Opinion
No. 3:20-CV-00068-CAR
2021-03-04
ARIA DENTAL GROUP, LLC, d/b/a Monroe Family and Cosmetic Dentistry, individually and on behalf of all others similarly situated, Plaintiffs, v. FARMERS INSURANCE EXCHANGE, Foremost Insurance Company, Grand Rapids, Michigan d/b/a and John Doe Corporations 1 - 100, Defendants.
Roy E. Barnes, Benjamin R. Rosichan, Mark D. Meliski, John R. Bevis, Barnes Law Group LLC, Marietta, GA, Nicholas Paul Martin, Dunwoody, GA, for Plaintiffs. Allen P. Pegg, Pro Hac Vice, Joshua Fordin, Pro Hac Vice, Miami, FL, Michael A. Caplan, Julia B. Stone, Caplan Cobb LLP, Atlanta, GA, for Defendant Foremost Insurance Company Grand Rapids Michigan.
Roy E. Barnes, Benjamin R. Rosichan, Mark D. Meliski, John R. Bevis, Barnes Law Group LLC, Marietta, GA, Nicholas Paul Martin, Dunwoody, GA, for Plaintiffs.
Allen P. Pegg, Pro Hac Vice, Joshua Fordin, Pro Hac Vice, Miami, FL, Michael A. Caplan, Julia B. Stone, Caplan Cobb LLP, Atlanta, GA, for Defendant Foremost Insurance Company Grand Rapids Michigan.
ORDER ON DEFENDANTS' MOTION TO DISMISS
C. ASHLEY ROYAL, SENIOR JUDGE
Plaintiff Aria Dental Group, LLC's claims arise from its allegations that Defendants Farmers Insurance Exchange ("Farmers"), Foremost Insurance Company ("Foremost"), and other unknown companies breached their contracts to provide insurance coverage for losses stemming from the COVID-19 pandemic. Plaintiff, individually and on behalf of others similarly situated, filed this suit asserting claims for State law breach of contract and seeking class certification and a declaratory judgment that Defendants breached their contracts. Plaintiff brings its claims pursuant to the Court's diversity jurisdiction.
See generally , Pl.'s Comp. [Doc. 1].
Id.
Pl.'s Comp., 2-4 [Doc. 1].
Before the Court is Defendants' Motion to Dismiss. This Motion [Doc. 17] is GRANTED in part and DENIED in part . The Court GRANTS Defendants' Motion to Dismiss the declaratory judgment claim against all Defendants and to dismiss Defendant Farmers. The Court DENIES Defendants' Motion to Dismiss the remaining breach of contract claims against Foremost.
BACKGROUND
Plaintiff's allegations, accepted as true and construed in Plaintiff's favor, are as follows: Plaintiff, a dental practice in Monroe, Georgia, alleges it purchased a Precision Portfolio Policy of insurance from Farmers and Foremost (the "Policy"). The Policy covers "direct physical loss of or physical damage to Covered Property caused by or resulting from a Covered Cause of Loss."
Sinaltrainal v. Coca-Cola Co. , 578 F.3d 1252, 1260 (11th Cir. 2009).
Pl.'s Comp., ¶ 9-10 [Doc. 1]. Plaintiff refers to Farmers and its subsidiary Foremost collectively as "Farmers" in many of its allegations, but Farmers and Foremost are distinct entities. The allegations in the Complaint are clearly against both Farmers and Foremost.
Pl.'s Comp., ¶ 12, Exhibit A [Doc. 1].
In 2020, Plaintiff lost business income and incurred expenses due to the COVID-19 pandemic and submitted a claim to Farmers and Foremost under the Policy. A Farmers and Foremost representative denied the claim due to a lack of direct physical loss or physical damage.
Pl.'s Comp., ¶ 8, 60, 61 [Doc. 1].
Pl.'s Comp., ¶ 61, Exhibit B [Doc. 1].
Plaintiff, individually and on behalf of others similarly situated, then filed this class action against Farmers, Foremost, and other unknown companies, alleging breach of contract and seeking class certification and a declaratory judgment. Defendants now seek dismissal of all claims.
