Bright House Networks, LLC. v. Pinellas County
Filing
41
ORDER: Defendant Pinellas County's Motion to Dismiss Complaint for Declaratory Relief 10 is GRANTED to the extent that this Court abstains from hearing this matter. The Clerk is directed to CLOSE THIS CASE. Signed by Judge Virginia M. Hernandez Covington on 9/25/2014. (KNC)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
BRIGHT HOUSE NETWORKS, LLC,
Plaintiff,
v.
Case No. 8:14-cv-1237-T-33TBM
PINELLAS COUNTY,
Defendant.
_____________________________/
ORDER
This cause comes before the Court pursuant to Defendant
Pinellas County’s Motion to Dismiss Complaint for Declaratory
Relief (Doc. # 10), filed on June 24, 2014. Plaintiff Bright
House Networks, LLC filed a response in opposition to the
Motion on July 17, 2014. (Doc. # 16). With leave of Court,
Pinellas County filed a reply to Bright House’s response on
July 31, 2014 (Doc. # 21), and Bright House filed a sur-reply
on August 27, 2014 (Doc. # 39). For the reasons stated below,
the Motion is granted as this Court finds abstention is
proper.
I.
Background
Bright House brought this declaratory judgment action
against Pinellas County on May 27, 2014. (Doc. # 1). In its
Complaint, Bright House alleges that it is a party to a Right
of Way Utilization Permit (ROW Permit/Permit) containing an
indemnification provision with Pinellas County. (Id. at ¶ 3).
The Permit relates to the construction of a Bright House
conduit on a bridge in Pinellas County, Florida. (Id. at ¶
8).
According to Bright House, Pinellas County’s bridge
contractor “asserted claims against Pinellas County” for
breach of contract, common law indemnity, and breach of the
Prompt
Payment
Act
relating
to
construction
of
the
aforementioned bridge. (Id. at ¶ 9). Pinellas County has since
“entered into a purported Coblentz agreement”1 regarding the
contractor’s claims without consulting Bright House. (Id. at
¶ 10).
Bright House seeks declaratory relief concerning (1) the
scope of an indemnification provision in the Permit to which
both Bright House and Pinellas County are parties; (2) whether
1
“A Coblentz agreement is a negotiated settlement in which
the defendant agrees to a consent judgment and assigns, to
the injured party, any cause of action the defendant had
against the defendant's insurer. The injured party must
thereafter ‘prove coverage, wrongful refusal to defend, and
that the settlement was reasonable and made in good faith.’”
Rodriguez v. Sec. Nat. Ins. Co., 138 So. 3d 520, 521 (Fla. 3d
DCA 2014)(quoting Chomat v. N. Ins. Co. of N.Y., 919 So. 2d
535, 537 (Fla. 3d DCA 2006)).
2
Bright
House
has
a
duty
to
defend
Pinellas
County
in
connection with the contractor’s claims; and (3) whether
Bright House has wrongfully refused to defend Pinellas County
pursuant to the Permit. (Id. at ¶ 16).
Pinellas County filed the present Motion to Dismiss
under Fed. R. Civ. P. 12(b)(1) and 12(b)(6) on June 24, 2014.
(Doc. # 10). Bright House filed a response in opposition on
July 17, 2014. (Doc. # 16). With leave of Court, Pinellas
County filed a reply on July 31, 2014 (Doc. # 21), and Bright
House filed a sur-reply on August 27, 2014 (Doc. # 39). This
Court has reviewed the parties’ submissions and is otherwise
fully advised in the premises.
II.
Legal Standard
A.
Rule 12(b)(1) - Subject Matter Jurisdiction
Federal
courts
are
courts
of
limited
jurisdiction.
Taylor v. Appleton, 30 F.3d 1365, 1367 (11th Cir. 1994).
“[B]ecause a federal court is powerless to act beyond its
statutory grant of subject matter jurisdiction, a court must
zealously insure that jurisdiction exists over a case, and
should
itself
raise
the
question
of
subject
matter
jurisdiction at any point in the litigation where a doubt
about jurisdiction arises.” Smith v. GTE Corp., 236 F.3d 1292,
1299 (11th Cir. 2001). Motions to dismiss for lack of subject
3
matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1) may
attack jurisdiction facially or factually. Morrison v. Amway
Corp., 323 F.3d 920, 924 n.5 (11th Cir. 2003).
A facial attack on the complaint requires “the court
merely to look and see if the plaintiff has sufficiently
alleged a basis for subject matter jurisdiction, and the
allegations in [the] complaint are taken as true for the
purposes of the motion.” Lawrence v. Dunbar, 919 F.2d 1525,
1529 (11th Cir. 1990)(quoting Menchaca v. Chrysler Credit
Corp., 613 F.2d 507, 511 (5th Cir. 1980)). Factual attacks,
in comparison, challenge “the existence of subject matter
jurisdiction in fact, irrespective of the pleadings. . . .”
Scarfo v. Ginsberg, 175 F.3d 957, 960 (11th Cir. 1999)(quoting
Lawrence, 919 F.2d at 1529). When the jurisdictional attack
is factual, as in the instant case, the presumption of
truthfulness afforded to a plaintiff under Fed. R. Civ. P.
