Constucture Management, Inc. v. Berkley Assurance Company et al
Filing
29
MEMORANDUM OPINION. Signed by Judge George Levi Russell, III on 3/2/2017. (jnls, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
CONSTRUCTURE1 MANAGEMENT, INC., :
Plaintiff,
:
v.
:
Civil Action No. GLR-16-0284
BERKLEY ASSURANCE COMPANY,
et al.,
:
:
Defendants.
:
MEMORANDUM OPINION
THIS
MATTER
is
before
the
Court
on
Defendant
Berkley
Assurance Company’s (“Berkley”) Motion to Dismiss (ECF No. 11)
and
Defendant
StarStone
National
Insurance
(“StarStone”)2 Motion to Dismiss (ECF No. 14).
The Motions are
ripe for disposition, and no hearing is necessary.
Rule 105.6 (D.Md. 2016).
Company’s
See Local
For the reasons outlined below, the
Court will convert Berkley’s Motion in part to a motion for
summary judgment and deny in part Berkley’s Motion.
The Court
will also deny StarStone’s Motion.
1
The Court will direct the Clerk to amend the case caption
to reflect the proper spelling of “Constructure Management,
Inc.” as Plaintiff.
2
StarStone was formerly known as Torus National Insurance
Company.
BACKGROUND3
I.
Plaintiff Constructure Management, Inc. (“Constructure”) is
a Pennsylvania corporation that provides construction management
services.
In April 2013, Constructure executed a contract with
Star Development Group, LLC to be a general contractor for the
construction of a Homewood Suites hotel in Laurel, Maryland (the
“Project”).
This
nonconforming
and
Project.
contract
damaged
Constructure
“Subcontract”)
work
then
with
required
that
entered
Integrated
Constructure
might
into
to
occur
a
remedy
during
the
subcontract
Systems,
Building
(the
Inc.
(“Integrated”), a Pennsylvania corporation, for structural steel
and rough carpentry work on the Project, which was scheduled to
begin in June of 2013 and end by November 2013.
The Subcontract required Integrated to maintain commercial
general liability insurance coverage, naming Constructure, among
others, an additional insured.
Integrated obtained an insurance
policy from Berkley (the “Policy”).
The Policy named Integrated
as a beneficiary and described Integrated’s location with an
address
in
Havertown,
Pennsylvania.
The
Policy,
effective
between November 2013 and 2014, contained a per occurrence limit
of
$1
million
Integrated
and
obtained
a
general
a
aggregate
second
3
policy
limit
of
$2
million.
from
StarStone
(the
Unless otherwise noted, the Court describes facts taken
from the Complaint and accepts them as true.
See Erickson v.
Pardus, 551 U.S. 89, 94 (2007) (citations omitted).
2
“Umbrella Policy”).
The Umbrella Policy provided coverage above
the Policy in the amount of $4 million.
Constructure
alleges
that
during
the
completion
of
the
Project, Integrated and its subcontractors (collectively, “the
Subcontractors”)
negligently
property damage.
Constructure repaired the damage and completed
the
Project,
but
suffered
performed
substantial
result of paying for the repairs.
their
work,
monetary
causing
losses
as
a
Constructure submitted an
insurance claim to recover the cost of repairing the damage and
completing the Project.
Constructure submitted the claim to
Brandywine Insurance Advisors (“Brandywine”), who Constructure
states is an agent for Berkley and StarStone in Pennsylvania.
Constructure alleges Berkley and StarStone failed to pay and
ignored the claim.
In October 2014, Constructure filed suit in the Circuit
Court
for
Howard
County,
Maryland
against
Aegis
Security
Insurance Company (“Aegis”), who Constructure alleged was the
surety of Integrated for the Project.4
In the Howard County
case, Constructure alleged Aegis breached its performance bond
obligations by failing to
perform Integrated’s subcontractual
4
Generally, a court may not consider extrinsic evidence at
the 12(b)(6) stage.
The court may, however, “properly take
judicial notice of matters of public record.”
