International Village Association, Inc. et al v. AmTrust North America, Inc. et al
Filing
33
ORDER denying [1-6] Defendant AmTrust North America, Inc.'s Motion to Dismiss Plaintiffs' Amended Complaint; denying 13 Defendant AmTrust International Underwriters Limited, Inc.'s Motion to Dismiss Plaintiffs' Amended Complaint; denying 27 Defendant Liberty Insurance Underwriters, Inc.'s Motion to Dismiss. Signed by Judge James I. Cohn on 6/17/2015. (ns)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 15-80260-CIV-COHN/SELTZER
INTERNATIONAL VILLAGE ASSOCIATION,
INC. and JOHN LABRIOLA,
Plaintiffs,
v.
AMTRUST NORTH AMERICA, INC.,
AMTRUST INTERNATIONAL
UNDERWRITERS LIMITED, INC., and
LIBERTY INSURANCE UNDERWRITERS,
INC.,
Defendants.
/
ORDER DENYING MOTIONS TO DISMISS
THIS CAUSE is before the Court upon Defendant AmTrust North America, Inc.'s
Motion to Dismiss Plaintiffs' Amended Complaint [DE 1-6], Defendant AmTrust
International Underwriters Limited, Inc.'s Motion to Dismiss Plaintiffs' Amended
Complaint [DE 13], and Defendant Liberty Insurance Underwriters, Inc.'s Motion to
Dismiss [DE 27]. The Court has reviewed the Motions and the record in this case, and is
otherwise advised in the premises. For the reasons discussed herein, the Court will
deny each of the Motions.
I.
BACKGROUND
This case involves a dispute over insurance coverage for a related state-court
action. Plaintiff International Village Association, Inc. ("Association") is a condominium
association located in Broward County, Florida. DE 1-5 at 88–97 (Amended Complaint)
¶ 3.1 Plaintiff John Labriola was at all relevant times a director or officer of the
Association. Id. ¶ 4.
In July 2014, an individual named Ilan Weiss sued Labriola in state court. DE 1-5
at 189–91 ("Weiss Complaint").2 Weiss alleged that Labriola published a blog entry
portraying Weiss as dishonest in connection with his dealings with the Association. Id.
¶ 5. This blog entry caused a potential buyer of Weiss's condominium to withdraw from
negotiations. Id. ¶ 9. Weiss thus asserted claims against Labriola for defamation and
interference. Id. ¶¶ 5–12.
Defendant AmTrust International Underwriters Limited, Inc. ("AmTrust
International") issued a commercial general liability policy to the Association effective
from February 1, 2014, through February 1, 2015. Am. Compl. ¶ 10; DE 1-5 at 98–160
("AmTrust Policy"). Liberty Insurance Underwriters, Inc. ("Liberty") issued an insurance
policy to the Association effective from February 2, 2014, through February 2, 2015.
Am. Compl. ¶ 12; DE 1-5 at 161–86 ("Liberty Policy"). Plaintiffs allege that the Policies
provide coverage for Labriola in the underlying action ("Weiss Action"). Am. Compl.
¶ 20. Plaintiffs also allege that they timely notified AmTrust International, together with
its affiliate, Defendant AmTrust North America, Inc. ("AmTrust North America"), and
1
For the purpose of resolving the Motions, the Court adopts as true the facts
alleged in the Amended Complaint. See Nat'l Ass'n of Bds. of Pharmacy v. Bd. of
Regents, 633 F.3d 1297, 1301 n. 3 (11th Cir. 2011).
2
On a motion to dismiss, the Court generally must limit its review of the facts to
the four corners of the complaint. However, the Court may also review documents
attached to a complaint or incorporated by reference. Fed. R. Civ. P. 10(c); Kelliher v.
Target Nat'l Bank, 826 F. Supp. 2d 1324, 1327 (M.D. Fla. 2011). Plaintiffs have
attached the Weiss Complaint and the insurance policies at issue to their Amended
Complaint herein, and have incorporated those documents into their allegations by
reference. The Court therefore may consider those documents in resolving the Motions.
2
Liberty of the Weiss Action, and requested a defense and indemnification under each of
the Policies. Id. ¶ 21. However, Defendants have refused to defend or indemnify
Plaintiffs. Plaintiffs therefore have asserted a cause of action for declaratory relief,
asking the Court to determine that Defendants are obligated to defend and indemnify
them with respect to the Weiss Action. Id. at 8. Plaintiffs also have raised a claim for
breach of contract based upon Defendants' alleged failures to provide a defense and
indemnification as required by the Policies. Id. at 9. Defendants have responded with
their Motions, seeking dismissal of the Amended Complaint for failure to state a claim.
