FCCI Insurance Company v. Mclendon Enterprises, Inc. et al
Filing
38
ORDER denying 20 Motion to Dismiss. Signed by Judge B. Avant Edenfield on 4/30/13. (bcw)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF GEORGIA
SAVANNAH DIVISION
FCCI INSURANCE COMPANY,
Plaintiff,
V
4: 12-cv-191
.
MCLENDON ENTERPRISES, INC.; and
BROOKS LAMAR MITCHELL,
Defendants.
ORDER
Before the Court is Brooks Lamar
Mitchell's ("Mitchell") Motion to Dismiss.
ECF No. 20. Mitchell asserts this Court
lacks subject matter jurisdiction over FCCI's
declaratory judgment complaint because no
actual controversy exists. Id. at 3. The
Court disagrees. Mitchell's motion to
dismiss is DENIED.
I. STANDARD OF REVIEW
Rule 12(b)(1) motions, like the present
motion, come in two flavors. They "can be
asserted on either facial or factual grounds."
Carmichael v. Kellogg, Brown & Root
Servs., Inc., 572 F.3d 1271, 1279 (11th Cir.
2009). Facial attacks on subject matter
jurisdiction are subject to the same standard
of review as 12(b)(6) motions. Gupta v.
McGahey, 709 F.3d 1062, 1064 (11th Cir.
2013) (citing Carmichael, 572 F.3d at
1279).
Mitchell's motion is a facial attack. It is
"based [solely] on the allegations in the
complaint." Gibbs v. United States, 865 F.
Supp. 2d 1127, 1135 (S.D. Fla. 2012)
(quoting Morrison v. Amway Corp., 323
F.3d 920, 924 n.5 (11th Cir. 2005). The
Court therefore must accept as true all
factual allegations in a complaint and
construe them in the light most favorable to
the plaintiff. Lanfear v. Home Depot, Inc.,
679 F.3d 1267, 1271 n.4 (11th Cir. 2012).
Nevertheless, the Court is "not bound to
accept as true a legal conclusion couched as
a factual allegation." Bell Ad. Corp. v.
Twombly, 550 U.S. 544, 555 (2007).
With that review lens established, the
Court turns first to the factual underpinnings
of the motion, and second to a discussion of
the legal issues presented.
II. BACKGROUND
On September 22, 2011, Mitchell, an
employee of McLendon Enterprises, drove a
company truck in which Bobby Brooks
Mitchell and Elijah Profit were passengers.
ECF No. 30 at 7. An Evans County school
bus failed to stop at a stop sign and collided
with Mitchell. Id The accident severely
injured Mitchell and his two passengers.
GSBA Risk Management Fund
("GSBA") provided liability insurance to
Evans County at the time of the accident.
Id at 10. The policy had a liability limit of
$1,000,000. Id. GSBA has paid out to
Bobby Mitchell, Profit, and Mitchell the
policy limits for damages relating to the
accident. Id.
FCCI insured McLendon. Id. at 3. The
FCC! policy provided that FCC! would pay
all money "the 'insured' is legally entitled to
recover as compensatory damages from the
owner or driver of an 'uninsured motor
vehicle." Id. at 11. "Uninsured motor
vehicle" included underinsured vehicles as
IN
indemnify or expend any sums on behalf of
McLendon for any damages. . . arising out
of the September 22, 2011 incident." Id. at
16.
well, which the policy defined as those
vehicles:
for which the sum of the limits of all
liability. . . policies applicable at the
time of the 'accident' either (1) is not
enough to pay the full amount the
covered 'insured' is legally entitled
to recover as damages, or (2) has
been reduced by payment of claims
to an amount which is not enough to
pay the full amount the covered
'insured' is legally entitled to
recover as damages.
Mitchell now seeks dismissal of this
case, arguing that because he never filed a
complaint against Evans, no actual
controversy exists as to coverage and thus
this Court lacks subject matter jurisdiction
under 28 U.S.C. § 2201. ECF No. 20. At 3.
!I!.