Philips v. Pitt
Cnty. Mem’l Hosp., 572 F.3d 176, 180 (4th Cir. 2009).
Matters
of public record include “items appearing in the record” of a
state court case.
Bowden v. Agnew, No. 12-1237, 2013 WL
3545507, at *3 n.2 (M.D.N.C. July 11, 2013) (citation omitted).
3
duty to process the insurance claim.
Aegis then filed a third-
party complaint against Integrated seeking indemnification and
contribution.
On
February
3,
2016,
Constructure
and
Aegis
dismissed all their claims against each other, with prejudice.5
On February 24, 2016, the circuit court granted Constructure’s
motion
The
for
summary
circuit
court
judgment,
concluded
dismissing
Integrated
Integrated’s
assigned
all
claims.
of
its
rights against Constructure to Aegis under their agreement of
indemnity.
Constructure
subsequently
dismissed
its
claims
against Integrated without prejudice.
On February 1, 2016, Constructure filed the present suit
against Defendants.
(ECF No. 1).
In its three-count Complaint,
Constructure seeks declaratory judgments (Count I) and alleges
breaches of contract (Counts II and III) against Berkley and
StarStone, respectively.
Motion
to
12(b)(6)
Dismiss
and
On March 15, 2016, Berkley filed a
under
12(b)(7)
Federal
(ECF
No.
Rules
11),
and
of
the
Civil
Procedure
following
day,
StarStone filed a Motion to Dismiss for Failure to State a Claim
under
Rule
12(b)(6)
(ECF
No.
14).
The
Motions
briefed as of May 11 and May 20, 2016, respectively.
were
fully
(ECF Nos.
19, 20, 24, 28).
5
Earlier, in June 2014, Constructure also filed suit
against Aegis in the Circuit Court for Prince George’s County,
Maryland.
No other pleadings or motions were filed by either
party, and the Circuit Court dismissed the case on November 5,
2014.
4
II.
A.
DISCUSSION
Standards of Review
1.
Rule 12(b)(6)
Both Berkley and StarStone move to dismiss the Complaint
under Rule 12(b)(6).
to
test
the
“The purpose of a Rule 12(b)(6) motion is
sufficiency
of
a
complaint,”
not
to
“resolve
contests surrounding the facts, the merits of a claim, or the
applicability of defenses.”
Edwards v. City of Goldsboro, 178
F.3d 231, 243-44 (4th Cir. 1999) (quoting Republican Party v.
Martin, 980 F.2d 943, 952 (4th Cir. 1992)).
A complaint fails
to state a claim if it does not contain “a short and plain
statement of the claim showing that the pleader is entitled to
relief,” Fed.R.Civ.P. 8(a)(2), or does not “state a claim to
relief that is plausible on its face,” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)).
A claim is facially plausible “when the
plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the
misconduct alleged.”
“Threadbare
recitals
Id. (citing Twombly, 550 U.S. at 556).
of
the
elements
of
a
cause
of
action,
supported by mere conclusory statements, do not suffice.”
Id.
(citing Twombly, 550 U.S. at 555).
Though the plaintiff is not
required
prove
to
forecast
evidence
to
the
elements
of
the
claim, the complaint must allege sufficient facts to establish
5
each element.
Goss v. Bank of Am., N.A., 917 F.Supp.2d 445, 449
(D.Md. 2013) (quoting Walters v. McMahen, 684 F.3d 435, 439 (4th
Cir.
2012)),
aff’d
sub
nom.,
Goss
v.
Bank
of
Am.,
NA,
546
F.App’x 165 (4th Cir. 2013).
In considering a Rule 12(b)(6) motion, a court must examine
the complaint as a whole, consider the factual allegations in
the complaint as true, and construe the factual allegations in
the light most favorable to the plaintiff.
Albright v. Oliver,
510 U.S. 266, 268 (1994); Lambeth v. Bd. of Comm’rs of Davidson
Cty.,
407
F.3d
266,
268
(4th
Cir.
Rhodes, 416 U.S. 232, 236 (1974)).
