignee (here CMR). Tenet, 918 F.3d at 1318.
Where Empire goes astray, however, is its argument that The
Orchards must first prevail on Count I in order to establish
standing

to

proceed

on

Count

II.

While

The

Orchards

will

eventually have to prevail on the issues of the invalidity or
revocation of the Assignment, it need not prevail at the pleading
stage.

At the motion-to-dismiss stage, a plaintiff bears the

burden of alleging facts that plausibly establish its standing.
Trichell, 964 F.3d at 996 (citing Ashcroft v. Iqbal, 556 U.S. 662,
677–84 (2009)).

If the complaint does so, the standing issue

remains alive but the case continues.

5

Case 2:20-cv-00422-JES-MRM Document 37 Filed 11/18/20 Page 6 of 9 PageID 868

The

Complaint

alleges

The

Orchards

properly

revoked

the

Assignment in May 2020, or alternatively that the Assignment was
never valid to begin with.

(Doc. #3, pp. 2-5.)

Assuming either

of these is true, as the Court is required to do at this stage of
the proceedings, The Orchards would remain the entity entitled to
enforce the insurance policy, and therefore have standing.
Empire also argues that the issue of standing was previously
decided and therefore The Orchards is estopped from denying the
validity of the Assignment. (Doc. #14, pp. 12-15.)
Opinions

and

Orders,

the

Court

assumed

the

validity

In prior
of

the

Assignment without ever addressing the issues that are now being
raised.

See CMR Constr. & Roofing, LLC v. Empire Indem. Ins. Co.,

2020 WL 1557887, *1 n.1 (M.D. Fla. Apr. 1, 2020) (rejecting
argument

that

policy

could

not

be

assigned

without

Empire’s

permission and noting CMR “now stands in The Orchards’ shoes”);
CMR Constr. & Roofing, LLC v. Empire Indem. Ins. Co., 2019 WL
2281678, *3 (M.D. Fla. May 29, 2019) (finding CMR had standing to
seek appraisal under the policy because “it is clear” The Orchards
assigned a policy benefit to CMR).
Because these prior opinions did not address whether the
Assignment was properly revoked or invalid from the outset, the
Court did not decide either issue in these prior orders.

“When a

potential jurisdictional defect is neither noted nor discussed in
a federal decision, the decision does not stand for the proposition

6

Case 2:20-cv-00422-JES-MRM Document 37 Filed 11/18/20 Page 7 of 9 PageID 869

that no defect existed.”

Ariz. Christian Sch. Tuition Org. v.

Winn, 563 U.S. 125, 144 (2011).
Because the Complaint plausibly alleges that the Assignment
was either invalid or revoked, The Orchards has sufficiently
alleged its standing to proceed on Count II. Accordingly, Empire’s
motion to dismiss Court II is denied.
B. Stay of Proceedings on Count II
As an alternative to dismissal of the Complaint, Empire
requests

the

Court

stay

the

breach

of

contract

claim

until

resolution of both the declaratory judgment claim and the Eleventh
Circuit appeal.

(Doc. #14, pp. 15-17.)

Empire argues that in

deciding the declaratory judgment claim, the Court may determine
The Orchards lacks standing, thereby mooting the breach of contract
claim.

(Id.

p.

15.)

Empire

further

suggests

the

Eleventh

Circuit’s decision “also may affect the outcome of certain legal
issues,” and it is therefore in the parties’ best interest for a
stay to be imposed.

(Id.)

Finally, Empire argues it “should not

have to re-litigate the same case when the case may be moot anyway
if the assignment is adjudicated as valid.”

(Id.)

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 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

7

Case 2:20-cv-00422-JES-MRM Document 37 Filed 11/18/20 Page 8 of 9 PageID 870

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.”

Vintage Bay

Condo. Ass’n, Inc. v. Lexington Ins. Co., 2019 WL 1149904, *1 (M.D.
Fla. Mar. 13, 2019) (marks and citations omitted).
The Court finds a stay of the breach of contract claim pending
the outcome of the declaratory judgment claim and/or the appellate
proceedings is not appropriate.

See Lane v. Enhanced Recovery Co.

LLC, 2018 WL 2688761, *1 (M.D. Fla. May 1, 2018) (noting that
“[m]otions to stay are not favored because when discovery is
delayed or prolonged it can create case management problems” (marks
and citation omitted)); see also Thomas v. Chenega Infinity, LLC,
2019 WL 2551899, *1 (M.D. Fla. May 7, 2019) (denying motion to
stay

case

because,

inter

alia,

“the

parties

have

exceptional circumstances that would warrant a stay”).

offered

no

The issue

of standing remains a live issue in Count II, as well as Count I,
and there is no reason to sever the counts.

Additionally, there

is no indication the outcome of the Eleventh Circuit appeal will
significantly impact the issues in this case. To the extent Empire
suggests it will be irreparably harmed if a stay is not imposed
due

to

“extensive

and

redundant

discovery,

reengagement

of

experts, and substantial motion practice” (Doc. #14, p. 16), the
Court is not convinced.

See Sampson v. Murray, 415 U.S. 61, 90

(1974) (“Mere injuries, however substantial, in terms of money,

8

Case 2:20-cv-00422-JES-MRM Document 37 Filed 11/18/20 Page 9 of 9 PageID 871

time and energy necessarily expended in the absence of a stay, are
not enough.

The possibility that adequate compensatory or other

corrective relief will be available at a later date, in the
ordinary course of litigation, weighs heavily against a claim of
irreparable harm.” (citation omitted)).
Accordingly, it is now
ORDERED:
Defendant

Empire

Indemnity

Insurance

Company’s

Motion

to

Dismiss The Orchards’ Complaint or in the alternative to Abate or
Stay Count II of the Complaint Until Count I is Resolved (Doc.
#14) is DENIED.
DONE AND ORDERED at Fort Myers, Florida, this
November, 2020.

Copies:
Parties of record

9

18th

day of