See generally Pl.'s Comp. [Doc. 1].
LEGAL STANDARD
On a motion to dismiss, the Court must construe the Complaint in the light most favorable to the plaintiff and accept as true all well-pled facts in Plaintiff's Complaint. To avoid dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " A claim is plausible where the plaintiff alleges factual content that "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." The plausibility standard requires that a plaintiff allege sufficient facts "to raise a reasonable expectation that discovery will reveal evidence" that supports a plaintiff's claims.
Sinaltrainal , at 1260.
Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ).
Id.
Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).
DISCUSSION
Defendants argue that (1) Plaintiff's Complaint must be dismissed as a shotgun pleading; (2) Plaintiff's declaratory judgment claim must be dismissed as duplicative of its breach of contract claims; and (3) Farmers must be dismissed because it is neither a party to the Policy nor liable under an agency relationship. As explained below, the Complaint is not a shotgun pleading, but the declaratory judgment claim and Defendant Farmers must be dismissed.
I. Plaintiff's Complaint is not a shotgun pleading.
Shotgun pleadings "are calculated to confuse" the parties and the Court. "A shotgun pleading is not a short and plain statement of the claim and does not allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Shotgun pleadings include those that may "assert[ ] multiple claims against multiple defendants without specifying which ... of the defendants the claim is brought against[,]" or may contain "multiple counts where each count adopts the allegations of all preceding counts, causing each successive count to carry all that came before and the last count to be a combination of the entire complaint." Plaintiff's Complaint is not a shotgun pleading. Defendant and the Court can easily discern Plaintiff's allegations from the Complaint, and the Complaint is not "calculated to confuse." Although the Complaint does not specify which Defendant is responsible for which allegations, this is "not fatal" where "[t]he complaint can be fairly read to aver that all defendants are responsible for the alleged conduct." Here, the Complaint clearly alleges that both Farmers and Foremost are responsible for all counts because Foremost is Farmers' alleged agent. And even though Count III and Count IV of Plaintiff's Complaint incorporate all preceding counts, this structure is consistent with Plaintiff's arguments. Thus, Plaintiff's Complaint is not a shotgun pleading.
Barmapov v. Amuial , 986 F.3d 1321, 1324–25 (11th Cir. 2021).
Hirsch v. Ensurety Ventures, LLC , 805 F. App'x 987, 991 (11th Cir. 2020) (quotations and citations omitted) (Stating that shotgun pleadings "exact an intolerable toll on the trial court's docket, lead to unnecessary and unchannelled discovery, and impose unwarranted expense[.]").
Id.
Id.
Id. (Explaining that courts must be able to determine "which facts support which claims[ ]" and "whether the plaintiff has stated any claims upon which relief can be granted[,]" and adversaries must be able to discern "which facts support which claims," and "whether the plaintiff has stated any claims upon which relief can be granted[.]"). Compare the allegations in Plaintiff's Complaint with those in Jackson v. Bank of Am., N.A. , 898 F.3d 1348, 1356-57 (11th Cir. 2018) (Finding a complaint was a shotgun pleading where, "having incorporated all 123 paragraphs of allegations into all sixteen counts, it is neither ‘short’ nor ‘plain.’ " and it took "fifty-four pages and untold hours of a Magistrate Judge's time" to rewrite "the complaint into an intelligible document a competent lawyer would have written.").
Kyle K. v. Chapman , 208 F.3d 940, 944 (11th Cir. 2000).
This Order dismisses all claims against Farmers, leaving no confusion as to which Defendant Plaintiff's claims are against. See supra.
Plaintiff explains that its breach of contract allegations in Counts I-II are prerequisites for the "extra expenses" claim in Count III, and the breach of contract allegations in Counts I-III are perquisites for the declaratory judgment claim in Count IV. Plaintiff's Response in Opposition to Defendants' Motion to Dismiss, at 3-4 [Doc. 20]. Furthermore, in this Order the Court dismisses the Count IV declaratory judgment claim. Thus, shotgun pleading in Count IV is no longer at issue. See infra.
