Evanston Insurance Company v. Republic Properties, Inc. et al
ORDER denying 138 Plaintiff Evanston Insurance Company's Motion to Dismiss Ciminelli Real Estate Services of Florida, LLC's Counterclaim and to Strike Ciminelli's Fifth and Sixth Affirmative Defenses. Evanston shall answer Ciminelli's Counterclaim no later than fourteen (14) days from the date of this Order. Signed by Judge Paul G. Byron on 12/4/2017. (JRJ)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
EVANSTON INSURANCE COMPANY,
Case No: 6:16-cv-1649-Orl-40GJK
CIMINELLI REAL ESTATE SERVICES
OF FLORIDA, LLC, COREY STANELY,
JR. , LAURETTE MUNIZ-MARCHA,
JAMES RIVER INSURANCE COMPANY
and DIMAGGIO’S ULTRA LOUNGE
This cause comes before the Court without oral argument on Plaintiff Evanston
Insurance Company’s Motion to Dismiss Ciminelli Real Estate Services of Florida, LLC’s
Counterclaim and to Strike Ciminelli’s Fifth and Sixth Affirmative Defenses (Doc. 138),
filed August 31, 2017; and Defendant, Ciminelli’s Memorandum of Law in Opposition
(Doc. 141), filed September 13, 2017. The parties have completed their briefing and the
Court is otherwise fully advised on the premises. Upon consideration, the motion is
Plaintiff, Evanston Insurance Company (“Evanston”), brings this action pursuant
to the Declaratory Judgment Act to resolve an insurance coverage. At all relevant times,
Defendant, Republic Properties, Inc. (“Republic”), owned real property located at 7432
Universal Boulevard in Orlando, Florida (the “Subject Property” or “building 7432”). In
2002, Republic hired Defendant, Ciminelli Real Estate Services of Florida, LLC
(“Ciminelli”), as its property manager with respect to real property described as “Republic
Square”, which included the Subject Property. Republic leased the Subject Property to
DiMaggio’s Ultra Lounge Corp. (“DiMaggio’s”), who used the property to operate a
Evanston issued two commercial general liability insurance policies to Republic
covering the Subject Property; one policy covered the Subject Property for the policy
period of January 23, 2015 to January 23, 2016 (the 2015–2016 Policy”), and the other
policy covered the Subject Property for the policy period of January 23, 2016 to January
23, 2017 (the “2016–2017 Policy) (collectively, the “Policies”). The Policies require
Evanston to defend and indemnify Republic for covered bodily injuries or property
damage. Because of its engagement as Republic’s property manager, Ciminelli
apparently qualifies as an additional insured under the Policies.
At approximately 1:00 a.m. on February 7, 2016, a shooting incident occurred at
the nightclub operated at the Subject Property that resulted in the death of two individuals
This account of the facts is taken from Plaintiff’s Fourth Amended Complaint (Doc.
126) and Defendant, Ciminelli’s Answer and Counterclaim (Doc. 129). The Court
accepts the allegations of Ciminelli’s Answer and Counterclaim as true for purposes
of deciding Evanston’s Motion to Dismiss Ciminelli’s Counterclaim (Doc. 138).
Whitney Info. Network v. Gagnon, 353 F. Supp. 2d 1208, 1210 (M.D. Fla. 2005).
and injuries to several others. Some of those who suffered injuries have submitted claims
to Republic or have sued Republic to recover for their injuries. On or about June 8, 2016,
Corey Stanley, Jr. filed suit in state court against Republic, Ciminelli, and DiMaggio’s for
injuries allegedly suffered in a separate shooting incident at the Subject Property
nightclub in October 2015. Evanston advised Republic and Ciminelli that it would
investigate these claims and lawsuits subject to a reservation of rights.
In the operative complaint, Evanston alleged that Republic provided false
information when it applied for the Policies. Specifically, Republic described the Subject
Property as a vacant building in its applications with Evanston, when in fact the Subject
Property was being operated as a nightclub. Because the Policies only provide coverage
for the operations specified in the application for insurance—that is, for a vacant
building—Evanston contends that it owes no duty to defend or indemnify Republic or
Ciminelli against any of the claims or lawsuits arising out of the February 7, 2016 or
October 2015 shooting incidents, when the Subject Property was being operated as a
nightclub. Evanston therefore initiated this lawsuit seeking a declaratory judgment stating
Along with its Answer, Ciminelli brought a counterclaim seeking reformation of the
Policies based on mutual mistake. (Doc. 129). Ciminelli alleges that “[d]ue to mutual
mistakes caused by scrivener’s error and/or inadvertence”, the properties insured under
the Policies were misidentified, whereby the Subject Property was mistakenly designated
“vacant”. (Doc. 129, ¶¶ 14–17). Therefore, Ciminelli seeks to reform the Policies to reflect
that the Subject Property was not vacant.
