Opinion
Case Number: 22-21262-CIV-MORENO
2022-10-03
CERTAIN UNDERWRITERS AT LLOYDS OF LONDON, Plaintiff, v. SCENTS CORPORATIONS, doing business as Perfumes of the World, Defendant.
Michael Charles Black, Michael C. Black, P.A., Miami, FL, for Plaintiff. Aaron Stenzler Weiss, Merrick Lawrence Gross, Carlton Fields Jorden Burt, P.A., Miami, FL, Caroline Lawhorn, Pro Hac Vice, John C. Sokatch, Pro Hac Vice, Dykema Gossett PLLC, Dallas, TX, for Defendant.
Michael Charles Black, Michael C. Black, P.A., Miami, FL, for Plaintiff. Aaron Stenzler Weiss, Merrick Lawrence Gross, Carlton Fields Jorden Burt, P.A., Miami, FL, Caroline Lawhorn, Pro Hac Vice, John C. Sokatch, Pro Hac Vice, Dykema Gossett PLLC, Dallas, TX, for Defendant. ORDER GRANTING DEFENDANT'S MOTION TO DISMISS PLAINTIFF'S ORIGINAL COMPLAINT FEDERICO A. MORENO, UNITED STATES DISTRICT JUDGE
THIS CAUSE came before the Court upon Defendant's Motion to Dismiss Plaintiff's Original Complaint (D.E. 19), filed on July 5 , 2022 .
THE COURT has considered the motion, the response in opposition, the reply, pertinent portions of the record, and being otherwise fully advised in the premises, it is ADJUDGED that the motion is GRANTED.
I. Background
This is a breach of contract case stemming from an agreement in which the Defendant, Scents Corporations d/b/a Perfumes of the World, agreed to purchase $351,543.00 worth of perfume products from nonparties, Benron Perfume LLC, M&R Distributors International, LLC, and Elegance Distributors, Inc. (the "Insureds"), and have the goods shipped via truck to Perfumes of the World in Dallas, Texas. The truck was loaded with the goods in South Florida, and then proceeded to begin traveling toward its destination in Dallas, Texas. During transit, however, the truck containing the goods was stolen at a gas station in Florida. According to the Complaint, the Insureds then demanded payment from Perfumes of the World per the contractual agreement of the parties, as the risk of loss allegedly passed to Perfumes of the World when the truck was loaded with the goods. D.E. 1-1 at ¶ 8. Perfumes of the World, however, refused to pay the Insureds for the stolen goods. Id.
Because Perfumes of the World refused to pay the Insureds for the stolen goods, the Insureds submitted claims to the Plaintiff, Certain Underwriters at Lloyds of London ("Lloyds"), who was the insurer of the goods. Lloyds paid the Insureds for the losses suffered and thereafter filed a one-count breach of contract action against Perfumes of the World in the Eleventh Judicial Circuit Court of Florida. Perfumes of the World then removed the case to federal court. The threshold issue presented by Perfumes of the World's Motion to Dismiss is whether Lloyds has alleged sufficient facts to establish its standing to sue Perfumes of the World. In this regard, Lloyds alleges that because it was the insurer of the goods and it "paid its insured for the losses suffered, [Lloyds] has become subrogated to its insureds' rights, however those rights may appear." Id. at ¶¶ 2, 9. But as explained below, these allegations are insufficient to establish subrogation, and thus Lloyds fails to establish standing.
II. Legal Standard
When considering a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the court must accept all factual allegations as true and view them in a light most favorable to the plaintiff. See Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). This consideration is limited "to the pleadings and exhibits attached thereto[.]" Grossman v. Nationsbank, N.A., 225 F.3d 1228, 1231 (11th Cir. 2000). However, a complaint listing mere "labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2008). Likewise, "[f]actual allegations that are merely consistent with a defendant's liability" are insufficient. Chaparro v. Carnival Corp., 693 F.3d 1333, 1337 (11th Cir. 2012) (internal citations omitted). And the allegations must not force the court to speculate or operate on mere suspicion. Twombly, 550 U.S. at 555, 127 S.Ct. 1955. That said, the court will not dismiss a complaint where the Plaintiff pleads facts that make the claim facially plausible. See id. at 570, 127 S.Ct. 1955. A claim is facially plausible when the court can draw a reasonable inference, based on the facts pleaded, that the opposing party is liable for the alleged misconduct. See Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. This plausibility standard requires "more than a sheer possibility that a defendant has acted unlawfully." Id. (citing Twombly, 550 U.S. at 557, 127 S.Ct. 1955). Thus, when the complaint contains "well-pleaded allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Iqbal, 556 U.S. at 679, 129 S.Ct. 1937.