12(b)(6) does not attach. Scarfo, 175 F.3d at 960. Because
the very power of the Court to hear the case is at issue, the
Court is free to weigh evidence outside the four corners of
the complaint. Eaton v. Dorchester Dev., Inc., 692 F.2d 727,
732 (11th Cir. 1982).
B.
Rule 12(b)(6)- Failure to State a Claim
4
On a motion to dismiss, this Court accepts as true all
of the factual allegations in the complaint and construes
them in the light most favorable to the plaintiff. Jackson v.
Bellsouth Telecomms., 372 F.3d 1250, 1262 (11th Cir. 2004).
Further, this Court favors the plaintiff with all reasonable
inferences from the allegations in the complaint. Stephens v.
Dep’t of Health & Human Servs., 901 F.2d 1571, 1573 (11th
Cir. 1990)(“On a motion to dismiss, the facts stated in [the]
complaint and all reasonable inferences therefrom are taken
as true.”). However, the Supreme Court explains that:
While a complaint attacked by a Rule 12(b)(6)
motion to dismiss does not need detailed factual
allegations, a plaintiff’s obligation to provide
the grounds of his entitlement to relief requires
more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action
will not do. Factual allegations must be enough to
raise a right to relief above the speculative
level.
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)(internal
citations omitted). Further, courts are not “bound to accept
as true a legal conclusion couched as a factual allegation.”
Papasan v. Allain, 478 U.S. 265, 286 (1986).
In
accordance
with
Twombly,
Federal
Rule
of
Civil
Procedure 8(a) calls “for sufficient factual matter, accepted
as true, to ‘state a claim to relief that is plausible on its
5
face.’” Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009)(quoting
Twombly, 550 U.S. at 570).
A plausible claim for relief must
include “factual content [that] allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Id.
III. Discussion
A. Fed. R. Civ. P. 12(b)(1)
Bright House brought this action before this Court on
the basis of diversity jurisdiction pursuant to 28 U.S.C. §
1332.
(Doc.
#
1).
In
an
effort
to
establish
complete
diversity, Bright House alleged:
Plaintiff [Bright House] is a Delaware limited
liability company. . . . [Bright House] is not a
citizen of the State of Florida. [Bright House’s]
principal place of business is New York. None of
the members of [Bright House] are citizens of the
State of Florida.
Defendant
Pinellas
County
is
a
subdivision of the State of Florida.
political
(Id. at ¶¶ 1-2). However, noting that Bright House failed to
properly allege its own citizenship, the Court entered the
following Order on May 29, 2014:
ENDORSED ORDER: Plaintiff attempts to allege
diversity of citizenship as the basis for the
Court's jurisdiction over this matter. However,
because the Complaint fails to properly allege
6
Plaintiff's citizenship, diversity has not been
definitively
established.
In
the
Complaint,
Plaintiff states that Defendant is a political
subdivision of the State of Florida and Plaintiff
is a Delaware limited liability company with its
principal place of business in New York and
summarily indicates that none of its members are
citizens of Florida. Diversity jurisdiction in a
case involving a limited liability company is based
on the citizenship of all members of the limited
liability company. Therefore, the Court directs
Plaintiff to file, on or before June 3, 2014, a
supplemental memorandum of law demonstrating that
proper grounds for diversity jurisdiction exists.
Failure to satisfy the Court that the requirements
for diversity jurisdiction exist may result in an
Order of dismissal for lack of jurisdiction.
(Doc. # 4)(internal citations omitted); see also Rolling
Greens MHP, L.P. v. Comcast SCH Holdings L.L.C., 374 F.3d
1020,
1022
(11th
Cir.
2004)
(“[A]
party
must
list
the
citizenships of all the members of the limited liability
company.”).
Bright House filed its supplemental memorandum regarding
citizenship on June 3, 2014, and stated:
[Bright House] has one member, the Time Warner
Entertainment Advance/Newhouse Partnership, a New
York general partnership, whose principal place of
business is in New York. This partnership consists
of two partners: Advance/Newhouse Partnership, a
New York General Partnership, whose principal place
of business is in New York, and Time Warner Cable
Enterprises, LLC, a Delaware limited liability
company, whose principal place of business is also
7
in New York. None of the partners of the
Advance/Newhouse Partnership and none of the
members of Time Warner Cable Enterprises, LLC, are
citizens of Florida.
(Doc. # 5).
On July 18, 2014, this Court held a case management
hearing and discussed with the parties the issue of subject
matter jurisdiction. (Doc. # 17). At the hearing, Bright House
cited to a declaration by Bright House’s general counsel,
which is attached to its response in opposition to the Motion
to
Dismiss.
(See
acknowledged
that
identify
the
Doc.
the
partners
#
16-4).
declaration
or
members
However,
failed
of
Bright
to
Time
House
describe
Warner
or
Cable
Enterprises, LLC or Advance/New House Partnership.
Bright
House
represented
to
the
Court
that
with
additional time to research the issue, it could provide the
necessary jurisdictional information. Therefore, the Court
set August 4, 2014, as the deadline for Bright House to
provide
the
supplemental
information
to
establish
its
citizenship and demonstrate complete diversity. Bright House
failed to file a supplemental memorandum in the time provided
by the Court. Accordingly, on August 6, 2014, this Court
granted the present Motion to Dismiss as Bright House failed
8
to establish that this Court had subject matter jurisdiction
over this action. (Doc. # 22).
