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Wheeler's Moving & Storage, Inc., and v. Markel Insurance Co.

January 11, 2012


The opinion of the court was delivered by: Kenneth A. Marra United States District Judge


This Cause is before the Court upon Vanliner Insurance Company's Amended Motion to Dismiss Complaint With Prejudice [DE 19]. The motion is fully briefed and ripe for review. The Court has carefully considered the motion, response, reply and is otherwise fully advised in the premises.


This case arises out of a $1,419,128.56 judgment entered against Plaintiff, Wheeler's Moving & Storage, Inc. ("Wheeler's"), in Palm Beach County Circuit Court. The judgment creditor is Benjamin McTigue ("McTigue"). The matter was removed from the state court to this court based upon diversity of citizenship of the parties and damages claimed by Plaintiff in excess of $75,000. Wheeler's is suing its insurers, Markel Insurance Company ("Markel") and Vanliner Insurance Company ("Vanliner") (together, "Defendants") seeking a determination as to whether Defendants had a duty to defend it in the case brought against it by McTigue and, if so, whether the insurers also have an obligation to indemnify Wheeler's for the damages it has suffered as a result of the judgment. Previously, the Court denied Wheeler's Motion for Remand and granted Markel's Motion to Re-Align Defendant McTigue as a party plaintiff. See DE 64.

The Complaint alleges three counts: Count I is a Breach of Contract claim against Markel, Count II is a Breach of Contract claim against Vanliner, and Count III is a claim for declaratory judgment against Markel.*fn1 DE 4-1. Plaintiff's Complaint incorporates, among other things, the McTigue Amended Complaint, McTigue's judgment and the Vanliner policy. In the instant motion, Vanliner moves to dismiss the complaint as to it (Count II) for failure to state a claim under Fed. R. Civ. P. 12(b)(6) arguing that it fails to allege a basis for coverage under the Vanliner commercial automobile liability insurance policy for the McTigue claim. Allegations

In the Complaint, Wheeler's alleges that it was insured under policies of insurance which included commercial general liability coverage issued by Markel and commercial automobile liability coverage issued by Vanliner. Compl. ¶¶ 5, 8. In paragraph 10, Wheeler's describes the underlying McTigue action as one arising from injuries suffered by McTigue due to having been "locked in a trailer located on the premises of the business operated by the Plaintiff." Compl. ¶ 10. Wheeler's alleges that it provided Markel and Vanliner with a copy of McTigue's Amended Complaint and made a demand that they defend Wheeler's in the lawsuit and that it be indemnified for any damages awarded to McTigue. Compl. ¶ 12. Wheeler's alleges that Defendants refused to provide a defense to the lawsuit and have denied coverage to Wheeler's for the claims made against it by McTigue. Compl. ¶ 13. The Complaint states that a final judgment was entered in favor of McTigue and against Wheeler's in the amount of $1,419,128.56, exclusive of taxable costs, and that the judgment remains outstanding and unpaid. Count II, the only count against Vanliner's, alleges that Vanliner's failure to provide Wheeler's with a defense to the lawsuit filed against it by McTigue constitutes a direct breach of the insurance contract. Compl. ¶ 33.

McTigue's underlying Amended Complaint alleges two counts, one for "Negligent Hiring and/or Negligent Retention of Employee Dennis Crawford Against Defendant Wheeler's Moving & Storage," and another for "Negligent Supervision Claim Against Defendant Wheeler's Moving & Storage." See DE 14-1 at 10-13 of 19. Standard of Review

The general rule in federal court is that a complaint need only set forth "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). However, to survive a Rule 12(b)(6) motion to dismiss, a plaintiff is required to provide factual allegations that raise a right of relief above the speculative level. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). When ruling on a motion to dismiss for failure to state a claim upon which relief may be granted, a court must limit its consideration to the complaint, the written instruments attached to it as exhibits, and "documents incorporated into the complaint by reference, and matters of which a court may take judicial notice." Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007) (citation omitted); GSW, Inc. v. Long County, Ga., 999 F.2d 1508, 1510 (11th Cir. 1993). To resolve a motion to dismiss, the district court "may begin by identifying allegations that, because they are mere conclusions, are not entitled to the assumption of truth." Ashcroft v. Iqbal, -- U.S. --, 129 S.Ct. 1937, 1940-41 (2009). Then, "[w]hen there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id.