DISCUSSION
"In a case of actual controversy. . . any
court of the United States . . . may declare
the rights and other legal relations of any
interested party." 28 U.S.C. § 2201
(emphasis added). Thus, "[un all cases
arising under the Declaratory Judgment Act
the threshold question is whether a
justiciable controversy exists." Atlanta Gas
Light Co. v. Aetna Cas. And Sur. Co., 68
F.3d 409, 414 (11th Cir. 1995).
Id.
Mitchell never filed suit against Evans
because he settled with the county and
GCBA for $650,000. See ECF No. 30 at 22.
Mitchell admits that Evans is "immune from
any further liability above the liability limits
[of the GCBA policy]." Id. at 22. Mitchell
nevertheless sent a settlement demand of
$1,000,000—the limits of the uninsured
motorist coverage FCC! issued to
McLendon—to FCC! subsequent to the
filing of this action. Id. at 6, 20-23.
Notably, the language of § 2201 does not
include a requirement that a declaratory
judgment defendant have filed a complaint
in order for an actual controversy to exist.
All the statute requires is an actual,
justiciable controversy. See Id. This case
presents one.
FCCI filed this declaratory judgment
action seeking guidance on its liability and
coverage obligations as insurer for
McLendon. Id at 16. FCC! contends that
Evans's statutorily limited liability' prevents
the bus involved in the accident from being
considered an underinsured motor vehicle
under the policy. Id. at 15. FCCI therefore
believes it is not "obligated to defend,
FCCI claims it has no obligation to pay
out any money under McLendon's
uninsured motorist coverage because the
Evans bus was not an underinsured motor
vehicle at the time of the accident. See ECF
No. 30 at 16. Mitchell has made a
settlement demand of FCC! seeking
payment of the uninsured motorist policy
limits. Id. at 20-23. One party claims
entitlement to coverage, the other party
denies it is obligated to cover. That is the
O.C.G.A. § 33-24-51(c) limits the liability of any
political subdivision of the state of Georgia for
damages stemming from the negligent use of a stateowned vehicle "to the extent of the limits or the
coverage of the insurance policy" covering the
vehicle.
2
ThisUay of April 2013.
very definition of an actual controversy for
purposes of declaratory relief, even absent a
judgment or lawsuit challenging FCCI's
coverage liability. See Md. Gas. Co. v. Poe.
Coal & Oil Co., 312 U.S. 270, 273 (1941).
IV.
1
A\'ANT EDENFIELD, J GE
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF GEORGIA
CONCLUSION
Because an actual controversy exists
here, this Court has subject matter
jurisdiction pursuant to 28 U.S.C. § 2201
and § 1332 .2 Mitchell's motion therefore
must be DENIED .3
Although § 2201 grants courts the discretion to
declare the rights of parties, it does not independently
See Borden v.
confer subject matter jurisdiction.
Katzman, 881 F.2d 1035, 1037 (11th Cir. 1989)
(noting that "a Suit brought under the Act must state
some independent source of jurisdiction, such as the
existence of diversity."). The parties here, however,
are diverse and the amount in controversy handily
exceeds $75,000. See 28 U.S.C. § 1332. Diversity
jurisdiction over any claims Mitchell might bring
against FCC! under state law therefore would be
appropriate.
In denying Mitchell's motion to dismiss, the Court
in no way suggests FCCI should prevail on the merits
of the "actual controversy" in this case. Indeed, the
Court is dubious that the liability limitation in
O.C.G.A. 33-24-51(c) can effectively transfer to a
third party insurer like FCCI. "The intent of the
[Georgia] legislature in enacting [O.C.G.A. § 33-245!] was to allow for the compensation of parties
injured by employees and agents of the state
where recovery is otherwise barred [by state
sovereign immunity]." ('rider v. Zurich ins. Co., 222
Ga. App. 177, 178-79 (1996). The legislature did
not, it appears, intend to extend a derivative liability
limitation to third party insurers who contract to
provide underinsured motorist coverage to accident
victims when those victims are injured by state
vehicles. In other words, the state's liability
limitation very well may limit only what Mitchell is
entitled to vis-à-vis Evans County. It very well may
not, however, limit generally what Mitchell is
"legally entitled to recover as damages" vis-à-vis
other parties from whom Mitchell seeks recovery.
ECF No. 30 at 12 (quoting the policy language FCC!
relies on to argue that the
3
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