Evanston now moves to dismiss Ciminelli’s reformation counterclaim and to strike
Ciminelli’s fifth and sixth affirmative defenses. (Doc. 138).
STANDARD OF REVIEW
A complaint (or counterclaim) 2 must contain “a short and plain statement of the
claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(1). Thus, in order
to survive a motion to dismiss made pursuant to Rule 12(b)(6), the complaint “must
contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible
on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). A claim is plausible on its face when the plaintiff
“pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Id.
Though a complaint need not contain detailed factual allegations, mere legal
conclusions or recitation of the elements of a claim are not enough. Twombly, 550 U.S.
at 555. “While legal conclusions can provide the framework of a complaint, they must be
supported by factual allegations.” Iqbal, 556 U.S. at 679. Courts must also view the
complaint in the light most favorable to the plaintiff and must resolve any doubts as to the
sufficiency of the complaint in the plaintiff’s favor. Hunnings v. Texaco, Inc., 29 F.3d 1480,
1483 (11th Cir. 1994) (per curiam).
At the motion to dismiss stage, district courts must generally constrain their review
to the “four corners of the complaint.” Keating v. City of Miami, 598 F.3d 753, 762 (11th
Cir. 2010). A “document outside the four corners of the complaint may still be considered
A motion to dismiss a counterclaim under Fed. R. Civ. P. 12(b)(6) is evaluated in the
same manner as a motion to dismiss a complaint. Whitney Info. Network v. Gagnon,
353 F. Supp. 2d 1208, 1210 (M.D. Fla. 2005).
if it is central to the plaintiff’s claims and is undisputed in terms of authenticity.” Maxcess,
Inc. v. Lucent Techs., Inc., 433 F.3d 1337, 1340 n.3 (11th Cir. 2005).
Evanston’s Motion to Dismiss
The thrust of Ciminelli’s counterclaim is that the Subject Property was listed as
vacant on the Policies because of mutual mistake. (Doc. 141). Ciminelli asserts that
Evanston knew that the Subject Property was operated as a nightclub, and agreed to
insure it as such. (Id. at pp. 8–9). Because of a scrivener’s error, Ciminelli argues, building
number “7430” was transposed with building number “7432” on the inspector’s report (the
“Inspection Report”), 3 and that error transferred to the Policies. “The square footage of
the buildings is the key to understanding the insurance that was intended.” (Doc. 141, p.
8). Evanston knew the Subject Property was occupied by a nightclub—and not vacant—
for two reasons: (1) Evanston’s inspector was advised that the nightclub was in the
“smallest building by square footage”; 4 and (2) Evanston’s inspector went inside building
Although the Inspection Report and Policies fall outside the four corners of Ciminelli’s
counterclaim, the Court is satisfied that review of such documents is proper because
both are central to Ciminelli’s reformation claim and their authenticity is undisputed.
See Maxcess, Inc. v. Lucent Techs., Inc., 433 F.3d 1337, 1340 n.3 (11th Cir. 2005).
The Subject Property is the smallest insured building by square footage. The Policies
state that the Subject Property is 7278 square feet. (Doc. 126-3, p. 9; Doc. 126-4, p.
10). The Inspection Report states that the Subject Property is 7533 square feet. (Doc.
138-1, p. 2). The next smallest building is 11,771 square feet, and 11,769 square feet,
according to the Inspection Report and Policies, respectively. (Doc. 138-1, p. 2; Doc.
126-3, p. 8; Doc. 126-4, p. 9).
The Inspection Report stated: “Building 7430 / 7533 sq ft has a late night /weekend
nightclub as a tenant.” (Doc. 138-1, p. 2). The same Report stated “Building 7432 /
19,324 sq ft is currently vacant . . . .” (Id.).
number 7430 and 7432 (the Subject Property) and personally observed which was
operating a nightclub. (Id. at pp. 8–9).