2005)
(citing
Scheuer
v.
But, the court need not
accept unsupported or conclusory factual allegations devoid of
any reference to actual events, United Black Firefighters v.
Hirst, 604 F.2d 844, 847 (4th Cir. 1979), or legal conclusions
couched as factual allegations, Iqbal, 556 U.S. at 678.
2.
Rule 12(b)(7)
Berkley
also
moves
to
dismiss
the
Complaint
under
Rule
12(b)(7) for failure to join a necessary party under Rule 19.6
Rule 12(b)(7) motions require a two-step inquiry.
6
First, the
Rule 19 states, in pertinent part, that a party is
necessary if (A) “the court cannot accord complete relief among
existing parties” without the absent party, or (B) the absent
party “claims an interest relating to the subject of the action
and is so situated that disposing of the action in the [party’s]
absence may” either (i) “impede the person’s ability to protect
the interest” or (ii) subject the current parties “to a
substantial risk of incurring double, multiple, or otherwise
inconsistent obligations.”
6
court
must
proceeding
determine
because
consideration
“whether
of
pursuant
its
to
a
party
relationship
Rule
is
to
19(a).”
necessary
the
to
matter
Owens-Ill.,
Meade, 186 F.3d 435, 440 (4th Cir. 1999) (quoting
a
under
Inc.
v.
Teamsters
Local Union No. 171 v. Keal Driveaway Co., 173 F.3d 915, 917–18
(4th Cir. 1999)) (internal quotation marks omitted).
If the
absent party is necessary, it must be ordered into the action so
long as joinder does not destroy the court’s jurisdiction.
Id.
Second, “[w]hen a party cannot be joined because its joinder
destroys
diversity,
proceeding
can
the
continue
court
in
must
its
determine
absence,
or
whether
whether
it
the
is
indispensable pursuant to Rule 19(b) and the action must be
dismissed.”
Id.
Although
loath
to
Rule
dismiss
12(b)(7)
cases
permits
based
on
dismissal,
nonjoinder
“[c]ourts
of
a
party,
are
so
dismissal will be ordered only when the resulting defect cannot
be
remedied
result.”
and
prejudice
or
inefficiency
will
certainly
Id. at 441; see also Nat’l Union Fire Ins. Co. of
Pittsburgh, Pa. v. Rite Aid of S.C., Inc., 210 F.3d 246, 250
(4th Cir. 2000) (“Dismissal of a case [for nonjoinder] is a
drastic remedy . . . which should be employed only sparingly.”
(quoting Teamsters, 173 F.3d at 918)).
The burden is on the
moving party to “show that the [entity] who was not joined is
needed for a just adjudication.”
7
Am. Gen. Life & Accident Ins.
Co. v. Wood, 429 F.3d 83, 92 (4th Cir. 2005) (quoting 7 Charles
Alan Wright, et al., Federal Practice and Procedure § 1609 (3d
ed. 2001)) (internal quotation marks omitted).
B.
Analysis
1.
Berkley’s 12(b)(7) Motion
Berkley argues Constructure’s Complaint warrants dismissal
because Integrated and Aegis are necessary parties under Rule
19(a)(1)(B).
First,
The Court disagrees for two reasons.
for
Berkley
to
succeed
under
Rule
19(a)(1)(B),
Berkley must show that Integrated and Aegis “claim[] an interest
relating to the subject of the action.”
See also Buffkin v.
Maruchan, Inc., No. 1:14CV3, 2015 WL 860859, at *3 (M.D.N.C.
Feb.
27,
joining
2015)
[the
(“Another
absent
factor
person]
is
dissuading
that
[he]
this
has
court
not
from
thus
far
claimed any interest in the present action” (footnote omitted));
Am. Gen. Life & Acc. Ins. Co. v. Wood, 429 F.3d 83, 93 (4th Cir.
2005)
(holding
that
the
missing
person
“had
not
claimed
an
interest in the federal action, and therefore, joinder was not
required”).