Bright House then filed a Motion for Reconsideration on
August 11, 2014, requesting that this Court reconsider its
August 6, 2014, Order. (Doc. # 23). Specifically, Bright House
requested
that
this
Court
consider
the
supplemental
memorandum attached to the Motion for Reconsideration, which
details
its
citizenship,
and
vacate
its
previous
Order
dismissing this action. (Id.). Upon due consideration of
Bright
House’s
Motion
for
Reconsideration
and
Pinellas
County’s response in opposition thereto (Doc. # 25), the Court
found
good
cause
to
grant
Bright
House’s
Motion
for
Reconsideration (Doc. # 28). Thus, the issue of whether this
Court has subject matter jurisdiction over this action still
remains pending before this Court.
In
its
response
to
Bright
House’s
Motion
for
Reconsideration, Pinellas County requested that this Court
apply the “total activities” test to determine Bright House’s
citizenship. (See Doc. # 25). However, Pinellas County failed
to provide binding authority demonstrating that the Court was
required to engage in such an analysis. Therefore, in its
Order granting Bright House’s Motion for Reconsideration, the
Court provided Pinellas County an opportunity to file a
9
supplemental memorandum to its reply (Doc. # 21), to address
the applicability of the “total activities” test to the
instant action (See Doc. # 28). Pinellas County filed a
supplemental memorandum on August 22, 2014 (Doc. # 31).
Thereafter, with leave of Court, Bright House filed a surreply addressing this Court’s subject matter jurisdiction.
(Doc. # 39).
“The party wishing to assert diversity jurisdiction
bears the burden of establishing that diversity exists.” Duff
v. Beaty, 804 F. Supp. 332, 334 (N.D. Ga. 1992); Jones v. Law
Firm of Hill & Ponton, 141 F. Supp. 2d 1349, 1354 (M.D. Fla.
2001)(“The
party
seeking
diversity
jurisdiction
has
the
burden of establishing jurisdiction by a preponderance of the
evidence.”).
To sufficiently allege diversity jurisdiction, Bright
House must demonstrate complete diversity of citizenship and
that the amount in controversy exceeds $75,000.2 See 28 U.S.C.
§ 1332. In order to demonstrate complete diversity, Bright
House must establish that its citizenship is diverse from the
2
It is undisputed that Bright House has satisfied the amount
in controversy requirement. Specifically, “This suit concerns
coverage under the indemnification provision in the ROW
Permit relating to claims exceeding the jurisdictional
amount. The subject claims are in the approximate amount of
$694,889.” (Doc. # 1 at ¶ 5).
10
citizenship of Pinellas County. To sufficiently allege the
citizenship of a corporation, the state of incorporation as
well as the location of the principal place of business must
be
stated.
adequately
See
28
allege
U.S.C.
the
§
1332(c)(1).
citizenship
of
an
Furthermore,
to
unincorporated
business entity, a party must list the citizenship of all the
members of the limited liability company and all the partners
of the limited partnership. Rolling Greens MHP, L.P., 374
F.3d at 1022.
In its supplemental memorandum “Bright House has . . .
listed each member through its chain of ownership” and four
of the entities are corporations. (Doc. # 25 at 1). Bright
House has provided the state of incorporation and principal
place of business for each entity:
Bright House Networks, LLC, a Delaware limited
liability company, has one member, the Time Warner
Entertainment-Advance/Newhouse Partnership, a New
York general partnership, whose principal place of
business is in New York. This partnership consists
of two partners: Advance/Newhouse Partnership, a
New York general partnership, whose principal place
of business is in New York, and Time Warner Cable
Enterprises, LLC, a Delaware limited liability
company, whose principal place of business is also
in New York.
The
general
partners
of
Advance/Newhouse
Partnership are A/NPC Holdings, LLC, a Delaware
11
limited liability company, and A/NP Holdings Sub
LLC, a Delaware limited liability company, each of
whose principal place of business is in New York.
A/NP Holdings Sub LLC is also a wholly owned
subsidiary of A/NPC Holdings LLC.
The members of A/NP Holdings Sub LLC are Newhouse
Cable Holdings LLC, a New York limited liability
company, and Advance Communications Company, LLC,
a New York limited liability company, each of whose
principal place of business is in New York.
Newhouse Cable Holdings LLC is a wholly owned
subsidiary of Newhouse Broadcasting Corporation, a
New York corporation whose principal place of
business is in New York. Advance Communications,
Company LLC is a wholly owned subsidiary of Newark
Morning Ledger Co., a New Jersey corporation whose
principal place of business is in New Jersey.
The members of Time Warner Cable Enterprises, LLC
are
Time
Warner
Cable,
Inc.,
a
Delaware
corporation, and Time Warner NY Cable LLC, a
Delaware limited liability company, each of whose
principal place of business is in New York. Time
Warner NY Cable LLC is a wholly owned subsidiary of
TW NY Cable Holdings, Inc., a Delaware corporation,
whose principal place of business is also in New
York.
(See Doc. # 23-1).
