Foremost Signature Insurance Company v. Silverboys, LLC et al

Filing 51

ORDER denying in part Defendants' Motion to Dismiss [ECF No. 28]. Signed by Judge Darrin P. Gayles (hs01)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
MIAMI DIVISION
Case No. 1:17-cv-20581-GAYLES/OTAZO-REYES
FOREMOST SIGNATURE INSURANCE
COMPANY,
Plaintiff,
v.
SILVERBOYS, LLC, SOJO DESIGN,
LLC, SOFIA JOELSSON, XAVIER COE
a/k/a CHAYANNE COE, and ROBERT
WHITTINGHAM,
Defendants.
_______________________________________/
ORDER
THIS CAUSE comes before the Court on Defendants’ Motion to Dismiss [ECF No. 28].
The Court has reviewed the Motion and the record and is otherwise fully advised. For the
reasons discussed below, the Court DENIES the Motion.
BACKGROUND
Plaintiff Foremost Signature Insurance Company (“Foremost”) brings this action against
Defendants SoJo Design, LLC, Sofia Joelsson, and Xavier Coe a/k/a Chayanne Coe
(collectively, “SoJo”) and Silverboys, LLC (“Silverboys”) 1 asking the Court to declare that
Foremost has no duty to defend or indemnify SoJo on claims arising from an underlying action
between SoJo and Silverboys.
I.

The Underlying Action
On July 12, 2016, Silverboys filed an action against SoJo relating to SoJo’s allegedly

deficient design and construction of residential buildings in the Bahamas (the “Underlying
1

Silverboys has answered the Complaint [ECF No. 12].

Action”). Silverboys alleged damages “in the millions of dollars.” [ECF No. 1, Ex. A]. During
the relevant time period, Foremost insured SoJo Design, LLC, pursuant to three consecutive
liability insurance policies (the “Policies”).

Foremost is currently defending SoJo in the

Underlying Action with a reservation of rights.
II.

Procedural Background
On February 25, 2017, Foremost brought this action, pursuant to Federal Rule of Civil

Procedure 57 and 28 U.S.C. § 2201, seeking a declaration that the Policies do not cover
Silverboys’ claims against SoJo and that, therefore, Foremost has no duty to defend or indemnify
SoJo in the Underlying Action. Foremost alleged that this Court has diversity jurisdiction over
the declaratory action as the parties are of diverse citizenship and the amount in controversy
exceeds $75,000. [ECF No. 1].
On April 26, 2017, SoJo moved to dismiss arguing that (1) Foremost has not alleged the
requisite amount in controversy for diversity jurisdiction and (2) Foremost’s request for
declaratory relief is premature.
DISCUSSION
I.

Standard of Review
Rule 12(b)(1) Motion for Lack of Subject Matter Jurisdiction
A motion to dismiss for lack of subject matter jurisdiction brought pursuant to Rule

12(b)(1) of the Federal Rules of Civil Procedure may present either a facial or a factual challenge
to the complaint. See McElmurray v. Consol. Gov’t, 501 F.3d 1244, 1251 (11th Cir. 2007). In a
facial challenge, a court is required only to determine if the plaintiff has “sufficiently alleged a
basis for subject matter jurisdiction, and the allegations in [the] complaint are taken as true for
purposes of the motion.” Id. at 1251. By contrast, a factual attack “challenge[s] ‘the existence of

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subject matter jurisdiction in fact, irrespective of the pleadings, and matters outside the pleadings . . .
are considered.’” McElmurray, 501 F.3d at 1251 (quoting Lawrence v. Dunbar, 919 F.2d 1525,
1529 (11th Cir. 1990)). In a factual attack, “no presumptive truthfulness attaches to [a] plaintiff’s
allegations,” Lawrence, 919 F.2d at 1529 (quoting Williamson, 645 F.2d at 413), and the plaintiff
bears the burden to prove the facts sufficient to establish subject matter jurisdiction. See OSI, Inc.
v. United States, 285 F.3d 947, 951 (11th Cir. 2002).
Rule 12(b)(6) Motion for Failure to State a Claim
“To survive a motion to dismiss, a 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, 129 S. Ct. 1937 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570,
127 S.Ct. 1955 (2007)). Although this pleading standard “does not require ‘detailed factual
allegations,’ . . . it demands more than an unadorned, the–defendant–unlawfully-harmed-me
accusation.” Id. (quoting Twombly, 550 U.S. at 555).
Pleadings must contain “more than labels and conclusions, and a formulaic recitation of
the elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (citation omitted).
Indeed, “only a complaint that states a plausible claim for relief survives a motion to dismiss.”
Iqbal, 556 U.S. at 679 (citing Twombly, 550 U.S. at 556). To meet this “plausibility standard,” a
plaintiff must “plead[ ] factual content that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.”

Id. at 678 (alteration added) (citing

Twombly, 550 U.S. at 556). When reviewing a motion to dismiss, a court must construe the
complaint in the light most favorable to the plaintiff and take the factual allegations therein as
true. See Brooks v. Blue Cross & Blue Shield of Fla. Inc., 116 F.3d 1364, 1369 (11th Cir. 1997).
In reviewing a 12(b)(6) motion, the Court is largely limited to the allegations in the Complaint

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and the attached exhibits. However, “a document outside the four corners of the complaint may
still be considered 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).
II.