II.
LEGAL STANDARD
Under Rule 12(b)(6), a court shall grant a motion to dismiss where the factual
allegations of the complaint cannot support the asserted cause of action. Glover v.
Liggett Group, Inc., 459 F.3d 1304, 1308 (11th Cir. 2006) (per curiam). "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). The allegations must give a
defendant fair notice of the plaintiff's claims and the grounds upon which they rest. Id.
Thus, 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 (2009)
(quoting Twombly, 550 U.S. at 570).
A complaint must be liberally construed, assuming the facts alleged therein as
true and drawing all reasonable inferences from those facts in the plaintiff's favor.
Twombly, 550 U.S. at 555. A complaint should not be dismissed simply because the
court is doubtful that the plaintiff will be able to prove all of the necessary factual
allegations. Id. A well-pled complaint will survive a motion to dismiss "even if it appears
that a recovery is very remote and unlikely." Id. at 556 (internal quotation marks
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omitted). Nevertheless, a plaintiff must provide "more than labels and conclusions, and
a formulaic recitation of the elements of a cause of action will not do." Id. at 555.
III. DEFENDANT AMTRUST NORTH AMERICA, INC.'S MOTION
TO DISMISS PLAINTIFFS' AMENDED COMPLAINT [DE 1-6]
In its Motion, AmTrust North America argues that the claims against it should be
dismissed because it did not issue the AmTrust Policy to the Association. Instead,
AmTrust International issued the Policy. AmTrust North America thus asserts that it
could have no duty to defend or indemnify under the AmTrust Policy, nor could it breach
the Policy, and that it has been improperly joined as a defendant. DE 1-6 at 4.
However, Plaintiffs have attached as Exhibit D to their Amended Complaint the
letter they received informing them that their request for defense and indemnification in
the Weiss Action had been denied. The letter was sent by AmTrust North America—an
"AmTrust Financial Company" (DE 1-5 at 194)—and appears to lump together AmTrust
North America and AmTrust International as unitary or at least closely related actors.
Consistent with AmTrust North America's approach to its relationship with AmTrust
International, Plaintiffs have alleged that both of those Defendants bear responsibility for
the wrongful denial of defense and indemnification under the AmTrust Policy. See Am.
Compl. ¶¶ 6, 8. Given the unclear nature of the relationship between AmTrust North
America and AmTrust International, and of AmTrust North America's involvement with
the AmTrust Policy, the Court is unable to determine at this time that AmTrust North
America was improperly named as a defendant. Accordingly, AmTrust's Motion will be
denied.
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IV. DEFENDANT AMTRUST INTERNATIONAL UNDERWRITERS LIMITED,
INC.'S MOTION TO DISMISS PLAINTIFFS' AMENDED COMPLAINT [DE 13]
In its Motion, AmTrust International argues that the claims against it should be
dismissed because Labriola is not an insured under the AmTrust Policy with regard to
the acts underlying the Weiss Complaint. In the Amended Complaint, Plaintiffs allege
that Labriola qualifies as an insured under the AmTrust Policy as an officer, director,
and volunteer employee of the Association. Am. Compl. ¶ 13. The AmTrust Policy
defines the Association as an insured. DE 1-5 at 116. The Association's executive
officers and directors are also "insureds" with respect to their duties as officers and
directors. Id. Finally, the Association's volunteer workers are insureds while performing
duties related to the conduct of the Association's business. Id. However, the Weiss
Complaint alleges that Labriola was at all relevant times "acting solely in his individual
capacity, and not on behalf of or authorized by [the Association]." Weiss Compl. ¶ 4.
AmTrust International argues that because Labriola was alleged to have acted
independently of the Association, he was not acting within the scope of his duties as an
officer, director, or volunteer worker of the Association, thus is not an insured under the
AmTrust Policy.
Under Florida law, an insurer's duty to defend is determined by reference to the
allegations in the underlying action. Hartford Accident & Indem. Co. v. Beaver, 466 F.3d
1289, 1292 (11th Cir. 2006).3 The duty to defend arises when the underlying complaint
alleges facts that "fairly and potentially bring the suit within policy coverage." Id. (quoting
Jones v. Fla. Ins. Guar. Ass'n, 908 So. 2d 435, 443 (Fla. 2005)). Ambiguous terms of an
3
The parties appear to agree that Florida law governs AmTrust International's
duties under the AmTrust Policy. See DE 13 at 4; DE 23 at 5.