Berkley fails to provide any indication that either
Integrated or Aegis has claimed any interest relating to the
present
action.7
Thus,
Berkley’s
argument
fails
under
Rule
19(a)(1)(B).
7
March
It is clear that Aegis is aware of the present action. On
14, 2016, Berkley filed suit against Constructure,
8
Second, the failure of Integrated or Aegis to claim any
interest related to this case
supports the absence of proof
under the second prong of Rule 19(a)(1)(B).
Berkley
argues
there is a possibility of having inconsistent obligations if
Integrated and Aegis are not joined.
(See, e.g., Berkley’s Mot.
Dismiss at 14–15, ECF No. 11-1) (“. . . Berkley could face
separate and competing claims for the same policy limits . . .”
(emphasis added)).
risk”
merely
of
But Rule 19(a)(1)(B) requires a “substantial
inconsistent
“theoriz[ing]
inconsistent
insufficient.
obligations
the
obligations
for
possibility”
from
joinder,
that
Integrated
it
and
and
Berkley
will
Aegis
face
is
Coastal Modular Corp. v. Laminators, Inc., 635
F.2d 1102, 1108 (4th Cir. 1980); see also Dickson v. Morrison,
No.
98-2446,
1999
WL
543230
at
*5
(4th
Cir.
1999)
(“[M]ere
speculation that the absent shareholders could initiate suits
resulting in Appellants facing inconsistent obligations did not
require joinder of these shareholders in [the] motion.”).
Integrated, and Aegis for declaratory relief regarding questions
of insurance coverage in the United States District Court for
the Eastern District of Pennsylvania.
(See Berkley’s Mot.
Dismiss Ex. H, ECF No. 11-11).
In that case, Aegis filed a
motion to dismiss premised on the present action already being
underway. (Pl.’s Opp. Berkley’s Mot. Dismiss Ex. 4, ECF No. 194). In addition, Berkley’s complaint against Integrated in that
case references the present action, suggesting Integrated is
aware of it, too. (Berkley’s Mot. Dismiss Ex. H).
9
The Court concludes that any possibility of inconsistent
obligations is speculation at best.
The Court, therefore, will
deny Berkley’s Motion.
2.
Berkley’s 12(b)(6) Motion
Next, Berkley argues Constructure fails to state a claim
upon which relief can be granted because Constructure has never
been
found
liable
to
pay
damages
for
the
losses
the
Subcontractors caused.
At this point, the Court cannot conclude
whether
states
Constructure
a
claim
because
there
is
insufficient information to determine the lex loci contractus.
This
Court
has
original
jurisdiction
based only on diversity jurisdiction.
over
this
matter
It is axiomatic that
federal courts exercising diversity jurisdiction over a matter
“apply the choice of law rules of the forum state.”
CACI Int’l,
Inc. v. St. Paul Fire & Marine Ins. Co., 566 F.3d 150, 154 (4th
Cir. 2009) (citation omitted).
loci
contractus
applies
In Maryland, the doctrine of lex
when
interpreting
contracts.
See
Allstate Ins. Co. v. Hart, 611 A.2d 100, 101 (Md. 1992).
Under
this doctrine, the court applies the substantive law of the
state where the contract was made to determine its validity and
construction.
Id.
Normally, “a contract is made where the last
act necessary to make the contract binding occurs.”
Inorganic
Chems.
Ltd.
v.
Nat’l
10
Union
Fire
Millennium
Ins.
Co.
of
Pittsburgh, Pa., 893 F.Supp.2d 715, 725 (D.Md. 2012) (citation
omitted).
In
the
insurance
context,
“delivery
of
the
policy
and
payment of the premium are ordinarily the last acts necessary to
make an insurance policy binding.”
Id. (citation omitted).8
Courts look at the payment of the first premium.
See, e.g.,
Mut. Life Ins. Co. v. Mullen, 69 A. 385, 387 (Md. 1908) (“[A]s
the first premium on the policy was paid in this State by a
citizen of this State, and the policy delivered here, . . . it
is a Maryland contract and . . . governed by Maryland laws.”