If an action is dismissed it should generally be dismissed without prejudice. Stevens v. Premier Cruises, Inc., 215 F.3d 1237, 1239-40 (11th Cir. 2000). Leave to amend, however, "need not be granted where amendment would be futile." Id.; Hall v. United Ins. Co. of Am., 367 F.3d 1255, 1263 (11th Cir. 2004); see, also, Freeman v. Dean Witter Reynolds, Inc., 865 So.2d 543, 553 (Fla. Dist. Ct. App. 2003). When a motion to amend is denied based upon futility, the court makes a legal conclusion that any amendment to the complaint necessarily would fail. St. Charles Foods, Inc. v. Am.'s Favorite Chicken Co., 198 F.3d 815, 822 (11th Cir. 1999). Discussion

At the outset, Wheeler's concedes that the issue of whether its policy with Vanliner's provides coverage for the McTigue claim is a question of law for the Court. DE 25 at 2 of 5; Fireman's Fund Ins. Co. v. Tropical Shipping & Constr. Co., 254 F.3d 987, 1003 (11th Cir. 2001) ("[t]he question of the extent of coverage under an insurance policy is a question of law"); Boatright v. State Farm Mut. Auto. Ins. Co., 2010 WL 2220250, *2 n.3 (M.D. Fla. June 2, 2010) (the phrase "arising out of the operation, maintenance or use of an uninsured motor vehicle" in an automobile insurance policy "is not ambiguous and should be construed by the Court as a matter of law"). "When assessing an insurance dispute, the insured has the burden of proving that a claim against it is covered by the policy, and the insurer has the burden of proving an exclusion to coverage." Key Custom Homes, Inc. v. Mid-Continent Cas. Co., 450 F. Supp. 2d 1311, 1316 (M.D. Fla. 2006) (citations omitted). Wheeler's argues that the Court should deny the motion to dismiss because it would be more appropriate to resolve the question of whether coverage exists under the Vanliner policy through competing motions for summary judgment, and because issues of fact may exist regarding whether Defendants were given proper notice of the McTigue claim. DE 25 at 2.

Duty to Defend

Under Florida law, an insurer's duty to defend is determined solely from the allegations of fact in the complaint filed against the insured. See Higgins v. State Farm Fire & Cas. Co., 894 So.2d 5, 9--10 (Fla. 2004); National Union Fire Ins. Co. v. Lenox Liquors Inc., 358 So.2d 533, 536 (Fla. 1978). If the facts alleged show any basis for imposing liability upon the insured that falls within the policy coverage, the insurer has a duty to defend. Lime Tree Village Community Club Ass'n, Inc. v. State Farm General Ins. Co., 980 F.2d 1402, 140506 (11th Cir. 1993); Trizec Properties Inc. v. Biltmore Const. Co., 767 F.2d 810, 811-12 (11th Cir. 1985) (insurer must defend when alleged facts fairly and potentially bring the suit within policy coverage); Baron Oil Co. v. Nationwide Mut. Fire Ins. Co., 470 So.2d 810, 815 (Fla. Dist. Ct. App. 1985). If the allegations of the complaint leave any doubt as to the duty to defend, the question must be resolved in favor of the insured. Trizec Properties, 767 F.2d at 812; Baron Oil, 470 So.2d at 814. An insurer is under no duty to defend if the allegations in the complaint implicate a policy exclusion. Markel Intern. Ins. Co., Ltd. v. Florida West Covered RV & Boat Storage, LLC, 2011 WL 3505217, *1 (11th Cir. Aug. 11, 2011); State Farm Fire & Cas. Co. v. Tippett, 864 So.2d 31, 35 (Fla. Dist. Ct. App. 2003). "[A] court's determination that the insurer has no duty to defend requires a finding that there is no duty to indemnify." Trailer Bridge, Inc. v. Illinois Nat. Ins. Co., 657 F.3d 1135, 1146 (11th Cir. 2011) quoting Philadelphia Indent. Ins. Co. v. Yachtsman's Inn Condo Ass'n, Inc., 595 F. Supp. 2d 1319, 1322 (S.D. Fla. 2009) .

The Vanliner policy, attached to the Complaint as Ex. B, contains this provision ...

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