Pinellas County contends, however, that even considering
the supplemental memorandum, Bright House has still failed to
properly allege that this Court has jurisdiction. (Doc. # 25
at 1; see Doc. # 31). Specifically, Pinellas County posits
that Bright House has failed to support its allegations of
12
these corporations’ principal places of business. (Doc. # 25
at 1)(citing Fritz v. Am. Home Shield Corp., 751 F.2d 1152,
1153 (11th Cir. 1985)(“Determining a corporation’s principal
place of business may require a complex analysis of business
relationships among a hierarchy of corporate entities. . .
.”)). To that end, Pinellas County urges this Court to apply
the “total activities” test to determine the principal place
of business for each listed corporation. (Doc. # 25 at 2;
Doc. # 31 at 1)(citing Tai-Pan, Inc. v. Keith Marine, Inc. et
al., No. 95-338-CIV-J-20, 1997 WL 714898, at *2 (M.D. Fla.
May 13, 1997)). And, “[i]f the ‘total activities’ of any of
the four corporations in Bright House’s chain of ownership
would point to a principal place of business in Florida, then
Bright House would be considered a citizen of Florida and
diversity jurisdiction would not exist.” (Doc. # 25 at 2).
In Tai-Pan, the defendants filed a motion to dismiss for
lack of subject matter jurisdiction arguing that diversity
jurisdiction did not exist as the defendants were Florida
residents and a Florida corporation and the plaintiff had its
principal place of business in Florida. Tai-Pan, 1997 WL
714898, at *2. The parties agreed that courts in the Eleventh
Circuit apply the “total activities” test to determine where
a corporation has its principal place of business. Id.
13
This test combines the “place of activities” test,
which focuses on production or sales activities,
and the “nerve center” test, which focuses on the
situs of the managerial and policy making functions
of the corporation. Courts will also apply six
additional
factors
to
help
determine
a
corporations's principal place of business: (1) the
nature of the activity, i.e., whether “active or
passive,”
“labor-intensive,”
or
“management
demanding”; (2) the number of locations where the
corporation operates; (3) the significance of the
activity as it relates to the corporate purpose and
the corporation as a whole; (4) the amount of
contact the corporation has with the community; (5)
the location of the corporation's nerve center; and
(6) whether corporate decisions are confined to the
nerve center or delegated to other locations.
Id. “After considering the argued facts and the applicable
legal
principles,”
the
Tai-Pan
court
concluded
that
the
plaintiff had not met its burden of providing that its
principal place of business is outside of Florida, as the
plaintiff “all but conceded that [its] day-to-day operations
. . . were conducted . . . in the State of Florida”. Id. at
*4.
However, as previously noted by this Court, Pinellas
County has failed to cite any binding authority requiring
this Court to engage in a “total activities” analysis and has
failed to provide any factual support demonstrating that if
this Court were to apply the “total activities” test, the
enumerated corporations’ principal places of business are
14
within Florida. (Doc. # 28 at 11-12). Thus, the Court declines
to engage in such an analysis.
The Court notes that on numerous occasions, Pinellas
County has pointed out that in the state court action, Bright
House alleged that it was a Florida LLC; however, in this
action Bright House alleges that it is not a citizen of
Florida. (Doc. # 10 at 9; Doc. # 31 at 2). In an effort to
cure this discrepancy in the jurisdictional allegations,
Bright House has provided a declaration by attorney Kimberly
Sharpe, who drafted the complaint in state court, stating
that the state court jurisdictional allegation (i.e., Bright
House is a Florida LLC) was made by her without personal
knowledge. (Doc. # 16-5).
provides
that
such
In the declaration, Sharpe further
jurisdictional
allegation
“was
an
irrelevant and immaterial allegation made in connection with
venue
allegations.”
(Id.).
The
Court
recognizes
the
discrepancy in the jurisdiction allegations, but finds that
Bright
House
jurisdictional
has
since
statement
adequately
contained
in
retracted
the
state
the
court
complaint.
In its supplemental memorandum regarding citizenship,
Bright House provides a detailed breakdown of the citizenship
of its members. As articulated by Pinellas County, “Bright
15
House has . . . listed each member through its chain of
ownership and it appears that four of the entities are
corporations.” (Doc. # 25 at 1). This Court is satisfied that
none of these corporations are citizens of Florida; and as a
result, complete diversity exists. Thus, the Court finds that
Bright House has sufficiently alleged that this Court has
diversity jurisdiction over this action.
Now, although the Court finds that it has subject matter
jurisdiction over this action, the Court will address whether
the Court should abstain from hearing this action in favor of
the current state court proceedings.
B. Fed. R. Civ. P. 12(b)(6)
Pinellas
County
moves
the
Court
to
abstain
from
exercising jurisdiction in the instant declaratory action and
to dismiss the case. (See Doc. # 10). The Declaratory Judgment
Act, 28 U.S.C. § 2201(a), provides in relevant part, “[i]n a
case of actual controversy within its jurisdiction, . . . any
court of the United States, upon the filing of an appropriate
pleading, may declare the rights and other legal relations of
any interested party seeking such declaration, whether or not
further relief is or could be sought.” Chi. Ins. Co. v.