(emphasis added)).
Courts require “concrete evidence” to determine where the
delivery of the policy and payment of the premium took place.
IFCO Sys. N. Am., Inc. v. Am. Home Assur. Co., No. WMN-09-2874,
2010 WL 1713866, at *3 (D.Md. Apr. 27, 2010).
only
offer
“assumptions
and
guesses”
about
When the parties
the
lex
loci
contractus of the policy, courts must look at matters outside
the pleadings, and, accordingly, convert the motion to dismiss
to a motion for summary judgment on that issue.
Berkley
argues
Pennsylvania
is
the
lex
Id. at *3–4.
loci
contractus
because (1) the Policy lists a Pennsylvania corporate address
8
In addition, where an insurance policy provides an express
provision regarding the necessity of a countersignature, that
countersignature becomes the “last act necessary to effectuate
the policy.”
Id. at 725–26 (citations omitted).
Here, the
Policy does not appear to require a countersignature.
11
for Integrated,
Pennsylvania.
and (2)
Berkley
Integrated made
highlights
a
that
$6,000 payment
the
Policy
in
lists
Integrated’s Pennsylvania corporate address, but Berkley assumes
that it delivered the Policy to this address.9
In IFCO Systems,
this Court rejected the same argument -- that the policy’s lex
loci
contractus
was
Texas
because
the
policy
lists
a
Texas
corporate address for the insured -- and instead converted the
insurance company’s motion to dismiss to a motion for summary
judgment to look at information outside the pleadings.
1713866,
at
*3–4.
While
Constructure
points
out
2010 WL
Berkley’s
assumption, it, too, fails to offer any evidence that Berkley
delivered the Policy in Maryland or elsewhere.
There are also insufficient allegations for the Court to
determine where payment of the first premium occurred.
attaches Integrated’s
Berkley
November 2013 monthly operating report,
taken from Integrated’s bankruptcy filings.10
9
The report shows
At this stage in the litigation, the Court may consider
documents referred to and relied upon in the Complaint, “even if
the documents are not attached as exhibits.” Coulibaly v. J.P.
Morgan Chase Bank, N.A., No. DKC 10-3517, 2011 WL 3476994, at *6
(D.Md. Aug. 8, 2011) (quoting Fare Deals Ltd. v. World Choice
Travel.com, Inc., 180 F.Supp.2d 678, 683 (D.Md. 2001) (internal
quotation marks omitted).
Here, the Complaint alleges that
Berkley executed the Policy with Integrated.
(Compl. ¶ 9).
Accordingly, because the Complaint refers to, and relies on, the
Policy, the Court will consider it at this stage.
10
As noted in note 4 supra, the Court may take judicial
notice of matters of public record at the Rule 12(b)(6) stage.
Bankruptcy filings under Chapter 11 of the Bankruptcy Code are
public records. See 11 U.S.C. § 107(a).
12
that in November 2013, Integrated wrote a $6,000 check from a
bank
account
Berkley
with
and
a
StarStone’s
Pennsylvania entity.
ECF No. 28-3).
Pennsylvania
address,
insurance
made
to
Brandywine,
agent
payable
a
(Berkley’s Reply Pl.’s Opp. Ex. B at 10,
But there are no allegations before the Court
supporting when Berkley delivered the Policy.
It is not clear,
therefore, whether this November 2013 payment constituted the
first payment of the premium.
where
Berkley
delivered
the
Thus, there is no support for
Policy
to
Integrated
and
where
Integrated paid the first premium.
Constructure argues that even if the lex loci contractus
was Pennsylvania, Maryland law would nonetheless apply under the
doctrine of renvoi. The Court disagrees.
When the lex loci contractus doctrine requires the court to
apply the law of a foreign jurisdiction, Maryland courts can
utilize the limited renvoi exception to determine whether the
foreign jurisdiction would apply Maryland law.
Am. Motorists
Ins. Co. v. ARTRA Grp., Inc., 659 A.2d 1295, 1304 (Md. 1995).
