United States District Court, M.D. Florida, Orlando Division
ORDER
PAUL
G. BYORN, UNITED STATES DISTRICT JUDGE
This
cause comes before the Court on Defendant Republic
Properties, Inc.'s Motion to Dismiss Third Amended
Complaint (Doc. 93), filed April 28, 2017. On May 12, 2017,
Plaintiff responded in opposition. (Doc. 97). Upon
consideration, Defendant's Motion to Dismiss will be
denied.
I.
BACKGROUND[1]
Plaintiff,
Evanston Insurance Company (“Evanston”), brings
this action pursuant to the Declaratory Judgment Act to
resolve an insurance coverage dispute it has with Defendants.
Defendant, Republic Properties, Inc.
(“Republic”), owns real property located in
Orlando, Florida (the “Subject Property”).
Through a property manager, Republic leased the Subject
Property to Glitz Ultra Lounge to operate as a nightclub.
Evanston issued two commercial general liability insurance
policies to Republic covering the Subject Property; one
policy covered the Subject Property for the policy period of
January 23, 2015 to January 23, 2016 (the 2015-2016
Policy”), and the other policy covered the Subject
Property for the policy period of January 23, 2016 to January
23, 2017 (the “2016-2017 Policy) (collectively, the
“Policies”). The Policies require Evanston to
defend and indemnify Republic for covered bodily injuries or
property damage.
At
approximately 1:00 a.m. on February 7, 2016, a shooting
incident occurred at Glitz Ultra Lounge that resulted in the
death of two individuals and injuries to several others. Some
of those who suffered injuries have submitted claims to
Republic or have sued Republic to recover for their injuries.
Evanston advised Republic that it would investigate these
claims and lawsuits as required by the 2016-2017 Policy,
subject to a reservation of rights.
Upon
investigation, however, Evanston learned that Republic had
provided false information when it applied for the Policies.
Specifically, Republic described the Subject Property as a
vacant building in its applications with Evanston, when in
fact the Subject Property was being operated as a nightclub.
Because the 2016-2017 Policy only provides coverage for the
operations specified in the application for insurance-that
is, for a vacant building-Evanston contends that it owes no
duty to defend or indemnify Republic against any of the
claims or lawsuits arising out of the February 7, 2016
shooting incident, when the Subject Property was being
operated as a nightclub. Evanston therefore initiated this
lawsuit and seeks a declaratory judgment stating as much.
Republic moves to dismiss Evanston's Third Amended
Complaint pursuant to Federal Rule of Civil Procedure
12(b)(6) for failing to state a claim for relief.
II.
STANDARD OF REVIEW
A Rule
12(b)(6) motion to dismiss tests the legal sufficiency of the
plaintiff's complaint. In order to survive the motion,
the complaint must “state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). A claim is plausible
on its face when the plaintiff alleges enough facts to
“allow[] the court to draw the reasonable inference
that the defendant is liable for the misconduct
alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). The mere recitation of the elements of a claim is not
enough, and the district court need not give any credence to
legal conclusions that are unsupported by sufficient factual
material. Id. District courts must accept all
well-pleaded allegations within the complaint and any
documents attached thereto as true and must read the
complaint in the light most favorable to the plaintiff.
Hunnings v. Texaco, Inc., 29 F.3d 1480, 1484 (11th
Cir. 1994) (per curiam).
III.
DISCUSSION
The
Declaratory Judgment Act grants to the federal district
courts the power to “declare the rights and other legal
relations of any interested party seeking such declaration,
whether or not further relief is or could be sought.”
28 U.S.C. § 2201. An essential element for every
declaratory judgment action is the existence of an
“actual controversy” between the parties.
Aetna Life Ins. Co. of Hartford, Conn. v. Haworth,
300 U.S. 227, 239-40 (1937). An actual controversy exists
when “there is a substantial controversy, between
parties having adverse legal interests, of sufficient
immediacy and reality to warrant the issuance of a
declaratory judgment.” Md. Cas. Co. v. Pac. Coal
& Oil Co., 312 U.S. 270, 273 (1941). Ordinarily, a
controversy is not sufficiently immediate or real where the
parties' dispute is only hypothetical and not yet ripe,
has been rendered moot, or where the court's resolution
of the matter would be purely academic. See Texas v.
United States, 523 U.S. 296, 300 (1998); Aetna Life
Ins. Co., 300 U.S. at 240-41. On the other hand, a court
should permit a claim for declaratory judgment to proceed
where declaratory relief would (1) “serve a useful
purpose in clarifying and settling the legal relations in
issue, ” and (2) “terminate and afford relief
from the uncertainty, insecurity, and controversy giving rise
to the proceeding.” Volvo Constr. Equip. N. Am.,
Inc. v. CLM Equip. Co., 386 F.3d 581, 594 (4th Cir.
2004); accord Allstate Ins. Co. v. Emp'rs Liab.
Assurance Corp., 445 F.2d 1278, 1280 (5th Cir. 1971).
Republic
moves to dismiss the Third Amended Complaint on the grounds
that Evanston's declaratory judgment claims present no
actual controversy and are not yet ripe for adjudication.
Republic asserts that Evanston cannot state a claim for
declaratory judgment until there has been a decision on
whether Republic is responsible for any of the injuries
sought in the underlying claims and lawsuits.
The
Court finds Republic's argument unavailing. The facts
alleged in the Third Amended Complaint clearly articulate a
ripe and justiciable controversy between Evanston and
Republic. Evanston alleges that it issued an insurance policy
to Republic that covered bodily injuries incurred at a
property which was classified and operated as a vacant
building. However, Evanston later discovered that the Subject
Property was in fact being operated as a nightclub, thus
precluding coverage for bodily injuries according to the
policy's terms. Now that individuals have sued and
submitted claims to Republic seeking to recover for injuries
they suffered during the February 7, 2016 shooting incident,
Evanston contends that it has no duty to defend against or
indemnify those claims. Unless Republic agrees with
Evanston's position on this matter, then an actual
controversy exists between them.
Further,
the fact that Republic has not yet been found responsible for
any of the injuries at issue is of no consequence.
“[I]n the context of an insurance-coverage dispute,
when the facts and circumstances indicate that a claim is
likely to be brought, the claim has sufficiently
ripened to warrant declaratory judgment.” Natl Gen.
Ins. Online, Inc. v. Black, No. 5:15-cv-111-Oc-30PRL,
2015 WL 5009703, at *3 (M.D. Fla. Aug. 24, 2015). Evanston
alleges that a number of claims and lawsuits have been
brought against Republic arising out of the February 6, 2017
shooting incident which would invoke its duties to defend and
indemnify under the 2016-2017 Policy. A declaratory judgment
would serve a useful purpose in settling the parties'
legal obligations and would afford relief from the
uncertainty, insecurity, and controversy giving rise to the
proceedings. See Mid-Continental Cas. Co. v. Devonshire
Props., Inc., No. 8:15-cv-1049-T-17JSS, 2015 WL
12831311, at *2 (M.D. Fla. Nov. 12, 2015) (finding insurance
coverage dispute sufficiently ripe where declaration would
settle the parties' legal obligations and “help to
facilitate an early resolution of the parties' coverage
issues”). Evanston therefore states claims under the
Declaratory Judgment Act.
IV.
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