Lammers, No. 6:06–CV–658ORL–28JGG, 2006 WL 5085250 at *3
16
(M.D. Fla. Oct. 31, 2006)(emphasis in original)(citing 28
U.S.C. § 2201(a)).
The Declaratory Judgment Act confers “on federal courts
unique and substantial discretion in deciding whether to
declare
the
rights
of
litigants,”
allowing
a
court
to
determine “whether and when to entertain an action under the
Declaratory
satisfies
Judgment
subject
Act,
matter
even
when
the
jurisdictional
suit
otherwise
prerequisites.”
Wilton v. Seven Falls Co., 515 U.S. 277, 282, 286–87 (1995).
Courts are under “no compulsion” to exercise jurisdiction
under the Declaratory Judgment Act. See Brillhart v. Excess
Ins. Co. Am., 316 U.S. 491, 494 (1942); Fed. Reserve Bank of
Atlanta v. Thomas, 220 F.3d 1235, 1247 (11th Cir. 2000)(“A
court may exercise its discretion to dismiss a declaratory
judgment action in favor of a pending state court proceeding
that will resolve the same state law issues.”).
The Eleventh Circuit has outlined nine factors that a
district court may consider in determining whether to accept
or decline jurisdiction over a declaratory judgment action:
(1) the strength of the state's interest in having
the issues raised in the federal declaratory action
decided in the state courts;
(2) whether the judgment in the federal declaratory
action would settle the controversy;
17
(3) whether the federal declaratory action would
serve a useful purpose in clarifying the legal
relations at issue;
(4) whether the declaratory remedy is being used
merely for the purpose of “procedural fencing” —
that is, to provide an arena for a race for res
judicata or to achieve a federal hearing in a case
otherwise not removable;
(5) whether the use of a declaratory action would
increase the friction between our federal and state
courts
and
improperly
encroach
on
state
jurisdiction;
(6) whether there is an alternative remedy that is
better or more effective;
(7) whether the underlying factual issues are
important to an informed resolution of the case;
(8) whether the state trial court is in a better
position to evaluate those factual issues than is
the federal court; and
(9) whether there is a close nexus between the
underlying factual and legal issues and state law
and/or public policy, or whether federal common or
statutory law dictates a resolution of the
declaratory judgment action.
See Ameritas Variable Life Ins. Co. v. Roach, 411 F.3d 1328,
1330–31 (11th Cir. 2005). This list of factors is “neither
absolute nor exclusive, and no ‘one factor is controlling.’”
N.H. Ins. Co. v. Hill, No. CIV. A. 11-0414-CG-B, 2012 WL
1598155, at *2 (S.D. Ala. May 7, 2012). “Indeed, the Court
has no obligation to consider each and every factor on the
list and is free to consider any other factors it deems
18
relevant
or
significant.”
Id.
The
Eleventh
Circuit
has
“upheld a district court's refusal to assert jurisdiction
where the district court had considered only two of the
factors[.]” Id.
1.
Parallel Action
The initial inquiry for this Court is whether the present
action and the underlying state court action are parallel or
only related. As noted above, “the decision of whether to
hear a declaratory judgment action in the presence of a
parallel state court action is discretionary.” State Farm
Fire & Cas. Co. v. Knight, No. CIV.A. 09-0783-WS-B, 2010 WL
551262, at *3 (S.D. Ala. Feb. 11, 2010). “[S]uits are parallel
if substantially the same parties litigate substantially the
same issues in different forums.” Id. (quoting Scottsdale
Ins. Co. v. Detco Indus., Inc., 426 F.3d 994, 997 (8th Cir.
2005)(citations omitted)); see also Tyrer v. City of S.
Beloit, Ill., 456 F.3d 744, 752 (7th Cir. 2006) (“Generally,
a suit is parallel when substantially the same parties are
contemporaneously litigating substantially the same issues in
another forum.”) (internal quotation marks omitted). When
there is only a related state court action, however, “courts
have shown marked reluctance to exercise their discretion to
19
stay or dismiss the declaratory judgment action.” State Farm
Fire & Cas. Co., 2010 WL 551262, at *3.
Here, Bright House states that the primary issue in this
declaratory
action
is
Bright
House’s
“duty
to
defend,”
whereas the primary issue in Pinellas County’s counterclaim
against
Bright
House
in
state
court
relates
only
to
indemnification. (Doc. # 16 at 1). According to Bright House,
in the underlying state court action Pinellas County never
made any demand on Bright House to defend the subject claims
or requested that Bright House pay the cost of any defense.
(Doc. # 10 at 1-2). Instead, Bright House posits that Pinellas
County “chose to secretly negotiate a purported Coblentz
agreement with its contractor who had asserted claims against
Pinellas County under a Dispute Review Board (DRB) agreement
(Doc. # 10-2 at 26) and the Prompt Payment Statute.” (Doc. #
16 at 2). However, “The duty to defend is not a necessary
element of indemnification; the duty to defend is a necessary
element to the enforcement of a Coblentz agreement.” (Doc. #
16 at 4)(citing Stephens v. Mid-Continent Cas. Comp., 749
F.3d 1318 (11th Cir. 2014)).