In such cases, the court may apply Maryland law notwithstanding
the doctrine of lex loci contractus.
Under a “limited renvoi
exception,” Maryland courts “avoid the irony of applying the law
of a foreign jurisdiction when that jurisdiction's conflict of
law rules would apply Maryland law.”
Maryland
courts
apply
Maryland
13
Id.
In such a situation,
substantive
law
to
agreements
entered in foreign jurisdictions, notwithstanding the lex loci
contractus doctrine.
least
a
Id.
“substantial
This occurs when (1) Maryland has at
relationship”
to
the
contract
issue
presented, and (2) the state of the the lex loci contractus
would not apply its own substantive law, but instead would apply
Maryland substantive law to the contract issue.
Id.
The renvoi exception would not change the choice of law to
Maryland because Maryland has an insufficient relationship to
the contract issue under renvoi’s first prong.
contends
that
substantial
Project
under
the
relationship
took
place
in
first
to
renvoi
the
prong,
contract
Maryland.
In
Constructure
Maryland
issue
Francis
has
because
v.
a
the
Allstate
Insurance Co., even though the events underlying the insurance
coverage dispute took place in Maryland, the United States Court
of Appeals for the Fourth Circuit defined the contract issue as
whether
the
insurance
company
“had
a
duty
to
defend
[the
plaintiffs] based on the terms of a contract that was made in
California.”
709 F.3d 362, 369 n.6 (4th Cir. 2013).
Because
Maryland had “virtually no relationship” to that contract issue
other than the fact that the underlying events that “triggered”
attempted enforcement of the insurance policy “happened to take
place
in
Maryland,”
inapplicable.
Id.
the
Fourth
Circuit
found
renvoi
Here, if the parties entered into the Policy
in Pennsylvania, Maryland has no relationship to this Policy
14
coverage dispute, other than the underlying events triggering
Constructure’s attempted enforcement of the Policy taking place
in
Maryland.
Thus,
the
limited
renvoi
exception
is
inapplicable.
In
sum,
the
Court
concludes
there
is
insufficient
information to determine the lex loci contractus.
The Court
requires more factual development to determine the choice of
law.
The Court, therefore, must convert Berkley’s Motion to
Dismiss for Failure to State a Claim to one for summary judgment
on
this
issue.11
Berkley,
as
the
insurer
and
party
that
presumably has access to this additional information, will be
granted
twenty
days
from
the
date
of
entry
of
this
Court’s
Memorandum Opinion to file a supplemental brief regarding the
place of the Policy’s delivery and first premium payment, and
any additional information and argument in accordance with this
Court’s Memorandum Opinion.
Any opposition or reply will be
11
Rule 12(d) provides:
If, on a motion under Rule 12(b)(6) or 12(c),
matters outside the pleadings are presented to
and not excluded by the court, the motion must be
treated as one for summary judgment under Rule
56.
All parties must be given a reasonable
opportunity to present all the material that is
pertinent to the motion.
The Fourth Circuit has defined “reasonable opportunity” as
requiring courts to give all parties “some indication . . . that
it is treating the 12(b)(6) motion as a motion for summary
judgment, with the consequent right in the opposing party to
file counter affidavits or pursue reasonable discovery.” Gay v.
Wall, 761 F.2d 175, 177 (4th Cir. 1985) (internal citations
omitted).
15
filed in accordance with the deadlines set forth in Local Rule
105.2(a).
3.
StarStone’s 12(b)(6) Motion
Next, the Court will deny StarStone’s Motion under 12(b)(6)
for three reasons:
(1) Constructure is not required to plead
that it met conditions precedent; (2) Constructure is permitted
to plead inconsistent damage amounts; and (3) Constructure is
not required to have an underlying tort action to have standing.
First,
StarStone
argues
that
the
Court
should
dismiss
Constructure’s Complaint because Constructure has not pled that
the
Policy’s
conditions
precedent
were
met.