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insurance policy are liberally construed in favor of coverage. State Farm Fire & Cas. Co.
v. Steinberg, 393 F.3d 1226, 1230 (11th Cir. 2004). "Any doubts regarding the duty to
defend must be resolved in favor of the insured." Jones, 908 So. 2d at 443.
The Weiss Complaint and its exhibits reflect that Labriola is being sued upon his
communications directed to persons having an interest in the Association—including
condominium owners—to inform them of events relevant to an upcoming election of the
Association's board of directors and possible threats to the Association's interests. See
Weiss Compl. ¶ 5 & ex. A. Nowhere do the parties to this action or the Weiss Action
clearly define the duties of the Association's officers or directors. Absent a contrary
express definition of such duties, there is a strong argument to be made that the duties
of the Association's officers and directors include communication with condominium
owners regarding the Association's business and threats to the Association's interests.
Accordingly, Labriola's actions in this vein potentially fall within the scope of his duties of
an officer or director of the Association. Because all doubts regarding the duty to defend
are resolved in favor of coverage, this potential for coverage is sufficient to overcome
AmTrust International's argument for dismissal.
Weiss's conclusory assertion in the Weiss Complaint that Labriola was acting
only on his own behalf, and not on behalf of the Association, does not lead to a different
result. The duty to defend depends on the facts alleged in the underlying complaint, and
not the legal labels and conclusions the underlying plaintiff has attached to its facts.
See, e.g., Doe v. OneBeacon Am. Ins. Co., No. 11-00275, 2014 WL 5092258 at *10–12
(N.D. Fla. Oct. 9, 2014); Founders Ins. Co. v. Cortes-Garcia, No. 10-02286, 2012 WL
2505917 at *6 (M.D. Fla. June 28, 2012). The Weiss Complaint describes actions
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Labriola arguably took in the course of his duties for the Association. Weiss's assertion
that Labriola was acting solely in his individual capacity is a legal conclusion entitled to
no deference. Accordingly, AmTrust International's Motion will be denied.
V.
DEFENDANT LIBERTY INSURANCE UNDERWRITERS,
INC.'S MOTION TO DISMISS [DE 27]
Finally, Liberty argues that Plaintiffs' claims against it should be dismissed
because the Association never reported a claim to Liberty relating to the Weiss Action.
DE 27 at 3. Liberty contends that the Association's reporting of a claim is a condition
precedent to coverage under the Liberty Policy. Id. at 3–4. Liberty concludes that the
Association's failure to report a claim is fatal to Plaintiffs' causes of action against it for
declaratory judgment and for breach of contract.
However, Plaintiffs have alleged that "[a]ny and all conditions precedent to
bringing this action have occurred." Am. Compl. ¶ 17. Rule 9(c) of the Federal Rules of
Civil Procedure provides that "[i]n pleading conditions precedent, it suffices to allege
generally that all conditions precedent have occurred." Therefore, Plaintiffs' allegations
are sufficient to plead the occurrence of conditions precedent, including that a claim was
properly submitted or reported to Liberty under the Liberty Policy. See also Am. Compl.
¶ 21 ("LABRIOLA and the ASSOCIATION timely notified AMTRUST and LIBERTY of
the underlying lawsuit and requested a defense and indemnification regarding same.").
Liberty's contrary assertion that Plaintiffs did not satisfy conditions precedent to
coverage raises an issue of fact inappropriate for resolution on a motion to dismiss.
See, e.g., Ardaman & Assocs., Inc. v. Travelers Cas. & Sur. Co. of Am., No. 08-144,
2009 WL 161203 at *9 (N.D. Fla. Jan. 22, 2009). Liberty's Motion will be denied.
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VI. CONCLUSION
For the foregoing reasons, it is ORDERED AND ADJUDGED that Defendant
AmTrust North America, Inc.'s Motion to Dismiss Plaintiffs' Amended Complaint
[DE 1-6], Defendant AmTrust International Underwriters Limited, Inc.'s Motion to
Dismiss Plaintiffs' Amended Complaint [DE 13], and Defendant Liberty Insurance
Underwriters, Inc.'s Motion to Dismiss [DE 27] are DENIED.
DONE AND ORDERED in Chambers at Fort Lauderdale, Broward County,
Florida, this 17th day of June, 2015.
Copies provided to:
Counsel of record via CM/ECF
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