Greenwich Insurance Company et al v. Capsco Industries, Inc. et al

Filing 22

ORDER denying 12 Motion to Dismiss for Lack of Jurisdiction Signed by Chief District Judge Louis Guirola, Jr on 10/08/2014 (Guirola, Louis)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
SOUTHERN DIVISION
GREENWICH INSURANCE COMPANY
and INDIAN HARBOR INSURANCE COMPANY
v.

PLAINTIFFS

CAUSE NO. 1:14CV297-LG-JCG

CAPSCO INDUSTRIES, INC., et al.

DEFENDANTS

ORDER DENYING MOTION TO
DISMISS FOR LACK OF JURISDICTION
BEFORE THE COURT is the Motion to Dismiss for Lack of Jurisdiction
and Failure to Join Necessary Party [12] filed by the defendant, Ground Control,
LLC, seeking dismissal pursuant to the ripeness doctrine and for failure to join
Christopher Killion as a defendant. The plaintiffs, Greenwich Insurance Company
and Indian Harbor Insurance Company (hereafter referred to as “the Insurers”), did
not file a response in opposition to the Motion, but they filed an Amended
Complaint naming Killion as a defendant. To the extent that Ground Control
sought dismissal for failure to join Killion as a defendant, the Motion is moot. The
Court further finds that the Motion to Dismiss for Lack of Jurisdiction should be
denied, because the Insurers’ declaratory judgment action presents an actual case
or controversy.
FACTS
This declaratory judgment action arises out of the Margaritaville Casino
construction project. During the project, the defendant, Ground Control, provided
“labor and materials for removal or capping of existing structures and piping,
installation of storm drainage piping and structures, potable water lines and

structures, and sanitary sewer lines and structures.” (Def.’s Mot., Ex. 1 at ¶7, ECF
No. 46). Ground Control filed a Supplemental Complaint in the Circuit Court of
Harrison County, Mississippi, against the project’s general contractor, Capsco
Industries, Inc., and others seeking payment for services and materials provided for
the project. Capsco’s insurers, Greenwich and Indian Harbor, are currently
defending Capsco and three additional insureds pursuant to a reservation of rights.
The Insurers have filed the present declaratory judgment action, seeking a
determination that they do not owe a defense or indemnity to Capsco and the
additional insureds. Ground Control has filed the present Motion to Dismiss for
Lack of Jurisdiction, alleging that the declaratory judgment action was filed
prematurely.
DISCUSSION
“A federal court may not issue a declaratory judgment unless there exists an
actual case or controversy.” Columbia Cas. Co. v. Ga. & Fla. RailNet, Inc., 542 F.3d
106, 110 (5th Cir. 2008). “As a general rule, an actual controversy exists where ‘a
substantial controversy of sufficient immediacy and reality [exists] between parties
having adverse legal interests.’” Orix Credit Alliance, Inc. v. Wolfe, 212 F.3d 891,
895 (5th Cir. 2000). The Fifth Circuit has explained:
A court should dismiss a case for lack of “ripeness” when the case is
abstract or hypothetical. The key considerations are “the fitness of the
issues for judicial decision and the hardship to the parties of
withholding court consideration.” A case is generally ripe is any
remaining questions are purely legal ones; conversely, a case is not
ripe if further factual development is required.

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Id. at 896.
Generally, a declaratory judgment action concerning the duty to defend
constitutes an actual case or controversy prior to the resolution of the underlying
lawsuit filed against the insured. Columbia Cas. Co., 542 F.3d at 110. Declaratory
judgment actions concerning the duty to indemnify may also be considered prior to
resolution of the underlying lawsuit if “the same reasons that would negate the
duty to defend likewise negate any possibility the insurer will ever have a duty to
indemnify.” Id. at 111.
Ground Control argues that this declaratory judgment action is
“hypothetical, conjectural, conditional or based upon the possibility of a factual
situation that may never develop.” (Def.’s Mem. at 8, ECF No. 16). It also argues
that “factual determinations” must first be made in its underlying lawsuit against
Capsco and the other potential insureds, although it has not specified the nature of
these determinations.
In the opinion of the Court an actual case or controversy is presented by the
Insurers’ declaratory judgment action. The Insurers are currently providing a
defense to four potential insureds in the underlying lawsuit. Under Mississippi
law, “the insurer has a duty to defend when there is any basis for potential liability
under the policy.” Titan Indem. Co. v. Pope, 876 So. 2d 1096, 1101 (¶14) (Miss. Ct.
App. 2004). This determination is made by comparing the allegations made in the
complaint filed against the insured with the terms in the policy. Id. at 1100 (¶13).
Thus, this Court’s finding of whether the Insurers owe a duty to defend will not
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hinge on any factual determinations made in the underlying lawsuit.
With regard to indemnity, under Mississippi law, the duty to defend is
broader than the insurer’s duty to indemnify. Therefore, this Court may also be
able to make a determination as to the duty to indemnify prior to resolution of the
underlying lawsuit, given that the same questions of law pertaining to the duty to
defend may also impact the duty to indemnify.
CONCLUSION
The Insurers’ declaratory judgment action is ripe, because it presents an
actual case or controversy. As a result, Ground Control’s Motion to Dismiss must be
denied.
IT IS, THEREFORE, ORDERED AND ADJUDGED that the Motion to
Dismiss for Lack of Jurisdiction [12] is DENIED.
SO ORDERED AND ADJUDGED this the 8th day of October, 2014.

s/

Louis Guirola, Jr.

LOUIS GUIROLA, JR.
CHIEF U.S. DISTRICT JUDGE

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