Opinion
22-CV-62333-WILLIAMS/AUGUSTIN-BIRCH
03-21-2024
MT. HAWLEY INSURANCE COMPANY, Plaintiff, v. PLYMOUTH PLAZA, LLC, Defendant.
REPORT AND RECOMMENDATION ON DEFENDANT'S MOTION TO DISMISS [DE 108]
PANAYOTTA AUGUSTIN-BIRCH, UNITED STATES MAGISTRATE JUDGE.
This cause comes before the Court on Defendant Plymouth Plaza, LLC's Motion to Dismiss for Lack of Jurisdiction. DE 108. The Honorable Kathleen M. Williams, United States District Judge, referred the Motion to the undersigned United States Magistrate Judge for a report and recommendation. DE 109. Plaintiff Mt. Hawley Insurance Company filed a response to Defendant's Motion, DE 110, and Defendant has filed a reply. DE 112. Plaintiff has also filed supplemental exhibits, DE 114, and Defendant filed a response to those supplemental exhibits. DE 117. The Court has carefully considered the Motion and the record and is otherwise fully advised. For the reasons set forth below, the Court RECOMMENDS that Defendant's Motion be GRANTED.
Plaintiff filed the exhibits for its response in opposition in a separate filing. DE 111.
I. Background
Previously, Plaintiff issued a commercial general liability policy to Defendant for a commercial office building and parking garage owned by Defendant in Clearwater, Florida, which contained a per-occurrence limit of $1 million, subject to a general aggregate limit of $2 million. DE 38 ¶¶ 54-55; DE 38-4 at 15. Shortly after issuance of the policy, a stairwell in Defendant's parking garage collapsed while undergoing repairs, tragically killing Mitchel Klock, a worker, inside. DE 38 ¶ 60. As a result of this incident, Klock's estate sued Defendant (the “Klock litigation”), and Plaintiff issued a reservation of rights letter to Defendant, agreeing to defend Defendant in the Klock litigation while reserving its right to disclaim insurance coverage based on, inter alia, Defendant's purported misrepresentations on its insurance application relating to the parking garage's structural condition. See DE 38-6. Plaintiff eventually settled the Klock litigation by tendering the $1 million per-occurrence policy limit. DE 38 ¶¶ 87, 89. As far as Plaintiff alleges, the Klock litigation was the only threat, claim, or lawsuit against Defendant resulting from the stairwell collapse within its garage. See DE 38.
After settling the Klock litigation, Plaintiff initiated this litigation against Defendant. DE 1. Plaintiff later amended its Complaint to raise five counts against Defendant: (1) a declaratory judgment count, which sought a declaratory judgment that it owes no duty to defend or indemnify Defendant for any claims or lawsuits arising from or related to the December 20, 2021 garage collapse; (2) a recoupment of defense costs count, which sought reimbursement of all costs Plaintiff incurred for defending Defendant in the Klock litigation; (3) a recoupment of indemnity count, which sought to claw back the $1 million Plaintiff tendered to settle the Klock litigation; (4) an equitable subrogation count, which also sought to claw back the $1 million Plaintiff tendered to settle the Klock litigation; and (5) an unjust enrichment count, which likewise sought to claw back the $1 million Plaintiff tendered to settle the Klock litigation. DE 38 at 20-28.
In response to Plaintiff's Second Amended Complaint, Defendant filed a motion to dismiss, seeking to have all counts dismissed, DE 42, and Judge Williams entered an order granting in part and denying in part Defendant's motion, which dismissed with prejudice all counts except for Plaintiff's Count I for declaratory judgment. DE 103. Thereafter, Defendant filed the present Motion to Dismiss, seeking to have Plaintiff's Count I dismissed for lack of subject matter jurisdiction. DE 108.
II. Motion to Dismiss Standard
Federal Rule of Civil Procedure 12(b)(1) permits a party to raise lack of subject matter jurisdiction as a defense to a pleading. “Attacks on subject matter jurisdiction under Fed.R.Civ.P. 12(b)(1) come in two forms”: facial and factual attacks. Lawrence v. Dunbar, 919 F.2d 1525, 1528-29 (11th Cir. 1990). “‘Facial attacks' on the complaint ‘require[] the court merely to look and see if [the] plaintiff has sufficiently alleged a basis of subject matter jurisdiction, and the allegations in his complaint are taken as true for the purposes of the motion.'” Id. at 1529 (quoting Menchaca v. Chrysler Credit Corp., 613 F.2d 507, 511 (5th Cir. 1980)). “‘Factual attacks,' on the other hand, challenge ‘the existence of subject matter jurisdiction in fact, irrespective of the pleadings, and matters outside the pleadings, such as testimony and affidavits, are considered.'” Id. (quoting Menchaca, 613 F.2d at 511).