III. Discussion
Perfumes of the World asks the Court to dismiss Lloyd's breach of contract action for lack of standing, arguing that Lloyds has not plead sufficient facts to establish subrogation, and thus Lloyds fails to establish standing to sue Perfumes of the World. In response, Lloyds argues that the allegations in the Complaint sufficiently establish its standing because Lloyds alleges that it has become subrogated to the rights of the Insureds due to the fact that Lloyds was the insurer of the Goods, and Lloyds paid the Insureds for the losses suffered. See D.E. 22 at 2-3. The Court disagrees. These threadbare allegations are factually insufficient to establish subrogation, and thus Lloyds fails to establish standing to sue Perfumes of the World.
"A subrogee acquires standing to sue through subrogation." Interested Lloyds Underwriters v. Danzas Corp., 508 F. Supp. 3d 1249, 1259 (S.D. Fla. 2020) (quoting Am. Coastal Ins. Co. v. Electrolux Home Prod., Inc., No. 2:19-cv-180, 2019 WL 5068577, at *2 (M.D. Fla. Oct. 9, 2019)). Subrogation is a well-defined concept under Florida law where a third-party payor, like an insurer, is substituted for a person with a lawful claim or right. Boley v. Daniel, 72 Fla. 121, 72 So. 644, 645 (1916). Once substituted, the third-party payor can pursue the original plaintiff's damages. See Dade Cty. Sch. Bd. v. Radio Station WQBA, 731 So. 2d 638, 646 (Fla. 1999). There are two types of subrogation - conventional subrogation and equitable subrogation. Id. Notwithstanding the fact that Lloyds neglects to identify which theory of subrogation applies, Lloyds fails to plausibly allege either.
A. Conventional Subrogation
"Conventional subrogation arises or flows from a contract between the parties establishing an agreement that the third-party payor will have the rights and remedies of the original creditor." Id. To establish conventional subrogation, Florida courts generally require that there be "an express agreement." Cont'l Cas. Co. v. Ryan Inc. E., 974 So. 2d 368, 376 (Fla. 2008); see also Lovingood v. Butler Const. Co., 100 Fla. 1252, 131 So. 126, 131 (1930) (holding that there was no contractual subrogation "because there was no agreement between the [the parties] that the former should be entitled to the securities and rights of the creditor so paid."); but see Forman v. First Nat'l Bank, 76 Fla. 48, 16 So. 742, 744 (1918) (allowing for an implied agreement).
Here, the Court cannot reasonably infer that such an agreement existed. The Complaint alleges that "[Lloyds] paid its insured for the losses suffered and has become subrogated to its insureds' rights, however those rights may appear." D.E. 1-1 at ¶ 9. Mere payment, by itself, is not enough. Rather, Lloyds must allege that its payment to the Insureds was part of a subrogation agreement. See Dade Cty. Sch. Bd., 731 So. 2d at 646. The Complaint, however, does not contain any allegation that such an agreement exists, and thus Lloyds has not plausibly plead contractual subrogation.
B. Equitable Subrogation
"Unlike conventional subrogation, which is created by an express agreement, equitable . . . subrogation arises by operation of law." Cont'l Cas. Co., 974 So. 2d at 376. This equitable remedy applies whenever one party "has been required to pay a debt for which another is primarily answerable[.]" Amegy Bank Nat'l Ass'n v. Deutsche Bank Corp., 917 F. Supp. 2d 1228, 1233 (M.D. Fla. 2013) (quoting Rebozo v. Royal Indem. Co., 369 So. 2d 644, 646 (Fla. 3d DCA 1979)). To invoke this equitable remedy, a plaintiff must allege that: "(1) the subrogee made the payment to protect his or her own interest, (2) the subrogee did not act as a volunteer, (3) the subrogee was not primarily liable for the debt, (4) the subrogee paid off the entire debt, and (5) subrogation would not work any injustice to the rights of a third party." Dade Cty. Sch. Bd., 731 So. 2d at 646.
As an initial matter, here, Lloyds fails to allege that it paid the Insureds to protect its own interests; rather, as alleged in the Complaint, Lloyds provided payment in response to its receipt of insurance claims submitted by the Insureds. Accordingly, Lloyds' failure to allege facts demonstrating that it paid the Insureds to protect its own interest ends the analysis on whether equitable subrogation has been established. It has not. And because neither conventional nor equitable subrogation have been sufficiently plead, Lloyds lacks the requisite standing to maintain this action against Perfumes of the World. IV. Conclusion
For the foregoing reasons, it is
ORDERED AND ADJUDGED that Defendant, Scents Corporations d/b/a Perfumes of the World's Motion to Dismiss Plaintiff's Original Complaint (D.E. 19) is GRANTED. Because Plaintiff, Certain Underwriters at Lloyds of London, has failed to plausibly allege subrogation and therefore standing, the Complaint is DISMISSED without prejudice. Plaintiff shall file an amended complaint no later than October 14 , 2022 .
DONE AND ORDERED in Chambers at Miami, Florida, this 3rd of October 2022.