According to Bright House, Pinellas County attempted to
enforce
the
Coblentz
agreement
through
a
motion
in
the
underlying state court action – “Pinellas County and the
20
contractor filed a joint motion to approve their settlement
agreement and requested entry of a consent judgment against
Pinellas County and in favor of the contractor.” (Doc. # 16
at 3). Bright House provides that the state court agreed with
Bright House that this was improper; Pinellas County should
have brought a separate action seeking enforcement of the
Coblentz agreement. (Id. at 5). Florida law provides, “where
a party wishes to recover under a Coblentz agreement, the
party must subsequently ‘bring an action’ against the insurer
and
prove
certain
established
elements.”
(Doc.
#
16
at
5)(citing Chomat, 919 So. 2d at 537 (“Where an injured party
wishes to recover under a Coblentz agreement, ‘the injured
party must bring an action against the insurer and prove
coverage, wrongful refusal to defend, and that the settlement
was reasonable and made in good faith.’”); Mid-Continent Cas.
Co., 534 Fed. App’x at 926 (subsequent to the agreement, the
party
must
bring
an
action)).
The
record
reflects
that
Pinellas County has not filed such action.
In a proper action on a Coblentz agreement, the threshold
issue is whether the party is an insured at all. (Doc. # 16
at 6)(citing Taylor v. Safeco Ins. Comp., 361 So. 2d 743 (Fla.
1st DCA 1978)); see Sinni v. Scottsdale Ins. Co., 676 F. Supp.
2d 1319, 1324 (M.D. Fla. 2010)(“In Florida, a party seeking
21
to
recover
under
a
Coblentz
agreement
must
prove:
(1)
coverage; (2) a wrongful refusal to defend; and (3) that the
settlement
was
objectively
reasonable
and
made
in
good
faith.”); James River Ins. Comp. v. Fortress Sys., LLC, No.
11-60558-CIV,
2012
WL
6154281,
at
*1
(S.D.
Fla.
2012)(coverage is a threshold issue). Bright House argues
that the issue of coverage is best brought as a separate
action for declaratory relief. (Doc. # 16 at 6). Thus, Bright
House claims it filed this separate action to determine the
threshold issues, which it submits has been brought for the
entirely proper purpose of resolving issues that were not
“teed up” in the underlying state court action. (Id.).
Therefore, it is Bright House’s position that the state
court action has neither the same issues nor the same parties,
and therefore is not parallel to the present action. Instead,
the narrow issue of “duty to defend” is now presented for the
first time in this action.
Conversely, Pinellas County argues that an underlying
issue in both matters is the scope of both defense and
indemnity under the Permit. (Doc. # 21 at 2). According to
Pinellas County, in this action, Bright House is seeking more
than a declaration of the existence of a duty to defend.
(Id.).
Bright
House
requests
22
“declarations
that
(a)
the
subject claims are not covered by and are not within the scope
of the indemnification provision in the ROW Permit; (b) Bright
House has no duty to defend Pinellas County in connection
with the [subject] [c]laims; and (c) even if Bright house has
a duty to defend, Bright House has not wrongfully refused to
defend.” (Id.; see Doc. # 1 at ¶ 16). Pinellas County argues
that the requested declarations are part of the underlying
state action. (Id.). To support its position, Pinellas County
cites to paragraphs 5 and 15 of Pinellas County’s counterclaim
against Bright House in the state court action, where Pinellas
County alleges:
Pursuant to the terms of the ROW Permit Plaintiff
agreed to indemnify, pay the cost of defense, and
save harmless PINELLAS COUNTY from and against
payment of all claims arising out of the
construction, operation, or maintenance of the
underground facilities and resulting from the
negligent acts or omissions of the Plaintiff.
(Doc. # 10-2). Further in paragraphs 9 and 19, Pinellas County
alleges:
As a result, Plaintiff owes PINELLAS COUNTY for any
sums which may be awarded JOINT VENUTRE against
PINELLAS COUNTY, for the amounts expended in
defending against the claims of JOINT VENTURE,
including any amounts PINELLAS COUNTY is obligated
to pay PINELLAS COUNTY’s attorney for a reasonable
fee for the attorney’s services.
23
* * *
As a result, Plaintiff owes PINELLAS COUNTY for any
sums which may be awarded JOHNSON BROS. against
PINELLAS COUNTY, for the amounts expended in
defending against the claims of JOHNSON BROS.,
including any amounts PINELLAS COUNTY is obligated
to pay PINELLAS COUNTY’s attorney for a reasonable
fee for the attorney’s services.
(Id.).
Likewise, Pinellas County argues that Bright House – by
way of its defenses to Pinellas County’s counterclaim - has
raised the scope of the Permit’s indemnification clause and
its duty to defend in the state action:
The claims asserted against Pinellas County are not
within the scope of any indemnity obligation under
the [Permit].
* * *
Pinellas County failed to give the Plaintiff proper
notice of any claim that might be subject to the
indemnity provision in the [Permit], but instead
entered into agreements with the Joint Venture,
without notice to the Plaintiff, that form the
basis of the cross claims against the County.
Moreover, to the extent that any such claim is
within the scope of the indemnity provision in the
[Permit], Pinellas County failed to make any demand
on the Plaintiff to defend the County against such
claim.
(Doc. # 10-3)(emphasis added).