III. Plaintiff's Procedural Arguments
In response to Defendant's Motion to Dismiss, Plaintiff maintains that the Motion should be denied because (1) Judge Williams already rejected Defendant's arguments, as Defendant previously raised the same arguments in its objections to this Court's Report and Recommendation on the previous motion to dismiss; and (2) Defendant's Motion is barred as successive under Federal Rule of Civil Procedure 12(g)(2). DE 110 at 5-8. Plaintiff's arguments are without merit because a party can raise objections to subject matter jurisdiction at any time. Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428, 434 (2011) (“For purposes of efficiency and fairness, our legal system is replete with rules requiring that certain matters be raised at particular times. Objections to subject-matter jurisdiction, however, may be raised at any time.” (citation omitted)). Moreover, “it is well settled that a federal court is obligated to inquire into subject matter jurisdiction sua sponte whenever it may be lacking.” Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 410 (11th Cir. 1999); Menchaca, 613 F.2d at 511 (“It is axiomatic that a district court may inquire into the basis of its subject matter jurisdiction at any stage of the proceedings.”); Roberts v. Swearingen, 358 F.Supp.3d 1341, 1346 (M.D. Fla. 2019) (“[T]he Court may consider motions to dismiss for lack of subject matter jurisdiction at any time.”). Therefore, the Court will consider Defendant's Motion to Dismiss and examine whether subject matter jurisdiction exists.
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981) (en banc), the Eleventh Circuit adopted as binding precedent all decisions that the former Fifth Circuit issued prior to October 1, 1981.
IV. Subject Matter Jurisdiction for Declaratory Judgment
After the dismissal of the other counts, Count I remains the only operative count of Plaintiff's Second Amended Complaint. And as a request for declaratory relief under the Declaratory Judgment Act, “the threshold question” for Count I “is whether a justiciable controversy exists.” Atlanta Gas Light Co. v. Aetna Cas. & Sur. Co., 68 F.3d 409, 414 (11th Cir. 1995). For all actions, including those brought under the Declaratory Judgment Act, federal jurisdiction under Article III of the Constitution only exists for “cases or controversies.” Id.; MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 126 (2007) (explaining that the Declaratory Judgment Act only covers Article III cases or controversies); see also Keister v. Bell, 29 F.4th 1239, 1250 (11th Cir. 2022) (“Article III of the Constitution limits our jurisdiction to cases and controversies.” (alteration and quotation marks omitted)). Significantly, a case or controversy must exist at all stages of the litigation. Keister, 29 F.4th at 1250. Even if there was a live case or controversy at the commencement of litigation, “an issue can become moot at any stage of litigation.” Wood v. Raffensperger, 981 F.3d 1307, 1316 (11th Cir. 2020). Should a case become moot at any point, a court's subject matter jurisdiction ceases to exist. See Keister, 29 F.4th at 1250; see also Sheely v. MRI Radiology Network, P.A., 505 F.3d 1173, 1182 (11th Cir. 2007) (noting a dismissal for mootness equates to a dismissal for lack of subject matter jurisdiction); United States v. Shenberg, 90 F.3d 438, 440 (11th Cir. 1996) (holding mootness deprives a court of subject matter jurisdiction under Article III's case or controversy requirement).
The “test for determining whether [a] complaint seeking declaratory relief survives a mootness challenge is whether there exists ‘a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.'” Nat'l Parks Conservation Ass'n, Inc. v. U.S. Army Corps of Eng'rs, 574 F.Supp.2d 1314, 1327 (S.D. Fla. 2008) (quoting Super Tire Eng'g Co. v. McCorkle, 416 U.S. 115, 121 (1974)). “In order to demonstrate that a case or controversy exists to meet the Article III standing requirement when a plaintiff is seeking . . . declaratory relief, a plaintiff must allege facts from which it appears there is a substantial likelihood that he will suffer injury in the future.” Malowney v. Fed. Collection Deposit Grp., 193 F.3d 1342, 1346 (11th Cir. 1999); see also Emory v. Peeler, 756 F.2d 1547, 1552 (11th Cir. 1985) (“[T]he ‘case or controversy' requirement of article III of the Constitution . . . provides that a declaratory judgment may only be issued in the case of an ‘actual controversy.' That is, under the facts alleged, there must be a substantial continuing controversy between parties having adverse legal interests. The plaintiff must allege facts from which the continuation of the dispute may be reasonably inferred.” (citations omitted)); Maryland Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941) (“Basically, the question in [declaratory judgment cases] is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”).
Here, in its Motion to Dismiss, Defendant raises both a facial and factual attack of this Court's subject matter jurisdiction on the basis that Count I presents no case or controversy under Article III. DE 108 at 4-7. In other words, Defendant argues that Count I is moot, and the Court agrees. Because Count I cannot survive a facial attack, the Court does not address Defendant's factual attack. See Eldridge v. Pet Supermarket Inc., 446 F.Supp.3d 1063, 1071 n.2 (S.D. Fla. 2020) (“Because Plaintiff's allegations . . . do not survive a facial attack, the Court need not analyze whether they survive a factual attack.”).
