ABG 19 LLC v. Westchester Surplus Lines Insurance Company
2:23-cv-14221
S.D. Fla.Sep 27, 2023Background
- Plaintiff ABG 19 LLC owned insured property in Vero Beach, Florida under a policy issued by Westchester Surplus Lines Insurance Co.
- Hurricane Ian struck on or about September 28, 2022, causing alleged covered water damage to the property.
- Defendant denied coverage and refused to pay insurance proceeds for the Loss.
- Plaintiff sued for breach of contract (Count 1) and declaratory relief (Count 2) asking the court to declare whether the Policy covers the water loss.
- Defendant moved to dismiss Count 2 under Rule 12(b)(6); the magistrate judge recommends granting the motion and dismissing Count 2 with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether declaratory relief count is duplicative of breach claim | Dismissal premature; declaratory relief may be needed if Defendant asserts affirmative defenses later | Declaratory claim duplicates breach-of-contract claim and serves no useful purpose | Court: Count 2 is redundant to Count 1 and should be dismissed |
| Whether complaint fails to identify a predicate ambiguity in the Policy | Plaintiff did not identify a specific ambiguity in the complaint but suggested future defenses could create one | Complaint fails to identify any policy ambiguity that requires declaratory relief | Court: Did not reach on merits because dismissal on duplicative ground resolved the issue |
| Whether dismissal should be with prejudice | Argued premature to dismiss declaratory claim with prejudice | Argued dismissal with prejudice appropriate because no independent theory for declaratory relief exists | Court: Dismissal with prejudice recommended because Plaintiff identified no viable independent basis for declaratory relief |
Key Cases Cited
- Pielage v. McConnell, 516 F.3d 1282 (11th Cir. 2008) (Rule 12(b)(6) standard: accept allegations and construe in plaintiff's favor)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (complaint must state a plausible claim, not a formulaic recitation)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility standard: factual content must permit reasonable inference of liability)