In its motion to dismiss, Evanston argues that there was no mistake, and the
parties should be bound by their agreement as expressed by the Policies. (Doc. 138).
Evanston further argues that reformation would necessitate “post-loss underwriting” and
would expose Evanston to risks it never agreed to assume. (Id. at pp. 12–13). Evanston
also argues in passing that reformation would be inequitable because the mistake allowed
Ciminelli to pay low premiums that would not otherwise support the coverage afforded by
the reformation. (Id. at p. 13). Put another way, Evanston alleges that if the Policies are
reformed, Ciminelli will receive a windfall in coverage because it underpaid in premiums.
Evanston’s motion proceeds from a false premise. Evanston asserts that “it was
the larger location that was designated as vacant in the policies, and therefore there was
clearly no mistake in the Policies.” (Doc. 138, p. 3). This assertion is incorrect, and
clarification is necessary. The “larger location” (among the two identified in Ciminelli’s
argument), building 7430, was designated in the Policies as “BUILDINGS OR PREMISES
– BANK OR OFFICE – MERCANTILE OR MANUFACTURING”. (Doc. 126-3, p. 8; Doc.
126-4, p. 9). The “smaller location”, the Subject Property (building 7432), was designated
in the Policies as “VACANT BUILDINGS”. (Doc. 126-3, p. 9; Doc. 126-4, p. 10). Per the
Policies, the building numbers associated with the square footage was correct, 5 but the
use designations 6 were incorrect.
As noted above, the Inspection Report stated that building 7430 was 7,533 square
feet and was operated as a nightclub. (Doc. 138-1, p. 2). The Report also described
building 7432 as 19,324 square feet and vacant. (Id.). Per the Inspection Report, the
building numbers associated with the square footage was incorrect, but the use
designations (using square footage as the building identifier) 7 were correct.
Under Florida law, “[a] court of equity has the power to reform a written instrument
where, due to a mutual mistake, the instrument as drawn does not accurately express the
true intention or agreement of the parties.” Essex Ins. Co. v. Tina Marie Entm’t, LLC, 602
F. App’x 471, 473 (11th Cir. 2015) (per curiam) (alteration in original) (quoting Providence
Square Ass’n v. Biancardi, 507 So. 2d 1366, 1369 (Fla. 1987)). “A mistake is mutual when
it is shown that the parties agreed on one thing and when they put it in the contract they
said something different.” Blumberg v. Am. Fire Ins. & Cas. Co., 51 So. 2d 182, 184 (Fla.
That is, the Policies correctly state that building 7430 was approximately 19,550
square feet. And although building number 7432 is not identified by number in the
Policies, it is easily discerned as the smallest property by square footage, being
described as approximately 7,278 square feet.
By “use designations,” the Court refers to the classification of each property as vacant
or occupied by a business. (Doc. 126-3, pp. 8–9; Doc. 126-4, pp. 9–10).
Because the crux of Ciminelli’s argument is that building number “7430” was
erroneously transposed with “7432” in the Inspection Report, Ciminelli argues that the
square footage—not the building numbers—should be used to identify the properties
described in the Inspection Report.
Because Ciminelli’s reformation claim alleges a mistake, it must meet the pleading
standards imposed by Rule 9(b) in addition to Rule 8, Fed. R. Civ. P. 8 Claims asserting
mistake must include “specific allegations identifying the factual basis supporting each of
the elements of [the plaintiff’s] claim of mistake” to satisfy Rule 9(b). Barber v. Am.’s
Wholesale Lender, No. 8:12–cv–1124–T–27TBM, 2013 WL 1149316, at *4 (M.D. Fla.
Mar. 19, 2013).
Upon review of the counterclaim, the motion to dismiss and response, and the
Inspection Report and Policies, the Court finds that Ciminelli’s reformation claim contains
sufficient facts to state a plausible claim for relief. Ciminelli adequately alleges that the
parties had an agreement as to the designation of properties to be insured, but that, due
to inadvertence or scrivener’s error, the Policies do not reflect that agreement. Moreover,
the counterclaim meets Rule 9(b)’s heightened pleading standard because it specifically
details the underlying agreement and the terms in the Policies and Inspection Report
demonstrating the mistake. Evanston’s remaining arguments for dismissal have little
merit. 9 Therefore, Evanston’s motion to dismiss Ciminelli’s reformation counterclaim is
“In alleging fraud or mistake, a party must state with particularity the circumstances
constituting fraud or mistake.” Fed. R. Civ. P. 9(b).