24
Furthermore, Bright House filed a motion for summary
judgment in the state action seeking judgment on the scope of
the indemnification clause stating, “As a matter of law, the
Indemnity Claims on their fact (sic) do not fall within the
scope of the indemnification language in the Right of Way
Utilization Permit.” (Doc. # 10-8).
Pinellas County also
filed a motion for summary judgment on the “scope of the ROW
Permit and Bright House’s duty to defend and indemnify.” (Doc.
# 21 at 3; see Doc. # 10-9). Therefore, Pinellas County
submits that a review of the state court record demonstrates
that the issues of coverage under the indemnification clauses
of the Permit and Bright House’s duty to defend have been
raised in the underlying state court action. (Doc. # 21 at
3).
To the extent Bright House argues the need for separate
litigation to determine the enforceability of a Coblentz
agreement, the Court agrees with Pinellas County, that this
argument is misdirected. (See Id.). The enforceability of the
Coblentz
agreement
is
not
currently
before
this
Court.
Although the Complaint references the Coblentz agreement, it
does not request any determination from this Court as to the
enforceability of the agreement. Instead, Bright House seeks
declarations
as
to
the
coverage
25
of
the
Permit’s
indemnification clause, Bright House’s duty to defend, and
whether Bright House wrongfully refused to defend. (See Doc.
# 1 at ¶ 16).
The Court recognizes, however, that Bright House’s duty
to defend is a factor to be considered in determining the
enforceability of the Coblentz agreement.
But, it is not the
complete analysis. If this Court were to find that Bright
House did have a duty to defend, the controversy would not be
completely resolved. There must also be a determination that
the settlement was reasonable and made in good faith, which
are declarations Bright House is not seeking in this action.
(Doc. # 21 at 4)(citing Chomat, 919 So. 2d at 537 (“Where an
injured party wishes to recover under a Coblentz agreement,
‘the injured party must bring an action against the insurer
and prove coverage, wrongful refusal to defend, and that the
settlement was reasonable and made in good faith.’”)); see
Quintana v. Barad, 528 So. 2d 1300, 1301 n.1 (Fla. 3d DCA
1988)(“in order to enforce a consent judgment, ‘the injured
party must bring an action against the insurer and prove
coverage, wrongful refusal to defend, and that the settlement
was reasonable and made in good faith.’”).
A review of the state court record demonstrates that the
state court action and the present action are parallel as the
26
actions concern “substantially the same parties [who are
litigating]
substantially
the
same
issues
in
different
forums.” See State Farm Fire & Cas. Co., 2010 WL 551262, at
*3. Particularly, the issue of whether Bright House has a
duty to defend Pinellas County for the damages in accordance
with the Permit is raised in both the state court action as
well as the present action. Although Bright House contends
that Pinellas County “never demanded a defense from [Bright
House] and never requested [Bright House] to pay the cost of
any defense” (Doc. # 16 at 3), and thus, the duty to defend
issue was not “teed up” in state court, this Court disagrees.
The state court record provides that the issue of whether
Bright House had a duty to defend, along with the scope of
the indemnification provision, have been raised in the state
court action; specifically, in Pinellas County’s counterclaim
against Bright House, and Bright House’s defense thereto, and
the
parties’
competing
motions
for
summary
judgment
as
detailed above.
In its response, Bright House provided this Court with
a transcript from a state court hearing where it was discussed
whether the state court should defer ruling on the pending
motions for summary judgment until this Court determined
whether it would hear this action. (See Doc. # 16-1). At that
27
time, Bright House provided: “So it just so happens . . .
that we have some issues that overlap perhaps with respect to
the indemnity.” (Doc. # 16 at 95). Thus, Bright House admits
that issues present in the state court action – namely,
indemnification – are present in the instant action as Bright
House seeks, among other things, a declaration from this Court
as to the scope of the Permit’s indemnification provision.
Furthermore, the same parties involved in determining
the narrow issues before the Court were present in the state
court action. Bright House argues that in the state court
action, Bright House “was not a party to the cross-claims
between Pinellas County and its contractor.” (Doc. # 16 at
5). “The cross-claims between them are not an enforcement
action against [Bright House]. The coverage issues, if any,
between [Bright House] and Pinellas County are not at issue
in the cross-claims.” (Id.). However, the state court record
reflects that Bright House has raised the issue of its duty
to defend and the scope of the Permit’s indemnification
provisions against Pinellas County, and therefore, the same
parties involved in determining the issues before this Court
were present in the state court action.
Accordingly, the Court concludes that evaluation under
the guidepost factors enumerated in Ameritas is appropriate
28
under
the
circumstances.
See
Hartford
Fire
Ins.
Co.
v.
Donahue, No. 8:14-cv-829-T-30AEP, 2014 WL 3643554, at *3
(M.D. Fla. July 23, 2014)(finding it proper for the Court to
analyze whether abstention was appropriate under Ameritas
factors).
2.
Application of Ameritas Factors
Upon review of the Ameritas factors, the Court concludes
that
the
applicable
considerations
weigh
in
favor
of
abstention. See Penn Millers Ins. Co. v. AG-Mart Produce Inc.,
260 F. App'x 175, 177 (11th Cir. 2007)(affirming district
court’s decision to dismiss declaratory judgment action on
abstention grounds).
