Opinion
Case No. 3:22cv1979-TKW-HTC
2022-03-15
Austin ROOK, Plaintiff, v. The FIRST LIBERTY INSURANCE CORPORATION, Defendant.
Alex Stern, for Plaintiff. Matthew J. Lavisky, Jamie Combee Novaes, Butler Weihmuller Katz etc. LLP, Tampa, FL, for Defendant.
Alex Stern, for Plaintiff.
Matthew J. Lavisky, Jamie Combee Novaes, Butler Weihmuller Katz etc. LLP, Tampa, FL, for Defendant.
ORDER ON MOTION TO DISMISS
T. KENT WETHERELL, II, UNITED STATES DISTRICT JUDGE
This case is before the Court based on Defendant's motion to dismiss (Doc. 4) and Plaintiff's response in opposition (Doc. 5). No hearing is necessary to rule on the motion.
Background
This is an insurance dispute between the insured (Plaintiff) and the insurer (Defendant) arising out of a plumbing leak at the insured property. The complaint alleges that the insurance policy issued by Defendant covered the damages caused by the plumbing leak; that Plaintiff made a timely claim under the policy; that, to date, Defendant has failed to admit or deny coverage for the claim; and that Defendant's failure to provide coverage for the claim is a "material breach of the policy and causes Plaintiff to doubt [his] coverage rights under the policy."
The complaint asserts two claims. Count I alleges a claim for declaratory relief and seeks declarations of Plaintiff's rights to certain additional coverages (e.g., "loss of use" coverage and "law and ordinance" coverage) under the policy. Count II alleges a breach of contract claim and seeks damages for Defendant's failure to provide coverage and pay the benefits due under the policy for the covered loss.
Defendant argues that the complaint should be dismissed for failure to join an indispensable party (Plaintiff's wife, Kristen Elizabeth Rook) and that the declaratory relief claim in Count I should be dismissed because it is duplicative of the breach of contract claim in Count II. Plaintiff responds that his wife is not an indispensable party because she is not the named insured under the policy and that the declaratory relief count is not duplicative because it seeks additional relief that is not being sought in the breach of contract count. Each argument will be addressed in turn.
Indispensable Party
The Court may require a person to be joined as a party if that person has a legal interest in the subject matter of the case and the failure to join the person would "leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest." Fed. R. Civ. P. 19(a)(1)(B)(ii). The Court is not limited to the facts alleged in the pleadings when considering a motion to dismiss for failure to join an indispensable party under Fed. R. Civ. P. 12(b)(7). See Muscogee (Creek) Nation v. Poarch Band of Creek Indians , 525 F. Supp. 3d 1359, 1365 (M.D. Ala. 2021) (explaining that although the court must assume the truth of the factual allegations in the complaint when ruling on a Rule 12(b)(7) motion, the "court is not limited to the complaint, and the parties may present evidence outside the pleadings" (citing 5C Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1359 (3d ed. 2020) )); Aldar Tobacco Grp., LLC v. Am. Cigarette Co. Inc. , 2009 WL 10682051, at *1 n.1 (S.D. Fla. June 18, 2009) ("The Eleventh Circuit has never articulated a standard for district courts to follow in analyzing Rule 12(b)(7) motions, but its sister circuits allow for review outside the four corners of the complaint.").
Here, the insurance policy attached to the complaint only lists Plaintiff as the "named insured," but the policy also defines "insured" to include relatives of the named insured who are residents of the household. The complaint does not allege whether Plaintiff and his wife are residents of the same household (either at the insured property or elsewhere), but the examination under oath (EUO) of Plaintiff's wife that was attached to the motion to dismiss reflects that the wife has an ownership interest in the insured property and that she and Plaintiff reside in the same household but split their time equally between the insured property (in Pensacola, Florida) and a house in Huntsville, Alabama. Thus, Plaintiff's wife has an interest in the insurance proceeds at issue in this case and she should be joined as a plaintiff so Defendant will not be at risk of a future claim from the wife. See Armendariz v. Scottsdale Ins. Co. , 2020 WL 6134263, at *2 (S.D. Fla. Jan. 28, 2020) (ordering joinder of co-owner of insured property who was defined as an insured under the policy because "failure to join [her] could subject [the insurer] to substantial risk of incurring double, multiple, or otherwise inconsistent obligations upon the conclusion of this lawsuit.").
The Court did not overlook that Plaintiff's wife effectively disclaimed any knowledge about anything pertinent to the damage to the insured property in her EUO. However, she did not expressly release any potential claim that she might have against Defendant or otherwise disclaim her legal interest in the subject matter of this case.
Nor did the Court overlook Plaintiff's argument that a Florida appellate court has determined that a co-owner of a property is not an indispensable party to a first party property insurance action. See Doc. 5, at 19 (citing Kermes v. Citizens Prop. Ins. Corp. , 327 So. 3d 352 (Fla. 3d DCA 2021) ). However, the case cited by Plaintiff for this argument does not stand for that proposition because the case was decided on jurisdictional grounds, not the merits. See Kermes , 327 So. 3d at 353 ("[W]e dismiss for lack of jurisdiction [the insurer's] petition seeking certiorari review of the trial court's subsequent order denying its motion to dismiss for failure to join [the named insured's] husband as an indispensable party." (emphasis added)). Plaintiff's other arguments with respect to joinder are equally unpersuasive.
The case is factually distinguishable in any event because although the husband in that case still had an ownership interest in the insured property, he and his wife were "estranged" and "he ha[d] not lived in the [the insured property] for fifteen years." Kermes , 327 So. 3d at 352. By contrast, in this case, the EUO reflects that Plaintiff and his wife are still married and that they are still living in the insured property at least part-time.