Specifically,
StarStone argues the Complaint is deficient because it does not
state that Constructure notified StarStone of its claims. The
Court rejects this argument.
In
a
contract
dispute,
plaintiffs
are
not
required
to
expressly plead satisfaction of a condition precedent to allege
a
breach-of-contract
claim.
United
States
v.
Clark
Constr.
Grp., LLC, No. PJM 15-2885, 2016 WL 4269078, at *6 (D.Md. Aug.
15, 2016).
Rather, “failure to satisfy a condition precedent is
ordinarily
considered
an
affirmative
defense.”
Id.
“An
affirmative defense is usually not appropriate at the motion to
dismiss stage unless the facts necessary to establish it are
available on the face of the pleadings.”
Id.
As a result,
courts have “rejected defendants’ premature attempts to dismiss
16
a lawsuit based on the presence of conditions precedent clauses
when crucial facts have not yet been developed.”
Id. (citing
Howard Robson, Inc. v. Town of Rising Sun, No. ELH-14-2003, 2015
WL 424773, at *12–13 (D.Md. Jan. 30, 2015).
Instead, “an allegation is sufficient if it alleges that
the claimant ‘has at all times performed all its proper and
legitimate
duties
and
obligations
under
its
contract.”
Id.
(quoting Howard Robson, Inc. v. Town of Rising Sun, No. ELH-142003, 2015 WL 424773, at *12 (D.Md. Jan. 30, 2015)).
Constructure
alleged
that
it
“has
performed
all
Here,
of
its
obligations under the terms, covenants, and conditions of the
Umbrella Policy.”
Court
concludes
(Compl. at ¶¶ 44–45, ECF No. 1).
Constructure
has
alleged
sufficient
Thus, the
facts
to
should
be
support its contract claims.12
Second,
StarStone
argues
that
the
Complaint
dismissed due to inconsistency between the Counts.
StarStone
points out that Count Three, brought against StarStone, does not
12
For the foregoing reasons, the Court also rejects
StarStone’s argument that the Complaint is deficient because the
attached
exhibits
only
show
that
Constructure
notified
Brandywine of its claims, or show that the exhibits are
otherwise inconsistent. Because Constructure is not required to
expressly plead satisfaction of a condition precedent -- that
Constructure notified StarStone -- it necessarily follows that
Constructure
is
also
not
required
to
attach
exhibits
demonstrating it notified StarStone.
“The purpose of a Rule
12(b)(6) motion,” furthermore, “is to test the sufficiency of a
complaint,” not to “resolve contests surrounding . . . the
applicability of defenses.”
Edwards, 178 F.3d at 243–44
(quoting Martin, 980 F.2d at 952).
17
specify
a
requested
damage
amount.
Meanwhile,
Count
against Berkley, seeks damages of at least $550,000.
award
would
not
trigger
StarStone’s
requirement under the Policy.
Two,
Such an
umbrella
coverage
StarStone’s argument, however,
overlooks Rule 8(d)(3), which provides, “[a] party may state as
many
separate
claims
consistency.”
Count
or
defenses
as
it
has,
regardless
of
To the extent that Count Two is inconsistent with
Three,13
Rule
8(d)(3)
permits
Constructure
to
assert
inconsistent damage amounts against Berkley and StarStone.
Third,
dismissed
StarStone
because
argues
that
Constructure
the
Complaint
lacks
standing
should
to
declaratory relief due to the absence of a tort claim.
be
seek
The
Court disagrees.
StarStone relies on
Authority
v.
Regina
Washington Metropolitan Area Transit
Queen
(“WMATA”),
which
holds
that
“[a]n
injured tort plaintiff is not excused from obtaining a judgment
against
insurer.”
the
insured
tortfeasor
before
597 A.2d 423, 427 (Md. 1991).14
13
suing
the
liability
The court in WMATA,
It is not clear that the Counts are inconsistent to begin
with. Count Two states that Constructure lost “not less” than
$550,000, leaving room for the possibility that it had enough
losses to trigger StarStone’s umbrella coverage.