V. Count I Cannot Survive a Facial Attack
When only reviewing Plaintiff's Second Amended Complaint and accepting all allegations therein as true, the Court concludes that Count I presents no justiciable controversy. As previously mentioned, the only threat, claim, or lawsuit Plaintiff alleges in the Second Amended Complaint is the Klock litigation, which Plaintiff already settled and resolved by tendering the policy's peroccurrence limit. See DE 38 ¶ 89. By settling the Klock litigation, Plaintiff naturally ended and satisfied any obligation it had to defend or indemnify Defendant in the Klock litigation. Therefore, even if Plaintiff were to prevail and the Court were to grant a declaratory judgment that “[Plaintiff] had no obligation to defend or indemnify [Defendant] in the Klock action,” id. ¶ 111, that would provide no meaningful relief to Plaintiff. Thus, on its face, Count I is moot as to Plaintiff's request for declaratory relief regarding the Klock litigation. See In re Club Assocs., 956 F.2d 1065, 1069 (11th Cir. 1992) (“Central to a finding of mootness is a determination by . . . [a] court that it cannot grant effective judicial relief.”).
Moreover, to the extent Plaintiff seeks a declaratory judgment that it has no obligation or duty “to defend or indemnify [Defendant] for any claims triggered, or any lawsuits arising from or related to, the December 20, 2021 garage collapse occurrence,” DE 38 at 22, Plaintiff has not alleged any facts within its Second Amended Complaint regarding any other threat, claim, or lawsuit so as to demonstrate the existence of “a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” See Super Tire, 416 U.S. at 121 (emphasis added). In fact, Plaintiff has not alleged in its Second Amendment Complaint any other possibly injured parties besides Mitchel Klock. See DE 38.
As such, to the extent Count I requests a declaratory judgment that Plaintiff does not owe Defendant any duty to defend or indemnify it from any claims or lawsuits arising from or relating to the December 20, 2021 garage collapse, id. at 22, Plaintiff's request seeks an advisory opinion. Namely, what Plaintiff's obligations would be in the hypothetical situation an individual or entity raises a future claim against Defendant resulting from the December 20, 2021 partial garage collapse. But this is neither permissible nor sufficient for a declaratory judgment. See Golden v. Zwickler, 394 U.S. 103, 109 (1969) (“The federal courts established pursuant to Article III of the Constitution do not render advisory opinions. For adjudication of constitutional issues concrete legal issues, presented in actual cases, not abstractions are requisite. This is as true of declaratory judgments as any other field.” (alteration and quotation marks omitted)); Malowney, 193 F.3d at 1347 (“The remote possibility that a future injury may happen is not sufficient to satisfy the actual controversy requirement for declaratory judgments.” (quotation marks omitted)); Sully v. Scottsdale Ins. Co., 533 F.Supp.3d 1242, 1247 (S.D. Fla. 2021) (faulting plaintiff's request for declaratory relief for failing to “allege any potential future injury” that would require a resolution about the scope of coverage under the insurance policy).
Accordingly, on its face, Count I of Plaintiff's Second Amended Complaint fails to present a justiciable controversy and should be dismissed without prejudice for lack of subject matter jurisdiction. See Stalley ex rel. U.S. v. Orlando Reg'l Healthcare Sys., Inc., 524 F.3d 1229, 1232 (11th Cir. 2008) (“A dismissal for lack of subject matter jurisdiction is not a judgment on the merits and is entered without prejudice.”). Furthermore, seeing as the deadlines for amending pleadings and discovery have passed, the Court also recommends that Plaintiff not be granted leave to amend its Complaint for a third time. See Lowe's Home Ctrs., Inc. v. Olin Corp., 313 F.3d 1307, 1315 (11th Cir. 2002) (“[I]t is not an abuse of discretion for a district court to deny a motion for leave to amend following the close of discovery, past the deadline for amendments and past the deadline for filing dispositive motions.”); Ford v. City of Birmingham, 144 Fed.Appx. 51, 52 (11th Cir. 2005) (“Given that Ford's motion to amend the complaint was filed months after the deadline for amending the complaint had passed, we find no abuse of discretion in the district court's denial of Ford's motion to amend his complaint.”).
VI. Conclusion
Based on the foregoing, the Court RECOMMENDS that Defendant's Motion to Dismiss [DE 108] be GRANTED and that Count I of Plaintiff's Second Amended Complaint [DE 38] be DISMISSED WITHOUT PREJUDICE.
Within fourteen days after being served with a copy of this Report and Recommendation, any party may serve and file written objections to any of the above findings and recommendations. 28 U.S.C. § 636(b)(1); S.D. Fla. Mag. R. 4(a). The parties are hereby notified that a failure to timely object waives the right to challenge on appeal the District Court's order based on unobjected-to factual and legal conclusions contained in this Report and Recommendation. 11th Cir. R. 3-1 (2014).
DONE AND SUBMITTED.