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