Gibson v. Liberty Mutual Group, Inc.
2011 U.S. Dist. LEXIS 43405
| D.D.C. | 2011Background
- Gibsons sue Liberty Mutual for declaratory relief and breach under an all-risk policy that covered fire damage.
- Fire occurred November 14, 2009 causing substantial loss; policy was in effect and claim was timely filed.
- Parties engaged in settlement talks; suit removed from DC Superior Court to this Court after amendment.
- Plaintiffs' Amended Complaint asserts Count I (appraisal) and Count II (replacement costs) as declaratory relief, and Count III (breach of contract) with damages sought.
- Defendants move to dismiss Counts I and II for failure to state a claim; Count III is not challenged for dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether declaratory relief is appropriate for appraisal and replacement-cost disputes. | Gibsons seek legal declarations about appraisal obligation and replacement-cost entitlement. | Defendants contend the disputes are purely factual and not legal enough for declaratory relief. | Not appropriate; purely factual questions do not justify declaratory relief. |
| Whether declaratory relief should be granted when the breach of contract claim will resolve the dispute. | Declaratory relief will clarify rights before/independently of breach claim. | Count III will fully resolve the dispute; declaratory relief adds no value. | Not appropriate; Count III suffices to resolve the dispute. |
| Whether Counts I and II should be dismissed under Rule 12(b)(6). | N/A | Counts I and II raise legal questions necessary for relief. | Granted; Counts I and II dismissed. |
Key Cases Cited
- Maryland Cas. Co. v. Pacific Coal & Oil Co., 312 U.S. 270 (U.S. 1941) (court may deny declaratory relief if controversy is not real and substantial)
- Newton v. State Farm Fire & Cas. Co., 138 F.R.D. 76 (E.D. Va. 1991) (declaratory relief not appropriate for purely factual insurance disputes)
- Aetna Cas. & Sur. Co. v. Quarles, 92 F.2d 321 (4th Cir. 1937) (cited for piecemeal litigation concerns in declaratory relief cases)
- Allied-General Nuclear Servs. v. Com. Edison Co., 675 F.2d 610 (4th Cir. 1982) (reiterates avoidance of piecemeal declaratory relief)
- National R.R. Passenger Corp. v. Consolidated Rail Corp., 670 F. Supp. 424 (D.D.C. 1987) (discretionary considerations for granting declaratory relief)