Subject Matter Jurisdiction
For this Court to have diversity jurisdiction, there must be complete diversity between the

parties and the amount in controversy must exceed $75,000. 28 U.S.C. § 1332. With respect to
the amount of controversy, courts generally find jurisdiction “unless it appears to a ‘legal
certainty’ that plaintiff's claim is actually for less than the jurisdictional amount.” Burns v.
Windsor Ins. Co., 31 F.3d 1092, 1094 (11th Cir.1994) (quoting St. Paul Mercury Indemnity Co.
v. Red Cab Co., 303 U.S. 283, 288–89 (1938)). The party seeking jurisdiction must “bear[] the
burden of proving by a preponderance of the evidence that the claim on which it is basing
jurisdiction meets the jurisdictional minimum.” Federated Mut. Ins. Co. v. McKinnon Motors,
329 F.3d 805, 807 (11th Cir. 2003).
For a declaratory relief action “the amount in controversy is the monetary value of the
object of the litigation from the plaintiff’s perspective.” Cohen v. Office Depot, Inc., 204 F.3d
1069, 1077 (11th Cir. 2000). When an insurance company seeks a court’s declaration that it has
no duty to defend or indemnify its insured, “the court examines the following factors to
determine the amount in controversy: (1) the coverage limits under the insurance policy; (2) the
amount of damages sought in the underlying lawsuit; and (3) the pecuniary value of the
obligation to defend the underlying suit.” Clarendon America Ins. Co. v. Miami River Club, Inc.,
417 F. Supp. 2d 1309, 1316 (S.D. Fla. 2006).
Foremost has met its burden of proving the requisite amount in controversy in this action.
Indeed, the Policies provide coverage of up to one million dollars, Silverboys seeks “millions of

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dollars” in damages in the Underlying Action, and the costs of defending the Underlying Action
are not negligible. Accordingly, the Court finds that the amount in controversy exceeds $75,000.
III.

The Declaratory Judgment Claim is Ripe for Review
A. Duty to Defend
Under Florida law, an insurer’s duty to defend its insured “depends solely on the facts

and legal theories alleged in the pleadings and claims against the insured.” Stephens v. MidContinent Cas. Co., 749 F.3d 1318, 1323 (11th Cir. 2014) (quoting James River Ins. Co. v.
Ground Down Eng’g, Inc., 540 F.3d 1270, 1275 (11th Cir. 2008)). “The duty to defend arises
when the relevant pleadings allege facts that fairly and potentially bring the suit within policy
coverage.” Id. (internal quotations and citations omitted). However, in “exceptional cases” the
Court may consider undisputed extrinsic facts “when it is manifestly obvious to all involved that
the actual facts placed the claims outside the scope of coverage.” Stephens, 749 F.3d at 1324
(11th Cir. 2014) (quoting First Specialty Ins. Corp. v. 633 Partners, *1324 Ltd., 300 F.App’x.
777, 786 (11th Cir. 2008)).
SoJo claims that Foremost’s request for a declaratory judgment is premature as the Court
needs “actual facts” to determine whether Foremost has a duty to defend SoJo in the Underlying
Action. The Court disagrees. This is not an exceptional case. The Court, therefore, only needs
to the review the Policies and the pleadings in the Underlying Action to determine if Foremost’s
duty to defend has been implicated. Goldberg v. Nat'l Union Fire Ins. Co. of Pittsburgh, PA.,
143 F. Supp. 3d 1283, 1293–94 (S.D. Fla. 2015). Therefore, Foremost’s declaratory relief claim
relating to a duty to defend is ripe for review.

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B. Duty to Indemnify
To determine the more limited duty to indemnify, the Court must look beyond the pleadings
and into actual facts, which are generally only developed through discovery or upon conclusion
of the underlying action. See Stephens, 749 F.3d at 1324 (11th Cir. 2014). The Court, therefore,
cannot make a determination as to the duty to indemnify at this time. See Great Am. Assurance
Co. v. Walters, 3:15-CV-1008-J-39JBT, 2015 WL 13567713, at *3 (M.D. Fla. Oct. 7, 2015)
(citing with approval a case which allowed “a declaratory action to proceed on the issue of an
insurer's duty to defend, but stayed the issue of the insurer's duty to indemnify until (1) the court
found that the insurer had a duty to defend, and (2) the underlying state court allocated at least
some liability to the insured.”). If the Court ultimately determines that Foremost has no duty to
defend it will necessarily have no duty to indemnify. See Burlington Ins. Co. v. Normandy Gen.
Partners, 560 F.App’x. 844, 849 (11th Cir. 2014) (“In sum, because Burlington had no duty to
defend Normandy in the Appellants' action against Normandy, Burlington had no corresponding
duty to indemnify.”). Accordingly, the question of whether Foremost has a duty to indemnify
SoJo is stayed pending a determination of the duty to defend and/or the conclusion of the
Underlying Action.
IV.

Merits
While the parties fully briefed both jurisdiction and ripeness, they have not fully

addressed the merits of the duty to defend. As a result, the Court will wait until SoJo and/or
Foremost file substantive motions addressing the issue.

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CONCLUSION
For the foregoing reasons, it is hereby
ORDERED AND ADJUDGED that Defendants’ Motion to Dismiss is DENIED in
part. The Court will make a determination as to Foremost’s duty to defend SoJo following the
parties’ submission of substantive briefs. The Court’s determination as to Foremost’s duty to
indemnify is STAYED pending a further resolution of the duty to defend.
DONE AND ORDERED in Chambers at Miami, Florida, this 3rd day of January, 2018.

________________________________
DARRIN P. GAYLES
UNITED STATES DISTRICT JUDGE

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