II. The declaratory judgment claim must be dismissed.
Defendants argue that Plaintiff's declaratory judgment claim must be dismissed as duplicative of its breach of contract claims, and the Court agrees.
"It is common in [the Eleventh] Circuit for District Courts to dismiss requests for declaratory judgment when a plaintiff asserts a corresponding claim for breach of contract." "A petition seeking a declaratory judgment that alleges breach of duties and obligations under the terms of a contract and asks the court to declare those terms breached is nothing more than a petition claiming breach of contract." This is true even in the class action context. Here, Plaintiff merely seeks for the Court to declare that Defendants breached their contracts. Thus, the declaratory judgment claim must be dismissed as duplicative of the breach of contract claim.
See HM Peachtree Corners I LLC v. Panolam Indus. Int'l, Inc. , No. 1:17-cv-1000-WSD, 2017 WL 3700304, at *3 (N.D. Ga. Aug. 28, 2017) (collecting cases and holding that an amendment to add a declaratory judgment claim that would be duplicative of a breach of contract claim would be futile).
Ministerio Evangelistico Int'l v. United Specialty Ins. Co. , No. 16-25313-CIV-MORENO, 2017 WL 1363344, at *2 (S.D. Fla. Apr. 9, 2017).
Virga v. Progressive Am. Ins. Co. , 215 F. Supp. 3d 1320, 1323 (S.D. Fla. 2016). Plaintiff argues that its declaratory judgment is distinguishable because it seeks relief for class members whose claims have not yet been denied by Defendants. But such class members would have no case or controversy under which to sue. Furthermore, "[a] named plaintiff in a class action who cannot establish the requisite case or controversy between himself and the defendants simply cannot seek relief for anyone." Griffin v. Dugger , 823 F.2d 1476, 1483 (11th Cir. 1987).
III. Farmers must be dismissed.
Finally, Defendants argue that Farmers must be dismissed because Farmers is not a party to the contract, and it is not liable under an agency relationship. The Court agrees.
"It is ... fundamental that [a] person who is not a party to a contract (i.e., is not named in the contract and has not executed it) is not bound by its terms." Here, the Policy clearly establishes that Farmers was not bound by the contract as an insurer. The Policy states it is a "[s]mall business policy" of "Foremost Insurance Company" on the title page. Likewise, the "Common Policy Declarations" and the listing of "Forms and Endorsements," identify the issuer of the Policy as "FOREMOST INSURANCE COMPANY GRAND RAPIDS, MI. " Farmers is not identified as an insurer in the Policy, and Plaintiff admits that Foremost, not Farmers, signed the Policy. Thus, Farmers is not bound under the Policy.
Plaza Props., Ltd. v. Prime Bus. Invs., Inc. , 240 Ga. App. 639, 642, 524 S.E.2d 306 (1999) (footnotes and citations omitted).
A court cannot normally consider extrinsic evidence when ruling on a motion to dismiss, but a "court may consider an exhibit attached to a pleading, or a motion to dismiss, without converting the motion into one for summary judgment, where the exhibit is central to the plaintiff's claim, and its authenticity is unchallenged." Cantrell v. McClure , 805 F. App'x 817, 819 (11th Cir. 2020) ; Celestine v. Capital One , 741 F. App'x 712, 713 (11th Cir. 2018). ("[w]here exhibits are submitted that contradict the alleged facts, the exhibits control ..."). Plaintiff attaches the Policy to his Complaint, and neither side challenges its authenticity. Thus, the Court accepts Plaintiff's allegations in his Complaint as true only to the extent they are not blatantly contradicted by the Policy.
Pl.'s Comp., Exhibit A, at 2 [Doc. 1].
Pl.'s Comp., Exhibit A, at 7, 113, 114, 127 [Doc. 1] (emphasis in original).
See generally Pl.'s Comp., Exhibit A [Doc. 1]. Plaintiff's Response in Opposition to Defendants' Motion to Dismiss, at 3, 12, 13, 17 [Doc. 20].
