PEBB CLEVELAND, LLC v. Fireman's Fund Insurance Company
Filing
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OPINION ORDER granting 4 & 16 Defendants' Motions to Dismiss Complaint against Halycon and CBIZ; denying 15 Plaintiff's Motion to Remand to State Court. Signed by Judge Daniel T. K. Hurley on 1/23/15. (lr)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 14-81496-CIV-HURLEY
PEBB CLEVELAND, LLC,
plaintiff,
vs.
FIREMAN’S FUND INSURANCE COMPANY,
HALYCON UNDERWRITERS, INC. and
CBIZ INSURANCE SERVICES, INC.
d/b/a CBIZ MERIDIAN,
defendants.
_____________________________________________/
ORDER GRANTING DEFENDANTS’ MOTIONS TO DISMISS COMPLAINT
AGAINST DEFENDANTS HALYCON UNDERWRITERS, INC. and
CBIZ INSURANCE SERVICES, INC. d/b/a CBIZ MERIDIAN
FOR FAILURE TO STATE A CLAIM [ECF Nos. 4, 10-1, 16]
&
ORDER DENYING PLAINTIFF’S MOTION FOR REMAND [ECF No. 15]
THIS CAUSE is before the court upon defendants Fireman’s Fund Insurance Company
(Fireman’s Fund), Halycon Underwriters, Inc. (“Halycon”) and CBIZ Insurance Services, Inc.
(“CBIZ”)’s motion to dismiss the plaintiff’s complaint based on fraudulent joinder [ECF 4, 10-1,
16]. In addition, the case is before the court on plaintiff’s motion to remand [ECF 15].
I. PROCEDURAL AND FACTUAL BACKGROUND
Plaintiff Pebb Cleveland LLC (“Pebb”), a Delaware corporation, originally filed this suit
against defendants Fireman’s Fund, Halycon and CBIZ in the Circuit Court of the Fifteenth Judicial
Circuit, in and for Palm Beach County, Florida. Count 1 asserted a claim of breach of contract
against Fireman’s Fund, a California corporation. Counts 2 and 3 asserted negligence claims against
CBIZ and Halycon, Pebb’s Florida-based insurance agent and broker, respectively.
Fireman’s Fund removed the case to this court on December 1, 2014 [ECF 1], asserting
diversity jurisdiction under 28 U.S.C. §1332 on theory that the non-diverse defendants, Halycon and
CBIZ, were fraudulently joined to defeat the jurisdiction of this court which otherwise would exist.
The following facts, drawn from the plaintiff’s complaint, are accepted as true for the purpose of
resolving the instant motion.
At a time prior to January 9, 2014, Pebb applied for and obtained an “all risk” business
insurance policy from Fireman’s Fund which covered certain commercial property owned by it in
Aurora, Ohio. Defendants CBIZ Insurance and Halycon Underwriters represented Pebb in the
purchase of the policy, which was delivered to Pebb at its principal place of business in Boca Raton,
Palm Beach County, Florida.
On January 9, 2014, a deep freeze caused a sprinkler pipe to burst at Pebb’s Ohio property,
causing extensive water damage to the building. Pebb promptly submitted a property damage claim
to Fireman’s Fund, which denied the claim on ground the building was allegedly vacant for more
than sixty days and the building’s sprinkler system had not been protected from freezing.
Pebb filed a three-count complaint in state court on October 2, 2014. Count 1 alleged a
breach of contract against Fireman’s Fund based on its failure to honor Pebb’s property damage
insurance claim. Counts 2 and 3 alleged negligence against CBIZ and Halycon for failure to procure
an insurance policy covering unoccupied premises, and failing to advise that the policy obtained
included a “vacancy clause” which excluded damages related to unoccupied premises.
II. STANDARD OF REVIEW
A. Motion to Dismiss Failure to State a Claim
A complaint may be dismissed under Rule 12(b) (6) for “failure to state a claim on which
relief can be granted.” When ruling on a motion to dismiss, a court must accept the facts alleged in
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the complaint as true and grant all reasonable inferences in favor of the plaintiff. Chaparro v.
Carnival Corp., 693 F.3d 1333, 1335 (11th Cir. 2012). Although a complaint is not required to
contain detailed factual allegations, it 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 Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). To survive a motion to dismiss,
the plaintiff must plead “factual content that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.” Id.
A dismissal is appropriate when, on the basis of a dispositive issue of law, no construction
of the allegations of a complaint will support the cause of action. Executive 100, Inc. v. Martin
County, 922 F.2d 1536 (11th Cir. 1991).
B. Motion to Remand for Fraudulent Joinder
Defendant Fireman’s Fund removed this case to federal district court on the basis of diversity
jurisdiction under 28 U.S.C. §1332 and §1441. For removal under 28 U.S.C. § 1441 to be proper,
no defendant can be a citizen of the state in which the action was brought. 28 U.S.C. §1441(b).
Even if a named defendant is such a citizen, however, it is appropriate for a federal court to dismiss
such a defendant and retain diversity jurisdiction if the removing party satisfies the heavy burden of
proving by clear and convincing evidence that either (1) there is no possibility the plaintiff can
establish any cause of action against that defendant, or (2) the plaintiff has fraudulently pled
jurisdictional facts to bring the resident defendant into state court. Crespo v. Coldwell Banker
Mortgage, ___ Fed. Appx. ___, 2014 WL 7272766 (11th Cir. 2014); Triggs v. John Crump Toyota,
Inc., 154 F.3d 1284, 1287 (11th Cir. 1998).