Evanston’s fear that the Court may engage in “post-loss underwriting” is not germane
to the question of whether Ciminelli sufficiently pled its reformation claim. The same
is true with regard to Evanston’s arguments that (1) it did not agree to the potential
risks reformation would impose, and (2) Ciminelli paid insufficient premiums.
Moreover, the Court notes that Evanston persuasively argues that these concerns are
invalid. (Doc. 141, pp. 11–13).
Evanston’s Motion to Strike
Federal Rule of Civil Procedure 12(f) allows a court to strike “any redundant,
immaterial, impertinent, or scandalous matter” from a party's pleading. However, striking
material is a “drastic remedy to be resorted to only when required for the purposes of
justice.” Jackson v. Grupo Indus. Hotelero, S.A., No. 07-22046-CIV, 2008 WL 4648999,
at *14 (S.D. Fla. Oct. 20, 2008) (internal quotation marks omitted). Ultimately, prejudice
to the moving party is the cornerstone of Rule 12(f). See Embler v. Walker Elec. Sys. of
Fla., Inc., No. 2:05-cv-256-FtM-33SPC, 2006 WL 1406366, at *1 (M.D. Fla. May 18,
2006). As such, motions to strike are generally disfavored and should only be granted as
a remedy for material that “ha[s] no possible relation to the controversy and may cause
prejudice to one of the parties.” Jackson, 2008 WL 4648999, at *14.
Evanston moves to strike Ciminelli’s fifth and sixth affirmative defenses. Ciminelli’s
fifth affirmative defense alleges that Evanston “waived or is estopped from asserting
coverage issue based on the disputed vacancy status of the” Subject Property. (Doc. 129,
p. 9). Eight months before the first shooting, Evanston was put on notice by the Inspection
Report that the Subject Property was being operated as a nightclub. (Id.). Evanston also
received an inflated premium “that exceeded the risk when considering the status of all
insured properties.” (Id.).
Evanston moves to strike the fifth affirmative defense as insufficiently pled and
insufficient as a matter of law. (Doc. 138, p. 16). First, Evanston argues that the
allegations of the fifth affirmative defense are contradicted by the Inspection Report,
which controls. (Id.). In support, Evanston provides the following quotation from the
Inspection Report: “Building 7430 . . . has a late night / weekend nightclub as a tenant.”
(Id.). This argument is belied by the stated square footage of the building identified as
“Building 7430”, which Evanston conveniently omitted from its selected quotation. The
Inspection Report states, in full: “Building 7430 / 7533 sq ft has a late night /weekend
nightclub as a tenant.” (Doc. 138-1, p. 2 (emphasis added)). The “7533 sq ft” designation
is critical to understanding Ciminelli’s position. Ciminelli argues that the building number
“7430” was transposed with “7432” in the Inspection Report, and that Evanston should
have known under the circumstances. (See note 6, supra). Thus, reading the Inspection
Report in proper context, it does not contradict the fifth affirmative defense.
Evanston next argues that Ciminelli’s Fifth Affirmative Defense fails to comply with
Federal Rule of Civil Procedure 8. Upon review, the Court declines to strike Ciminelli’s
fifth affirmative defense.
Finally, Evanston asserts that Ciminelli’s sixth affirmative defense—that the
Policies should be reformed—is insufficient as a matter of law for the reasons identified
in its motion to dismiss. The Court denied Evanston’s motion to dismiss Ciminelli’s
reformation counterclaim, and, for the same reasons, denies Evanston’s motion to strike
Ciminelli’s sixth affirmative defense.
For the foregoing reasons, it is ORDERED AND ADJUDGED that Plaintiff
Evanston’s Motion to Dismiss Ciminelli’s Counterclaim and to Strike Ciminelli’s Fifth and
Sixth Affirmative Defenses (Doc. 138) is DENIED. Evanston shall answer Ciminelli’s
Counterclaim no later than fourteen (14) days from the date of this Order.
DONE AND ORDERED in Orlando, Florida on December 4, 2017.
Copies furnished to:
Counsel of Record
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