That said, a complaint can only be dismissed for failure to join an indispensable party if the party cannot be joined. See Focus on the Fam. v. Pinellas Suncoast Transit Auth. , 344 F.3d 1263, 1280 (11th Cir. 2003) (citing Bassett v. Mashantucket Pequot Tribe , 204 F.3d 343, 358 (2d Cir. 2000), for the proposition that "dismissal for failure to join an indispensable party is appropriate only where the entity in question ‘cannot be made a party’ "). Here, there does not appear to be any reason why Plaintiff's wife cannot be joined as a co-plaintiff in this case because she is a citizen of Florida or Alabama, Plaintiff is (allegedly ) a citizen of Florida, and Defendant is a citizen of Illinois and Massachusetts. Thus, rather than dismissing the complaint at this juncture, the Court will order that Plaintiff's wife be joined as a co-plaintiff. See Freeman v. Geovera Specialty Ins. Co. , 2020 WL 9212053, at *2 (S.D. Fla. Nov. 23, 2020) (ordering plaintiff to join indispensable party rather than dismissing case); Moreiras v. Scottsdale Ins. Co. , 2020 WL 2084851, at *3 (S.D. Fla. Apr. 30, 2020) (same). If Plaintiff's wife is not joined, then dismissal will be warranted. See Armendariz , 2020 WL 6134263, at *2.
Doc. 1-1, at 5 (¶2). But see Wife's EUO (Doc. 4-1), at 2, 4 (explaining how she and Plaintiff live essentially the same amount of time in Pensacola, Florida and Huntsville, Alabama).
Duplicative Declaratory Judgment Claim
It is well established under federal and Florida law that courts have substantial discretion in deciding whether to hear declaratory judgment actions in the first instance. See Wilton v. Seven Falls Co. , 515 U.S. 277, 286-88, 115 S.Ct. 2137, 132 L.Ed.2d 214 (1995) ; Taylor v. Cooper , 60 So.2d 534, 535-36 (Fla. 1952). Additionally, although the district courts in Florida are split on the issue, courts in this District typically will not entertain a declaratory judgment claim in the context of a first-party insurance dispute when an overlapping breach of contract claim is also pled and the declaratory judgment claim would not afford the plaintiff any relief beyond that which he will obtain if he prevails on the breach of contract claim. See Ollie's Neighborhood Grill Inc. v. Maxum Indem. Co. , 2022 WL 511496, at *2 (N.D. Fla. Feb. 21, 2022) (collecting cases).
Here, Plaintiff argues that the declaratory judgment count is seeking "forward-looking, prospective relief" that is distinct from the money damages being sought in the breach of contact claim because it seeks a declaration that Plaintiff is entitled to certain additional coverages in the future. However, the Court finds this argument unpersuasive because there does not appear to be any present dispute between the parties that the additional coverages will be available under the policy if it is determined that the insured property has suffered a covered loss and Plaintiff subsequently incurs costs that trigger the additional coverages.
Notably, Plaintiff does not claim that Defendant has taken the position that the additional coverages are not available in the context of a covered loss resulting from a plumbing leak and Plaintiff does not appear to dispute the position he attributed to Defendant in the complaint "that the additional coverages for nonphysical loss ... are triggered only after the policyholder incurs costs related to this coverage." Moreover, to the extent there is a disagreement between the parties as to whether the Plaintiff is currently entitled to payment under the policy for these additional coverages, that issue will necessarily be resolved in the breach of contract claim. Likewise, because the complaint does not allege that Plaintiff has incurred the costs necessary to trigger the additional coverages at this point, his alleged uncertainty as to whether these additional coverages will be available if and when the costs are incurred in the future will effectively be resolved by the determination in the breach of contract claim of whether the insured property suffered a covered loss. Accordingly, the declaratory judgment claim in Count I of the complaint is due to be dismissed as duplicative.
The Court did not overlook that some courts (particularly in the Middle District of Florida) have refused to dismiss declaratory judgment claims that were duplicative of breach of contract claims because "[m]otions to dismiss made under Rule 12(b)(6) only test the validity of a claim, not its redundancy; a redundant claim should not be dismissed as long as it is valid." Rock Custom Homes, Inc. v. Am. Zurich Ins. Co. , 2019 WL 4477819, at *2 (M.D. Fla. Sept. 18, 2019) (quoting Wichael v. Wal-Mart Stores E., LP , 2014 WL 5502442, at *2 (M.D. Fla. Oct. 30, 2014) ). However, even if a redundant declaratory judgment claim cannot be dismissed under Rule 12(b)(6) it can be stricken under Rule 12(f), which specifically authorizes the court to "strike from a pleading ... any redundant ... matter."
Conclusion
In sum, for the reasons stated above, it is ORDERED that:
1. Defendant's motion to dismiss is GRANTED in part and Count I of the complaint is DISMISSED .
2. Plaintiff shall have 14 days from the date of this Order to file an amended complaint joining his wife, Kristen Elizabeth, Rook, as a co-plaintiff. See Fed. R. Civ. P. 19(a)(2). The amended complaint shall omit the dismissed declaratory judgment count. See N.D. Fla. Loc. R. 15.1(A).
3. Failure to file an amended complaint consistent with this Order will result in the dismissal of this case without further notice.
4. Defendant shall have 14 days from the date the amended complaint is filed to file an answer. See Fed. R. Civ. P. 15(a)(3).
DONE and ORDERED this 15th day of March, 2022.