In the first category, the plaintiff “need not have a winning case against the allegedly
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fraudulent defendant, [but only the] possibility of stating a valid cause of action in order for the
joinder to be legitimate.” Triggs, 154 F.3d at 1287. “If there is even a possibility that a state court
would find that the complaint states a cause of action against any one of the resident defendant, the
federal court must find that the joinder was proper and remand the case to the state court.” Coker
v. Amoco Oil Co., 709 F.2d 1433, 1440-41 (11th Cir. 19893), superceded by statute on other grounds,
Wilson v. General Motors Corp., 888 F.2d 779 (11th Cir. 1989). The potential for legal liability
“must be reasonable, not merely theoretical.” Legg v. Wyeth, 428 F.3d 1317, 1325 n. 5 (11th Cir.
2005).
III. DISCUSSION
A. Motion to Dismiss - Failure to State a Claim
Under Florida law, negligence claims against an insurance agent do not accrue until the
existence of insurance has been completely resolved, i.e., when the coverage proceedings against
the insurer are final. Blumberg v. USAA Casualty Ins. Co., 790 So.2d 1061 (Fla. 2001). The theory
is that an insured claiming that he is entitled to insurance coverage is judicially estopped from
simultaneously claiming a lack of coverage against the agent that procured the policy on his behalf.
Id at 1061.
This means, under Florida law, that Pebb’s failure to procure claims against Halycon and
CBIZ are contingent and premature, as the defendants’ liability for failure to procure, if any,
becomes an issue for resolution only upon a final determination that no insurance coverage exists
under the policy issued by Fireman’s Fund. If the Court determines that Fireman’s Fund is liable
to Pebb under the policy, then Halycon and CBIZ caused no damage to Pebb because insurance was
properly procured. On the other hand, if the court determines that Fireman’s Fund is not liable under
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the policy because it does not cover damage to unoccupied premises, then Halycon and CIBZ are
potentially liable for failure to recommend and obtain adequate insurance coverage to meet the
known needs of the insured.
At present, the court agrees that there is no possibility that Pebb can state negligent failure
to procure claims against Halcyon or CBIZ, and accordingly finds that these defendants have been
fraudulently joined. Looney v. Protective Life Ins. Co., 2007 WL 2669190 (M.D. Fla. 2007);
Fontainebleau Gardens Condominium Ass’n, Inc. v. Pacific Ins. Co., Ltd., 768 F. Supp. 2d 1271
(S.D. Fla. 2011).
Pebb argues that a stay or abatement of its claims against Halycon and CBIZ is the
appropriate remedy if the Court determines that the claims are premature. See Blumberg v USAA
Cas. Ins. Co, 790 So.2d 1061, 1065 n. 2 (Fla. 2001) (finding proper remedy for premature litigation
is an abatement or stay of the claim for the period necessary for its maturation under the law).
However, considering the circumstances of this case, and that fact that Pebb’s claims against
Halycon and CBIZ may never mature if the court determines that Fireman’s Fund is liable to Pebb
under the policy, the court finds that dismissal of Pebb’s claims against Halycon and CBIZ, without
prejudice, is appropriate. Hernandez v. Infinity Indemnity Ins. Co., ___ F. Supp. 3d ___, 2014 WL
4494752 (S.D. Fla. 2014); Wells Fargo Ins. Services USA, Inc. v. Blackshear, 136 So.3d 1235,
1239 (Fla. 2d DCA 2014) (dismissal without prejudice is appropriate remedy where premature
element of count will not be cured by passage of time); Mobro Marine Inc. v. Essex Insurance Co.,
2011 WL 6328255 at *4 (M.D. Fla. 2011) (dismissing without prejudice negligent failure to procure
claims against insurance agent because claims were contingent and premature under Bloomberg);
Looney v. Protective Life Ins. Co., 2007 WL 2669190 (M.D. Fla. 2007).
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B. Plaintiff’s Motion for Remand
Pebb cannot properly state a claim against defendant Halcyon or CBIZ, as any negligence
action against them is contingent and premature pending the result of the breach of contract claim
against Fireman’s Fund. Without an actionable claim against Halcyon and CBIZ, the plaintiff is
left with its breach of contract claim against Fireman’s Fund. As such, the two remaining parties
to this action are completely diverse in citizenship and have been properly removed to this court.
Accordingly, plaintiff’s motion to remand must be denied.
IV. CONCLUSION
Pebb has stated a cognizable breach of contract claim against Fireman’s Fund. However, any
action against defendants Halycon or CBIZ is premature pending resolution of Pebb’s action against
Fireman’s Fund. Because no cause of action has yet accrued against these defendants as a matter
of law, they shall be dismissed. The court shall retain jurisdiction over the remaining claim against
Fireman’s Fund under its diversity jurisdiction.
It is accordingly ORDERED AND ADJUDGED:
1. The defendants’ motions to dismiss the negligence claims against Halycon and CBIZ
[ECF 4, 10-1, 16] are GRANTED, and the claims against defendants Halycon and CBIZ are here
DISMISSED WITHOUT PREJUDICE.
2. The plaintiff’s motion to remand [ECF 15] is DENIED.
DONE and SIGNED in Chambers in West Palm Beach, Florida this 23rd day of January,
2015.
________________________________
Daniel T. K. Hurley
United States District Judge
cc. All counsel
For updated court information, see unofficial website
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at www.judgehurley.com
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