Plaintiff argues the "twenty-seven references to Farmers in the Policy documents" show that the Policy is ambiguous as to the insurer. But "Farmers" appears only in the accompanying "Farmers Insurance Group of Companies Privacy Notice" and in the Policy letterhead. These references to Farmers do not show that it agreed to provide insurance to Plaintiff.
Plaintiff's Response in Opposition to Defendants' Motion to Dismiss, at 9 [Doc. 20].
See generally Pl.'s Comp., Exhibit A [Doc. 1].
Plaintiff's argument that Farmers can be held liable due to its agency relationship with Foremost also fails. Although Plaintiff alleges Farmers is Foremost's parent company, and Farmers was involved in marketing and adjusting Plaintiff's Policy, Plaintiff alleges no facts to establish an agency relationship.
Plaintiff's Response in Opposition to Defendants' Motion to Dismiss, at 2 [Doc. 20].
The existence of a parent/subsidiary relationship does not on its own establish an agency relationship under Georgia law. "The relation of principal and agent arises wherever one person, expressly or by implication, authorizes another to act for him or subsequently ratifies the acts of another in his behalf." Under Georgia law, an agency relationship requires that the principal exercise a high level of control over the agent:
Matson v. Noble Inv. Grp., LLC , 288 Ga. App. 650, 659, 655 S.E.2d 275 (2007).
To prove actual agency, the purported principal must have assumed the right to control the method, manner, and time of the purported agent's work, as distinguished from the right merely to require certain definite results in conformity to the contract. The right to control the purported agent's time means the right to control the hours of work. The right to control the method and manner of work means the right to tell the purported agent how to perform all details of the job, including the tools he should use and the procedures he should follow.
Satisfaction & Serv. Hous., Inc. v. SouthTrust Bank, Inc. , 283 Ga. App. 711, 713, 642 S.E.2d 364 (2007) (internal quotation marks and footnotes omitted).
No allegation shows that Farmers controlled "the method, manner, and time" of Foremost's work. Plaintiff's allegation that Farmers "controlled most, if not all, aspects of Aria's contractual relationship with Foremost" is insufficient to establish agency because mere control over "results in conformity with the contract" will not establish an agency relationship under Georgia law. Thus, Defendant Farmers must be dismissed.
Id. ; Anderson v. Am. Family Ins. Co. , No. 5:15-CV-475 (MTT), 2016 WL 3633349, at *6 (M.D. Ga. June 29, 2016).
Plaintiff's Response in Opposition to Defendants' Motion to Dismiss, at 11 [Doc. 20]. Satisfaction & Serv. Hous., Inc. , 283 Ga. App. at 713, 642 S.E.2d 364. Plaintiff also alleges that Farmers selected the language in the Policy; Farmers marketed and sold the Policy; Farmers denied the claim; Foremost used Farmers' letterhead; Farmers sold similar policies across the country; and Farmers was involved in the adjustment of the claim. But these kinds of allegations do not establish agency under Georgia law. Anderson , No. 5:15-CV-475 (MTT), 2016 WL 3633349, at *5 (finding that Plaintiff's supporting allegations did not support parent company's liability for subsidiary's insurance contract. Allegations included that parent and subsidiary traded under common names; insurance policies were underwritten by parent company; and parent company was involved in the marketing and adjustment of the claim); Kids R Kids Int'l, Inc. v. Cope , 330 Ga. App at 895, 769 S.E.2d 616 (2015) (holding that the mere use of logos or trademarks is insufficient to show apparent agency.).
CONCLUSION
For the reasons above, Defendants' Motion to Dismiss [Doc. 17] is GRANTED in part and DENIED in part . The Court GRANTS Defendants' Motion to Dismiss the declaratory judgment claim against all Defendants and to dismiss Defendant Farmers. The Court DENIES Defendants' Motion to Dismiss the remaining breach of contract claims against Foremost.
SO ORDERED, this 4th day of March, 2021.