Further,
StarStone offers no authority, and the Court finds none,
requiring the Complaint to specifically plead losses that
sufficiently trigger umbrella coverage in cases involving
coverage disputes.
14
Unlike Berkley, StarStone does not address whether
Maryland law applies, and relies on Maryland cases throughout
18
however,
contemplated
an
injured
tort
different party than the insured.
this
Court’s
direct
decisions,
a
against
the
action
tort
plaintiff
who
was
a
See id. at 425–26 (“Under
claimant
defendant
may
not
maintain
tortfeasor’s
a
liability
insurer until there has been a determination of the insured’s
liability in the tort action.” (emphasis added)).
Put differently, WMATA’s requirement of an underlying tort
action does not apply
when a plaintiff brings a declaratory
judgment action simply to determine insurance coverage, rather
than when a tort claimant
brings suit against the liability
insurer to determine the insured’s tort liability.
See Harford
Mut. Ins. Co. v. Woodfin Equities Corp., 687 A.2d 652, 658 (Md.
1997)
(“Maryland
public
policy
ordinarily
does
preclude
an
injured claimant from initially bringing a direct action against
the
alleged
tortfeasor’s
liability
insurer
to
litigate
the
matter of the insured’s tort liability, as distinguished from a
declaratory judgment action concerning separate and independent
policy coverage issues.” (emphasis added)).
Here,
the
injured
tort
plaintiff,
Constructure,
is
also
insured under the Policy; Constructure seeks declaratory relief
its Motion.
Thus, the Court will apply Maryland law to this
issue irrespective of the conflict of laws dispute between
Berkley and Constructure. See Berg Chilling Sys., Inc. v. Hull
Corp., 435 F.3d 455, 462 (3d Cir. 2006) (“Because choice of law
analysis is issue-specific, different states’ laws may apply to
different issues in a single case, a principle known as
‘depecage’ [sic].”).
19
only
to
determine
policy
coverage.
StarStone
argues
Constructure’s claim is actually to determine tort liability -in addition to policy coverage -- because Constructure seeks
damages
“reliant”
on
its
assertion
of
the
Subcontractors’
negligence, and “intertwines the two” throughout the Complaint.
(StarStone’s Mot. Dismiss at 9, ECF No. 14-1).
To avoid WMATA’s
requirement of an underlying tort action, Constructure bringing
its claims against StarStone, rather than the Subcontractors, is
nevertheless sufficient.
GJH-14-03189,
2015
WL
See Palmer v. Audi of Am., Inc., No.
222127,
at
*3
(D.Md.
Jan.
13,
2015)
(holding an underlying tort action was not required because the
plaintiff
“did
not
bring
suit
against
Defendants
to
resolve
their tort liability; rather, she sought a declaratory judgment
to
resolve
WMATA’s
an
insurance
requirement
policy
of
an
coverage
underlying
dispute”).
tort
Thus,
action
is
inapplicable.
In sum, the Court concludes that Constructure (1) is not
required
to
plead
that
it
met
conditions
precedent,
(2)
is
permitted to plead inconsistent damage amounts, and (3) is not
required
to
have
an
underlying
tort
action
for
standing.
Accordingly, the Court will deny StarStone’s Motion to Dismiss.
III. CONCLUSION
For
the
reasons
stated
above,
the
Court
will
CONVERT
Berkley’s Motion (ECF No. 11) in part to a motion for summary
20
judgment and DENY in part Berkley’s Motion.
The Court will
CONVERT Berkley’s Motion to a motion for summary judgment on the
issue
of
the
lex
loci
contractus
of
the
Policy.
Berkley’s
supplemental brief is due within twenty days of the date of this
Memorandum
Opinion.
The
Court
will
DENY
the
Motion
extent Berkley seeks dismissal under Rule 12(b)(7).
will also DENY StarStone’s Motion (ECF No. 14).
the
The Court
A separate
Order follows.
Entered this day 2nd of March, 2017
/s/
________________________
George L. Russell, III
United States District Judge
21
to
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?