To begin, this Court finds that the state court has a
strong interest in the issues presented in the Complaint being
decided in the state action. The state court action is being
litigated in Florida state court and has been pending for
roughly four years. See Fed. Ins. Co. v. Hamptons at Metrowest
Condo. Ass'n, Inc., No. 6:13-CV-1087-ORL-37, 2014 WL 299107,
at *3 (M.D. Fla. Jan. 28, 2014)(“The state court, which
presided
over
the
lengthy
litigation
of
the
underlying
claims, is in a better position to evaluate the factual issues
necessary to the indemnity determination.”); Lincoln Ben.
Life Co. v. Look, No. 2:05-CV-0353-FTM, 2006 WL 3734331 (M.D.
29
Fla.
Dec.
15,
undoubtedly
2006)(finding
have
a
that
substantial
“Florida
interest
in
state
courts
deciding
the
issues raised in this lawsuit [as] [t]he underlying state
action is being litigated in Florida state court, and any
ruling on . . . coverage obligation in this action would have
profound
and
preclusive
effects
on
the
state
court
litigation.”).
Furthermore, Florida law governs the substantive issues
presented in the instant action – not federal law – which
gives Florida a substantial interest in having these issues
decided in state court. See Mt. Hawley Ins. Co. v. Park Ave.
At Metrowest, Ltd., No. 6:13-CV-556-ORL, 2013 WL 6858946
(M.D. Fla. Dec. 30, 2013)(finding in favor of abstention).
Not to mention, Pinellas County, a party in both actions, is
a political subdivision of the state of Florida.
Likewise, the state court is in a better position to
evaluate the factual and legal issues presented in this
action, which are vitally important to an informed resolution
of the case. As noted above, in the event Bright House is
bringing
a
separate
action
regarding
enforcement
of
the
Coblentz agreement, a declaration in this case as to Bright
House’s
duty
controversy.
to
defend
would
not
resolve
the
entire
Instead, it would only resolve a portion of the
30
state
court
action
because
it
would
still
need
to
be
determined whether the agreement was reasonable and made in
good faith.
As demonstrated by Pinellas County, Bright House has
actively participated in the state action.
by
Bright
House
raising
the
scope
This is evident
of
the
Permit’s
indemnification clause and its duty to defend in the state
court
action,
specifically
in
its
defenses
to
Pinellas
County’s counterclaims (See Doc. # 10-3), and its motion for
summary judgment (See Doc. # 10-8; Doc. # 16 at 4). Therefore,
because the state court is familiar with the factual issues,
parties, and the evidence before it, and because it has been
presented with the very issues that are being presented to
the
Court
in
instant
case,
would
jurisdiction
the
both
this
hinder
Court’s
judicial
exercising
economy
and
unnecessarily encroach onto state jurisdiction. See Hartford
Fire Ins. Co., 2014 WL 3643554 at *3 (concluding that it was
proper
for
the
Court
to
abstain
from
exercising
jurisdiction).
Moreover, the Court is confident that the state court
can
provide
an
alternative
remedy
that
offers
the
same
clarification and declaratory relief as this Court can. In
fact, as stated above, the issues of “duty to defend” and
31
indemnification have been raised by Bright House and Pinellas
County in the state court action. The Court notes that the
state court held a hearing on several matters, and in regards
to whether the state court would proceed on determining “the
competing
Motions
for
Summary
Judgment
on
the
issue
of
indemnification and paying the cost of the defense language
that is in the [Permit],” the state court pronounced:
I’m going to let the Federal Court have the first
shot at it. And then if they want to send it back
or not do it or there’s better reason why I should
do it, then I’ll be glad to let you call it back
up, but right now I’m not going to do it.
(Doc. # 16-1 at 98). Thus, the state court “passed the motion
pending
Bright
the
Federal
House’s
Court’s
action.”
interpretation,
the
(Id.).
state
Contrary
court
did
to
not
indicate, albeit even impliedly, that the issues in the
present action are not the same as the issues in the state
action. (See Doc. # 16 at 7). Instead, the state court
deferred ruling on the motions until this Court determined
whether it was more appropriate for the federal court or the
state court to make a determination.
Therefore, upon consideration of Ameritas factors, and
for the reasons stated above, the Court concludes that the
32
applicable considerations weigh in favor of abstention.3 Thus,
Pinellas
County’s
Motion
is
granted.
As
this
Court
has
determined that abstention is proper under the circumstances,
the Court declines to address Pinellas County’s arguments
that Bright House’s Complaint is vague as it fails to make
specific reference to the Coblentz agreement and that Bright
House failed to add an indispensable party to this action.
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
(1)
Defendant Pinellas County’s Motion to Dismiss Complaint
for Declaratory Relief (Doc. # 10) is GRANTED to the
extent
that
this
Court
abstains
from
hearing
this
matter.
(2)
The Clerk is directed to CLOSE THIS CASE.
DONE and ORDERED in Chambers in Tampa, Florida, this
25th day of September, 2014.
Copies: All counsel of record
3
Although not addressed individually, the Court has
considered all nine Ameritas factors in making its abstention
determination.
33
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